The flipper-free building
Local developer Ian Gillespie is experimenting with the idea of building a downtown condo that is affordable to a couple making minimum wage. The tower would be located on Cordova between Gastown and the Downtown Eastside. To keep costs down it will feature simple finishes, no parking, and owners would do their own maintenance instead of paying strata fees to cover repairs. To try to keep out speculators and flippers they will require the units to be owner occupied.
The 108-unit project is a collaboration involving Vancity credit union, Habitat for Humanity and a Downtown Eastside housing group. Habitat will get four condos suitable for families in the building and will choose who gets them. Another eight units, to be managed by the PHS housing society, will go to local community workers.
The remaining 96 condos will go to buyers who will have to prove that they plan to live in the units and who agree to do some maintenance themselves instead of just paying standard condo-maintenance fees. According to the material submitted to the city, nearly three-quarters of the condos will sell for less than $300,000, and more than half will be affordable to people making between $29,000 and $36,000 a year. That’s the income of an individual earning $15-$19 an hour, or a couple in which each partner makes the $8-an-hour minimum wage.
One interesting point: one of the reasons they can build this condo development for cheaper is because the land got cheaper:
The land, previously owned by developer Robert Wilson, was repossessed by Vancity last year. He had purchased it for $7.9-million in July, 2007, shortly before the city’s real-estate market deflated. It’s now assessed at $5.4-million.
Read the full article in the Globe and Mail.
July 28th, 2010 at 8:42 pm
@space889:
Miami is a long time haven for dirty money from Latin America, especially Colombia (drugs) and Venezuela and Ecuador (oil). And of course Cuba pre-Castro.
Go rent the Godfather Part II some time.
Mr. Market doesn't care where money comes from. Economic fundamentals always prevail.
July 28th, 2010 at 5:57 pm
@Recently Bearish:
Whew, that's good, wouldn't want to trigger another 400 bps rate cut (particularly from .75) and god knows what the CMHC would do with another $250 billion of taxpayer guarantees.
Oh wait, are these cheap shots in violation of the Morality of Government Spending Criticism Act?
July 28th, 2010 at 5:47 pm
@space889:
Ever here of Miami? That was in the US last time I checked. It has also seen a 45% drop in RE prices.
July 28th, 2010 at 5:44 pm
Maybe some blowback from the escalating tax regime that has been insidiously imposed on BC taxpayers under the guise of 'rates and fee creep'. At 6:00 on Global Vaughn Palmer will supposedly list the hikes in direct and indirect taxation that has been foisted on the BC taxpayer. I hope they do a forensic analysis on where the money is going, but that might ignite a political conflagration so I won't hold my breath for too much truth from a Global news cast. Still I would hope that even the bozo's out there have to finally be picking up on how the fund flow to public service entities is draining the public coffers to the extent that services can no longer be delivered because of outrageous salaries and perks.
Remember this….everytime its announced that more money is going into healthcare ( for ex) the unions immediately go on strike and claw back any money that has been allocated for services and equipment. This results on moneies only servicing the unions and nothing of the additional tax dollars going into the schools , hospitals etc etc….net zer for the taxpayer. The unions then go right back on attack mode and cry that services are underfunded….after having stolen all the money…..outrageous…..like the kid who kills his parents asking for clemancy from the judge because he's an orphan. Over 90% of the healthcare budget gets sucked away for wages and outrageous pensions….how is the kids hospital ever going to modernize if the union pigs keep their cash from going to the equipment they so desperatley need?
July 28th, 2010 at 5:43 pm
@Recently Bearish
There is an important NOT missing from my last post – almost certain that the numbers will NOT be lower than those of 2008.
July 28th, 2010 at 5:40 pm
Reviewing Paul B & Larry's numbers (and VHB's tallys), it seems to me that there have been around 2097 sales so far in July, with 2 days left. If that number is roughly correct, it is almost certain that this month's sales numbers will be lower than those in 2008, but equally certain that it will be the 2nd lowest July sales in 10 years (and only marginally higher than that 2008 low).
July 28th, 2010 at 5:35 pm
@paulb.:
Those SOLDs are killer. RE agents must be feeling the pinch this summer.
July 28th, 2010 at 5:20 pm
New Listings 141
Price Changes 132
Sold Listings 70
July 28th, 2010 at 4:04 pm
@space889: Plus, IRS agents carry guns.
July 28th, 2010 at 3:51 pm
@patriotz: well a lot of mainland Chinese people still rely on business in China to generate income so A and/or B does matter to them. Also I think Canada and US have a tax treaty which make things easier while I don't think China have a tax treaty with US. How much it mattesr I don't know since I'm not familiar with owning property in US and their income tax codes, just heard some horror stories.
Regardless I think dirty money probably just don't like US when Canada offers so much more safety and way more social benefits.
July 28th, 2010 at 3:30 pm
@space889:
That simply isn't true. I mean that should be common knowledge in Vancouver, as people here have owned vacation properties in Pt. Roberts, etc. for decades.
You are liable for US income taxes if (A) you are a legal resident of the US, or (B), you spend more than 181 days a year in the US, or (C) you are a US citizen (but the first $75K is exempt if you are non-resident). (A) and (B) are the same as Canada.
Anyone who owns any property in the US (RE, stocks, etc) is also liable for US estate taxes (on the US property), but I think that only applies to value > $2 million or so.
July 28th, 2010 at 3:23 pm
Here is another piece of bubble news, from Hong Kong this time.
http://news.mingpao.com/20100729/gab1.htm
The land auction concluded yesterday with a transaction price of 10.4B $HKD, resulting in a price of $32000HKD ($4200 CAD)/sq feet.
Of particular interest is that the sq.ft price $4200 CAD/sq is 30-50% higher than all the home sales transactions nearby. My enquiring mind would like to know why a builder is willing to pay $4200 for just the raw land and somewhere nearby there are apartments avaiable for sale at 30-50% lower than the raw land price?
According to the news, the developer is betting that once the apartments are completed, there will be Mainland Chinese flocking to buy everything up. LOL.
July 28th, 2010 at 3:21 pm
@crabman: I say the same thing until my sister counter with "yes but if you are a rich guy and owns a house in US, you have to declare your worldwide income to the IRS and pay taxes on it. The IRS is a lot tougher and meaner than CRA. Plus US extradite criminals back to home country."
So that does kind of puts a big dampner on corruption money from China going to US.
Well there are also some other annoying restrictions for foreigner/non-PR to own a house in US too.
But for a million bucks difference, I would probably put up with that hassles. Or hell, buy in those coutries where US people love to retire too at even cheaper price.
July 28th, 2010 at 3:17 pm
@realpaul:
Those stats were from May.
July 28th, 2010 at 2:51 pm
The 'Translink Tax' is actually 32.5 cents per litre.
July 28th, 2010 at 2:48 pm
Does this ever put the U.S government debt into perspective.
$13 trillion debt.
80 million houses in the country.
$13T would buy 72 million of them or 90%.
http://finance.yahoo.com/banking-budgeting/articl…
Think they're ever planning on paying it back?
July 28th, 2010 at 2:46 pm
@Whitebear: I can
a) stab myself with a large knife
b) stab myself with a small knife
c) not stab myself at all
I choose (c).
July 28th, 2010 at 2:37 pm
I was just trying to say that it may be wiser to invest in Seattle now than Vancovuer if you have a chunk of money.
July 28th, 2010 at 2:32 pm
@Whitebear: Most of the US still has inflated prices even after a 30%+ decline. Remember that when you're thinking of buying a house in Vancouver in a couple of years at 20% off current prices.
July 28th, 2010 at 2:32 pm
Prices are up, say the pimps, in spite of sales off over 40% and inventory spiking. What will they think of next? We haven't heard from the media much lately on the real benefits of real estate ownership….is this announcement a shot in the dark? Are we in for another barrage of bullshit?
http://www.vancouversun.com/business/Canada+home+…
July 28th, 2010 at 2:12 pm
Not only that but it was listed at 1.5 in February.
Seems it took a hefty drop in asking to get someone to finally bite.
July 28th, 2010 at 2:09 pm
@ 'Whitebear'
Yep, "so-called disaster". You funny. This month's Case Shiller:
http://img844.imageshack.us/img844/7733/201007csu…
Seattle is fortunate in that its late start means gains are only wiped out to ~2005.
July 28th, 2010 at 2:00 pm
@Whitebear: What's the history of the house? Was it a complete reno? East Queen Anne is a pretty desirable area, kind of like Fairview here, except it's quite close to Lake Union if you have a boat. Seattle didn't get run up nearly as much as other parts of the USA and let's remember they have major business there, Microsoft, Amazon, Adobe, biotech & startups galore, etc etc. Anyway, a sample size of 1 doesn't tell you squat. Are you trying to imply this one house disproves "the so-called worst housing disaster in the US"? LOL
July 28th, 2010 at 1:59 pm
@Whitebear:
Same reason as anywhere else – they haven't run out of fools yet. Seattle prices are only back to 2005 levels.
http://seattlebubble.com/blog/
As for this particular house, the current listing says it's been remodeled. That probably accounts for much of the increase over the 2002 price.
What do you think a house like this would sell for in Vancouver?
July 28th, 2010 at 1:48 pm
From last sold price at 700k in 2002 to the recent 1.3M even in the midst of the so-called worst housing disaster in the US, this house still managed to almost double?
I recall the bear were already saying housing was in a bubble 2002. Now, the bubble has burst and this house still managed to fetch 1.3M? Any clue, bears?
July 28th, 2010 at 1:45 pm
Any clue why bubble still exists in Seattle???
http://www.zillow.com/homedetails/353-Highland-Dr…
1.3M just sold for a 33 lot????
July 28th, 2010 at 1:43 pm
Anonymous, it's a 2008 table. I didn't notice before pulling the trigger. Something a little fresher though I'm not sure it reflects HST changes, if any:
http://retail.petro-canada.ca/en/fuelsavings/2139…
July 28th, 2010 at 1:42 pm
@fixie guy: Eventually they realize some bubbles are in fact bubbles, but usually only once they stop inflating. Even if they DO realize it's a bubble, like Van RE, they believe it will keep growing forever. The term "bubble" is meaningless to them. It's just a word for high prices. Bubble mechanics, boom/bust cycle, credit, deflation, price discovery, none of that plays into their consciousness. Bubble means "buy, and ride the wave, and cash out to a greater fool!"
July 28th, 2010 at 1:40 pm
@Tony Danza:
You're bang on Tony regarding the $2M value for the oil tank removal and close proximity to Safeway.
But that still leaves 1.2M for that POS property.
July 28th, 2010 at 1:35 pm
@fixie guy: according to the link (Canada Gasoline Tax), I see about a 10 cent difference between Vancouver and Alberta. That doesn't fully account for the 35 cent difference in actual gas prices between Vancouver and Edmonton. What gives?
July 28th, 2010 at 1:35 pm
@space889: Well it doesn't seem too ridiculous when you consider that "the underground oil tank has been removed". I mean that's worth at least a mil right there.
Not to mention you can walk to Safeway, Subway and the local elementary school quite easily saving you another mil on transportation costs.
All in all not a bad deal when you put on your bubble goggles.
July 28th, 2010 at 1:29 pm
@Boombust: The reason the sell/list is higher than expected (though still lower than most previous years) is that new listings have dropped off considerably. Fortunately, we're still sitting on 18K inventory, with plummeting sales, leaving a very high MOI, with a good likelihood for ongoing price declines.
July 28th, 2010 at 1:22 pm
Wow, crabman.
If that doesn't clearly demonstrate the lunacy of the Vancouver bubble I don't know what does.
A teardown barely in W. Van. or a recently refurbished mansion in Beverly Hills for the same money? Insanity.
July 28th, 2010 at 1:14 pm
@Best place on meth:
Once they got away with taxing working people on their income, they will eventually tax us on how much oxygen we use. The government will not stop on its own. They are greedy and their greed knows no limits. Look at the Translink extortion: we are paying levy thorough hydro, and then 12% tax on the levy, at work we pay parking fee with translink levy and 12% on top of the levy, we pay gas with translink levy and pay 12% tax on top of the levy… and this is just the tip of an iceberg.
Nobody knows any more how much tax we are paying in various extortionist forms.
July 28th, 2010 at 1:13 pm
@Inventory: Thanks!
What is the total inventory at? I'm curious to see how quickly it'll bounce back next month compared to other cities (Edmonton).
July 28th, 2010 at 1:12 pm
@space889: LMAO! For the same price, look what you could get in Beverly Hills instead of that POS Vancouver teardown.
July 28th, 2010 at 1:07 pm
If governments have to tax, and they do, I would rather they tax things like gas rather than my earnings.
Nobody HAS to drive but we all have to make a living.
So double the fucking gas tax and cut my income tax you bastards!