The Little Mountain that Couldn’t

Apparently Vancouver has an affordable housing problem.

For buyers housing affordability is at a new low despite our problems with construction quality.

And lately we’re seeing more news stories about more families leaving BC due to the high cost of living.

So are we building more affordable housing?  Well, we’re trying I guess, but if you live in Vancouver you may have noticed a big vacant spot for homes just up Main street near Queen Elizabeth Park.

Several years ago the housing units at Little Mountain were torn down to make way for a new higher density housing development.

So why has nothing happened over those years?

According to Michael Geller it’s developer inexperience.

“The developer … doesn’t fully understand how to do business here,” Geller said in a phone interview.

Four years ago, BC Housing started moving the 224 residents of a social housing project into other subsidized homes. Now, only four residents remain in one building on the 6.2-hectare site by Queen Elizabeth Park and bounded by 37th and 33rd avenues and Main Street.

In June, a city report said there was a blueprint for Holborn Properties to redevelop the site with as many as 1,800 units in stepped towers up to 12 storeys, most buildings being four to 10 storeys in height. The province has committed to replacing all 224 social housing units plus another 10 for aboriginal residents. Most of the buildings at Little Mountain were demolished in 2009.

Geller also referred to the years of delays Holborn has faced in building a proposed 64-storey hotel and residential tower at West Georgia and Thurlow.

“If one wonders why this one is taking so long, one might also wonder why the same developer’s project on West Georgia took so long — although I see construction is finally underway,” he said.

“All of these things are symptoms of the lack of experience with high-profile, highly complex undertakings.”

So apparently we sold that land to a developer that doesn’t know how to get things done and to make matters worse, they bought it for an undisclosed sum right before the mini market crash of 2008.  If prices keep falling as they are now is anything going to get built there?

And if it does get built how much responsibility will the city end up taking for falling profit margins or ‘developer inexperience’? Are we looking at the potential for another Olympic Village scenario?

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registered
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126 BLISTINGAGENT Says: “All four of the regular panel members seem pretty much in love with CMHC mortgage insurance, the bank economist and union economist alike!”

No doubt. It’s an indirect and unadvertised stimulus program targeted directly at their industry, one maintained for so long now that its removal is perceived as somehow unfair. “Canadian taxpayer dollars should funnel into real estate, just as it’s ‘always’ done.”

oneangryslav2
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oneangryslav2
Crazy bull anecdote of the day (week?): My brother lives in North Burnaby in the area bounded by Hastings and Parker, Willingdon and Gilmore. His neigbhour a couple of doors down (whom both he and I know as we played soccer on the same youth team) many years ago) tore down a nondescript bungalow and built himself a large house. Almost to the day of the one-year anniversary of the place having been completed this friend is sitting at home watching television early in the evening (this happened a couple of weeks ago), when he hears the doorbell ring. He opens it to find a gentleman standing there asking if the house was for sale. The friend asks sarcastically “do you see a for sale sign?” “No”, responds to (as it turns out) real estate agent. The real estate agent… Read more »
oneangryslav2
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oneangryslav2

@BLISTINGAGENT:

“Mitt Romney wouldn’t like it, therefore it must be good!”

I think that Mittens is an entitled know-little prick, but that’s a ridiculous quote by an “expert.”

BLISTINGAGENT
Guest
BLISTINGAGENT

As a few people have mentioned, this week CBC’s The National is spending time each night looking at the slowing Canadian real estate market.

Tonight they had their “The Bottom Line” panel on, and obviously they also discussed housing. All four of the regular panel members seem pretty much in love with CMHC mortgage insurance, the bank economist and union economist alike! They consider it to be the saviour of the Canadian real estate market. To paraphrase a comment made by the union economist, “Mitt Romney wouldn’t like it, therefore it must be good!”

Tomorrow they are featuring Vancouver … should be interesting.

Dog
Guest
Dog

Sales low to the end of the year.
Prices up into the end on low volume.
US and Canadian prices up on momentum.

gokou3
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gokou3

@Pro-public housing (previously known as Anonymous: Yes, although I don’t agree with many of the things you said, I appreciate you spent the effort to convey your ideas thoroughly.

+1 for patiently waiting:
“I think its in bad taste to vote down on-topic posts just because you disagree with them. I save my thumbs down for obvious trolling and personal attacks. That’s it.”

Anonymous
Guest
Anonymous

@Pro-public housing (previously known as Anonymous: you made all the armchair economists disappeared.

“Instead of telling me to shut up, can anyone deal with this point?”
please continue your points! besides arguing dollars and cents, listing and sales, they dont know anything else.

Pro-public housing (previously known as Anonymous
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Pro-public housing (previously known as Anonymous

@HAM Solo

“If the COV wants to have housing projects, why not just wait for private developers to go bankrupt in the bust and buy up semi-completed projects.”

I like this idea. I wonder if the Little Mountain developer will be one those ones that goes bust. I wonder if the Little Mountain development will only be half completed. I wonder if ground will ever break in the first place at Little Mountain.

It hardly makes sense to sell the Little Mountain land to a developer just to buy it back from them after they go bankrupt in the real estate bust.

Balda
Member
Balda

in case anyone want to share some truth with the participants of “Canada’s largest real estate tradeshow for Asian Buyers and Investors on September 22nd at Metrotown Hilton Hotel”, can be fun 🙂

http://vancouver.en.craigslist.ca/bnc/vol/3254507199.html

Pro-public housing (previously known as Anonymous
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Pro-public housing (previously known as Anonymous

Thank you b5baxter and Dan in Calgary. I guess I need to lighten up.

BLISTINGAGENT
Guest
BLISTINGAGENT

So we have a Westside property owner who sold at the top of the market to a dumb overseas buyer with more money than sense and no clue about the local market? And now they are renting units instead? Sounds like the province did exactly what most readers of this blog would advise them to do (myself included.)

I do support some degree of social housing – possibly more than we have now – but the Little Mountain site was still very due for redevelopment in my opinion. Also I really liked the proposals I saw, they looked like Arbutus Walk which is an area I really like.

Anonymous
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Anonymous

@ HAM Solo

On the other hand, I’m not sure the city needs any more units of housing built of any kind. Just adds to fundamental overcapacity of housing stock. If the COV wants to have housing projects….

The mayor needs a ribbon to cut and a feather in his cap.

Pro-public housing (previously known as Anonymous
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Pro-public housing (previously known as Anonymous
Thank you Patiently Waiting, HAM Solo, Fixie Guy and Scott. I guess I over-reacted. Even though I have a different ideological perspective than most of the commenters on here as I am left wing and most of you are probably more right wing than me, I do think we can learn from one another. I learn the most when you respond intelligently to some of the issues I raise. @ fixie guy: “It ignore market segments. Renters on assistance are the least likely to live in structures driving market appreciation. It also ignores a basic fundamental; what percentage of the rental market is held by subsidized renters?” Good points. I think you are mostly right. But I do think many renters on the Rental Assistance Program are probably living in basement suites. These basement suites could be located in million… Read more »
jesse
Member
@COLT: I transcribed (paraphrased) a bit of Tsur’s comments, in case people can’t take listening to 5 minutes of CKNW: Simi Sara: lot of emails: why can’t industry people admit prices going down? Tsur Somerville: prices flat down in some areas market now weaker in a long time [jesse: worst since 2008] Simi: Is the market collapsing? Tsur: No expectation market will adjust by being slow off 1.5% from peak. That is “flat to me” In other words $1M house went down $15K Simi: but this is a gradual process, right? Tsur: Sees relatively flat prices, perhaps slight declines while incomes catch up Simi: is this overdue? Tsur: If people think prices are going to fall 40% are smoking the same stuff people where prices going up 10%/yr: interest rates low. Thinks people are balking at price levels and looking… Read more »
Dan in Calgary
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Dan in Calgary
@Pro-public housing (previously known as Anonymous Says: “Wow! My comment is already voted down to be hidden. There was real estate bull on here the other day who said this blog votes down any comment that goes against the ideological grain. I guess they were right. Geez, now I am siding with a RE bull!!! Argh!” There is indeed a certain element of groupthink here, but it doesn’t define the blog; it’s just one aspect. Truly, it’s a great blog. There are a few people who have been around for a while, and who sometimes act like the long-term employee who claims the same seat in the lunchroom day after day as if it’s theirs personally. But I believe they are in the minority. I enjoy reading all comments except those of obvious trolls. Not everyone who reads exercises their… Read more »
b5baxter
Member

@HAM Solo:
“…the COV wants to have housing projects, why not just wait for private developers to go bankrupt …”

I have heard stories about this happening in the past. Weren’t some of the Shaughnessy mansions converted to housing for war veterans when the previous owners couldn’t afford to pay property taxes after on of Vancouver’s infamous bubbles burst.

FWIW, I thought Pro Pub Housing made some good points about Little Mountain.888888888888888888888888888888888

Bag it and tag it
Guest
Bag it and tag it

@HAM Solo: Thx to all that provided input on US REIT’s. I tend to agree it’s past time to buy them…yields are now low. I have some US cash I’m my account I’m looking to deploy…

Patiently Waiting
Member
Patiently Waiting

It think its in bad taste to vote down on-topic posts just because you disagree with them. I save my thumbs down for obvious trolling and personal attacks. That’s it.

OTOH Pro-public, remember the down votes on your posts represent only a small percentage of those who read them.

HAM Solo
Guest
HAM Solo

@ pro public housing

I am sympathetic, to a degree, to your plight. Points in your favour: a) you started posting under an actual name, b) you are trying to make a point that rent subsidies exist and that they serve to prop up house pices, fair enough.

On the other hand, I’m not sure the city needs any more units of housing built of any kind. Just adds to fundamental overcapacity of housing stock. If the COV wants to have housing projects, why not just wait for private developers to go bankrupt in the bust and buy up semi-completed projects.

vangrl
Member
vangrl
http://www.news1130.com/news/local/article/403259–economist-predicts-big-drop-in-vancouver-housing-prices a comment on the article ” Realtor here: As a realtor I would love to see price continue to go up. That means there are buyers and the market keeps moving. Realtors, mortgage brokers and people that owe houses dont like to think prices will go down or else nobody will buy, or finance. The truth is prices are going down. In my office there are over 100 realtors everyone is full of listing with very few buyer. 35% of my clients over the last year that sold have all decided to rent Before that it only happened twice in 12 years.. As much as I respect Bob Rennie for being successful he is out to lunch if he doesnt think prices are going down. Foreign investment is going down because immigration has tighten up, mortgages have tighened up… Read more »
Patiently Waiting
Member
Patiently Waiting

Please come back, I’m begging you…

http://www.news1130.com/news/local/article/403240–premier-wants-more-people-in-skilled-trades

The premier is also appealing for British Columbians who left the province for work elsewhere in Canada to return.

“Come home to our province. Find that job here, it’s waiting for you. We need your skills.”

This is so freaking pathetic. Is it that bad or is Christy Crunch just an idiot? Well OK, its both.

Keeping An Eye On The Pimps
Guest
Keeping An Eye On The Pimps

Sometimes I worry needlessly, like the time that real estate expert guy, along with the world class city media, took those Chinese billionaires on an helicopter tour.

I thought for sure they would have bought everything in site and there would be nothing left to buy.

HAM Solo
Guest
HAM Solo

@32 bag & tag

I think to some degree the boat may already have sailed on US REITs…but I tend to be a little risk averse when it comes to momentum-type trades…even though my trend-following friends might say the US market is safe through year-end.

One stock that looks reasonably good here is Starwood Property Trust (STWD US Equity). It owns a portfolio of 2nd mortgages and subordinated debt on US (and some european) RE, with a big portion of that being hotels. Yield of 6-7 percent is reasonably covered and the underlying properties have a fairly good loan-to-value. I owned it a little lower down and sold out around $22. If you have a greater risk tolerance than me, you could conceivably buy below $24 with a Bernanke-assisted target of $28-$30 and take coupon along the way.

yvr2zrh
Member
@COLT: We should archive this. He’s basically on record of saying prices +/- 2%. He also said something about incomes catching up. Well, other than the fact I just fled the country to get a life – – I haven’t seen significant income increases for a long time and given the state of the economy, I don’t see them in the near future. He’s got a story and sticking to it. He just does not see that we have any type of problem or at least he refuses to phrase it in such a way that gives a negative forecast. When asked if prices would fall more – – he could have said “Probably”. That’s what I would have said as a diplomatic likely outlook. However, he said 1.5% is not a number that means anything.
Romeo Jordan
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Romeo Jordan

Well, hopefully we’ll see close to 400 listings tomorrow.