October 22, 2007

New York thinks we're expensive!

It may not be news to us – but the New York Times just ran a story on how expensive condos are in Vancouver:

 “When I try to explain to friends in the States how much it costs here, they don’t believe me,” Ms. Gill, 29, who is a real estate broker, said of the city’s high prices. “They say, ‘You’re lying.’”
But $840 a square foot — which is how much the couple paid for their condo — is not unusual these days.
Downtown Vancouver is the most expensive housing market in Canada, according to a survey of 21 cities worldwide released last April by Century 21. The average sales price for a condo in Vancouver was around $419,750 in 2007, up 14.6 percent from last year, according to Royal Le Page Real Estate Services. The average sales price in Toronto, Canada’s largest city, was about $241,818, up 15.7 percent from last year, and in Montreal, $201,818, up 4.6 percent.

The whole story here.

Read more »

“There’s never enough” – that’s the first rule of non-market housing.  Advocates for affordable housing in a tight market like ours have no difficulty making that case: the evidence is abundantly apparent, whether in the media or on the streets.
So it’s easy to lose perspective.  In fact, the list below (circulated by the Mayor’s office) came as a bit of a surprise to me.  I hadn’t realized there had been any completed projects this year, nor that there were that many units under construction. 
Perhaps because Councils unanimously support these initiatives (with only a couple of exceptions I can think of in 15 years on Council) and the Left is reluctant to give the Right any credit at all, gains are discounted and difficiencies magnified.
It does look as though most of the housing to come will be the maintenance of existing SROs, upgraded and secured and concentrated in the Downtown East Side and Downtown South.  Unfortunately, it doesn’t seem to make much difference, either in politics or perception.   And in fact, I wonder if it really makes a difference to homelessness.  The truly dysfunctional rarely find a place in these government-funded projects, since they’re often too disruptive to those who wish to maintain a stable environment. 
Nonetheless, whether sufficient or not, it’s an improvement.  And that’s always worth acknowledging. 
Social Housing Projects Completed in 2007:

Project Address New Units Converted Units Grace Mansion 596 East Hastings   85 units Helping Spirit Lodge 1475 Kingsway   36 units Southview Heights 3131 East 58th 57 units   Triage on Fraser 5616 Fraser St.   30 units Jackson Ave. Hsg. Co-op 230 Jackson Ave.   23 units The Vivian 512 Powell St.   24 units Total 6 projects/255 units 57 units 198 units

Social Housing Projects Under Construction:

Kindred Place 1321 Richards St. 87 units   Beulah Gardens II 3355 East 5th 89 units   St Vincents 4875 Heather 60 units   Triage on Hastings 65 East Hastings 92 units   Icelandic Residence 2020 Harrison Dr. 77 units   Woodwards Singles 131 W. Hastings 125 units   Woodwards Families 122 W. Hastings 75 units   Passlin Hotel 768 Richards St. 46 units   Pennsylvania Hotel 412 Carrall St.   44 units Total 9 Projects/695 units 651 units 44 units

Social Housing Projects Funded and in Development:

Portland on Main 980 Main St. 80 units   Small Suite Demonstration 337 West Pender 120 units   Olympic Village, Parcel 2 151 West First Ave. 88 units   Olympic Village, Parcel 5 85 West First Ave. 99 units   Olympic Village, Parcel 9 1685 Ontario St. 69 units   Union Gospel Mission 601 East Hastings 133 beds, rooms and units   Carl Rooms 335 Princess Ave.   47 rooms Marble Arch Hotel 518 Richards St.   145 rooms Orange Hall 329/41 Gore Ave.   27 units Orwell Hotel 456 East Hastings   55 rooms Park Hotel 429/33 West Pender   56 rooms Molson/Roosevelt Hotel 166 East Hastings   45 rooms Savoy Hotel 258/60 East Hastings   28 rooms St. Helens Hotel 1161 Granville St.   98 rooms The Rice Block 404 Hawks Ave.   44 rooms Walton Hotel 261/5 East Hastings   51 rooms Lu’ma/Aboriginal Mothers 2019 Dundas St. 10 units   Trio Downtown Eastside 30 units   Circle of Eagles 1470 East Broadway   17 rooms Lu’ma/Aboriginal Families Broadway/Nanaimo 20 units   Total 20 Projects/1262 beds, rooms, units 649 units 613 rooms Grand Total 35 Projects/ 2212 beds, rooms, units 1357 units 855 rooms Read more »

Andrew Ramlo and David Baxter of Urban Futures were fast off the mark with an analysis of the latest census figures on families and housing, just released on September 12.  And what they chose to highlight is so counterintuitive, it’s difficult to grasp.
Despite all the cranes on the skyline and the overhyped marketing campaigns, this has been one of the slowest periods of housing growth – in both real and percentage terms – in three decades.

The 2006 data show that the 2001 to 2006 period represented the slowest growth in the region’s housing stock since the early 1970’s.  In addition, the stock of rental housing actually declined by over 10,000 units between 2001 and 2006….

The most recent Census release showed the number of occupied dwellings in the Vancouver CMA (essentially the same geography as the GVRD), has grown to 816,765 dwellings by 2006, eight percent more than the 758,385 that were occupied in 2001 (Figure 1).

While headlines bemoan what is perceived to be a white hot construction market, this actually represents the smallest percentage increase in the occupied housing stock the region recorded in the last 35 years, even below the 11 percent increase that occurred during the deep recession of the 1981 to 1986 period. It is also the second smallest absolute increase, falling just above the 1981 to 1986 low of 52,330 additional occupied dwellings.

And that’s one of the reasons so many young people are living at home.  (It’s just not kids; over 10 percent of adults between the ages of 30 and 24 were still at home.)
You can find the full report here.
Ironically, these numbers come out at a time when opposition is building to cut EcoDensity off at its knees.  Letters are being written, flyers distributed, petitions circulated and protests organized, all with the same intent: to ensure that as little new housing as possible will be built in the existing neighbourhoods of Vancouver. 
So long as the critics don’t have to take on the issue of housing supply raised by these numbers, they can probably get away without having to address the complex issues of affordability and alternatives for a new generation.

Read more »

A good piece in The Tyee by Cynthia Yoo, reporting from the frontlines of the rental housing crunch.

… my idyllic summer evening turned quickly into a battleground scene. Dozens of flip-flopped, lululemon’ed denizens milled about the front grounds of a building in one of the most prized postal-codes in the city… These lotus-eaters’ fabled Shangri-las are Kitsilano, the West End and Commercial Drive. And to nab those coveted 1 or 2BR suites, Vancouverites often resort to bribery and bidding wars, lies and fists-full of cash.

She picks up on a comparison rarely made:

“The United States, although constantly misconstrued by the left-liberal coffee-house ‘progressives’ in Vancouver as ‘right-wing’ is in fact one of the more progressive places in terms of affordable housing programs,” according to Howard Rotberg who has written extensively about rental housing issues.
The U.S. has everything from transferable affordable housing tax credits issued to affordable housing developers who sell them to provide early stage financing, to dedicated affordable housing mutual funds. He says B.C. (and Vancouver in particular) is in fact one of the least progressive jurisdictions in North America.

And then this:

The solution, then? Ramlo, Gurstein, Durning and Rotberg are all waiting to see what happens with the City’s new EcoDensity Planning Initiative, but aren’t holding their breath. But “the one real value to EcoDensity initiative is the ‘initiative’ part,” says Ramlo. “A conversation is starting as we as a city are realizing we have to densify and work on the problems.”

Oh, but they are holding their breath. As opposition gets organized to EcoDensity – a key plank of which is increased affordability by providing a greater diversity of housing – it counts on a passive response by those who would defend it. And those on the left whose priority is affordability are often reluctant to speak out for several reasons:
(1) They believe in neighbourhood activism. And if neighbourhood activists are fighting EcoDensity, they prefer to remain unaligned.
(2) EcoDensity is a policy developed by Sam Sullivan and the NPA. If it works, the right gets the credit.
(3) EcoDensity is not perfect. It won’t do everything that’s needed, and what it may do won’t happen quickly. Trade-offs will be required. In this case, the Perfect can drive out the Good. The result: neither the Perfect, nor the Good.
Thus the problem worsens, and both the opponents of EcoDensity and the affordable housing advocates can then re-unite: City Hall (specific politicians to be named here) is doing nothing to address this emergency!

Read more »

As I learned on Council, when it comes to the issue of housing, especially in the Downtown East Side, advocates are fearful of too much success.  Some fear resources and sympathy might dry up if the problem is addressed.  So the problem is played up and the progress played down.
The danger is that we might miss some pretty amazing progress.

Read more »

My latest column in Business in Vancouver:

July 10-16, 2007; issue 924
Housing crises can generate solutions
Having been on city council for 15 years, I’ve been through a housing crisis or two. The housing crisis of ’89 – now that was a good one. I still remember fondly the council meeting in which we pushed through about a half-dozen different initiatives in an afternoon.
That’s the upside of a good crisis: you can do things that otherwise get put off for “further study” and more “public process.”
Sometimes there’s a good reason for putting off action: with a little more time, the crisis goes away. When dealing with a phenomenon dependent on external factors like interest rates and incomes, circumstances can quickly change.
And then you find out that the crisis was exaggerated.
But politically, so what? If people believe that no one can afford to buy a house, politicians must respond creatively. And sure enough, some creative ideas are coming forward.

Read more »

The New York Times reports on how the commodities boom in Western Australia has affected the price of housing in Perth.

Perth, though about the same population size as Greater Vancouver, sprawls to the north and south, consisting largely of detached, single-family housing.  If Randal O’Toole’s argument was correct (that limiting land supply forces up the cost of housing), Perth should be one of the more affordable places in Australia.   

For more on Perth (and images of its suburbs), go here.

 July 5, 2007

Boom in Commodity Prices Makes Perth Attractive to Many, Unaffordable to Others

PERTH, Australia — The global commodities boom has been very good to the state of Western Australia and its capital, Perth. While the broad Australian economy has had some slow periods and property prices are rebounding, Perth has been humming.
Kris Thomas seems perfectly placed to ride along with the good fortunes of the city. Mr. Thomas, a 25-year-old native of Perth, is a computer programmer for an oil and gas company at a time when the industry cannot find enough skilled people.
But he is packing his bags and moving east to Melbourne, not because he does not have a good job but because he can no longer afford a decent place to live in Perth.
Mr. Thomas, who is single, earns 57,000 Australian dollars, or $49,000 a year. The average wage in Western Australia rose last year to nearly 56,000 dollars, putting it the closest to salaries in the largest Australian state, New South Wales, in 13 years.
“It’s nearly impossible to get something in Perth at the moment,” Mr. Thomas said. “Housing prices in Perth have increased heaps, but salaries haven’t.”

Read more »

Last November, I wrote a post (here) on the dilemma of the three-storey walk-up, the plain stucco boxes that proliferated in the apartment districts of Vancouver from 1945-55:

For the last three decades, these buildings have been a reserve of lower-middle-income affordable rental housing….
When the real-estate market was hot in the late 1980s, … low-rise apartments were being replaced by highrise condos with less units. Result: population density reduced, housing affordability lost, views compromised, tenants distressed, neighbours angry, politicians unhappy. Pretty much a lose-lose all the way around.
The Council responded by imposing a rate-of-change condition on vulnerable neighbourhoods like the West End, in addition to a rezoning that took away much of the incentive to redevelop. More positively, developers were redirected …
This combination took the pressure off, rents remained stable, evictions were almost unheard of, and, as they say, the dog didn’t bark…. (But) if there’s any significant loss in the affordability of the three-storey walkup, then, believe me, the pit-bull of politics will be unleashed.

So … who let the dogs out?

As regular PT reader Sungsu noted in a comment, a just-released report from City Hall tallies up some of the recent damage:

In Kerrisdale, an issued development permit allows 41 strata units to replace 67 rental housing units at 5951 Balsam (Bermuda Manor). The sale price for the new units is almost $900 per square foot. A second approved development application at 2260 West 39th allows the replacement of 23 rental housing units by 12 strata units … (The city has already had to issue demolition permits for 260 rental housing units this year alone.)

In the Sun today, Frances Bula sums up the recommendations from staff:

…. any demolition or conversion to strata would have to come to council for approval. While the door is left ajar for developers who come to the city with creative proposals to build replacement housing, it would be shut for anyone who simply wants to tear down old rental apartment buildings to replace them with strata-title condominiums.

Next Tuesday, Council will be asked to approve a recommendation to go to a public hearing – effectively freezing any further development applications.

I don’t think Council has much choice on this. As the report notes, the city no longer has large (or even many small) development sites to take the pressure off the existing rental stock. And another story in the Sun explains why that pressure is so excrutiating:

(Relator Bob) Rennie thinks prices may level off, but doesn’t see any dramatic drop.

It can’t keep going up as fast as it has been,” he says.

But we watch for what levels it off — interest rates, if we’re not working, or there’s an oversupply. You just watch those three things, and none of them seem to be visible on the horizon.”

The other factor, of course, is that a substantial amount of Vancouver real estate sells to people who don’t live here. Some are from Europe and Asia, some from the U.S., some from Alberta. Rennie estimates 15 to 20 percent of downtown condos are sold to non-residents. And he sees the 2010 Olympics as a $5 billion advertising campaign for Vancouver’s high quality of life, which may attract more international attention.

The thing that nobody likes to admit is that Vancouver at a certain level is looked at as a resort city,” says Rennie.
“Nobody likes to talk about it, but we are.”

I hesitate to use the cliche ‘perfect storm,’ but there are a lot of heavy breezes blowing – and any local politician who fails to respond could well be blown away.

The problem, of course, is that stopping change rarely achieves any solution. Some way has to be found for the aging housing stock to be replaced without sacrificing the lower-middle-income renters.

Over 50 per cent of Vancouver households, and over 80 per cent of younger households, are renters. They face a triple whammy: Rapidly rising condominium prices price low-income earners out of home ownership; redevelopment of rental buildings is eroding the housing stock; and income growth is not keeping up with increasing rents.

That’s a lot of voters.

Read more »

A Price Tags reader was reading Michael Geller’s blog entry on Australia’s Gold Coast, and one of the things that jumped out at him was this:

There is a 50-per-cent cap on the number of foreigners who can buy into any new multi-family building in Australia.

“Very interesting,” he thought, “particularly given the apparently high rates of foreign/absentee ownership in our downtown core.  …. There are fears that we are becoming a “resort city” of sorts.  Could the City actually legislate a restriction on foreign ownership?  Or tax foreign investors with multiple homes differently…. and perhaps use increased revenue to fund more social housing?”
So how much foreign ownership is there?  He asked a numbers guy who works with census data (and since I haven’t asked whether he’d mind seeing his name in print, we’ll keep calling him Numbers Guy):

For the first time this census includes numbers of permanently occupied and total numbers of dwellings (by block) so it’s possible to see the ‘occupation rate’ of city blocks.  

Among the lowest is Coal Harbour, which you’d expect, and even there 60% of the dwellings are occupied by permanent residents. Concord Pacific runs at between 75% and 90% occupied by permanent residents. Some of the vacant units will of course be just that, those being sold or bought or rented, but empty on Census day. Some of the ‘absentees’ are Albertans, so until we make them leave Canada and join Texas as a confederation, we can’t really penalise them. Of course, they already pay more tax as they’re not able to get the homeowners grant (and they consume very few city services when they’re not around).

That won’t settle the issue, of course.  But it certainly reflects the difference between Canada and Australia on immigration policy (5.85 migrants per thousand population for Canada; 3.85 for Australia) and acceptance rates for asylum seekers  (36 percent for Canada; 20 percent for Australia).

Read more »

From the National Post

  Brian Hutchinson National Post

CREDIT: Steve Bosch, CanWest News Service A forest of condominium buildings in Vancouver. “View corridors” between towers are protected, giving most condo dwellers a glimpse of the sea or mountains.

Canadians are living in houses bigger than ever, even though our families are shrinking. In this, the second of a three-part series, the National Post examines the backlash against living large.
– – –
Do not feel bad for Gordon Price. A former Vancouver councillor, he lives in what he calls “the smallest home” he has ever owned. It is in a 1950sera tower that borders Stanley Park, the city’s crown jewel.
The West End apartment he shares with his partner measures approximately 1,100 square feet, which makes it about half the size of the average Canadian home. One small bathroom, no garden, limited storage and parking.
Like many people living in his densely populated neighbourhood, Mr. Price has no children. This helps free up space in his small home.
His apartment is bright and airy, with large windows that overlook the tranquil Lost Lagoon. The simple, open design fools the eye and makes the place seem much larger than it really is.
“It’s not the size that counts,” says Mr. Price with a wink. “It’s what you make of it.”
Vancouverites are used to making do with less. Most have no choice; the city is sandwiched between water and mountains, and real estate here is astronomically priced, the highest in Canada. Traditional single-family homes — even small bungalows — cannot be had for less than $500,000, making them unattainable for even moderately high-income earners.
Figures released last week indicate that detached bungalows in Vancouver sell for an average of $758,000; in Toronto, they sell for an average of $387,744.
Other Canadians may wonder how people in Vancouver could possibly cope inside such small homes; Mr. Price’s apartment is actually a generous size, by West End standards. And his neighbourhood has one of the highest population densities in North America, with about 20,000 people per square kilometre. That is more than four times the density of Montreal, one of Canada’s oldest and most congested cities.

Read more »