Rental Housing on Cortes - An Overview

Who provides rental housing?
Investors: Private
Corporate
Why?
As an investment and for profit.
There are various types of rental investments:

1.Multi family units that provide profit from rent as well as property value.
The multi family units that provide profit from rent depend on volume to generate income and therefore are usually apartment or town home complexes. The investor usually hires a manager or property management company to deal with the day to day operation of the business. The focus is on maximum return on rents with minimal expense in infrastructure. The quality of these rentals is usually in keeping with the amount of rent charged. One can expect a high end expensive rental to have a well maintained building and grounds. At the opposite end many low rent buildings are poorly maintained inside and out.

2.Privately owned single family units or homes where the profit is long term and the
intent is sell in the future.
Privately owned single family rentals range from homes with our without in-law suites to individual condos or town houses. The owners of these properties depend on market value increasing over time and care about future resale value. Because they are long term investments they prefer good long term tenants and usually view the rent earned as a way to pay for the property and keep it in good condition. For the best investment these units are often in good neighbourhoods.

3. Time share units where some of the ‘profit’ is gain by use of the property.These properties include summer homes as well as apartments and condos and can be owned by private individuals or by a group of individuals. As these properties are used seasonally by the owners they are often made available on a short term basis to the general public looking for a vacation rental. For the majority of summer home owners the rental income helps pays for the property. This can include mortgage payments and general maintenance as well as property management fees. These property owners have the added expense of furnishing and equipping the homes as well as cleaning and maintenance costs both inside and out. Generally these owners see the property is a long term investment and keep them for personal use therefore they look after the properties well.

As can be seen from this information the best bet for affordable rentals on Cortes Island would be #1. Multi family units. The problem is there is limited existing zoning that will allow such dwellings in the community. RM1 allows for residential use limited a maximum of 6 dwelling units per lot. Minimum lot size 2 acres (septic regulations may require a lager lot). Currently there is one property on the island with this zoning.
The community has been very adamant about wanting to keep densities low in order to keep the rural feel of the island in tact. An attempt was made in the last zone change to address the lack of rental housing by allowing a secondary dwelling on individual properties and to allow for extra dwellings on properties that are larger than the minimum size for that zone. This solution has not dramatically increased the number of dwellings available for year round rentals.

The reality is the cost to construct and service a home today far surpasses any expected return from rental income. This reality also explains why there has been no developer attempting to have a property re zoned to accommodate rental housing. Even with a zone change to accommodate multi family dwellings the cost to construct makes building rental units that are affordable an impossibility unless the developer wants to take a loss or subsidize the housing. Even if said same developer did want to risk it the rezoning process requires public hearing and co operation of neighbours and one then runs in to the NIMBY (not in my back yard) hurdle.

The best way to address the shortage of rentals on the island is to create affordable housing for those who can afford and want to purchase homes. This will open up the rental market for those who prefer to rent or cannot afford to buy.

The community needs to focus on creating affordable homes for residents to purchase.