Tag Archives: developers

What roll for developers in affordability debate?

Often when it comes to real estate stories in the local media the people interviewed are developers, marketers or realtors. These are all professionals who deal with the market every day, so it makes sense for the media to seek their opinion on housing stories.

But should they be driving the ‘affordability’ debate?

Architect and professor Avi Friedman thinks not.

“Builders will not initiate innovative ideas because they are profit motivators, so the city needs to act as a catalyst,” he told CBC Radio One’s Rick Cluff on The Early Edition.

Friedman also criticized the idea offered by many in the real estate industry, like marketer Bob Rennie, that Vancouver isn’t going to be affordable for everyone and that young people should consider moving to the suburbs.

“People who grew up and live in a city should be able to buy a home in their city. The fear is that, some of these young people may leave Vancouver,” Friedman said.

“Once you see the departure of young people from the city, they take along their potential … to start new businesses, to create a vibrancy that young people bring to a place.”

Friedman says it is incumbent upon the city and its leadership to foster and implement new ideas that will allow young people to stay and thrive in Vancouver.

Read the full article over at the CBC.

Builders stop building in a bubble?

Markoz left this comment in yesterdays thread, but it got held up in moderation because it had more than two links:

My wife works at a bank and her boss sent a link to this BIV article entitled, “Nobel economist housing bubble formula shows Vancouver resistant.

Here is a copy of my response (unfortunately the charts I clipped won’t paste into the comment section):
His theory (as presented by the article’s writer at least) is that builders are smart enough to stop building before/when a bubble pops. I’m not sure if he means that a slow down in building is a precursor to a bubble popping or if he means that when sales drop so do housing starts. In Vancouver, housing starts only dropped off significantly well after sales did in 2008.

Vancouver sales began to tank in March or April of 2008.

Residential property sales in Greater Vancouver totalled 2,997 in March 2008, a decline of 16.3 per cent from the 3,582 residential sales recorded in March 2007, and a decline of 25.7 per cent compared to the 4,033 sales in March 2006.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 3,218 in April 2008, a decline of five per cent from the 3,387 sales recorded in April 2007, and a 3.8 per cent drop from the 3,345 sales in April 2006.

VANCOUVER – The Greater Vancouver housing market continued its re-balance between sales and listings last month. The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver declined 30.7 per cent in May 2008 to 3,002 from the 4,331 sales recorded in May 2007.
All of the above is from the REGBV website: http://www.rebgv.org/monthly-reports?month=May&year=2008
It just kept getting worse:http://www.huffingtonpost.ca/2012/07/04/vancouver-home-sales-10-year-low_n_1649539.html

“This summer, sales went off a cliff,” added Somerville, who is director of the centre for urban economics and real estate at the Sauder School of Business at the University of B.C.:http://www.canada.com/vancouversun/news/business/story.html?id=e6e0c211-fddd-413b-9a94-3564e20567d8

The financial crisis did not start until Lehman Bros failed on September 15, 2008.

Here are the housing starts specs:

Apparently our builders aren’t as smart as the Nobel Laureate. Starts for all types of homes stayed above the average for 2004-2008 till the end of 2008. They plummeted after the fact. Perhaps the writer is putting his own spin on what Smith said. I wasn’t there so I don’t know.

The other thing to note is that the writer never actually asked Smith if he thought Vancouver was in a bubble. He did a follow up interview with him but seems to have avoided asking the question directly. He says, “Using Smith’s formula for housing bubble-burst scenarios, B.C. and Vancouver do not appear threatened, despite record-high prices in the latter. B.C. housing starts this year are up 3.1% from 2013 and forecast to rise a further 1.4% in 2015, according to Canada Mortgage and Housing Corp.” Why not just ask him what he thought instead of making a supposition?

Historic accord splits control of properties

They’re not making any more land, but we still seem to be finding some to build on.

The 21 hectare Jericho lands in Point Grey is part of an agreement to split control of three Vancouver properties between a crown corporation and three First Nations – the Musqueam, Squamish and Tsleil-Waututh Nation.

David Eby, MLA for Vancouver-Point Grey, said he was heartened to learn that a deal had been made regarding the Jericho Lands.

“There had been a lot of people in the community, myself included, that believed this land would be tied up in negotiations – potentially in court – for many years,” he said. “There’s a very clear and well-established traditional use of this land by First Nations. They were certainly entitled to it and it sounds like they received a fair share of their lands. It was certainly a surprise to hear that it has happened at all, let alone so quickly.”

Mr. Eby said the significance for the community he represents is that development will proceed faster than many anticipated.

“I would not be understating it to say that many members of the community that are neighbours to this property are incredibly concerned about the type of development that could potentially be located at this site,” he said.

“I can tell you everybody from affordable housing advocates to environmental groups … to the West Point Grey Homeowners’ Association has weighed in with different perspectives about what should happen here. That consultation will be challenging, but it’s critically important that it happen.”

Read the full article here.


Where are the 3 bedroom condos?

M- and MarKoz brought up this topic – Vancouver seems to be seriously lacking in affordable family housing.

There are lots of 1 and 2 bedroom apartments, but not much available for 3-4 bedrooms until you go to houses.  M- suggest the city requires more large units to be built to provide future homes for Vancouver families:

CoV could require condo developers to include a much larger percentage of 2-bed and 3-bed units in the towers that they’re approving, and require some of those units to have a more family-sized square footage. Maybe in exchange for higher density, to make it less controversial.

It won’t help much of anything today, but it will prevent today’s towers from becoming tomorrow’s ghettos.

My wife and I used to have an 800 sq.ft condo. It was too small for the two of us. Then we got a 1000 sq.ft apartment, and it was enough space for the two of us (we would have liked more, but it was good enough).

Then we had a kid.

The 1000 sq.ft unit slowly became too small for our family, so we’ve upgraded to a house (rental, of course).

We keep an eye on the condo/house markets, and there’s not much selection of 3-bed units out there, until you get into houses.

MarKoz adds:

When I went condo hunting I could find nothing similar. You would have marginal master bedrooms and second bedrooms the size of a closet. The master bathroom was usually huge at the cost of a smaller living room etc. All had fireplaces – a waste of precious wall space in a small unit. Stainless and granite with barely enough counter space to lay a pizza box. Closets were minimal as was out of suite storage.

I moved on to townhouses. 1200 square feet spread over 3 floors is worse than 800 square feet on one floor. So much space given over to stairs and landings.

Who wants these places? Apparently everyone but me. They sure are selling. In the US they have plenty of 3 bedroom units but I guess those don’t attract specuvestors like 565 sq ft one bedrooms.


REDMA changes, is this a big deal?

Ex-kitsie pointed out this story:

Justice Minister Susan Anton has introduced Bill 17 (Miscellaneous Amendment Act, 2014) which includes a proposed amendment to Section 23 of the Real Estate Development Marketing Act (REDMA).

Ex-kitsie explains:

This is the legislation that governs the marketing of real estate by developers to consumers. The amendment would make a purchase agreement enforceable against a purchaser where the developer’s disclosure agreement included misrepresentation of a material fact and the developer was not aware of the misrepresentation at the time the agreement was entered into. This amendment would remove the ability of the purchaser to terminate or renegotiate the agreement upon discovery of the misrepresentation. So… the developer can include unsubstantiated inaccuracies while still enforcing the purchase agreement against the purchaser who relied upon the misrepresentation. Of course, we all know developers would never lie.

We’re not sure if this is a big deal or not, here’s a link to the amendment, you’ll have to scroll down about half way to find the relevant section.  Any comments on whether this is a dramatic change to the Real Estate Development Marketing Act or just a minor adjustment?