Last April, I posted “Vanishing Vancouver: The Dilemma of Incompatible Values” in response to a column by Barbara Yaffe on the loss of Vancouver’s pre-1940s stock of character homes.  But as she illustrated in a column last month,  heritage (and, analogously, affordability) are all very fine – until you affect someone’s property values:

CoupleIan Todd was surprised to learn last month, entirely by chance, that a new city of Vancouver policy aimed at preserving west side character homes has reduced the value of his own property by at least $500,000. …
And because the buyers next door face no such restrictions on their new build, that lot sold for $3.5 million in April. Todd’s home, after being designated as having character merit in September, is valued at $3 million. …
Todd expects when all these other homeowners learn what city policy has done to their property values, the fur will start flying.

Here are some questions I raised back in August, addressed to owners of property and homes in Vancouver:

  • Who is willing to take a loss on the sale of their property – if the City could indeed come up with a way to lower land values?
  • Who will take less than the market would pay by constraining a subsequent owner to ensure the preservation of the existing home?
  • houseWho is willing to have their property taxes raised sufficiently to allow the City to compensate the difference between what the character home is worth on the market and the value if it were designated and protected as a heritage property?  Which is what the law requires.
  • Or yet another way: Who is willing to rezone neighbourhoods or other parts of the city so drastically that it would flood the market with housing sufficient to make the character homes competitive?

And then a question for anyone who would run for office;

  • Who, in fact, is willing to run for office on a platform of lowering property values or increasing taxes enough to protect homes almost a century old?  Or to put in place regulations so onerous it effectively prohibits demolition?  Or do anything that would negatively affect the current owners before they can cash out?

It’s basically the same question with respect to affordability:

Are you willing to bring in any policy that would, by design or result, negatively affect existing property values?

Because if you’re not, how can you address affordability generally – that is, beyond targeted non-market projects or special programs for rental housing?  If existing values don’t fall, won’t all new housing be just as expensive as determined by the market if not by the higher costs of new development?
Since it comes down to voters, not abstract questions, will you tell the couple above that their loss of half a million justifies your interventions for the greater long-term good?  That they should be happy with the incredible increase they’ve seen on their house, not the relatively minor loss.
And if you can’t, why should the rest of us believe that you intend to do anything that would bring down values enough to make this city ‘affordable’?

Comments

  1. The most potent issue, beyond any political party’s good intentions is our banking system: fractionl reserve banking, compound interest, indiscriminate borrowing and panding to gain politcal favour among voters.
    Concrete towers, wood frame walk-ups or SFD’s the form doesn’t matter.
    The don’t-speak-of-it monster hanging over our heads, Country, City Province, family or individual, enriching people in distant lands we have never heard of, this is the cause of exponentially, unreasonable rising shelter costs and no one dare touch it!
    Shelter costs, be it SFD’s condos or rentals, will continue to bloat until that mad dog is muzzled. And not one word of sincere on-line gossip matters one iota because the guys and gals at the receiving end are wallowing in the gravy you warmed for them!
    Gossip on and buy tents for the kids. QED

  2. Why not a compromise, you can sell your house for market rate and tear it down, etc. but it must be built back using a series of design guidelines to create the style it replaced. Maybe you have to work with a heritage architect on the design. Or, no restriction on selling price but a 15% landfill charge on all wood unless its reused or something along those lines. Or, what about a credit where if the house isn’t torn down you receive a credit for future development on another development site, perhaps able to add an extra floor, etc.?

    1. Scott, you may end up with something worse than the original. I can see small-time builders “forced” to do crappy knockoff mouldings from painted MDF instead of stained Douglas fir, plastic panels instead of real stained glass, OSB sheathing instead of plywood etc. etc. etc. Get them wet with a poor rain screen, lack of soffits, a shoddy roof job or a broken water pipe and they’ll disintegrate quickly into a fungi-laden pile of mush.
      Very few new houses I’ve seen offer good quality neo-traditional style. In my view it’s far better to have the character or heritage-rated home moved within the same development site and consume the overly-generous front yard setback to allow infill dwellings under design guidelines in return for not binning the original.
      The city could allow an additional unit or two over the zoning allowances where multiple lots are consolidated to help finance the proper heritage renovation and spread the costs over more units and lessen the impact on each one. It is much more expensive to keep and renovate an existing structure (or recycle the materials) than to send it off to the landfill, therefore these additional price elevations need to have some mitigation measures.

  3. The best form of affordable housing is the type that isn’t quickly snatched up by foreign investors. These are apartments that aren’t downtown.
    It’s strange that people balk at Vancouver’s affordability, yet strive to “maintain the character of the neighbourhood.” Like Commercial Broadway.
    The best way to increase affordability is to build housing near transit, in places other than downtown where it’d be quickly bought out by chinese prospectors.

    1. In that case Kyle the best type would be a character house that cannot be torn down or up zoned. Seems to be offshore owner repellent.
      My heart bled very little for the poor Todds. Imagine only $3 million for their home, however will they cope? Time to start scrimping on the grey poupon. I wonder what they paid for that house. Were their lives mired in misery five years ago when it was probably worth half that?

  4. I love the photo. a sad looking couple, hunched over and huddled together as though they’ve just endured a natural disaster. 3.5 million down to 3 million. Oh, the humanity.

    1. This couple is almost up there with the “we are the creme de la creme of the city” lady from many years ago. At least they own a house.

  5. Gord, you’ve nailed it.
    This is something I’ve never understood – how can property owning people possibly care about “affordability”?
    I think they are paying lip service to a nice and pleasant idea, but would never be willing to implement the policies actually needed to achieve it.
    Because, ultimately, if rents are to fall, property prices must fall too. Assuming, of course, there is SOME positive connection between rents and property prices… which there must be! Unless we are willing to throw all economic theory out the window – (so the price of a revenue generating asset has no connection to the amount of revenue it generates…? We truly are living in an unfathomably complex world then – and there are apparently uncountable opportunities for arbitrage no one seizes.)
    So everyone in Vancouver perpetually drones on about “affordability”, but since property owning voters will NEVER condone a policy that has any effect on their property prices, don’t hold your breath for rents to fall. It doesn’t bother me that my rent is high – it’s the hypocrisy of the public dialogue that really infuriates me (that hypocrisy on proud display by Barb Yaffe).

    1. Well, you’d have to care about those who don’t own property, and take a much less entitled attitude to your real estate investments. Did it ever occur to anyone that there is no guaranteed windfall return on real estate and perhaps the doubling of property values in the last decade had an equally sinister dark side? Most people who own in this city didn’t pay twenty times their gross yearly income for their homes, and probably NEVER imagined when they bought their homes to live their lives in that this would happen. Yet we are supposed to see it as an enshrined right? I’m supposed to feel sorry for a generation that enjoyed cheap post secondary, an abundance of jobs that offered things like benefits and pensions, and the opportunity to buy real estate and pay it off in a reasonable amount of time? Because a tiny smidgen of equilibrium is too much? What about the forever children in your wake?
      Please don’t take personal offense to
      to the above. I understand how the chips fell but I do not understand the resistance to correction when it is this far out of balance. I certainly don’t wish hardship on anyone but it seems blatantly obvious that one person’s windfall is another’s starvation, and quite frankly we’d all be better off if one of our basic human needs wasn’t a commodities game. If you found a home, lived and loved in it and eventually paid it off within your means then you have already won.
      Ps. Kyle, they don’t build affordable housing these days, but they do tear it down.

  6. Nothing is forever, and the reality is character homes continue to be demolished because the only way a developer can make a return on investment is to build new and bigger. Small ugly homes on big lots sell for a premium versus character homes, because they are not considered “heritage” and so are easier to get permits for demolition.
    Character homes would once again become valuable if we allowed our city to up zone with a FSR bonus on older homes, as developers would be able to realize a profit by converting them to multi-family units.
    An added bonus of building multi-family units is elderly residents will be able to age in place by downsizing in their neighbourhood, – something not possible in most of Vancouver, and the reason why retirees disappear to condos downtown.
    Why current zoning ain’t working

  7. Jeez. This is the story of Canada – where we’ve seen home prices double to triple in all 26 major urban centres last decade due to easy money policies and increased CMHC subsidization of mortgages. 70% of folks are owners. Do you think they want to the gov to bring in interest rate or CMHC policies that would bring down home prices? They think they’re millionaires. That is why this gas bag is still being pumped. Young homebuyers are being sacrificed to keep the economy going.

  8. If you want to preserve older character buildings it’s better to use a carrot, not a stick, much as was done with RT7&8 in Kitsilano. Then reconsider the whole Laneway House boondoggle, to whit: only allow the bonus density of a Laneway House as an incentive for retention of a character or heritage house. Don’t give the Laneway bonus as a reward for tearing down existing homes. Finally, provide Building Bylaw relaxations and tax incentives to upgrade older homes.
    Simple eh?

  9. The road to hell is paved with good intentions.
    I think Vancouver needs to get clear about what precisely is worth preserving in these so called character homes? Admittedly this is not at all clear but is it just the street facing facade or is it the whole building? Related to this is the tiresome assumption that houses which are older cannot be surpassed by new designs.
    And why can’t you just address these concerns through design review and design guidelines?
    Perhaps your government could give out awards to character buildings and a 10% annual tax break on property taxes for registered character buildings? As I see it right now your problem is that owners of character buildings are being punished; this makes no sense. You should reward them!

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