The Jewish Seniors Alliance https://jsalliance.org/ provides a range of services for Jewish and non-Jewish members of our community. I joined the Board of Directors a number of years ago, in part because the organization gave my late father a great deal of joy. Three times a year, JSA publishes Senior Line, a most impressive magazine, and since I can no longer write for the Vancouver Courier (No Rachel, I wasn't fired. The paper folded!) I enjoy writing a column about urban issues and housing in each issue.
Dolores Luber, the Editor-in-Chief often suggests topics I should write about. Since many seniors are contemplating a move from their home of many years to a condominium, she thought an article on what to consider when buying a condominium might be of interest to many readers. She was right.
Earlier this month, the magazine arrived in members' homes and I have received quite a few comments. Most have been positive and several people told me they wished they had read my article before they bought their condominium. So here is the article as it appeared in the magazine, along with a link to the magazine. My article appears on pages 44 and 45, yes, near the end!
This past Tuesday was World Obesity Day. Like many people, I struggle with maintaining my weight at an acceptable level. But my interest in obesity is as much professional as it is personal. That is because in 2003, I participated in the production of a documentary film featured on David Suzuki's The Nature of Things that examined how good planning can reduce obesity. I would like to share some background as to how this came about.
In 1999, I was appointed President and CEO of a new corporation established to develop approximately 200 acres of land adjacent to the Simon Fraser University campus on Burnaby Mountain. The goal of the development was to enhance campus life and generate revenue for various university programs. I thought there was also an opportunity to undertake a more exemplary type of development compared to that usually created by the private sector. In our case, we wanted to create a truly sustainable community. Yes, I know it's an overused word today, but in 1999 this was still a somewhat novel idea.
In 2002 I received an invitation to attend the 2nd Annuall New Partners for Smart Growth planning conference in New Orleans. The theme was building safe, healthy and livable communities and since we were wanting to create a livable community and since I had never been to New Orleans, it seemed like a worthwhile conference to attend.
Upon arrival, I recall looking at the program and noticing a lot of the speakers were doctor this and doctor that. I assumed they were simply pretentious academics until I attended the first session and realized they were medical doctors. At first I was suprised until I remembered that the origins of planning and zoning were all about maintaining good health - separating the noxious industrial uses from residential areas and so on.
However, at this conference, the topics were much broader. As noted in the program:
"The purpose of this conference is to educate a broad range of practitioners in how we can redesign existing urban neighborhoods and improve the design of new neighborhoods to create safe, walkable, bikeable urban environments. Doing so will improve public health by increasing physical activity, reducing air and water pollution, decreasing violent crime, and reducing the number of pedestrian traffic accidents."
I returned from the conference truly inspired. While many of the concepts discussed at the conference were already incorporated in the master plan developed by Norm Hotson and Margot Long and others, we refined our planning approach and designs to a more fully create a healthy community. This included introducing a community transit pass that would allow residents to travel on public transit throughout the region at a fraction of the cost of a regular three-zone pass.
We also decided to ban fast food restaurants in favour of restaurants that served healthy food. This meant no McDonalds, no Burger Kings, etc.
I started to go around giving talks about this and Glynnis Whiting, a documentary film maker heard about this. She was in the process of making a film for the National Film Board on how good planning can contribute to good healthy. She had already lined up Stockholm's Dr. Stephan Rossner, an obesity specialist, and Dr. Lawrence Frank, a UBC professor who had written books on the correlation between good planning and good health. His studies revealed that people who lived in higher density neighbourhoods that promoted walking were healthier than those in car-dependent low-density suburban neighbourhoods.
The program aired on December 3, 2003 titled "The Weight of the World". I must confess that while I have always thought highly of my work, never in my wildest dreams did I expect to hear David Suzuki telling a national audience about the good work I was doing as a property developer!
On March 4th, Stu McNish of Conversations Live organized a housing panel discussion on what has been happening in Metro Vancouver housing markets over the past year, and what might happen in the year to come. The panel included Metro Chair Mike Hurley, mayor of Burnaby, Bob Rennie, Beau Jarvis, Neil Chrystal and me. The Vancouver Sun was one of the key sponsors.The event has attracted considerable publicity, in part thanks to a shout out by Mark Goodman of The Goodman Report, one of the program sponsors.
While I suspect you have little time to watch podcasts, I would urge you to watch this one since you will hear that we are in the midst of a growing housing crisis. However, as Beau Jarvis pointed out, the crisis isthe cost of creating new ownership and rental housing as much as affording what is built.
Both Bob Rennie and Neil Chrystal discussed the challenges of pre-selling and financing new developments when the investor market has dried up; first time buyers can't arrange the required down payments; and empty nesters do not want to wait three or four years for their new home to be completed.
It was also reported that rental projects are becoming increasingly difficult to finance since rents are finally dropping due to increased supply coming onstream, combined with reduced immigration and people moving away or into their parents' basements. It was on this that Bob Rennie and I were again in total agreement.
We are building more rental housing so that rents will come down. But now that rents have come down, rental projects may no longer be feasible. It's a Catch-22!
During the course of the evening, I shared two concerns related to Vancouver projects with which I am involved. I have asked city officials, including the capable people in the mayor's office, to follow up.
Financing municipal fees. The first is the challenge trying to finance projects like a new 61-unit Cambie Corridor condominium project approved at public hearing in 2023, when the municipal charges and permit fees total $9.3 million. That's more than $150,000 per unit.
Unreasonable Off-site Engineering fees.This amount includes the entire cost of a new traffic signal even though three other developers are required to share the cost. Unfortunately, it is city policy that the first developer must pay, and then hopefully recover from the others through a Latecomers' Agreement. Given the financing crisis facing developers, this will no longer work.
Now is not the time to expect a developer to not only arrange financing for his own project but also finance other developers' obligations. This city policy needs to change right away.
Although not publicly discussed by the panel, the need to defer timing of certain municipal fees until occupancy was also discussed amongst those in attendance. Hopefully, the city will soon announce that it is willing to implement this change. (I understand Council may be considering a motion by Cllr Rebecca Bligh to consider this on March 12).
Application of Empty Home Tax to Unsold Inventory. The other issue I raised relates to the application of the Empty Home Tax to unsold inventory.
As a result of successful lobbying by UDI, developers of projects with five units or more do not have to pay EHT on unsold inventory.
(As an aside, I was president of UDI from 1984 to 1985 and in the subsequent years, under the direction of Maureen Enser, and Anne McMullin, it has become a most effective voice for the development industry.)
However, EHT does apply to unsold inventory in a four-unit multiplex project, or any housing development comprising less than five units if units remain unsold for six months or more in a year. I hope you agree this seems most unreasonable.
As soon as this becomes more widely known, and it will, few small developers will want to risk developing much-needed multiplex projects, or duplexes for that matter.
Given the housing funding crisis facing us in the coming years, I urge the city to now implement changes the EHT Bylaw so that unsold inventory is not subject to EHT regardless of whether it is in a project with more than five units, or less than five units. Especially since for tax reasons, it is not reasonable to expect these units to be rented out.
You can watch the entire panel discussion here. Given the thoughtful voices sitting beside me on the panel, I hope you will watch this discussion. I have also asked senior city staff to follow up on my concerns. I'll keep you posted. https://www.conversationslive.ca/archive/030425-real-estate-update
Conversations Live with Stuart McNish is a long form, thoughtful, public affairs dialogue addressing the big topics of our times. A social purpose venture, we are seeking to advance our understanding and seek solutions through dialogue.
For each episode we bring together panels of individuals with deep experience in the month’s topic for a constructive and unscripted conversation, aiming to bring out the full story behind the headlines and soundbites.
Our events are webcast free of charge on the Vancouver Sun and our own website, and available for video replay and as audio podcasts afterwards. Host Stuart McNish is a long-time broadcaster, moderator and interviewer. We hope you will join us for the conversation.
Last February, I was pleased to participate in a housing panel discussion with Housing Minister Ravi Khalon, Coquitlam Mayor Richard Stewart, and representatives of real estate banking, rental housing, and economics.
Tomorrow, March 4, at 6pm, another housing panel discussion will take place. As Stu McNish observes
"Last year at this time the headlines were filled with Real Estate Crisis stories. The Province and the Feds were making announcements upon announcements. Bills 44 and 47 were introduced with the idea that they would force municipal governments to increase density.
It is legislation that was supposed to increase certainty of supply, stabilize prices and boost construction. But did it work?"
I am delighted to be invited back to join Bob Rennie, Neil Chrystal, Beau Jarvis, and Metro Chair Mike Hurley to review what happened over the past year and whether the housing legislation has worked.
While I will save most of my remarks until tomorrow, I intend to point out that while the province has certainly played a role in encouraging municipalities to approve higher density housing, the sad reality is that presale markets have dried up. Investors have been driven out of the game by bans on foreign buyers, short-term rentals, second-home buyers, and higher interest rates. Empty-nesters who are interested in downsizing to a townhouse or apartment are not willing to buy three or four years before completion.
Rental housing markets are not much better. Many condo projects have converted to rental, thus increasing supply, while demand has been curtailed by reduced immigration and many younger people moving to Alberta or back into their parents' basements.
Furthermore, ever-increasing municipal CACs, DCCs/DCLs, and off-site engineering fees (that sometimes require developers to front-end payments to be recovered from nearby developers at some time in the future) are making it impossible to finance many new projects. Especially since these fees must be paid before the project can even proceed.
This is evident from the number of projects that have been approved in principle, but not proceeded to final approval and construction.
Each of this year's panelists is experienced, knowledgeable and thoughtful. I am anticipating a very lively, informative, and entertaining conversation. While there is a lot going on tomorrow, I hope you can tune in. And if you can't, you can always watch the video. Details can be found here: https://www.conversationslive.ca/
Those of you who read Catch-22 will no doubt like me have fond memories of the book. There are two aspects of the book that seem relevant to Vancouver's current rental housing crisis.
The first is how the squadron's Mess Officer, Milo Minderbinder, managed to buy eggs for seven cents, sell them to the mess halls for five cents, and still make a profit. As I recall, he claimed he made money on volume!
The other was Yosarrian who tried to get out of flying more missions. To get out of flying missions he had to prove he was mad. But that didn't work since anyone who wanted to stop flying missions couldn't be mad. Or something like that.
So why is Vancouver's rental market like this. Well, in order to bring down rents, we need to increase the supply of rental housing. But if rents do indeed come down, as they are, in part due to increased supply, then new projects will no longer be financially feasible. So eventually, rents will go back up. Are you following me?
Russil WVong's post reporting on Cressey's numbers.
I thought about this today when I received an email from Russil Wvong. It offered several important observations. The first is that larger suites, which are most needed, are not financially viable. The cost is greater than the rent that can be charged. So they have to be subsidized by smaller suites that we don't really need.
While Cressey's numbers are overly simplified (a small suite is usually more expensive to build on a cost per sq.ft. than a larger suite, etc.) the point being made is absolutely valid.
The other point is that the more we build, the more rents come down, and as a result, we will not be able to build more, until rents rise again. That's why I thought of Catch-22. Read on!
The conclusion is right. We don't need to just reduce rents. We need to reduce costs. And one way to do that is reduce municipal fees. Fortunately, I think municipal politicians and officials are now getting the message. But if they don't, they just need to wait until a few more developments go into foreclosure. It won't take much longer.
The city of Vancouver requires that market rental projects have a minimum of 35% apartments with two or more bedrooms. Strata projects must have a minimum of 25% apartments with two bedrooms, and a minimum of 10% apartments with three bedrooms. Family Room Policy.
The problem is, the 3BR and even 2BR apartments end up being cross-subsidized by the studio and 1BR apartments. This raises the floor for rents on studio and 1BR apartments.
"The real problem, though, is not that we don't make money off of the three-bedroom units, it's that we have to drive the revenue [higher] on the one-bedroom units in order to subsidize the three-bedroom units," Hani Lammam explains. "It's not good enough not to make money on it. In order for me to be able to finance the project, I have to average out a return across all of it, so what really happens is the one-beds are subsidizing the three-beds. That's really what happens."
Why don’t market rents for 3BR and 2BR apartments reflect the cost to build them?
Yes, $4,000 a month for an apartment in Vancouver may be an achievable price, but that becomes less true if families have options to rent a townhouse in Surrey or Langley for around the same price.
"Once you get to a certain rent or purchase price, as a buyer, I have options," said Lammam. "The one-bedroom or even two-bedroom apartment appeals to that young, upstart new family, but the moment that family grows, it's hard to stay in an apartment, and I don't think it's the ideal. I don't think a family wishes they can live in an apartment, I think they wish they can live in a house."
As asking rents decline, fewer rental projects are viable
Of course the other headwind here is that asking rents are declining. The February 2025 report from rentals.ca says that the asking monthly rent for a 1BR in the city of Vancouver is $2522. For a 2BR, it’s $3433.
To keep building rental housing as rents decline, we need to reduce costs.
