Housing predictions - the Vancouver Sun

Over the years, the Vancouver Sun has invited me to share my thoughts on housing trends that might be expected in the year(s) to come.  On re-reading these articles, I have found that I am often wrong, but also right in terms of what might happen. However, I was always wrong on timing. Below are excerpts from an earlier year-end outlook column.

2012 https://vancouversun.com/opinion/op-ed/housing-transportation-will-be-hot-topics

In December 2012 I listed 10 things to be expected in 2013 (in alphabetical order)

Car sharing and reduced parking requirements. Just as fax machines gained popularity as more people acquired them, I predicted increased interest in car-sharing. This would allow municipalities to reduce minimum parking requirements with the attendant benefits of greater affordability, reduced congestion and pollution.

Depreciation Reports. I anticipated that the new requirement for every condominium to complete a depreciation report would result in some owners discovering the cost of repairs was greater than the value of the improvements, with a call upon government for assistance.

Fee-simple row houses. As a result of a legislative change related to party-wall agreements, I predicted an increased interest in individually owned rowhouses. I was wrong.

Laneway and coach house programs. With the success of the Vancouver program, other municipalities would introduce similar programs, but with greater flexibility to preserve smaller, older homes.

Micro suites. The success of projects in Vancouver and Surrey, combined with reduced parking requirements, will encourage other municipalities to reduce minimum suite sizes to allow smaller units for sale and rent.

Modular housing. I hoped for renewed interest in my 2009 BC Housing Study on how modular units could be set up on vacant land for the homeless, to be relocated to other sites at a later date.

Regeneration of older social housing. While awaiting a construction start on Little Mountain, I anticipated reviews of other older public and social housing projects.

Replacement Rental Housing. As older rental projects deteriorated, I predicted that housing experts would call on provincial and municipal governments to establish policies to require replacement rental housing in new projects.

Smaller housing on smaller lots. Given downsizing empty-nesters' desire for alternatives to rowhouses and apartments, some small house infill developments would get underway.

Transit funding. Discussion on this 'hot' 2012 topic would continue, with many believing a comprehensive user-pay system was preferable to selective bridge tolls and property tax funding.

I noted that none of these ideas were new. However increased interest in more sustainable lifestyles would give greater currency to ideas previously considered just fads. While 10 years later car-share has increased in popularity (notwithstanding the demise of Car2Go); reduced parking standards are in the news; condo depreciation reports have led to redevelopment properties; and replacement rental requirements are now in place, other expectations are still not happening. But they will!

In subsequent years, I have often repeated similar predictions, especially related to fee-simple rowhouses, modular housing, and what is now often referred to as 'gentle densification' of traditional single-family neighbourhoods. 

This year is no exception. Below is the article that appears in today's Vancouver Sun. I welcome your comments

Adera Development is using CLT (cross-laminated timber) as part of its SmartWood program, as the material used to construct its more current projects like the soon-to-be constructed SÕL in West Coquitlam. PHOTO BY SUPPLIED /PNG

In the summer of 1999, I received a call from then Vancouver Sun columnist Paula Brook. She was writing an article on condominium living and wondered if I had thoughts on future trends.

I responded that when condominium, or strata-titled legislation (the terms can be used interchangeably), was introduced in 1966, condos were regarded as an affordable alternative to renting. Nobody imagined that one day they would be selling for $1 million or more.

Although condominium living subsequently became widespread, I suggested one future trend would be to avoid condominium living since many homeowners preferred not to deal with strata councils deciding what flowers could be planted or when a roof should be replaced. Also, lower income homeowners did not want to have to pay someone to cut their grass. I proposed ‘fee-simple,’ or individually owned rowhouses, as a desirable alternative.

A subsequent Vancouver Sun column titled “Taking the Condo out of the Box” observed that for centuries, individually owned attached dwellings had been built throughout the world, and they were not condominiums. It was time to introduce this form of housing to Vancouver.

The article generated significant public interest; but while individually owned rowhouses are very popular in Toronto, few have been built in Vancouver.

Why? Outdated zoning bylaws require lengthy approvals and excessive municipal fees, especially for service hook-ups, resulting in them being more expensive to build.

However, in the coming year, there could be increased demand for alternatives to condominium living, with corresponding regulatory changes. One reason is many condominium owners disagree with the provincial government’s recent decision to remove restrictions on rentals and age.

There is also the desire for more housing choices within established single-family neighbourhoods. Small developments of individually owned rowhouses could fit nicely.

Similarly, ‘semi-detached’ housing, comprising two attached, individually owned homes on two adjacent lots, could be preferable to duplexes — which many forget is another type of strata-titled development.

The combined impact of the prohibition on rental and age restrictions, along with expanded or increased provincial and municipal speculation and vacancy taxes and the federal government’s forthcoming underused housing tax (UHT), might have a surprising, unanticipated consequence.

Prior to the introduction of strata-title legislation, the most usual form of apartment ownership in B.C. was the housing co-operative. Unlike a condominium, where one owns the apartment and a percentage of the common area, in a co-operative, one owns a share in a corporation that owns the building. The share is associated with a particular unit.

In recent years, co-operatives have been developed for lower-income households, usually with government subsidies. However, in the future, some higher-income households may find a New York-style co-op more appealing than a condominium since municipal, provincial, and federal speculation and vacancy taxes will not apply. B.C.’s property transfer tax and companion foreign-buyers tax will also generally not apply. Furthermore, co-ops can independently impose additional rules and restrictions, including who can live in the building.

B.C. residents should also note each of these taxes noted above has different regulations and filing deadlines: Vancouver empty homes tax, February 2; B.C. speculation tax, March 31; federal UHT, April 30.

In previous outlook columns, I have written about the benefits of another type of living arrangement – home-sharing, which matches someone who has available space with someone looking for a place to live.

As rents increase, expect more interest in home-sharing along with new home-share websites like nesterly.com, which operates in the United States. It matches homeowners with renters, including those who may lend a hand for discounted rent.

Locally, North Vancouver-based Hollyburn Community Services Society has been exploring, with Canada Mortgage and Housing Corporation (CMHC) and Simon Fraser University’s Renewable Cities program, the creation of a program to match seniors occupying under-utilized single detached houses with other seniors seeking a place to live.

In 2023, we can also expect the expanded application of innovative housing construction.

Fifty years ago, the United States government created Operation Breakthrough to promote the benefits of industrialized housing systems. Since then, many of us mistakenly believed that expanded use of ‘manufactured’ or modular housing construction was just around the corner.

Recently, modular housing has provided temporary housing for the homeless. Attractive and affordable manufactured home communities have also been developed around the province. However, few multi-family projects have been built using modules.

Expect this to finally change. Manufactured housing can be faster to build, quality controlled, less wasteful, and more energy efficient. It could also help address the province’s severe shortage of skilled construction labour.

Also, expect more housing to be built with mass or heavy timber using cross-laminated timber (CLT) products. This technique can be a cost-effective and sustainable alternative to concrete for buildings up to 12 storeys. While some may worry about potential fire dangers, CLT products are surprisingly fire-resistant.

Adera Development is using CLT (cross-laminated timber) as part of its SmartWood program, as the material used to construct its more current projects like the soon-to-be constructed SÕL in West Coquitlam. PHOTO BY SUPPLIED /PNG

Regardless of the method of construction or housing tenure, a key concern in 2023 will be what is going to happen to housing prices and rents.

Notwithstanding ambitious federal immigration targets, most analysts expect housing prices to decline in 2023, but not crash. This will be due to a weaker economy and price increases experienced over the past few years, combined with higher inflation and interest rates.

However, rents will continue to increase.

One reason is new supply will not keep up with demand. The combination of higher construction costs and interest rates will result in approved projects being put on the back burner since they cannot be financed.

While it is easy to make predictions, the past few years have taught us how difficult it is to get them right. Few expected the 2020 pandemic, last year’s war in Ukraine, or the accelerated effects of climate change.

Looking forward, many B.C. municipalities have new mayors and councils, and the province has an energetic new premier. Housing affordability remains top of mind. While I do not expect expanded speculation and vacancy taxes nor foreign buyers’ taxes or bans to improve housing affordability, there is a growing acceptance that streamlining provincial and municipal approval procedures will reduce housing costs.

Many politicians have promised to speed up and improve development approval systems. Let us hope they follow through.

Best wishes for a happy, healthy and more affordable 2023.

Michael Geller is a Vancouver-based planner, real estate consultant and retired architect. He serves on the Adjunct Faculty of SFU’s Centre for Sustainable Development and School of Resource and Environmental Management. He writes a regular blog at gellersworldtravel.blogspot.ca and can be found on Twitter @michaelgeller