This is astonishing, and not in a good way:

.

BURNABY

.

From Business in Vancouver:

A wave of land speculators led by mainland Chinese buyers is snapping up old Burnaby rental apartment buildings, driving per door prices above $350,000 and razing the units for high-rise condominium construction.

The land rush is centred around four transit-linked Burnaby town centres where at least three dozen apartment buildings have been bought for demolition in the past year. Unlike Vancouver, Burnaby has no restrictions on tearing down low-cost rental apartments and building condominiums in their place. Last year, the suburban city issued 419 demolition permits and are averaging 34 per month so far in 2015. …

“The apartments are mostly in two and three storey wood-frame buildings that are 40 or 50 years old, with rents below the Metro Vancouver average.

According to Williams, all of the apartments deemed for development are being replaced by condominiums that will be sold to investors. “Most of these will be put back into the rental market, but they won’t rent for $850,” Williams said. Generally, tenants are given one-year notice and are offered an opportunity to buy or rent in the new condo tower, he said. …

“I have 1,000 buyers looking for apartment sites,” said Bill Goold, a specialist in multi-family sales. He said it is not uncommon to have 15 buyers lined up for an open house. “We are seeing multiple bids.”

Goold confirmed that nearly all his recent Burnaby land development sales are to investors from mainland China, which he visited last month on a successful sales trip. “One buyer from China flew over here and paid $40 million cash for a Metrotown site,”  said Goold.

 .

I’m shocked, actually.  I has assumed Burnaby had many of the same protections as Vancouver.

For decades now it has not been possible in this City to convert purpose-built rental apartment blocks to condominium, or even demolish them unless replacement stock was provided and the existing tenants had supported the changes in a super-majority vote.  Nor was it even possible in many neighbourhoods like the West End to replace an existing low-rise walk-up with a larger building, thereby diminishing development incentive, assuming it was even allowed under a rate-of-change provision that regulates the speed of change.

A problem had arisen in the late 1980s in Kerrisdale: a few 1940-50s walk-ups were demolished and replaced with condo highrises, generally around 20 storeys.  In addition to the loss of lower-income housing, there was also a drop in density – a 30-unit rental building was replaced with a condo of large expensive units with less people overall.  And then, of course, there were issues of view blockage, evictions and fear of accelerating change in the neighbourhood.

From council’s point of view, it was lose-lose-lose: less rental stock, less density, less affordability.  If that trend had extended to blocks of affordable housing in South Broadway, the West End, Mount Pleasant, it was obvious to the NPA council at that time that they would have a full-blown political crisis on their hands.  Indeed, they did.  Jim Green of COPE came close to threatening Gordon Campbell’s majority in the 1990 civic election on this housing issue.

So it was stopped through changes of policy and zoning.  Stability, over the objections of many apartment owners, was restored; demolitions and conversions were no longer serious options.  Rents, regulated provincially, have remained relatively constant, but the cash flow from the aging building stock has been sufficient to maintain them in good condition.  Other than the occasional ‘renoviction’, there has been stability in the rental market – still tight, but at least affordable for middle and lower-middle-income renters, particularly if they can save on the cost of transportation thanks to the frequent transit network.

But recent tremors seem to be shaking that stability in Burnaby.

.

Metrotown

South Metrotown in Burnaby

.

Unlike the previous trend, this one is being exacerbated by the impact of international capital, able to bid up properties beyond the constraints of rents determined by the income levels of local renters.  If this stock is now subject to speculative pressures disconnected from Vancouver incomes, the spillover effects from Burnaby could be regional as the market supply is diminished.  If low-income renters are pushed further away from rapid transit, the results could be even worse.

Yet this is occurring in Burnaby with a secure left-of-centre council that, unless I am missing something, seems content to allow one of the most significant affordable rental neighbourhoods, close to transit, to be bulldozed for more condo towers.

Or am I missing something?

Comments

  1. I’m speculating, but this might be a Vancouver Charter versus Local Government Act thing, whereby Burnaby doesn’t have the legislative authority to enact some of the Vancouver provisions you describe. Given market trends around SkyTrain stations, it’s hardly astonishing though, no? Another question would be where are the three-storey walkups of the future being built, and if they’re not being built, why not?

  2. This is exactly the issue with Chinese investment, its not going to stop at Westside homes or mansions in West Vancouver as people politely suggest. There is nothing stopping a complete takeover of all condo projects in the Vancouver region. Its actually a smart strategy by them, they see the home prices are driven up so people will naturally be forced into smaller apartments which the Chinese can then overbid and buy up too. If you are only allowed to take $50k USD a year out of China how are they able to do these huge cash purchases? Oh here’s how:

    http://www.zerohedge.com/news/2015-05-04/how-chinese-oligarchs-used-fake-trade-invoices-launder-almost-1-trillion-globally

  3. Well for one I am glad that Mr. Price has started to write about real issues in the region as opposed to dedicating his blog and his influence to marveling at the cuteness of the latest 10 block bike-lane.

    Now while Burnaby seems to be obsessed with increasing its beloved contingency fund (now in 800 million neighborhood – yes you read that well) while increasing taxes each and every year we have to also recognize that that walk-up rental stock around Metrotown is reaching its end of life. These are not concrete towers from West End that can potentially last several hundred years but poorly made wooden structures that are nearing the end of their usual 50 year life. So they are bound to be redeveloped. The question is whether Burnaby should be forcing developers to create some low income rental housing. But Burnaby has zero interest in that – their social housing project is called Vancouver.

    1. “The question is whether Burnaby should be forcing developers to create some low income rental housing. But Burnaby has zero interest in that – their social housing project is called Vancouver.”

      Yes, I’ve heard others say the same thing – that Burnaby is not interested in promoting the construction of social housing within its borders.

  4. The selling out of our cities continues. I wonder how much land area is now controlled by those who live offshore?

    Of course its amazingly hypocritical that we have heard so little from Burnaby’s mainly NDP MLA’s on this loss of affordable rental housing. But, since one of them shares a bed with Burnaby’s mayor, perhaps that is understandable.

  5. A few thoughts:

    1) Aside from displacement concerns, this is a very appropriate place to allow towers. The proximity to Skytrain, existing retail, and parks are all great.
    2) The surrounding area is full of examples of how shiny new residential towers don’t stay new and expensive forever.
    3) The above is cold comfort for existing renters who can’t wait 30-40 years for the towers to age.
    4) I would feel a lot better about these rezonings if the surrounding single-family neighbourhoods were upzoned at the same time.

  6. Only more supply guarantees a reasonable balance of price and more rentals.

    Social housing essentially requires a tax subsidy, or a law. Burnaby, or Vancouver, could easily require each new building to contain, say 10%, below market rentals, say 30-50%, by law. The question is ” why is it not done?”

    Homelessness can easily be dealt with, but neither city chose to act on it. They just pay lip service. Why is that ! Because the homeless don’t vote ?

  7. Reblogged this on Metrotown Residents' Association Blog and commented:
    Need a moratoreum on demolitions of 3 storey walkups until Burnaby has a plan. The Mayor’s monopoly on council and hand picked commissions and commitees ensures that debate is stifled and that Burnaby will be the least affordable and least accessible rental market in the Province.

Leave a Reply

Your email address will not be published. Required fields are marked *