Parker, by Mosaic Living, is a rental apartment development in Surrey, B.C. (Courtesy Mosaic Living)

Vancouver-based Mosaic Homes has focused on designing and building homes throughout B.C.’s Lower Mainland for over 20 years.

Nearly 7,000 homes later, it’s launching a rental division, Mosaic Living, to meet burgeoning demand in the sector.

“In the early days of a development company, you’re trying to grow and so you’re directing all your capital towards your development program – building homes that we would sell and then are able to redeploy capital to grow that program,” said Geoff Duyker, senior vice-president, marketing, at Mosaic Homes.

“Our business reached a maturity level where we were able to start retaining buildings that we were building to maintain as properties where we could have homes to rent. We have a shortage of rental housing. That’s true in Vancouver,” he told RENX. “If you look, buildings that have been built for the purpose of renting out homes, that hasn’t really happened in a meaningful scale in decades.

“And so we also saw that opportunity and said there are incredibly low vacancy rates throughout the region. There’s an opportunity to meet a need that’s not being met today.”

Mosaic a fully integrated developer, builder

He said the timing is also right as all levels of government are recognizing the need for more housing and providing incentives for rental development.

Duyker said the homebuilding side of the business includes multiresidential dwellings and townhomes with low-rise, mid-rise and high-rise apartments.

“Historically, our customer has been someone who buys a home. We made a decision to start building homes that we would retain ownership of to rent,” he said. “We’re now entering a phase where a bunch of these buildings are being completed and we’re moving residents in. We’re a fully integrated business.”

That means Mosaic is handling everything in-house, from acquisitions to financing to the approvals process to the actual development.

“We also are a construction company, we build our own homes. I oversee the team that markets and sells our homes. We do that in-house as well. And we have home care which provides a service to our homeowners after they move in.”

Duyker said the privately owned company has built homes throughout the region from the North Shore through the Fraser Valley to Abbotsford.

Founding partner of RISE Properties Trust

Mosaic is also a founding partner of RISE Properties Trust, a private Canadian real estate investment trust that acquires and revitalizes underperforming rental apartment communities primarily in the Pacific Northwest.

Duyker said the REIT owns and manages $2.7 billion in assets.

It has an in-house property management company called Thrive Communities, in which Mosaic is also a partner.

“So we have lots of exposure through being an active owner . . . to the rental business in the U.S.,” he explained. “An interesting thing is that Vancouver and Seattle are cities that are very close together but they’re very different real estate markets. I always say they’re kind of the inversion of each other.

“In Vancouver, most development companies build homes to sell and there’s a little bit of building of rental, whereas in Seattle it’s the opposite. Almost everything gets built as purpose-built rental and very little multifamily gets built to be sold.

“So having exposure to that market that is much more mature from a rental perspective and being a partner in a very sophisticated business that owns a significant amount of rental and then manages it in-house, we had a great head start.”

The Mosaic Living portfolio

The Mosaic Living portfolio will soon include more than 520 homes across communities in the lower Mainland. About 320 homes are currently complete and under management.

“A fundamental principle for us getting into this business is our purpose historically has been to design and build a better home and it’s historically been to sell. We want to bring that over to rental so we thought as part of getting into this business we are who we are,” said Duyker.

“We still are passionate about designing and building a better home and so we wanted to provide a better home for our customers who want to rent.

“We have designed and constructed all four of our rental properties that are currently complete and have residents in them. And we have another four properties that are at various stages of construction being managed by our team. We build them ourselves.”

Current developments are apartment buildings with varying suite sizes and configurations, with the exception of Gardner, an apartment and townhome property of 100 homes in Abbotsford.

Projects include Mosaic Living Lakewood in Hastings-Sunrise, a 10-minute drive from downtown Vancouver, Parker in Surrey, Fremont in Port Coquitlam, Lynn in North Vancouver and Williams in Richmond.

Rental and for-sale housing

Going forward, he said Mosaic will continue to build homes for rent as well as homes for sale.

“We think to operate as a development company of scale, you have to do rental now because so many municipalities are requiring rental as part of  approving new large-scale projects,” Duyker explained. “We also think a big component of rental is service and that’s one of the reasons why we’re spitting out Mosaic Living as a separate team because we do in-house property management.”

A Canada Mortgage and Housing Corporation Rental Market Report released in February states the purpose-built rental apartment vacancy rate in Vancouver decreased from 2.6 per cent in 2020 to 1.2 per cent in 2021, similar to 2019.

The return of students and increased migration to the region grew rental demand faster than supply. The tightening conditions intensified existing imbalances in the Vancouver rental market, the report notes.