How to avoid letting Bills 44 & 47 increase your property taxes

Last year the province approved Bill 44 which permits 4 or 6 homes on most single-family lots without a need for rezonings and public hearings. It also approved Bill 47 allowing higher densities near transit stations and bus loops. At the time, many questioned whether these Bills would increase property assessments and taxes.

Bill 44-Multiplexes. Government officials responded that since Bill 44 was so widespread, it was unlikely to have a significant impact on property values. I agree. However, I also expect some single-family lots, especially larger lots located in areas where multiplex developments might be popular, and where there have been recent sales at higher values, will go up in their assessed value. As a result, property taxes will increase.

Bill 47-Transit Oriented Development. Similarly, many single-family properties near transit stations will likely increase in value. This will likely be evident on your 2025 Assessment Notice, especially if there have been nearby sales of single-family zoned lots at higher values. A good example is along the Broadway and Cambie Corridors. 

While this may be good news for certain owners, it will not be good news for those who have lived in their homes for many years and have no intention of selling to a developer or homebuilder. For them, increased assessments will simply lead to an increased property assessment and higher property taxes.

Fortunately qualifying owners of these properties can do something to avoid higher property taxes. They can make an application under Section 19(8) of the BC Assessment Act before November 30th.   

This section of the act applies to residential properties that have been owned and occupied continuously for 10 years by the present owner. Instead of being assessed higher, they can be valued on the basis of their present single-family residential use, even though they may have a higher alternative use and greater value. 

Examples would be single-family dwellings on land that can be subdivided into smaller parcels or developed with multiplexes or multi-family/apartment or commercial use. 

To illustrate how this works, look at these two identical side-by-side properties on Cambie Street.

If you look carefully at the bottom of the 5407 Cambie assessment you'll see this note.

Assessed Value only reflects actual not potential use. Assessment Act. s 19(8)

If single-family houses near your home have been selling at higher prices due to Bills 44 & 47 or other Official Community Plan or zoning changes, you should check this out.

Eligible owners must apply annually by November 30th. All applications should be submitted by this date.​

NOTE: You will not know for certain whether you assessment has gone up until January 2025 when the new assessments come out. If you miss the November deadline, you can make application up until March 15 of the following year. However, if you can make the application this year, it will be easier to ensure that your assessment does not increase due to the zoning changes. 

A common question is whether property owners who take advantage of this provision will have to pay back the taxes they saved if and when they sell at  a higher price. The answer is NO.

You can find more details and the application form here: https://info.bcassessment.ca/Services-products/property-classes-and-exemptions/section-19-8-of-assessment-act-special-assessments-for-certain-long-term-residents

BROADWAY PLAN Redux - Douglas Todd Vancouver Sun November 23, 2024

Last week, Douglas Todd, a columnist with the Vancouver Sun invited me to follow up on some of my earlier concerns about the Broadway Plan. Below is the result. 

While I might have rephrased some of the things I said so that it didn't appear that I believe all the applicants are speculators, and all land deals are between $100 and $150 psf...(in fact some developers and speculators are paying more), overall Douglas Todd quoted me most accurately.

I am curious what Jennifer Podmore and others associated with the Senakw development think of my expectation that rather than leave units empty in such a highly visible location, the Squamish Nation and QuadReal will rent their market suites at rates below what other developers are hoping to achieve, namely $5.50 to $6 per sq.ft. per month or more , depending on whether it is a studio or 3-bedroom unit. o or 3-bedroom unit.

Tens of thousands of Vancouver residents and beyond live in fear of being displaced or their communities distorted by colossal property development, including within the upzoned land of the Broadway plan.

That’s where “realtors are having a field day,” says Michael Geller, Vancouver community planner and property developer.

The same fears exist within the B.C. government’s transit-oriented-development zones — that is, property within 800 metres of SkyTrain stations and transit hubs, not to mention in the vicinity of scores of more highrise proposals peppered throughout Metro Vancouver.

Residents within the Broadway zone and around SkyTrain stations aren’t only afraid they’ll be forced out of their rentals, many are also wondering whether it’s simply time to move away from the coming chaos.

Their resistance will be on display Saturday at 1 p.m. at a “Pause the Plan!” rally on the north side of Vancouver City Hall, where citizens will urge city council to rethink the mammoth Broadway plan.

Paradoxically, in the midst of the turmoil caused by the city’s and province’s dramatic upzoning to address extreme unaffordability, not much new building is actually going on.

In other words, many residents might have more time than they think before the demolition crews, excavators, orange fences and construction cranes move in and transform their normally quiet streets and neighbourhoods.

There are many reasons for the plodding pace.

One is that this year brings a general slowdown in housing construction in Metro, partly due to higher interest rates.

A more specific reason related to the Broadway corridor and Vancouver is that it’s mostly real estate “speculators” who are making the initial moves for more towers, said Geller.

Most of the entrepreneurs trying to get in on the city’s radical new density allowances aren’t developers, says Geller. They’re investors who wish to get councillors to approve their projects in the hopes that they can then sell them to developers.

More than 120 tower proposals have been made with the Broadway plan. Credit: Screenshot of interactive map by Stephen Bohus

They’re speculating on big profits on land that has suddenly become much more expensive because governments have unilaterally approved towers in the 20-storey range on city blocks on which there were once just low-rise multiplexes or detached homes.

Bob Moore of Dexter Realty acknowledges many of those behind the projects are being “somewhat speculative or opportunistic.”

While land assemblers are buying up many housing lots to turn them into highrise sites, Moore believes other applications are by long-term owners of older, three-storey rental walk-ups.

“These owners believe they can secure a 20-storey allowance themselves, so they can sell to a developer for a higher price,” said Moore. “But … this strategy does not appear to be working out so well.”

The many towers being proposed under the Broadway plan will forever change some character streets like this one on East 10th between Fraser and Main. Photo by Arlen Redekop /PNG

In other words, the profit margins aren’t looking promising, including for the pension funds and real estate investment trusts (REITS) expected to eventually buy and run the purpose-built rental towers.

“(Building) starts are likely to be muted for the next little while,” said University of B.C. business professor Thomas Davidoff, including because of the understandable but “onerous” Broadway plan requirement that builders must support displaced tenants.

“A combination of high interest rates and weakened rents — likely from a weaker economy and reduced immigration — currently makes both rental projects and condos less profitable than they were awhile ago,” said Davidoff.

Population-based demand for housing in B.C. and Metro will likely decline in the short-term, concurs Bryan Yu, chief economist for Central 1. While B.C.’s population had been growing at the record rate of 3.3 per cent a year due to international migration, Yu expects it to slow to “one per cent per annum in the coming two years.”

There is something else causing developers to worry that they can’t make enough profit building inside the Broadway corridor or around Vancouver subway stations, said Geller.

And that is the giant Sen̓áḵw project, Geller said — the new rental skyscrapers under construction by the Squamish Nation on reserve land at the western end of the Burrard Bridge in Kitsilano.

Senakw’s initial 3,000 highrise units haven’t “faced the same financial challenges as most other projects since there is no land cost, compared to a land cost of $100 to $150 per square foot of buildable area for other projects,” said Geller.

“When they are finished I expect the Squamish Nation and Quadreal (an arm of the B.C. Pension fund) will not want to allow them to sit empty too long. I predict that they will rent for less than other projects, especially since there is no parking. And that could upset the market a bit.”

The Squamish Nation’s 3,000 rental units next to the Burrard Bridge will be less expensive than those built under the Broadway plan “since there is no land cost, compared to a land cost of $100 to $150 per square foot of buildable area for other projects,” says Michael Geller. Photo by Arlen Redekop /PNG

Moreover, the retired architect said, the Sen̓áḵw highrises were able to start construction quickly because two years ago Prime Minister Justin Trudeau announced a “massive, $1.4-billion, low interest loan” for the project, which could eventually provide 6,000 units.

Other builders aren’t able to get such favourable loans, Geller said.

Despite other expensive efforts by federal, provincial and civic governments to stimulate the building of houses, Moore laments an additional problem: Governments themselves often get in the way.

“Developers look for a stable and predictable environment. The last 2½ years has been anything but,” he said, with abrupt cost increases in not only interest rates, but also in taxes and building code demands.

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These expenses “were not known two years ago when many developers put Broadway plan sites under contract,” Moore said. For instance, he said, the B.C. government is now “mandating accessibility standards for all new homes” in large condo and rental projects, “which reduces the number of units in a building.“

Despite Vancouver city council adopting the Broadway plan 2½ years ago, Moore also noted it was only this month that politicians got around to approving the first project: “It will be another 2 1/2 years before the first 20-storey rental building is ready for occupants.”

In other words, there is little doubt a juggernaut is marching toward the Broadway corridor and other neighbourhoods.

But it’s moving slower than expected.

dtodd@postmedia.com

CKNW - Why Developers are Going into Receivership.

This week, news broke that a major Surrey developer Thind Properties https://thind.ca/ was put into receivership by its lender Kingsett. At first there was just one project in Surrey with 90% of the units already presold. This seemed quite odd, since presales are often the key to getting a project's construction underway. But in this case, the presales occurred some time ago and the Building Permit had not yet been issued.

Then we learned that there were two other major projects in Richmond and Burnaby by the same developer also in trouble. In total, the lender was owed over $300 million. And then it was reported that the developer had misappropriated funds and failed to pay money owed to the government.

Both Paul Sullivan, https://ryan.com/about-ryan/leadership/paul-sullivan/ generally regarded as one of the most knowledgeable appraisers and real estate consultants in town and I were invited by CKNW to comment on the receivership and why it might have happened. Paul spoke to Mike Smyth. A day earlier, I had spoken to Jas Johal. Neither of us knew the other was doing the interviews but if you can take the time to listen, you'll hear us saying essentially the same things.

Paul Sullivan on Mike Smyth Show CKNW How does an $85 million project go down the tubes The Mike Smyth Show | Global News

MG on the Jas Johal Show. https://www.iheart.com/podcast/256-the-jas-johal-show-31081170/episode/why-are-big-vancouver-developers-going-240525450/

In case you don't have time to listen, here are some key takeaways.

The presale markets have dried up. In order to arrange project financing lenders want to know whether there is a market for a project. When I first started in this business, good lenders undertook research to assess whether a market existed, the prices the units would sell for upon completion, and then make a decision whether to lend on the project or not, and if so, what percentage loan would be acceptable.

That's not how we do it today. Instead, in most cases, developers are required to set up presale programs, usually in a purpose-built presentation centre, with models mock-ups of a kitchen and bathroom, and sometimes a full suite or two. Virtual reality displays show the views from each suite and related marketing information. The cost of all this is usually six figures and often seven.

Until the last couple of years, most presale buyers were investors intending to rent out the completed unit, or younger households willing to purchase three or more years before the project was completed. Families with children or empty nesters were generally not major market segments. Although certain projects in established neighbourhoods like Kerrisdale, Dunbar, West Vancouver were designed and sold to empty nesters, who could plan a move three years later.

New tax programs are major culprits. Unfortunately, government taxation programs have completely changed the presale marketing of projects. The Foreign Buyer Tax, and subsequently the ban on foreign buyers removed them from the market. Then the Speculation and Vacancy Tax and Empty Home Tax discouraged those wanting to purchase a condominium as a second home. To add insult to injury, the prohibition on short-term rentals further exacerbated the situation.

While many applaud the governments for introducing these taxes, they haven't thought about a significant, unintended consequence. A lot of projects are simply not able to meet their presale target and get underway. Others are not even trying. If you need proof, just look at how many projects have been approved in recent years along the Cambie Corridor that have not proceeded. It is also estimated that there are 44,000 units in Surrey that are in the approval process, or already approved, that are unlikely to proceed. 

On top of all of this, as Jas Johal pointed out, there are a substantial number of completed and unsold condominiums. Furthermore, there are many units, especially high-end luxury units that sold a couple of years ago at very high prices, oftentimes in excess of $3,000 psf, that are nearing completion. Units in these buildings are now being offered for sale as assignments, oftentimes well below the original price paid. 

Travelodge Receivership. When I spoke with Jas Johal, he referenced Coromandel's high profile receivership that we had discussed last year. He wondered whether the Thind receivership was likely the last one we would see for a while, or just the beginning. Unfortunately, I thought it was just the beginning adding that earlier this year, theTravelodge Motel redevelopment in North Vancouver being undertaken by Marvel Group, for which I had been the Development Manager for three years, was put into receivership by its lender Atrium MIC. 

Although I had obtained the rezoning that created the value, and oversaw the Development Permit Application, at the time of the receivership, I was owed a substantial amount of money. Whether I get any of it back remains to be seen.

There will be more Receiverships. Sadly, I expect more receiverships in the year ahead. In addition to detriorating market conditions, project costs have increased considerably.since projects were first conceived and received preliminary approvals.  Three key increases are construction costs, interest rates, and municipal fees. Looking at two projects I'm involved with along Cambie Street, construction costs are substantialy higher than five years ago. Although prime rates interest rates are coming down, developers are often paying substantially higher interest rates. In the case of Thind, their loans were at 10% and 12%. While some people may be pleased to read about developers going broke, sadly a lot of small people get hurt too.

Municipal fees and timing are serious concerns. Both Paul Sullivan and I pointed out that unfortunately the higher municipal Community Amenity Contributions and Development Cost Levies that were approved when times were good are seriously impeding new developments from proceeding. In the case of the Cambie street projects, the municipal fees, including engineering requirements total $9 million, for a 61-unit project. This is 90% higher than for a similar project completed across the street a year ago. Furthermore, while we constantly hear project approvals are being sped up, and in some instances they are, they still take much too long. It often takes months to get an answer from staff on what fees might be payable.

To conclude, as more high profile projects go into receivership, lenders become increasingly cautious. As a result, it is likely that many more projects with prior approvals and obligations to pay substantial fees payable to the city, are not going to proceed. The market simply is not there right now.  

Crying Wolf. Developers have often complained in the past about the difficulties making projects work financially. But this time they are not crying wolf. Sadly, the unintended consequences of projects not proceeding will be serious. A lot fewer people will be working, and as I and others have written, the affordable housing crisis is not just about the cost of housing. It is also about BC's low incomes. Canceled projects will not help.

So, when is Big too Big? Density in the name of Affordability.

My concerns about high density, taller buildings that are out of scale with their immediate surroundings are not new. In fact, I have written about this for many years. 

Below is an article I wrote for the Vancouver Courier seven years ago. While it was about buildings in the West End and Downtown, I think it is worth reading within the context of the Broadway Plan and other developments happening around the region, often at densities that were inconceivable in Vancouver not that long ago.

FROM THE VANCOUVER COURIER August 1, 2027

Someone once asked, 

“When you are sitting in the bathtub with the hot water running, how do you know when to shout?”

     This quotation came to mind last week when Vancouver city council approved a rezoning application at Nelson and Burrard.

     The development includes 331 market strata units in a 57-storey tower, 61 units of social housing, seismic upgrades and restoration of a church, and expanded facilities and program space for the church and surrounding community. It will be the third tallest tower in the city, for the time being.

     The development is a partnership between the First Baptist Church of Vancouver and Westbank Project Corp — a company I greatly admire for working with top notch architects and a commitment to design excellence. This architecturally striking tower, intended to resemble a pair of organ pipes, was designed by the late Bing Thom.

     When a CBC reporter asked me what I thought of the design, I told her I thought it was very innovative and would appeal to those wanting to see more variety in Vancouver architecture.  But I agreed with those who thought it was too big for the site and neighbourhood context.

     She said she was surprised by my response. But she shouldn’t have been.

     While I have often sought approvals for taller and higher density developments, in recent years I have become increasingly concerned with the size of some new Vancouver developments. In my opinion, they are simply too big. 

     However, city staff and politicians justify higher densities and heights noting the developments offer promises of greater housing affordability, community amenities and sustainability.

     In supporting this development, Mayor Gregor Robertson repeatedly told reporters it would provide much needed social housing units and funding for more social housing at a time when federal and provincial subsidies were not available. He is correct.

     

     While council rightly rejected Chinatown’s 105 Keefer St. development, other developments have been approved at greater heights and densities than many planners considered appropriate since they offered public amenities, housing affordability and Community Amenity Contributions (CACs).

     They include the Independent at Kingsway and Broadway, and 508 Helmcken, which, at a floor space ratio (FSR) of 17.4, is approximately 10 times the density of a typical Kerrisdale highrise. These buildings are now under construction and time will tell if my concerns were valid.

     The famous American architect Louis Sullivan once said that building form should follow function. In the case of these projects, form follows finance.

     I acknowledge that there are architects, planners and developers who disagree with my concerns. They question whether it really matters if a building is 30 storeys, 40 storeys or 50 storeys. What matters more to them is how the building is designed at the street level. They believe FSR is a blunt instrument that should not be used to assess the likely success of a design.

     I understand and appreciate this point of view. However, it was not that long ago that six FSR was as high as the city would allow for residential development. Today double-digit FSR residential projects, like the Burrard and Nelson development, are becoming commonplace.

     The debate over when is big too big reminds me of a radio interview with the late Arthur Erickson many years ago. In describing his design philosophy, he said it was important for new developments to relate to their surroundings. When the interviewer pointed out that over time surroundings will change, Erickson agreed. But he added that future buildings should relate to his building designs, and so on. 

     As I look around Vancouver and other parts of Metro Vancouver, there is no doubt that many new developments no longer relate to their surroundings. Their designs are formed by the significant density bonuses offered in return for amenities, affordable housing and cold hard cash. 

     Each year Metro municipalities are now receiving hundreds of millions of dollars from developers in return for extra height and density. Many will say this is a good thing; it means property taxes will not have to go up so much.

However, I worry that if we continue to allow a yearning for housing affordability and CAC payments to drive project densities, heights and massing, we may ultimately compromise the quality of the built environment that has made Vancouver the envy of planners from around the world.

Ozzie Jurock's OZBUZZ Podcast with me. November 16, 2024

Ozzie Jurock https://ozbuzz.ca/ always enjoys telling it like it is. Or at least how he thinks it is. Which may be why I and so many others enjoy talking with him. 

Ozzie has had an incredible career, and has been very successful. He has made a lot of people a lot of money. His annual conferences attract hundreds, if not thousands of followers. 

Five years ago I wrote about one of them for the Vancouver Courier. https://www.vancouverisawesome.com/courier-archive/opinion/vancouver-real-estate-advisor-urges-conference-goers-to-jurock-this-way-3107615

Having known Ozzie for a long time, I always enjoy the opportuntiy to reminisce with him. 

He recently invited me to sit down and answer ten questions on a variety of issues. When our conversation was finished he offered me the opportunity to listen to the tape and edit it. I couldn't.

I hate listening to myself (I know, I'm not alone). While I don't always agree with everything I say after the fact, if I said it, I thought it should stay in. And so this is unedited content.

You can find our interview at the link below. Of course I talk about my concerns with the Broadway Plan, and the recent provincial Bills 44 and 47. But we also discuss quite a few other topics including how I got into the business, my favourite projects, and who I admire. 

I enjoyed Ozzie's questions. I hope you can find the time to listen in, and enjoy some of my answers. 

https://ozbuzz.ca/2024/11/16/c-housing-drama-the-legend-says-no-to-4-6-plexes-everywhere-highrises-ok-but-not-off-broadway/

Making Predictions about Vancouver Real Estate - Vancouver Real Estate Podcast - 2 years later

In 2020 I was invited by Adam and Matt Scalena, two charming and successful real estate agents to be a guest on their podcast. While I can't remember what I said then, I was invited back two years later in November 2022 on the day Ken Sim and his new council was inaugurated.

Over the weekend, someone mentioned that they had recently listened to this podcast (it was raining too much to play golf) and was suprised by how many of my predictions turned out to be right, and so terribly wrong!

Being the self-centred person that I am, I just listened to a portion of this interview. While I was embarrassed by some of the things I said, sadly I was right about how the deteriorating condition of the Downtown Eastside would ultimately lead to street crime impacting citizens throughout the city. City planners were in part to blame.

Below is a summary of some of the topics we discussed. If you have time, and are trying to decide whether to rent or buy, and where to buy, you might be interested some of the things  we discussed.

Does the current economic moment remind you of any other time in history?

Today is a mild version of what I witnessed from 1981-1983. In 1981, developers in Vancouver were making a lot of money and drinking very expensive wine. By 1983, interest rates had risen to 18% and that slowed everything down. Some house prices were dropping by 40-50%.

That is not what we’re seeing now, but we are seeing a decrease in sales. The rise in interest rates is impacting sales and prices, and it’s also causing pauses in both strata and rental developments. A lot of projects that looked attractive two years ago are not feasible today.

I don’t want to pretend I know what will happen to interest rates. When I grew up, 7-8% was considered an attractive rate.

What we do know is that a lot more people are moving to Canada, so the demand is there. It’s a question of figuring out how to match supply and demand.

How will the current interest rate environment impact housing affordability?

Vancouver will never be as affordable as Winnipeg. The cost of land, cost of construction and current interest rates make it hard to produce housing for those with modest incomes in this city.

It seems like the cost of building is up while house prices are coming down. How does that play out in the short term?

If all of the developers start putting their projects on hold, construction costs will come down. The contractors will be a bit hungrier. But there’s still the cost of materials.

One problem is a lot of these costs are global. It’s hard to believe the war in Ukraine impacts the cost of construction in Vancouver but it’s true. That’s a reality we have to deal with.

Will we see housing prices drop significantly in Vancouver?

No, I don’t think we’ll see prices drop by 50% in Vancouver like we saw in the 80’s. We’ve had downturns since then, like in 2008 when many developers went broke. We’ve seen costs go up and go down.

I got some advice when I was younger: Buy as soon as you can. Even if you pay too much, it won’t matter in the long run. That advice has stuck with me and I’ve given it to a lot of younger people. Prices do go up and down but in the long run, it doesn’t matter. In the long run, prices go up.

Don’t think of your personal residence just in terms of an investment

Is Ken Sim’s plan to improve the permit approval process feasible?

On election night, I was invited to an event to discuss what was happening. Colleen Hardwick was asked whether Ken Sim would be able to improve the approval process and she said he couldn’t. To which I replied, “The approval process in Vancouver is so bad it’s impossible not to improve it!”

I don’t know if Ken Sim will be able to get the process down to three days, three weeks or three months, but there are lots of ways to improve the permit approval process in Vancouver.

I drove down Cambie Street on my way here today and noticed all of the little bungalows that have been replaced by six-storey buildings. To achieve that, the city did an overall plan for the street and every single building went through a lengthy and expensive rezoning process.

That’s nuts! Some of those buildings are not particularly beautiful and they still went through this long process. We don’t need to have so many rezoning meetings and a complex review process. We need to rethink the role of the urban design panel. So yes, we can definitely improve the approval process in Vancouver

What is it about Vancouver’s permit approval process that is so challenging?

There’s such a backlog of applications at Vancouver City Hall because the staff have to go through such a lengthy process. I sent a note off to the city planners this morning and if it was any other developer, I’d expect a response by the end of the day. But with the city planners, I don’t think I’ll ever get a response!

There’s a lot of great staff at City Hall and I think the new council will bring in some good changes.

There was once an idea that we’d have the equivalent of a Nexus lane for architects, planners and developers who have demonstrated that they’re honest and do a good job. Why should they go through the same lengthy process as inexperienced people who need more hand holding? I think that’s an excellent idea for municipalities to adopt.

Do you think electing Ken Sim was a win for Vancouver?

Yes, I do think Ken Sim becoming mayor is a win for Vancouver. I know Kennedy Stewart and he’s a decent guy. But he’s just not the inspirational leader so many of us were looking for.

And for some reason, so many things got worse and not better under his leadership. The situation in the Downtown Eastside was one of those areas; the city should never have allowed the situation to deteriorate to the point that it has.

Back in university, I did my thesis on setting up modular housing on vacant lands. When I ran for city council in 2008, I suggested setting up these same modular units to help address homelessness. Finally, many years later, that idea was adopted. The way they are using them is expensive but there are other ways for us to create housing solutions.

Modular units or RVs may not be the right answer to address homelessness but we do need to come up with more creative answers. Sometimes it takes longer to build social housing than market condos

What is the biggest challenge facing Vancouver right now?

I think the situation in the Downtown Eastside is a huge problem for Vancouver. It does lead to a lot of crime and there’s nothing worse than worrying about your personal safety. I know a lot of people who are moving out of single family homes and into condos for the added security.

Right now there are five tents in front of St. Paul’s Hospital. Do we wait until there are 25 tents until we address the situation? We’ve become almost immune to this. People walk by these tents all the time without raising an eyebrow. We have to come up with some solutions

On housing affordability for young families in Vancouver:

Another problem in Vancouver is that so many people cannot afford to live here. And they certainly can’t afford to live in Vancouver and have children.

It bothers me that people are deciding whether or not to have children based on whether they can afford suitable accommodation. To those people, I saw you should move to Trail or Nanaimo, start a new life, and have children.

The Globe & Mail recently published an article saying young people should leave big cities like Toronto and Vancouver for the sake of their financial futures. Do you agree?

I hate to say it but in a way I subscribe to that. I worked in St. John’s, New Brunswick a number of years ago and at the time, St. John’s was ranked as one of the least liveable cities in Canada. But there was a good quality of life there. The cost of living and housing was considerably less than living in Toronto or Ottawa.

So while I want to give young people ideas about how to get into a house in Vancouver, at some point people should consider whether they can afford to live in Vancouver. Those ads we’ve heard about people moving to Alberta can be pretty enticing.

Are municipalities outside of Vancouver facing the same problems?

The problems we see in Vancouver’s Downtown Eastside are not restricted to the Downtown Eastside. We’re seeing the same issues in Surrey, Maple Ridge and in other municipalities. Compared to the climate in the rest of Canada, Metro Vancouver is a lot more comfortable.

I was in a discussion recently about the growing tech industry in Vancouver. One of the concerns was rising housing costs for all of the employees of these big tech firms. I shared with the group that in San Francisco, they have Google buses that pick up employeesfrom the suburbs and bring them to work. There’s a similar program here with a bus going to/from Port Moody.

What areas outside of Vancouver do you see people moving to?

Port Moody is a sophisticated place. For people who can’t afford Yaletown, they move to Port Moody. There are a number of attractive communities, like Port Moody, North Vancouver and New Westminster, within Metro Vancouver. And you can go further; Abbotsford and Chilliwack can offer you a pretty nice quality of life.

When I did my first project in 1989, my wife and I took $1 million up to Squamish to buy property because I was convinced Squamish was the future. And now, Squamish is so expensive that people are moving to Pemberton!

If I was a lot younger, I’d invest in real estate in Lillooet. It’s far away but it’s a community that is going to transition over time. I visited a few years ago and it inspired me to write an article about how Lillooet is changing.

From these municipalities, you can still come into Vancouver. But a lot of people who do move out find they don’t want to come back into the city as often. On the weekends, I like to go out on my bike and discover different municipalities. It’s amazing how much is available outside of Vancouver.

We sometimes get it into our minds that the world revolves around Commercial Drive and Main Street… And those are prime places! But there are other communities outside of Vancouver that offer similar amenities.

Are you seeing a shift away from urban centres? Are cities less important?

There’s a wonderful blog by Brandon Donnelly, who is a big supporter of urban life. I mention this because there is a percentage of people who believe living, working and playing in the city is the way to go.

But there is also an increasing number of people who want an urbane existence but don’t need to have it in downtown Vancouver.

A number of years ago, a friend of mine became the mayor ofTrail, BC and so I was invited to visit. After spending a weekend there, I realized that Trail is a fabulous community. It has a history of mining but things are starting to change. I met a lot of interesting people who had moved to Trail to start new lives. They cared about the look of the community and it did look very attractive

Are smaller communities in BC having a moment?

I think so. One of my daughters moved to New West and the other moved to Victoria.Victoriahas been growing a lot over the years and downtown Victoria is very urbane. It’s like Vancouver was a few years ago. They have their own issues with crime and homelessness but it is still an alternative to Vancouver. Other alternatives would be Kelowna or Penticton.

The world is changing. It used to be East Vancouver was where you went for craft beer, but now Courtenay is winning that battle. When I was in Victoria, I picked up some whiskey and gin from local distilleries

On tackling housing affordability by mixing light industrial and residential housing:

When people ask me where we should build more affordable housing, I always say we should integrate housing with light industrial usage. And what prompted that idea was my daughters taking me on a craft brewery crawl for my birthday a few years ago. As I sat in these places with my pint of beer, I kept wondering why there wasn’t housing above.

So I’m now pitching a new project where we don’t reduce the number of industrial units but we incorporate residential units within it. In my mind, that makes a lot of sense. It helps us increase capacity and make the most of the high cost of industrial land. False Creek Flats would be an ideal spot for this.

For years, people opposed the integration of housing with light industry because they thought it would raise the value of the land so much that industry wouldn’t want to be there. But that’s simply not true.

Anytime I see a one or two storey building in Richmond, I just want to put a modular house on the top! When you look at a parkade, almost no one parks on the top floor. So why not put housing there?

One of the reasons why I think the Downtown Eastside got worse was because in 2014, city council decided to restrict condo development in the Oppenheimer District of the DTES. I argued against that because I believe we need a broader mix of people in the area, rather than a “ghetto” of low income people.

But the council decided to not allow condominiums so as to not increase the value of land and make it unaffordable for social housing. That was a mistake. We need to advocate for a broader socioeconomic mix in that area

What are your thoughts on the supportive housing project at 8th and Arbutusthat a lot of people seem to be against?

I did participate in that discussion and I did support having social housing in that area. But what I did not support was having a high concentration of formerly homeless people all brought into one building.

When I was at CMHC, we used to talk about what the magical size of a building should be. We concluded that when you went above 60 units, you change the complexion of a building. So my argument against this site wasn’t with the scale of the development but was with wanting to put 100 formerly homeless people into the building.

Why can’t we make social projects just look like market or rental projects? I found this building looked too institutional. If it just looked like a regular apartment building, I think it would have generated less opposition.

Will areas in Vancouver like Chinatown and Railtown have their day again?

Absolutely. The pendulum swings and neighbourhoods change over time. Some neighbourhoods have always been beautiful but even places like Shaughnessy went through hard times. Over the years, things change and now we’re allowing subdivisions and coach houses in Shaughnessy, which is great.

Point Grey used to be a beautiful neighbourhood. Now, a lot of the shops are boarded up and the Safeway left. It’s not attractive. But in 20 years, it will be. New retail will come in, transit will get closer and the area will have a revival.

Throughout history, neighbourhoods get better and worse. Some do better than others but the pendulum does swing.

What do the next 1-5 years in the Vancouver real estate market look like?

Construction costs have now risen to the point where projects are going on hold. But as more projects go on hold, the construction costs will come down and the projects will get going again.

A lot will depend on what happens to interest rates, as well as what is happening in the global context. What happens in the US and China and in other parts of the world impact us and we don’t have control over that.

But municipal governments do have control over certain things and the stuff they can do is important. They have to deal with crime and housing affordability, but they also have to work on building liveable and attractive communities. I don’t understand the priorities of people in government who let these places deteriorate

I hope most municipal governments will commit themselves to making our communities more and more liveable. If not, I’ll have to come back on this podcast in a few years and encourage people to move to Lillooet and Trail and other places that are focused on creating liveable communities

The 5 Wire: Getting to Know Planner & SFU Professor, Michael Geller

What is one book you’d recommend listeners read?

I’ll give two books. For your younger listeners, I recommend “21 Lessons for the 21st Century” by Yuval Noah Harari. I highly recommend that book! Harari is a wonderful writer.

For your older listeners, I recommend “The Last Days of Roger Federer: And Other Endings” by Geoff Dyer. It’s not just about Roger Federer or tennis but about people’s last days. If you’re a musician, when do you decide to stop? Do you stop when you’re at the peak or do you keep touring forever?

For us real estate people, we probably won’t stop until no one will hire us. I love what I do so I can’t see myself stopping anytime soon

In the last 5 years, is there a new belief, behaviour or habit that has improved your life?

I’ve changed my attitude towards what I eat. I’ve become more conscious about what I eat; I actually look at the ingredients on the packages and every once and a while I put something back.

What music do you have on repeat right now?

10cc! In the 1960s and 70s I lived in Manchester with a group that hung out with Graham Gouldman. I’m stuck in the past!

What have you been binge watching?

When I was in Europe I attended an architecture and design film festivalwhich then came to Vancouver in early November. Even if you missed the event, you can look up the films.One film I will recommend is about Richard Henriquez, who is a friend of mine and has designed a lot of important projects in Vancouver.

What is something you’ve purchased in the last few years for under $1500 that has had a positive impact on your life?

My golf clubs! If you had asked me 40 years ago, I’d talk about a painting or sculpture because that gave me the greatest joy back then. But that’s not so important to me anymore.

The next time I’m on, it will probably be my electric bike. I don’t have one yet. People who own them tell me they’re always worried about their bikes being stolen, so hopefully we can do something about that.

https://www.vancouverrealestatepodcast.com/podcast/50-years-of-vancouver-real-estate-wisdom-with-michael-geller/

Broadway Plan Public Hearing - November 14, 2024

Thanks to Mike Klassen and Peter Meizner and any other councillors who did appear in the council chamber to listen to the few speakers who showed up at the hearing. 

Last evening, the Public Hearing for the first three of the dozens of Broadway Plan highrise tower proposals continued. Ever since the 70s when I was a CMHC architect/planner trying to help non-profits obtain approvals for social housing projects, I have had serious reservations about the merits of holding public hearings. 

I even included some thoughts about Public Hearings in my 2022 Holiday Greeting Card

26 Days! In the 80s, I lived through many such hearings, including a 26-day PH for the infamous Spetifore Lands. https://www.delta-optimist.com/local-news/looking-back-at-the-tdl-plans-defeat-30-years-later-3104909. It is the longest hearing ever held in Canada. As noted in this 2019 retrospective article,  

"In an interview a decade later, Michael Geller, who was brought in to devise the plan and marshal it through the approval process, called the hearing a watershed in Canadian planning.

“To their credit, the Tsawwassen community waged the most articulate and organized opposition on private property in Canada,” he said.

Lifelong Delta resident Doug Husband, who was mayor during that time, said it was a challenge trying to cover all the legal bases and navigate a process that appeared destined to have just one result.

“David Strangway was the president of UBC and he came out to see me before the public hearing took place and he said, ‘I just want you to know I have a number of my professors living in Tsawwassen and they are going to make this public hearing the most high-profile public hearing you’re ever going to be involved in. It has nothing to do with single-family developments and traffic and density and all those things. It’s going to be about the environment and First Nations’ issues,’” Husband recently told the Optimist.

After the Federal Minister of the Environment proposed a moratorium to stop the development we held a press conference on the property. It was the first, and last time I used a bale of hay as a podium!

“That’s what they did, they brought up the Lummi Indian Band to speak about how it was sacred land. They had the minister of environment say there should be no development on this land until such time as there is an environmental study. That was Lucien Bouchard, so they flew him out and had him stand on the banks of the Boundary Bay area. It was absolutely quite phenomenal. It was highly organized and I give them great credit for being able to do that, but we had about 8,000 written submissions during the course of that hearing, even as far away as Germany, about saving the flyway and protecting the birds,” he recalled."

Last night's Public Hearing was not as dramatic or lengthy. Some thoughtful comments were made both in favour and opposition to the proposals, especially the building that most offended me on West 14th between Arbutus and Yew. 

The meeting began with a city planner providing a brief outline. The mayor then invited the proponent to make a presentation, but he said no. He was there to answer any questions. Why didn't he make a presentation? This was highly unusual, but I think you'll find the answer later in this post.

Most of the people who I knew were in opposition to the project did not speak at the hearing. After all, I could only see two councillors in the chamber - Mike Klassen and Peter Meizner. If others were there, I apologize for not mentioning you. But thank you for coming.

Others were watching from home. Consequently, there was no longer the opportunity for meaningful exchanges between the politicians and speakers like there often was in the past. 

Fortunately the city has made all the written comments available online in a readable form.

You can find some of the opposition comments, including those by Mike Harcourt, architects Sean McEwen and Peter Busby, and me here. 

https://council.vancouver.ca/20241112/documents/phea6opposed20241112-redacted.pdf

You can also read the comments by Kin Chong, a structural engineer who lives nearby. He listed what he considered numerous practical and safety challenges of building a highrise tower on a sloping site on a narrow and constricted street such as this. 

He observed, perhaps correctly, that the promise to keep all the mature trees would be impossible to keep. After all, the contractor would need to cut down these trees to properly install the crane in a safe and secure manner in such a constricted location. Given the recent accidents with cranes, I found myself thinking maybe he is right.  

Below is a link to just a few of the comments from those in favour of the tower proposal. I say just a few since earlier in the day 242 letters in favour of the application were 'dumped' into the system thanks to the YIMBY organization (YES In My Back Yard) although few, if any of these writers lived on the street where the building was proposed. 

https://council.vancouver.ca/20241112/documents/phea6support20241112-redacted.pdf

This is just one of the letters you will find here:

"Stop letting these NIMBYS with too much time on their hands decide everything simply because they go to these meetings. Vancouver is in desperate need of more housing. These NIMBYS do not care about anyone but them. Its time for NIMBY culture to go away. Please build more housing. I cannot afford the current housing that is built in this city."  

I watched the Public Hearing at the same time as I watched the Canucks hockey game. At times, I wasn't sure what was more depressing. 

When one housing advocate spoke for the third time in favour of build, build, build, regardless of neighbourhood impacts, after all, we're in a housing crisis, fortunately I could mute my computer and turn up the hockey sound. (I suspected some of the councillors may have been doing the same.)

This speaker upset me when she criticized opponents for saying apartments shouldn't be built on side streets. In fact, not one person ever wrote or said that about this proposal. What most were saying was that an ugly 17-storey apartment building, that was 10 times the size of the adjacent homes and completely out of character, should not be built in the middle of this particular block. There were many more suitable locations for towers within the Broadway Plan.

Fortunately, I was pleased to hear the last speaker. He happened to be a developer who lived immediately next door to the proposed development. He said something I had hesitantly included in my written comments, namely this was not a well-though out proposal from a capable, experienced developer. 

The truth was this proponent was a poorly financed land speculator who had only optioned the properties hoping to get rezoning approval so that he could flip the properties to someone else. He had no intention of building the project. He was trying to do the same with two other proposals elsewhere along the corridor.

Since he was the last speaker, the mayor invited the applicant to have the last word. So what did he have to say in response to all the negative comments, especially those by the last speaker? Nothing. 

I found it incredible that he did not at least thank all the people who came out to speak both in favour or opposition of his proposal. We always do that!

As a minimum, he should have offered some response to the allegation he had not been able to arrange any financing since he was simply speculating on the land. 

As I noted in my written comments, (see below) perhaps this is why the suites were so poorly designed. Why waste time and money on refining them if you have no intention of proceeding with the building? (See my previous post).

Hopefully, all the councillors who watched this meeting and read the comments pro and against will have the good sense to reject this project. As several speakers correctly noted there are many better tower proposals coming forward in much more suitable locations. Why approve this one just because it is on the top of the pile? 

Especially when the applicant is not an experienced developer; he doesn't own the property; the design is awful and completely out of scale and character with the neighbourhood; the suites are not designed to be livable especially for lower income families with children. 

Surely this is why the city is even considering this proposal and forgiving $2,557,098 in Development Cost Levies. 

Now as for the Canucks, Vancouver had just three shots in each of the first two periods.

Here are my written comments about the proposal

While I have been a longstanding supporter of higher density and taller buildings, as an architect, planner, real estate consultant and developer, I strongly oppose this application for many reasons. 

1. While staff claim the design conforms with the Broadway Plan, at an FSR 10 times the adjacent homes, and 7 times their height, the building is completely out of scale with the surrounding neighbourhood. 

This illustration highlights the fact that the developer and architect don’t want the building to fit in. And it doesn’t and is not likely to ever fit in if approved as proposed.

2. While staff correctly note the form and massing conform with the Broadway Plan, they do not mention that the height and density significantly exceed what would be permitted by the Transit Oriented Area zoning guidelines which designate this area for 3.0 FSR and 8 storeys. 

3. While beauty is in the eye of the beholder, this is not an attractive building. The developer claims "Located in a quiet, calm, tree-lined neighbourhood, this building has been designed to integrate seamlessly into the community." This is patently absurd. The building is totally out of character with Kitsilano. 

These balconies are drawn to appear like they are 12 feet deep. In fact, they are less than 6 feet which is the minimum depth to be truly usable.

4. A careful review of the drawings reveals a combination of deception and dishonesty. The adjacent homes, with their pitched roofs, are drawn as blocks. The shadows are drawn as if the sun is in the north, not the south. The balconies are drawn to appear significantly deeper than their actual depth. 

I know that this unit will not be livable for a family with children. Yes, it has three bedrooms and two bathrooms. But there is no entry closet, no linen or broom closets, the kitchen has virtually no cupboard space. There isn’t even space for a normal-sized dishwasher. 

5. As the former CMHC architect overseeing the social housing programs, I know that the 2 and 3 bedroom units will not be livable for a family with children. The kitchen is little more than a kitchenette, with a half-sized dishwasher and few drawers. While this might be fine for millenials who will eat out or order in, it's inappropriate for a family with children who may livetheir for many years. 

While the two and three bedroom units have two bathrooms, presumably for marketing reasons, there are no entry closets, no built-in bedroom closets, no linen or broom closets, There are no closets in the bedrooms. There is no washer or dryer, which one has come to expect. There isn't even a communal laundry room in the building 

Why this lack of attention to detail? Because the developer most likely does not intend to build this project. He doesn't own the land. There are no previous developments illustrated on the developer's website. He wants to get a rezoning approval for this and two other assemblies along the Broadway Corridor so he can flip the properties. 

If Council feels it must approve this application since it "conforms with the Broadway Plan", at least impose conditions to direct the architect to revise the design so that it looks like Kitsilano, not Dubai. 

Reduce the height and density to that set out in the Transit Oriented Area zoning requirements. And given all the financial benefits being offered the developer, demand that the family units be revised to be livable for families with children. 

And then impose a moratorium so we can collectively discuss how to improve the Broadway Plan since this application clearly demonstrates it is broken.