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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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The rental residential market in Vancouver in the recent years looked like the markets in many other metropolitan centers in Canada. It's well known for its high rents, second nationally only to Toronto ($919* and $1027 respectively), the big demand and the relatively weaker supply. If we can explain such phenomenon in times of high interest rates (some parts of 80s) and in places with state-regulated markets regarding rents (Quebec) then how to elucidate the lack of sufficient supply in Vancouver now despite the strong migration inflows (mainly from Asia and other parts of Canada**), the generations' low interest rates, the vacancy rates below 1 percent and the absence of any state-regulation on rent increases?

In 1999 the vacancy rates in Vancouver, the biggest city in the province of British Columbia and the third largest in Canada (1,8 million), was 2,7 percent, unchanged from 1998. In 2000 though it dropped to 1,4 percent, 12 months later - under 1 percent. With the economy recovery around the corner this trend hardly will be reversed. In 2000 rents increase by 2-3 percent, more than the average inflation in the country. Similar trends we see in Montreal, but there they are explained mainly by the state-regulations that hurdle the new rental developments.

It's clear that Vancouver along with Toronto has exceptionally high residential rents. Even in the lowest areas of the city the unfurnished apartments are rented for almost $750 for 2BR. In the most expensive areas the rents reach an average to 1,400 for 2BR. There are many reasons for that as well as for the relatively weak supply on the market (2,000 new units per year). The first of them is the increase of the land costs, especially in the Lower Mainland and Southern Vancouver Island. During the last 15 years land costs rose by 100 percent in Vancouver.

On the second place we have a lack of suitable land for building, which places further upward pressure on the land prices and pushes up the development costs. The supply of land for rental development is limited by the local authority zoning, the natural barriers such as mountains and water close to key urban areas and also by the protection of the land for parks.

Another cause for the relatively weak supply is the fact that at the same time as the number of renters is growing, many older buildings have been converted into owner-occupied condominiums or have been demolished. For example, between 1987 and 1995 approximately 26,000 rental units have been demolished in urban areas of British Columbia province.

The solution? The solution is the same we mentioned in the case of Toronto - to ease further the credit policy and to allow the more and more renter households to move to the owners' residential market.

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* - Anywhere the rents are in Canadian dollars ($1 US = $1.6 CAD).

** - Every year the renter population of Vancouver increases by 10,000 households.

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