From CITY HALL WATCH - BC Assessment Review Panel approves threefold increase in Dunsmuir Hotel property assessment

The following was published yesterday on CityHallWatch 

CityHallWatch has just learned that an unusual third-party appeal to the BC Property Assessment Review Panel has resulted in a threefold increase in the assessed value for the Dunsmuir Hotel at 500 Dunsmuir Street. Readers will recall this historic building was ordered to be demolished by the City of Vancouver in late 2024 after years of neglect by its owner.

The property is owned by controversial Trump Tower property developer Holborn Group who in 2008 purchased the Little Mountain property from the BC Government. The company was subsequently severely criticized for delaying redevelopment of the social and market housing approved for the property. Development is now underway.

Third party assessment appeals are rare

While most people are familiar with property assessment appeals, what is not widely known is that anyone can initiate a third-party appeal of the assessed value of any property in British Columbia.

This appeal was initiated by retired architect and real estate consultant Michael Geller. He became interested in this property after reading a December 16, 2024 Vancouver Sun article by Dan Fumano regarding a City of Vancouver report to Council from the City’s Chief Building Official.  It ordered the demolition of this 167-unit former SRO because it had become unsafe and dangerous to the public due to years of neglect by the owner. Although on the heritage list, it was not a  protected heritage building.

Upon reading this Vancouver Sun story and Council Report, Geller was curious to see the assessed value of a building deemed so dangerous to the public that it had to be demolished immediately.

He was surprised to discover this dangerous building was assessed at an astonishingly high $1,757,000 and even more surprised to see the land value of this prominent 12,000 square foot Central Business District (CBD) property assessed at only $6,345,000 for a total of $8,102,000, or $675 per square foot. Based on its ‘outright’ 7 FSR commercial zoning, this equated to only $96 per square foot buildable. This value was considerably less than nearby properties.

SRO Replacement/Conversion fee

When a Vancouver SRO unit is demolished or converted, a $300,000/unit fee may be required. However, there was no reference to this in the Council Report. Geller wrote to the City and was subsequently advised by the former Vancouver Senior Planner who worked on this property that (a) since the property was vacant for many years, and (b) rezoned from mixed-use to commercial, and (c) the Salvation Army (the previous owner) had relocated the SRO units into another building prior to its sale, the fee was not applicable. However, BC Assessment was not likely aware of this when they valued the land and building.

Assessment history

In 2019 this property was assessed at $26,643,000. An agent for the owner appealed this assessment, and successfully had it reduced to $15,521,000. It was further reduced three more times to $8,102,000 in 2024. For 2025, the assessed value was further reduced from $8,102,000 to $6,476,000.

During this time, the SRO removal/conversion fee increased from $125,000 to $300,000.

As a result of this very low valuation, Holborn was saving property taxes while allowing the building to become so run down that it became unsafe to the public.

.

Above: Decision notice from BC Assessment 2025 Property Assessment Review Panel. Below are the key numbers.

Original 2025 Assessment
(values as of 1-Jul-2024)
Land $6,375,000
Buildings $101,000
Total $6,476,000

Amended Assessment
(March 2025)
Land $18,864,000
Buildings $101,000
Total        $18,965,000

BASIS FOR THE APPEAL – A REQUEST FOR EQUITY ON LAND VALUE

In his appeal, Geller noted that since the SRO replacement fee did not apply for the reasons previously mentioned, and the building was not a protected heritage structure, the land value should be comparable to the assessed value of adjacent properties, including a vacant lot immediately next door. This lot was half the size but assessed at considerably more than the subject property.

After taking considerable time to review Geller’s written and verbal submissions, the Property Assessment Review Panel agreed with his arguments.

It should be noted that if the owner disagrees with the Panel decision, it may appeal to the Property Assessment Appeal Board. It has until April 30th, 2025 to file this appeal. While Geller doesn’t know if the owner will appeal, he is confident that the Appeal Board will uphold the Panel’s decision now that all the facts related to the SRO replacement fee are known.

WHY IS THIS ISSUE IMPORTANT?

Under-assessments of industrial/commercial/institutional (ICI) properties appear to be a long-standing systemic problem. Key players here include developers and their legal teams, BC Assessment, and municipal and provincial governments.

Our municipal and provincial governments have checks and balances in place, and it is up to our elected officials to ensure that they are functioning. The failure to do so can have serious negative consequences for society as a whole.

Let’s look first at the actual story of demolition in January 2025, since it is so recent in memory. The issue was covered extensively by media. Here we take excerpts from coverage by CBC.

Vancouver council reluctantly votes to demolish 115-year-old building. Councillors criticized owner of Dunsmuir House for letting historic building fall into disrepair (Akshay Kulkarni, CBC News, 18-Dec-2024).

“Vancouver councillors passed a motion Wednesday that would see a 115-year-old building on the city’s Dunsmuir Street demolished — even as they chastised the property owner for letting the heritage-listed building fall into disrepair.

Built in 1909 at the corner of Dunsmuir and Richards streets, Vancouver’s Dunsmuir House has served as a grand hotel, a barracks for soldiers and a single-room occupancy (SRO) housing complex. But since 2013, it’s stood vacant. 500 Dunsmuir Street is listed in the city’s heritage registry but is not subject to heritage protection, according to a city report, which also noted a detailed cornice atop the building and its historic brick façade.

… City staff recommended that the building be demolished over the risk of a “catastrophic, cascading collapse,” saying that water leakage and disrepair mean walls are no longer supported properly… While councillors passed a staff motion approving the demolition, they did so after criticizing the building’s owner, Holborn Properties, and asking staff to look at legal avenues the city could take against property owners who do not maintain historic buildings…

… In a statement to CBC News, Lee Medd, director of asset management for Holborn, said they are committed to “acting responsibly in the best interests of public safety, the community and the future of this site.” Medd did not say what would replace Dunsmuir House or when that may happen, but that Holborn has had “long-held intentions to redevelop this location.”” Link – https://www.cbc.ca/news/canada/british-columbia/dunsmuir-house-demolition-city-of-vancouver- 1.7414532

And here below is a link to CityHallWatch coverage of “The demolition of 500 Dunsmuir Street” (more photos at the link) – https://cityhallwatch.wordpress.com/2025/01/18/demolition-of-500-dunsmuir-in-photos/

*****

THE ROLE OF MUNICIPAL GOVERNMENT

We must note that the City of Vancouver is not an innocent bystander when it comes to low-balled assessments, which benefit some property owners at the expense of the rest of the taxpayers.

In his article on another case of low assessments by BC Assessment, Robert Renger quoted Derek Holloway, AACI (Ret.), a 28-year veteran of BC Assessment: “I’ve made Vancouver City & Council aware of many under-assessed properties over the years. I hear crickets when I send the [info] – even the press is afraid.”

ADDITIONAL INFO ABOUT THE PROBLEM OF UNDER-ASSESSMENTS

A 2019 article by Kerry Gold in The Globe and Mail is entirely relevant now in 2025. She even refers to another project by same developer (Holborn) though the developer is not named in the article. Below are some excerpts relevant to today’s story of the amended assessment at 500 Dunsmuir.

“B.C. has lost millions to undervalued commercial properties, former assessor says” (Kerry Gold, Globe and Mail, 22-Jan-2019, for subscribers).

“Recently retired BC Assessment assessor Derek Holloway says that for too long, large commercial properties, often slated for residential density, were being undervalued and money was left on the table. That’s money that could have been going toward funding social housing and affordable housing models, such as co-op housing.

When big properties aren’t taxed correctly, he says, residential property owners take on the extra tax burden.

… He blames policies that saw government stepping away from housing programs, selling off public lands to private developers and failing to ensure trophy properties were valued and taxed according to the market. Mr. Holloway says that anyone concerned with the creation of affordable housing should consider this overlooked source of lost funding… “I don’t know of any housing advocates who have taken issue with low assessments, since the process is so insulated,” says Mr. Holloway…

…. The former provincially owned Little Mountain property, for example, may have been under-assessed due to a lack of transparency, he says. The province sold it to a developer [NOTE – Holborn – same as the subject of the 500 Dunsmuir demolition and low-ball property assessment] in 2007 as part of a secret deal, receiving payments in future installments. “I’ll bet that BC Assessment has never seen the sale agreement,”

… He’s especially critical of the BC Liberals’ handling of Little Mountain, which was one of Canada’s largest low- income housing projects. “BC Housing could have just held onto the site and then subdivided off individual lots over 10 years, reaping the windfall for B.C. taxpayers that is reflected in the higher assessments.

… “Past provincial governments have not only screwed taxing jurisdictions by perennially under- assessing trophy properties – they’ve handed over massive amounts of prime real estate to developers, all whilst ignoring B.C.’s needs for affordable housing.”

Link – https://www.theglobeandmail.com/real- estate/vancouver/article-bc-has-lost-millions-to-under-assessed-commercial-properties-former/

*****

More recently, in an article entitled “Retired appraiser says BC Assessment intentionally undervaluing commercial properties” (Chilliwack Progress, 24-Feb-2023) Paul Henderson reinforced a number of critical themes.

“A retired property assessor says residential taxpayers in B.C. are getting fleeced by chronically under-valued industrial/commercial/institutional (ICI) properties. Derek Holloway was a senior appraiser at BC Assessment for 28 years, and he’s been banging this drum for years, reaching out to media outlets across the province with examples of properties sold at rates way higher than assessments.

… Holloway points to the New York District Attorney who accused former president Donald Trump of inflating values of some of his assets in financial statements to obtain favourable terms for loans, while deflating the value of other assets to reduce property taxes. ‘In B.C., this is a regular occurrence for many large ICIs,’ Holloway says. ‘ICI property owners often hire an army of assessment appeal agents and lawyers to frustrate BC Assessment and the appeal system.’ ”

… Holloway responds that at the very least there is an imbalance if some ICI properties use the appeal system to keep valuations low since the others (usually smaller ones) will have to make up the taxes… It’s all a messy and opaque business, and there does not seem to be enough political will to make it cleaner and more transparent.

Link – https://www.theprogress.com/opinion/opinion-retired-appraiser-says-bc-assessment-intentionally-undervaluing-commercial-properties-1938542

CONCLUSION

This amended BC Assessment for 500 Dunsmuir will no doubt please those members of Council and others who were so very critical of Holborn’s behaviour in neglecting the building . Geller should be complimented for taking on the appeal, noting it was not for any personal gain, other than the satisfaction of seeing Holborn paying its fair share of taxes, based on the true value of the property.

MORE MATERIAL

The demolition of 500 Dunsmuir Street (in photos) – https://cityhallwatch.wordpress.com/2025/01/18/demolition-of-500-dunsmuir-in-photos/

Demolition of 500 Dunsmuir St at Special Council Meeting December 18th. Former SRO, building derelict since 2013. Owner is Holborn (Little Mountain developer) – https://cityhallwatch.wordpress.com/2024/12/17/500dunsmuir-demolition-council-dec18/

BC Assessment’s low valuation of 601 Beach Crescent saved purchaser Pinnacle millions in property tax (at the expense of other Vancouver taxpayers). Note: This article points out how there seems to be a systemic bias of low valuations for some major properties, at the expense of other taxpayers https://cityhallwatch.wordpress.com/2024/12/02/bc-assessment-valuations-601beach-cr-saved- pinnacle-millions-renger/

April Fool's Day is cancelled in Vancouver and Odessa

April Fool's Day has always been one of my favourite days of the year, perhaps because I have always enjoyed being a fool. Over the years I have celebrated the occasion with various pranks. Below are three of my favourites.

In 1998, Prince Charles, Prince of Wales and his sons Prince William and Prince Harry participated in official engagements in Vancouver and had a private holiday in Whistler. I was selling a condominium building in Kerrisdale, and decided to buy a page in the Vancouver Courier and reported that the Prince had purchased a penthouse in my Elm Park Place development at Larch Street and West 41st Avenue.  After all, the prince admired good architecture, and this was a very well-designed building and the 100% wool Axminster carpets in the building were similar to those in the palace. 

After the article appeared, several buyers angrily phoned my office complaining about my decision to sell to the prince. Some worried his presence in the building would add to the security costs and monthly condominium fees. Really! 

Eventually, my assistant was able to point out the article had been published on April 1st, and the prince had not purchased a unit.

The next year I wrote an advertorial in the Courier about a secret provincial government report that the province was considering a SkyTrain extension along the Arbutus Corridor and West 41st to UBC. The extension would be funded in part by increased UBC tuition fees and taxes on the businesses along West 41st, especially the coffee houses. It would go past Elm Park Place and Crofton House School, where my daughter was a student.

The following day one of my daughter's Crofton School classmates brought the newspaper article to 'show and tell' to let the girls know there would soon be a SkyTrain station near the school. My daughter had to tell her that it wasn't a real story. Her dad had made the whole thing up since he was trying to sell some apartments. It was just an April Fool's Day prank. Amy had never heard of April Fool's Day before.

In 2013, I tried again. This time it was a story in the North Shore News about my proposal to build 14,000 duplexes and coach houses in the upper lands of West Vancouver, which would double the population over the next 20 years. The housing would be linked to Ambleside and Dundarave by gondolas, like that I had proposed at SFU. 

Brent Bartholomew, Metro's Director of Planning liked my proposal, noting that "for too long, West Vancouver has been an enclave for the rich and very rich. This proposal would accommodate more lower and middle income households, including the children and parents of the rich and very rich."

This article had a number of unexpected results. Both Business in Vancouver and the Vancouver Sun contacted me seeking more details about my proposal, especially the network of gondolas. However, many local residents were not amused at all. In fact, in an effort to address the damage, I had to buy space in the following week's paper to apologize to those who were so upset. Really!

The following year I was working in Russia. I had some time between assignments and on April 1 decided to visit Odessa, Ukraine where my family originated. There was a war in eastern Ukraine but I did not expect it to affect Odessa, and other than the presence of some Russian artillery and soldiers, it didn't. 

But the reason I mention this is because since 1973, on April 1, Odessa celebrates Humorina https://en.wikipedia.org/wiki/Humorina  an annual festival of humour with parades and performances around the city. While I missed most of it due to a late flight, I saw enough of it to realize what a wonderful event it is.

Sadly, due to the war in Ukraine, Humorina has been cancelled in recent years.

April Fool's Day in Vancouver 2025. This year, it feels like we are also in the midst of a war in Vancouver. As a result, I haven't seen any evidence of April Fool's Day in the newspapers or on the radio. As CBC's Stephen Quinn mentioned this morning, there are so many foolish things happening in our daily lives, April Fool's Day pranks don't seem as necessary or appropriate as they were in the past.

Let's hope that next year April Fool's Day will again be celebrated in Odessa....and Vancouver. 

Buyer Beware: Buying presale or resale condominiums -Jewish Seniors Alliance Magazine

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! 

https://jsalliance.org/wp-content/uploads/2025/03/SL_Vol302_Winter2024-Final-Web-1-opt.pdf

Building UniverCity: the story behind the story - Kim Stephens - Waterbucket eNews March 4 2025

 

World Obesity Day - March 4, 2025 - The Nature of Things - Weight of the World

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!

You can watch the video here. https://www.nfb.ca/film/weight_of_the_world/

We Are in the Midst of a Growing Housing Crisis - Conversations Live - March 4, 2025

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 is the 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

REAL ESTATE REPORT - Conversations Live - Stu McNish - March 4th at 6pm

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/