In early February, Starlight Investments completed its latest west-coast project: Bella Vista, in Central Saanich, B.C. The 235-unit, purpose-built rental development, completed in just two years, has injected a sizable amount of supply into the local market, including eight affordable units.
Green Street News spoke with Howard Paskowitz, Starlight’s vice president of development and public affairs, about the firm’s latest project, what challenges persist with building purpose-built rentals and lender sentiment toward funding multifamily projects.
Bella Vista is Starlight’s first project in Central Saanich. What made you want to invest there?
We are Canada’s largest provider of rental housing, so anytime we have an opportunity to increase housing supply, that’s what we try to do. Central Saanich, we think, is a great location. The entire island, really, has been underserved by new rentals for a long time. My understanding — and I found this in an article — is there were no new rental buildings built in Central Saanich between 1997 and 2013, so as more and more people are discovering how great it is to live on the island and in Saanich, they’re finding a real shortage of new rental housing, and we’re very happy to address the need for that.
Under the Housing Supply Act in B.C., the province set up targets for different municipalities for new housing. We’re very excited that the five-year housing target for the District of Central Saanich is 588 suites, and with this one project of 235 suites, we’re providing 40% of the region’s housing target.
Another important aspect is finding the right municipal partners to work with us, and we have found that in places like Central Saanich and Langford, for example, where we also have other developments.
What’s demand been like so far?
It’s been great. We only just opened a few weeks ago, and we’ve already hit double digits for leasing. Our lease-up target is January 2026, and we are on track for that, which is exciting. I think where we’re located is fantastic — the Greater Victoria’s Marigold community. We’re near Saanichton Bay Park. Our suite offerings range from studios up to three-bedroom suites. We really have something for everyone, so it’s been moving well, and I expect that to continue.
How have you seen purpose-built rental development change over the last decade or so? One of the big things we hear is that buildings need to be a lot more amenitized now.
I think we’re all seeing — and whether this [is] because of Covid or whatever the case may be — people want to belong to something bigger than them. So when we call it a rental community, that’s really our approach. Those amenities — spaces that bring people together, whether that’s spacious lobbies or modern gyms, social rooms, get-together rooms — those features are really in demand.
Condo developers, for example, build a property, sell it, and they move on. By doing rental, it’s a long-term commitment to the communities that we serve, so we need to build a residence that’s practically timeless. These amenities have to really withstand the test of time.
You’re also seeing a lot more renting as a lifestyle. I think that’s changed significantly over the past few years. You do have to factor in families, so we’ve got an outdoor play space, for example, which is great. A lot of people these days have dogs, so we’ve included a dog-walk area in some of our buildings, and we’re putting in dog washes for when you come in from outside. The amenities must reflect the needs of the community that you are trying to attract.
Are there any amenities you’ve found that haven’t worked or end up not getting used?
People used to get all excited about having pools. I think a lot of developers are moving away from that. I think by creating spaces like gyms and party rooms, you create these opportunities for people to come together. Top-of-the-line gyms, yoga rooms and gathering places are examples of amenities that remain very much in demand these days.
When it comes to getting shovels in the ground, what’s the biggest challenge to getting rentals built right now?
I would say there are two twin challenges. The first one is the financing — it’s making the economics work. It takes a lot of money to build these rental communities — they’re very capital intensive — so you really need to be committed to the process. Companies make decisions based on it making sense financially, and while we’re very mindful that what we’re producing is housing that Canadians need, it’s not a cheap process. Construction costs, as everyone knows, have gone through the roof over the past few years. Interest rates have been very tricky to maneuver. In terms of solutions, CMHC has really recognized the need to encourage and enable more housing, and that’s been fantastic.
“While we’re very mindful that what we’re producing is housing that Canadians need, it’s not a cheap process”
The other issue that sometimes happens with development is the time it takes. There’s a municipal process that we have to follow, and you’re now seeing a lot more attention from all three levels of government on the importance of creating efficient approvals processes. They have to be rigorous because you can’t build a residence and then not follow through with proper infrastructure and servicing.
But a lot of municipalities are stepping up and taking the lead and saying, “We want housing built here. How can we work with you?” We have seen some great opportunities for partnership, which we’re excited about.
We have been seeing that push for shorter approval timelines. Is that something you’ve seen actually materialize yet?
Yes, I have seen that. I think it’s very easy as outsiders, or someone outside this industry, to say, “Why does it take so long?” And I get it. What we’re creating is going to be there for decades, if not longer, so it has to fit within the fabric of the existing community. It has to make sense. It has to take into consideration the needs and the wants of the people that are already living in the community, but we need to balance that with the [needs of] future residents.
We are seeing more municipalities understanding that if there’s a lack of quality housing in their municipalities, people will go somewhere else. Growth pays for growth, but what I’ve added to that is my own thing: Growth pays for growth, but cities pay for decline. Finding a way to manage that growth is key, and I think you’re seeing that with a lot of municipalities across Canada.
You touched on financing earlier. What’s the attitude of lenders right now when it comes to construction loans for purpose-built rentals?
As the condo market has really slowed down, more lenders are getting a lot more sophisticated with their understanding of rental. For example, CMHC has really expanded its programs — one of the great ones is the Apartment Construction Loan Program. It really helps to get more apartments built faster, and CMHC comes in as that backstop and that sort of insurance and provides the lenders the comfort to move forward.
When you have a track record like Starlight and some of the other big, purpose-built rental developers, lenders are happy to work with you because they know you’re going to build quality housing for the long term. So, it has definitely come a long way, and I think it’s great. And again, I think it comes back to understanding we have a serious housing crisis, and one of the major ways to fix that is by increasing housing supply.
Are there any markets Starlight has its eye on right now for new opportunities?
All of Canada. I would say in the world of economics, where you see high demand and low supply, you really try to bump up that supply. We are continuing to see an urgent need for every type of housing in every community across the country. Starlight is focused on providing safe, high-quality rental housing to communities across Canada as multifamily residential trends continue to shift.
Because we have a large existing portfolio of rental communities, we tend to focus primarily on how we can intensify our existing communities through infill development. These properties are primarily in B.C. and Ontario, so I expect you’ll see Starlight continue to grow within those provinces — there’s no question about that. But again, if we see opportunities to provide rental housing or if there are communities or municipalities that want the best-in-class rental housing developer, we’re ready to be there, and we’d love to take that on.
