WATERLOO — The Waterloo market may be oversaturated with student housing.
Councillors voted Monday to put off additional developer incentives in Northdale after staff said there is plenty happening — to the point of a potential housing surplus.
University representatives on the city's town and gown committee said, based on a committee study, there's more supply than demand.
"It's going to be very competitive if everything stops right now," said Chris Read, University of Waterloo's representative on the committee.
The committee presented its findings to council Monday.
The study, based on some firm numbers and some estimates, said there is a potential surplus of more than 1,000 bedrooms in the city, with another 900 bedrooms planned on campus and about 6,200 planned off campus.
Student enrolment isn't expected to keep pace with planned builds.
"When we look at the enrolment numbers and projections for the two universities combined our estimates I think would actually be closer to kind of a zero increase (annually)," Read said.
Mayor Dave Jaworsky questioned the numbers.
"Assuming it's correct … that's about a three per cent vacancy rate, which it's my understanding is sort of a healthy vacancy rate," he said.
The committee looked at bedrooms built since 2000 in the area bound roughly by Columbia Street West to the north, Weber Street to the east, Erb Street to the south and the Fischer-Hallman Road and Westmount Road areas to the west.
The committee's study found about 31,000 students need accommodation every year.
Right now the University of Waterloo and Wilfrid Laurier University have 9,140 beds available for students. There's another 23,000 bedrooms approximately in low-rise rentals and multi-residential buildings in the study area.
The study area included the city's Northdale neighbourhood.
Northdale is bound by Columbia Street, King Street North, University Avenue West and Phillip Street.
The previous city council crafted a land use and community improvement plan for Northdale that envisions a revamp of the mostly student, single-residential neighbourhood into a mixed-use, higher density area.
Monday staff asked politicians to hold off on approval of a development incentive called a residential intensification and affordability loan/grant until 2017 so they can do more research on student housing stock.
Ward Coun. Jeff Henry said he didn't necessarily expect housing supply to come on so quickly in Northdale.
"That's the story of Northdale, everything happens faster than anyone can really imagine and we've got to keep up," he said.
Before the Northdale plan was put into effect there were 17 projects that had building permits or were in site plan approval for the neighbourhood.
Since the plan went into effect in July 2013 another 2,185 units, totalling 3,125 bedrooms have received site plan approval or building permits.
In November politicians approved a tax increment grant program to encourage environmentally sustainable projects. There have been no takers to date.
The value of a tax increment grant is paid by the city over 10 years to a developer once their project is complete, using the increased taxes generated by the development.
