Village at False Creek and Elections

It’s been about a year since I did a quick “stress test” on the Millennium Water Village at False Creek development in terms of recouping a loan by liquidation of Millennium’s assets. Well now NPA mayoral candidate Suzanne Anton would like an update on how things are going:

NPA Candidate for Mayor Suzanne Anton is calling on City Hall to release information on sales, social housing and the overall financial position of the Olympic Village project.“The Olympic Village at Southeast False Creek has been an ongoing financial concern for Vancouver residents,” says Anton. “And Mayor Robertson promised during the last election to be open and transparent on this. They need to report on the village by November 1.”A receiver was appointed to oversee the development in November 2010. Anton says the last financial reporting by the city was in April 2011. She believes a report would be of great interest to voters at this point.

And a response from Ballem:

Market (For Sale) Condominiums

Total sales: 427 sold out of 737 market units (60% sold)

Sales since February 2011 launch: 164 (164 units over 156 days – just over one per day) to mid September 2011

Total rented: 26 market units have been rented

Total market units occupied: 453 out of 737 units (62% occupied)

Market Rental Units

Total rented: 119 out of 119 rental units (100% rented)

Commercial Spaces

TD Bank and Legacy Liquor Store open

Terra Breads: successfully opened Saturday, Sept. 24, 2011

Laundry/Drycleaning Store: tenant improvements under way with anticipated opening by end of year

Urban Fare: scheduled to open in June 2012 but they are attempting to open in May 2012

London Drugs: anticipated to open by end of May 2012

City Owned Commercial Spaces

Creekside Community Centre – Village Kitchen Restaurant scheduled to open in the spring of 2012

Salt Building: City is in negotiations to finalize long term tenancy – in the meantime, the Salt Building is being used for short term tenancies

Affordable Housing

The two City buildings (on Parcels 5 and 9) – both 100% occupied (total of 168 units)

Co-op (Parcel 2) – ~80% occupied (66 of 84 units)

Overall occupancy of the Village is 73%

I think it would be good to get an update on the finances, not just occupancy, as well. As of a year ago, the City had a $530 Million loan, never mind the land value. As this project has progressed things have become rather confusing. I’m hoping the illustrious City managers can clarify the situation, in the interests of “great interest”. I’ll do my best to wade through the accounting but it’s not looking good. There are still 284 units to be sold, it seems and a few plots have been reserved for a cooperative and rental units. For the sake of City taxpayers, let’s hope the greater fool bin hasn’t been bled dry.

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Jerry Boyle
Jerry Boyle
8 years ago

In the US the banks have an incentive to hold foreclosed properties off the market (and to delay foreclosure, for that matter) since they have to reflect any losses on their books when they sell them.

In Canada the incentive will go the other direction. The sooner the banks foreclose and sell the property, the sooner they will be made whole by the CMHC. Based on that, I would expect rents to drop when the bubble bursts.

Absinthe
Absinthe
8 years ago

@patriotz: Rents are determined by incomes in the longer term. There is a cap to earnings. Other market sectors can also have ceilings on potential earnings. There is a known constraint in the overall earning potential of rents. This, to me, is a fundamental truth of the earnings potential. However, rents may have upward pressure applied to them that raises them above affordability for the people dwelling therein. It was either Piggington or Ben Jones that showed that in the States, although directly *previous* to a crash. The question we were investigating is whether that has happened in post-crash bubble cities because of banks holding inventory. You made a very dismissive statement about what myself and others were "missing", only it had missed the context. I usually value your contributions as being less glib than that, so I thought to… Read more »

patriotz
8 years ago

@Ziggy Strawdust:

"What’s that thing crawling out from under the sink?"

Well they said the house had a "lot of charnel", didn't they?

🙂

patriotz
8 years ago

@Absinthe:

"it’s quite clear that housing can deviate from fundamentals. And that means rents, too"

What you are saying is equivalent to "it's quite clear that the stock market can deviate from fundamentals. And that means corporate profits, too".

Earnings are the fundamentals. Rents always represent the actual value of shelter at any given time. Rents of course can be and are affected by supply and demand shocks, but they are what they are, all the time.

white payer
white payer
8 years ago

@Best place on meth:

"It’s beautiful photos like these that are a testament to the professionalism of Vancouver landlords and which capture peoples imagination so completely that they flock to the viewing, lining up all the way around the block in hopes of becoming the new tenant."

Hey, the house in the ad belongs to local royalty, so there, quit yer bitchin'

kits college girlz
kits college girlz
8 years ago

Li-Kai "I guess that mean he put “FORECLOSURE” on his boxers."

his "INVENTORY" was not something to die for..anyway he is probably "UNDERWATER" by now

ciao

Absinthe
Absinthe
8 years ago

@patriotz: The point made was that in the States, the bank is sitting on lots and lots of that inventory. I am attempting to confirm or deny that based on the numbers, not on theory. There is some indication that in formal bubble cities that have been foreclosure heavy, there has been an upward fluctuation in rents in the short term. If you can bring data to show that empty bank holdings haven't been a market force, I'd be happy to see it. Further, the system isn't something that we can assume adjusts on a dime. Market peculiarities – like housing bubbles – can take a while to sort out. Lots of forces cause pockets of pressure up and down, from psychology and local forces to legislation, taxing, and credit. I think we both agree that fundamentals matter, but it's… Read more »

Devore
Devore
8 years ago

@Anonymous:

You’re assuming average household size remains unchanged.

You're right, it increases.

Li Kai Shing
Li Kai Shing
8 years ago

@kits college girlz:

I guess that mean he put "FORECLOSURE" on his boxers.

N
N
8 years ago

@jesse:

"Need a price crash and inventory glut first!"

Well, I certainly can't see that happening here.

N
N
8 years ago

@patriotz:

In the States, we are seeing homes that were formally owner occupied go into foreclosure and sit empty. The banks don't rent them out, so the unit unavailable but the former owner still needs a place to live. That could put upward pressure on rents.

McLovin
McLovin
8 years ago

Net +100. Less then I'd like but I'll take it.

18,500 month end still well within reach.

rp1
rp1
8 years ago

@gordholio: "Peace Arch Hospital Winfall Lottery is in danger of losing money"

That's because everybody already has houses, many have more than one. They could make the prize "debt relief" up to some maximum like $2 million and idiots would flock to it, as long as tickets are cheaper than filing for bankruptcy.

Contrarian Lemming
Contrarian Lemming
8 years ago

@Anonymous:

The LTO registrations tell the same story: Lots of sales registered soon after the launch, then slowing to a trickle.

Mar 11

Apr 35

May 65

Jun 11

Jul 15

Aug 7

Sep 5

Oct 2 (as of Oct 12)

rp1
rp1
8 years ago

#54 @Ziggy Strawdust: "What’s that thing crawling out from under the sink?"

Looks like a dead muppet.

kits college girlz
kits college girlz
8 years ago

since i broke up with boyfriend i always play lottery. they say if you are not lucky in love then your lucky in money…

Anonymous
Anonymous
8 years ago

@Anonymous:

"Perhaps there are just too many of those $50/ticket lotteries?"

And people are broke.

Anonymous
Anonymous
8 years ago

@patriotz:

You're assuming average household size remains unchanged.

bubba
bubba
8 years ago

# 44 @patriotz:

Of course….

A 4th level of Gov't that is UNelected and thus UNacccountable serves the vested interests well, especially the BC Gov't.

However, one should check out the governance model and the remuneration these Metro puppets get.

Many of these Metro Directors, Council members from Local Gov't , get $25,000 + annually and extra perks.

Anonymous
Anonymous
8 years ago

@gordholio:

Perhaps there are just too many of those $50/ticket lotteries?

Ziggy Strawdust
Ziggy Strawdust
8 years ago
Devore
Devore
8 years ago

@gordholio: Wasn't the last home lottery for some Vancouver/suburb hospital earlier this year also nearly tank due to lack of ticket sales? They had a big promotion and sale in the last week.

(I don't pay attention to lotteries, so don't remember the name now.)

Best place on meth
Best place on meth
8 years ago

It's beautiful photos like these that are a testament to the professionalism of Vancouver landlords and which capture peoples imagination so completely that they flock to the viewing, lining up all the way around the block in hopes of becoming the new tenant.

http://vancouver.en.craigslist.ca/van/apa/2646569

gordholio
8 years ago

Says here in today's Peace Arch News that this year's Peace Arch Hospital Winfall Lottery is in danger of losing money – for the first time in its 16-year history. Ticket sales are at just 35%, with just a week to go.

Ironically enough, the grand prize is a house.

Interestingly, exectuve director Jackie Smith is apparently "at a loss as to what is stifling sales."

Hmm…what could it be? A money-losing lottery to win a house in an environment where the price of housing is wiping out people's money.

Of course, no one wishes ill will to such a worthwhile cause. I just find it extremely, incredibly, amazingly ironic.