In April, Surrey City Council formally approved a significant new initiative that will see approximately 350 new rental homes built on City-owned land, near the Scott Road SkyTrain Station.
Project Overview and Strategic Location
The approved project site, a 2.9-acre parcel at 10975 126a Street, is strategically located in the South Westminster Neighbourhood within the Scott Road Transit-Oriented Area. This proximity to rapid transit is highly significant, as it situates the new units within easy commuter access to major employment centers across Metro Vancouver, enhancing their long-term desirability.
The City plans to lease the land for a term envisioned at 60 years, facilitating the design, construction, operation, and maintenance of a six-story, wood-frame rental development. A minimum of 20% of units are earmarked for below-market rates to meet affordability criteria, a threshold aligned with the Canada Mortgage and Housing Corporation’s (CMHC) Apartment Construction Loan Program (ACLP) requirements — a financing tool expected to be leveraged to optimize development feasibility.
Impacts on Existing and Future Rental Supply
The scale and structure of this development are significant relative to Surrey’s rental stock, much of which is still concentrated in secondary suites and individually rented condominiums. Purpose-built rental buildings have historically represented a smaller share of Surrey’s inventory, though this is beginning to change with initiatives like the City’s Affordable Rental Housing Strategy, adopted in 2018 and bolstered by recent Housing Accelerator Fund (HAF) grants.
The planned infusion of 350 units, along with the City Development Corporation’s separate application to develop 1,800 additional units as part of a larger, phased project, represents a shift toward addressing housing needs. Nevertheless, Surrey faces a shortfall. Over the next five years, the city is projected to require 53,111 new homes to meet demand. Of these, approximately 38% will need to be purpose-built rental units. While the new infusion of units is planned for a transit-friendly area, demand for housing near key transit hubs such as SkyTrain stations will likely persist.
Development and Financial Considerations
The City’s procurement process for this project is structured to attract qualified private or non-profit developers who can deliver high-quality rental products while also meeting affordability mandates. The City’s aim of achieving a degree of below-market affordability will be a consideration for planning. Proponents will be expected to propose models that maximize unit delivery and offer various options for the number of below-market units, balanced against lease terms for the land.
This flexibility allows bidders to structure offers based on their financial modelling, particularly leveraging the CMHC ACLP, which offers up to 100% loan-to-cost coverage for residential space, 50-year amortization, and fixed rates from first advance through to stabilization.
Timing, Procurement, and Market Outlook
City staff are now beginning the procurement process to select a development partner, with construction anticipated to start in 2027 and completion targeted for 2029. This timeline positions the new units to come online during a period when Surrey’s population is expected to continue expanding rapidly, driven both by immigration and interprovincial migration trends favouring suburban nodes with transit access.