This is astonishing, and not in a good way:
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.
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?