After two serious setbacks, the Hudson Mews apartment building opened its doors for a sneak peek on Wednesday — and there’s already a lineup for the 120 units.
The 2008 economic crisis delayed the project and vandalism last fall caused $40,000 in damage, which is why Townline Group president Rick Ilich described the opening as the third chapter in the story of the “Hudson District.”
“I guess we’ve had two false starts here,” Ilich said during the event in the building that faces Fisgard Street between Blanshard and Douglas.
The Mews completion follows the Hudson condominium project within the bones of the old Hudson’s Bay Company building, and establishment of a public market on its ground floor.
Despite the delays, Ilich is confident the rental building will be full by the end of August.
“At last count, there were somewhere between 500 and 600 names on a list for 120 homes,” he said. Victoria’s low vacancy rate also works in the building’s favour, he said.
Colliers’ Victoria multi-family residential expert Ken Cloak said the vacancy rate is about 2.9 per cent.
The 12-storey Mews offers 83 one-bedroom, 600-square-foot suites, with rents starting at $1,225 per month, and 37 two-bedroom suites that are about 900 square feet, from $1,700 per month.
Victoria Mayor Dean Fortin said a new rental building in the city has been a long time in coming.
“We’re always concerned about housing affordability and making sure the spectrum is here,” Fortin said.
While units in the Mews are at the higher end of the market, he said, “we also recognize that as people flee to quality that adds to other [available] housing stock and allows people to find affordable housing.”
The Mews is part of a wave of new rentals.
Cloak said the time is right for developers to look at purpose-built rental buildings as low-interest rates mean borrowing remains cheap, construction costs are reasonable and there are often incentives in the form of tax holidays offered in some municipalities for building rentals.
Cloak said developers have taken notice, suggesting there could be 1,000 more units added to the mix in the near future.
“Who knows if all [the proposed projects] go ahead, but at the same time, it will be a burden on existing inventory,” he said, noting that could drive older buildings to upgrade as tenants move to new suites.
Ilich said Townline had been tempted to build condominiums. “We always envisioned doing rental within our district, but we moved it to the front burner as interest rates and costs stabilized at these historic levels.”
Ilich isn’t worried about the number of condo units being built, many of which are likely destined for investors who will be looking for renters.
“We feel there are a lot of people that simply don’t have the historic low land costs that we do, so we … would be quite prepared to continue building out all rental,” he said. If the condo market changes, Townline can change plans, he said, “but we are comfortable with the flexible, mixed-use concept we have.”
Townline’s next project — Hudson Walk — will be built across Herald Street in place of the now-abandoned Radius project. Ilich said Townline will go to the city for a development permit for that site in the next few weeks.
“We have permits already but this will be a bit of a variance on what was previously approved,” he said, noting it will comprise a mix of rental, condominium and retail space.
Once that project is underway, Townline will focus on completing the Hudson District.
Plans for that final phase, called Hudson Place and likely to be completed in the next five to six years, are still in flux.
“You have to react to the marketplace,” Ilich said. “And we have the ability in our final phases to accommodate office, retail, rental and market condos,” he said.