Downtown Vancouver Construction Declines as Costs Rise

City officials say development no longer pencils out due to high costs and slowing rent growth.

Apr. 7, 2026 at 8:06pm

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A minimalist studio photograph showing an arrangement of premium construction materials and tools, such as steel beams, concrete blocks, and power tools, against a clean, monochromatic background, conceptually representing the financial challenges facing real estate developers in downtown Vancouver.Piles of building materials and tools sit idle, reflecting the decline in new construction projects in downtown Vancouver.Vancouver Today

According to Vancouver's community development director, new construction in downtown Vancouver and at the waterfront has 'essentially dried up' as the cost of development has surpassed the benefits. The city's multifamily tax exemption, which provides developers an incentive to build, is seeing declining interest because projects are no longer financially viable. Overall housing development has also declined due to high vacancy rates, skyrocketing construction costs, and slowing rent growth.

Why it matters

The decline in downtown and waterfront development in Vancouver reflects broader economic trends impacting the real estate and construction industries, including rising material and labor costs that are outpacing rent growth and making many projects financially unviable. This could have significant implications for the city's tax revenue, job market, and overall economic growth.

The details

According to Chad Eiken, Vancouver's community development director, there is currently not a single large apartment or mixed-use project in the permitting process for the downtown or waterfront areas. This marks a significant shift from recent years, as the city's multifamily tax exemption program - which provides developers a tax break to encourage new construction - is seeing declining interest due to projects no longer 'penciling out' financially. Overall housing development has also slowed due to high vacancy rates, surging construction costs, and slowing rent growth.

  • On Monday, April 7, 2026, city officials discussed the decline in downtown and waterfront construction during a city council workshop.

The players

Chad Eiken

Vancouver's community development director, who reported on the decline in new construction projects in the downtown and waterfront areas.

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The takeaway

The slowdown in downtown Vancouver development reflects broader economic challenges facing the real estate and construction industries, including rising costs that are outpacing rent growth and making many projects financially unviable. This trend could have significant impacts on the city's tax revenue, job market, and overall economic growth if it continues.