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Translink wants more money

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Public transit has an impact on property values (both positively and negatively) so isn’t it only right that the good folks at Translink get some of that boom-time real estate money?

The new TransLink board is looking at real-estate partnerships to solve the problem of spiralling costs for Metro Vancouver’s burgeoning public transit system, says board chairman Dale Parker.

In an interview with The Province, Parker said there are opportunities for TransLink to cash in on the added real-estate value created by rapid-transit lines and station hubs, and TransLink should look at them.

“One of the things we’d certainly like to look at is what are the opportunities for TransLink to benefit from the real-estate development that goes on around the stations,” Parker said following a Monday night public hearing on the property-tax issue. “There’s going to be increased density — can we participate and benefit in the sense of partnerships in real estate?”

Yes. Can we please? Apparently we can!

The board was created in November by the B.C. government, which abolished the old governance structure and a TransLink board made up of elected municipal politicians.

“The new legislation gave us greater scope for participating in ownership around the lines from what we were able to do before,” said Parker.

And what a perfect time to have public transit speculate on real estate! After scrapping a very unpopular tax on owners of non-residential parking spaces the Translink board is looking to make up the 18 million dollars elsewhere:

Rather than slash the $900-million-plus budget for the fiscal year beginning April 1 by $18 million, the board is expected to levy the property tax in some way that stings homeowners and business owners equitably.

Currently, business owners are taxed at a rate five times that of a homeowner for properties of comparable value.

“One thing the board does want to do is focus on what other sources of revenue, certainly other than property tax and fare, because those two may very well be close to being maxed out,” said Parker. “The public is demanding a much larger expanded system and we’re going to have to figure out how to pay for that.”

I’ve got an idea! How about pull-tabs or scratch and win? Hey! You never know!

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Anonymous

Anonymous 2008-03-20 17:50:46,

Did you go to school? Do you know how to think? Why would someone want to sell in a rising market? It's because the have to!! That's the same reason why someone will sell in a falling market!!

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blueskies

Whether they want to sell or not may be immaterial, one way or the other that property will be on the market.

very true!

from weak hands to the strong

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Clarke

I suspect that when things crash there will be more than a few people that are terribly overextended, and probably are holding condos or SFH that will be in negative equity territory. Whether they want to sell or not may be immaterial, one way or the other that property will be on the market.

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patriotz

Keep in mind people paid a lot for their RE and are expecting a good return.

People were expecting a good return from their Nortel shares too.

People can expect anything they want. RE will only sell for what buyers are willing to pay. And I don't go along with this "people don't have to sell" stuff. People do have to sell, except for those making lateral moves within the market, which are irrelevant to supply and demand, and investors in sustainable cash flow positions, who will be incented to get out by falling prices. Maybe not right away, but soon enough. Don't forget the builders too.

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scullboy

Anon,

It's still a seller's game in that case. When prices are skyrocketing and demand exceeds supply, buyers tend to jump at any opportunity and compete with each other. In the case you cite, the sellers merely have to wait Sooner or later the seller MUST sell, particularly with home prices falling due to oversupply.

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Anonymous

I have a friend who is a RE agent. On Jan 1st he guaranteed me RE would go up 10% this year and said it’s still a seller’s market. I saw him the other day and he now says 10% gain only for downtown and it’s turning into a buyer’s market. Funny how RE agents can change their tune so fast.

Actually, a down market is neither a buyer's nor a seller's market. Sellers don't want to sell because they think their property is worth more than buyers are actually willing to pay. Buyers don't want to buy because they think (correctly) that prices will only go down further. This explains why the number of transactions in places like LA is at an all-time low recently.

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Anonymous

I have a friend who is a RE agent. On Jan 1st he guaranteed me RE would go up 10% this year and said it’s still a seller’s market. I saw him the other day and he now says 10% gain only for downtown and it’s turning into a buyer’s market. Funny how RE agents can change their tune so fast.

Actually,

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jesse

Oops meant offer HIM 50% of the returns.

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jesse

"On Jan 1st he guaranteed me RE would go up 10% this year"

In that case I have a proposition: I'll put up all the capital and offer you 50% of the "guaranteed" returns as long as he covers all losses. Since losses are by definition impossible it's monay in da bank.

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King Leaky

If a RE agent will GUARANTEE a 10% increase in one year in any area take them up on it before the kool-aid runs out! If they will put their money where there mouth is and make up for any difference in market price of a unit to total a 10% increase you can't lose. Take out a 40 year mortgage, put no money down and walk away with the extra money at the end of the year no matter what the market does.

..but I'm guessing his guarantee is meaningless and not backed up with cash right?

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mathamatical

Time can only tell what will happen. As a first time buyer I'm hoping franko is correct. If you look at the listings getting posted it's climbing at an alarming rate. Keep in mind people paid a lot for their RE and are expecting a good return. They will be people who will lower their price and some that will just refuse.

I have a friend who is a RE agent. On Jan 1st he guaranteed me RE would go up 10% this year and said it's still a seller's market. I saw him the other day and he now says 10% gain only for downtown and it's turning into a buyer's market. Funny how RE agents can change their tune so fast.

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Drachen

"The 81 crash and the 90 correction saw price drops of 38% and 22% in less than a year"

Ok, so if it drops a mid 30s % per year it's still got at least two years of falling to do and I doubt we'll do much more than just get over the hump this year, proper price drops won't be around 'till late this Fall at the earliest.

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franko

It should be noted that the above is based pretty much on SFD's, as condos did not play such a significant role in those days. The building frenzy of all those condos will only add more fuel to the meltdown.

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franko

"it's still a few years before prices will be the bottoming point" All excitement and pumped joking aside, I strongly disagree. Vancouver is kind of unique when it comes to crashing, and Robert Shiller did'nt call it the "bubbliest city in the world" without a reason. It has a history of holding in there longer than other areas and drawing attention to it's insanity with awe, only to blow up in dramatic fashion. The 81 crash and the 90 correction saw price drops of 38% and 22% in less than a year, and languish for several years thereafter. 95 also saw a sudden price drop, but rather than languish, it continued to drift lower for another 7 years. The big difference is that the current bubble is unprecedented, and the bottom of the crash will not be such a mistery… Read more »

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e8005

<blockquote cite="trent">Public transit sure can’t compete on the convenience level Actually, public transit certainly CAN compete on convenience, but we generally need more density throughout the metro for this to work, which is exactly why it makes sense for Translink to enter real estate. Translink will use their muscle to ensure we don't get any more 1-storey Sleep Country buildings built beside rapid transit stations – if your municipality doesn't want density, you won't get rapid transit, fair and square! Anyway, let me explain the convenience advantage Translink can offer. More concentrated density in town centres means more people who live, work, and play mostly within their own town centre or at least within other town centres, rather than, say living in a sparse Surrey SFH neighbourhood, working at a Burnaby office park by the highway, and playing downtown. Also,… Read more »

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Drachen

Don't get too excited Franko, it's still a few years before prices will be nearing the bottoming out point.

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franko

Bout time to change the topic, no?

I'm so pumped about the likelyhood of our RE market starting to tank that I can barely contain myself, and we're screwing around with some intricacies of this translink stuff.

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Krrish2

BDK,

m waiting for statscan report and mbz4sure dh.

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vanguy

I think that Translink is right to want to keep some of the increased value that a new transit line will bring to an area. But like all things the devil is in the details. Do you they intend to actually develop land? I hope not because from having worked with some Translink people, you wouldn't believe the overpaid, under-worked attitude of that place. There is a lot of public-sector padding in Translink and to me it's not all akin to the lean, mean attitudes of the developers I've met. I imagine they'll partner with developers, and just cream a % off the top. But where it gets tricky is the conflicts of interest now inherent in the planning process. Do the planners put a stop at a location because Translink already owns the land, or do they try and… Read more »

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Burden of Proof

Mold City,

Timing a speculative market is easier with stocks and commodities because there are many indicators and technical tools to help you do that.

How do you time the speculative RE market? You could use some of the same tools – although in RE they are more limited.

In my view, we have just in the last month received the first technical indicator of a top in the RE market: affordability is at an 18 year low. Therefore, affordability is just now what it was when the last bubble burst. Until this month, prices still had a way to go before comming up against a historical cealing.

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gah

"If profit from real estate related deals will help transit, wouldn’t a downturn in the market potentially hurt transit?"

No, that is what taxpayers are for!

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Mold City

..And if privatization is the cure to all the worlds woes, why not turn a profit on everything? Roads, police service, etc. Sell the roads off and let companies put tollbooths at every intersection. Have police service available to the highest bidder. Imagine the profit opportunities!

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Mold City

Burden of Proof – thanks for the reasonable post, my question is how can you time a speculation driven market? To keep this on topic it appears that Translink is jumping into local real estate when its being driven by nothing but speculation. If profit from real estate related deals will help transit, wouldn't a downturn in the market potentially hurt transit?

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Krrish2

Krishh

"People with retardation always deny being retarded."

You don't understand what you're saying, you just type words and think it looks good. You ran away yesterday saying you need a few months to figure stuff out, what're you doing back again?

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Krrish2

Vancouver Real Estate is one and the only option for this world to invest,The city of best ever "eclipse" in R.E.Vancouver,B.C.bpe.

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