MACLEANS Magazine's 12 Housing Predictions for 2025

At the end of each year, I like to offer predictions for the year ahead and share them with readers of the Vancouver Sun and this blog. Today, I came across12 Housing Predictions offered by MACLEANS Magazine. While some are truly predictions, others, including "BC will tax house flippers" are already known facts. But I will be interested to see which come true a year from now. Personally, I think all will turn out to be correct!

THE YEAR AHEAD 2025 - Ten Housing Predictions for 2025

Politicians will spar over how to tackle the housing crisis. Falling interest rates will draw young people into the real estate market. And a rude awakening is coming for homeowners renewing mortgages.

December 30, 2024

1. Toronto’s Condo Market Will Plummet

After a few years of stagnant pricing, the Toronto condo market is poised for a plunge. In the first half of 2024, sales of newly built condos fell by 57 per cent year over year—the biggest slowdown since 1997—largely due to high interest rates. The number of condo listings is now much higher than recent averages, and sales remain low. TD says prices will keep declining, then recover modestly by year’s end. Then we may face the opposite problem: since the downward trend has spooked condo investors, who account for 70 per cent of pre-construction sales, condo starts have also dropped dramatically. In the long run, that could mean a condo shortage, driving prices up again. 

2. B.C. Will Tax House Flippers

Bad news for West Coast real estate investors: on January 1, British Columbia will implement a flipping tax aimed at curbing short-term investments and boosting the province’s minuscule vacancy rates. The first of its kind in Canada, the tax will apply to those selling property they’ve owned for less than 730 days, with some exceptions for circumstances like job relocations, deaths and divorces. Sellers who’ve owned their homes for 365 days or less will be taxed at 20 per cent of income on the sale, with the rate gradually decreasing to zero by the two-year mark. The rule is in addition to the federal flipping tax, introduced in 2022, which makes the capital gains from the sale of a home taxable as business income.

3. Interest Rates Will Keep Dropping

The Bank of Canada has finally tamed the beast of inflation—but the national GDP outlook looks less than rosy. As a result, the BoC will keep chopping interest rates through 2025, likely at a similar clip as in 2024. As rates decrease, more buyers will pour into the market, fuelling more competition. Softened lending rules will also heat up the market. The government has raised borrowing caps for mortgages secured with a down payment of less than 20 per cent from $1 million to $1.5 million. It also extended the maximum amortization from 25 to 30 years for some mortgages. The changes will make borrowing accessible to more buyers—many of whom will start house-hunting in 2025.

4. U.S. Firms Will Pour Billions into Canadian Real Estate 

What we call a runaway housing market, U.S. real estate firms call an opportunity. Soaring prices, skyrocketing rents and a growing population that’s unable to afford either have created massive demand for purpose-built rentals. Blackstone, the largest private-equity firm in the world, bought Canadian rental housing owner Tricon for US$3.5 billion in May. Meanwhile, Texas-based developer Hines LLP is planning to invest up to $2 billion in land for large-scale, six- to eight-storey apartment towers in cities like Toronto, Vancouver, Calgary, and Montreal. It’s also interested in reviving projects that have been stalled in the past few years by high interest rates and construction costs. It’s a good time to do business with Canada: the governing Liberals cut the five per cent tax on new rental builds and now offer cheaper financing to builders who will try to help dig us out of our own mess.

5. Labour Shortages Will Cause Construction Delays

The next decade will be a challenge for Canada’s battered construction industry. Between now and 2033, we’ll lose 263,000 construction workers to retirement. That was predictable. Making things worse: only about two per cent of Canada’s newcomers over the past decade have skilled-trade qualifications. Domestically, young Canadians are also increasingly choosing white-collar careers over blue-collar ones. All of this will put the brakes on Canada’s ambitious goal of building 3.9 million homes nationwide by 2031.

6. First Nations Will Be the Big New Developers

In 2025, Indigenous communities nationwide will be leading the charge on housing. The country’s most impressive project is Sen̓áḵw, a cluster of 11 skyscrapers in Vancouver with 6,000 residential units, developed on land belonging to the Squamish Nation. Its first three towers will be done in 2025. The Attainable Housing Initiative, a B.C. government project on Indigenous land, will deliver 2,600 homes with 40 per cent subsidies starting in the spring. And, on the Prairies, the Southern Chiefs’ Organization, representing 33 Anishinaabe and Dakota nations, will develop a residential tower in the middle of downtown Winnipeg.

7. More Millennials and Gen Zs Will Buy Homes

Thanks to declining interest rates, rising wages and, to a lesser extent, the new option of completing an entire mortgage application online, far more millennials and Gen Zs will eye homeownership than in recent years. A nationwide Scotiabank poll revealed that more than half of non-homeowning Canadians aged 18 to 34 plan to buy a home at some point in the next five years. That’s promising news: according to the same Scotiabank poll, only 26 per cent of 18-to-34-year-olds own a home today, compared to 47 per cent in 2021, and 35 per cent live with their families. In 2025, they’ll become bigger players in a hotter housing market.

8. A Wave of Mortgage Defaults Is Coming

In 2025, more than a million households will face mortgage renewals at elevated interest rates. The banks are ready for it, having already set aside more than $4.5 billion in provisions for credit losses. The fallout from broken mortgages isn’t just bad news for homeowners, but for the economy at large. Canadian households are already among the most indebted in the world and, as defaults rise, banks may need to reserve more capital, triggering a credit crunch and making borrowing harder.

9. Edmonton Will Implement Automated Permits

Edmonton is set to become Canada’s first municipality to use AI for building-permit approvals. In 2025, it will roll out its Auto Review program, allowing builders to apply for permits for detached and semi-detached homes online and receive approvals the same day. This initiative aims to boost Edmonton’s construction industry, which has struggled to keep up with the city’s population boom—up 12 per cent to 1.1 million over the last five years. 

10. Poilievre Will Eliminate GST for New Homes

If his party forms a government, Conservative Leader Pierre Poilievre plans to one-up the Liberals’ tax cut for rental builds, slashing GST for all newly built homes under $1 million. Housing wonks agree that the plan will jump-start homebuilding. But there’s a catch: to pay for it, Poilievre will eliminate the Liberals’ Housing Accelerator Fund and the Canada Housing Infrastructure Fund. Those efforts are intended to help cities fund infrastructure improvements, in exchange for loosening zoning rules. In 2024, they resulted in a wave of density-boosting zoning reforms across the country.

STOREYS - 2025 Predictions - Kerry Gold

 

As I wrote in my recent Vancouver Sun year-end forecast article, according to Yogi Berra, it's hard to make predictions, especially about the future. That said, here is Kerry Gold's article published today with several predictions from some thoughtful, knowledgeable people, and me! 

As far as year-ahead predictions go, industry observers say not much will change from this year to next in the Vancouver housing market, despite interest rate drops – though some trends standout.

Kerry Gold 

December 30, 2024

As far as year-ahead predictions go, industry observers say not much will change from this year to next in the Vancouver housing market, despite interest rate drops.

Realtor and investor Bryan Yan, who has a solid record of market forecasts, said the prime rate must drop to below 5% for price escalations between five and 10%. Right now, at 5.45%, it’s not enough to shift the market into a higher gear, and so he expects a buyers' market to continue.

“Most places are selling at or below assessment, about 5% below assessed value right now,” said Yan. “So, if your listing agent sells above assessment, you should buy them lunch, because that’s not happening.”

What is happening is the fear-of-missing-out buyer (FOMO) that fuelled the pandemic years has been replaced by a buyer more willing to throw money around. Yan is also seeing a trend play out, which is an increase in listings for estate sales by executors. Now flush with cash, these estate beneficiaries are usually willing to pay more for a property because they didn’t earn the money.

“The age of the FOMO buyers is gone, and YOLO [you only live once] buyers remain. In the last three years, the FOMO buyers have been burdened with high interest rates and payments. But right now, the inheritance-based real estate market is taking off. In the next two to three years, it’s estimated [by Chartered Professional Accountants Canada] that around $1 trillion will pass to the heirs as inheritance in Canada. You see that now with a lot of sales. It’s started,” said Yan. “So, we are in an inheritance-based real estate market. And not just by death, but by parents giving their kids an early inheritance, with a warm hand instead of a cold hand.

“So, these guys say, ‘Why not buy? I got the money through my inheritance.’”

The Royal LePage annual Market Survey Forecast is also expecting a tepid year for Vancouver, with home price increases of 4% for the region, while forecasting gains of 5% for Toronto and 6.5% for Montreal. Calgary, Ottawa and Winnipeg are also expected to see modest 4% gains, according to the report.

“Over the past several months, supply has been building in the Toronto and Vancouver real estate markets as sellers responded to early interest rate cuts by listing their homes. However, with home prices in these cities remaining high, many sidelined buyers continued to wait for more favourable borrowing conditions,” Phil Soper, President and CEO at Royal LePage, explained in the report.

“Flat property prices also reduced the urgency often driven by fears of ‘missing out,’ creating a temporary stalemate where inventory lingered, and buyers hesitated to act. By mid-fall, this dynamic began to shift as buyers re-engaged with the market,”

In Greater Vancouver, listings dropped from around 14,000 to 15,000 to approximately 10,000, as sellers removed their homes from the market as the buying season ended, says Randy Ryalls in the report. He’s hoping those homes taken off the market will return by spring. And a lower bond yield and lower fixed interest rate would have a big impact on market conditions, he adds.

“If that bond market weakened a bit, and those longer-term rates could come down another half a point, something like that, it would probably spark buyers to get back into the market,” said Ryalls.

“Buyers are not coming out in big numbers, although we saw a nice jump in October, after that second to last interest rate cut by the Bank of Canada. [Overall] transactional volume in Greater Vancouver took a nice jump, about 30% year over year. November carried on, not to that degree, but still pretty good numbers. We were trending in the right direction.”

The presale market is the hardest hit, and developers are having a tough time, he added. Lowering prices to spur buying activity isn’t as easy as it sounds.

“A lot of people have been fence sitting, but prices are not adjusting down. There are a number of reasons why. Number one is that banks won’t allow it to happen. The developers have to hit their numbers or the project is a no go,” he said.

“Developers have been pumping the brakes quite a bit hoping for better market conditions.”

Developer Hani Lammam, EVP of Cressey Development Group, said that the top-end downtown rental market that aims for rents of $5.50 per foot and higher is “unsustainable based on local incomes.”

“The demand is there, but they simply cannot afford the exorbitant rents being asked in certain circumstances,” said Lammam.

Developer and consultant Michael Geller said there is not one overall market for Vancouver this coming year. Rather, the region will be divided into sub-markets, each with its own unique flavour. Developers will have to respond to diverse sub-markets.

“What applies to East Vancouver may not apply to Burnaby or Richmond,” he said.

Geller said that the experienced players in the development industry will target end-users such as first-time buyers, move-up buyers, and empty-nesters. The investor is no longer the focus of a presale program, he said. The glut of purpose-built rental units coming online, combined with restrictions around foreign buyers and short-term rental platforms has taken the steam out of the investor-driven presale condo market.

And the federal foreign buyer ban, extended to last until 2027, may have had an impact on Vancouver’s pricey luxury market, both rental and ownership.

With price-sensitive demand, Geller said smart developers and architects will get more creative about their designs.

“Consideration should be given to designing projects containing suites that could appeal to those interested in co-purchasing,” he said. “These could include one-bedroom units where the living room can become a separate sleeping room at night and two-bedroom units with two similarly sized ensuite bedrooms.”

Real Estate News

50 Years After. Musings on what has changed since 1974

When younger people see an old, bald, overweight man, it's often difficult for them to appreciate that he didn't always look that way. Yes, this is me when I arrived in 1974. I was 27. 

When the Vancouver Sun invited me to comment on what might happen to Vancouver’s housing markets in 2025, I could not help but think back fifty years to 1974 when I arrived in Vancouver to become Canada Mortgage and Housing Corporation’s assistant architect/planner for British Columbia. 

My responsibilities included overseeing the initial planning for Granville Island and the city’s proposed redevelopment of the South Shore False Creek. I also participated in the design and loan approvals for thousands of non-profit rental and cooperative housing units funded by CMHC throughout British Columbia. These included developments by various community, faith-based, and ethnic groups.

As Program Manager Social Housing, at the beginning of December, I phoned up non-profit sponsors to see if they had a project needing funding, since I still had funds to allocate!

Inclusionary Zoning vs Non-Profit Housing

Today, non-profit housing continues. But municipalities increasingly look to the private sector to fund affordable housing through Inclusionary Zoning (IZ).

 “If you include 20% affordable homes, we will let you build a much larger building.”

Unfortunately, while many projects have been approved or are going through the approval process, often with fervent neighbourhood opposition, many of these projects will not likely get built. Notwithstanding the higher densities which were intended to bring down land costs, provincial and municipal policies are not having the desired effect of bringing down land prices on a per sq.ft of buildable area. Furthermore, as a result of the combination of higher land costs, higher construction costs (in part due to higher energy requirements), higher lending interest rates, and excessive municipal fees and project approval delays are making many projects no longer financially feasible.

Rather than rely on the private sector to build highrise buildings at excessive densities which do not fit with their neighbourhood context, municipalities should promote smaller multi-family buildings and seek a return to the 1974 level of federal and provincial funding. We should also bring back programs like MURBs and AHOP. 

When I arrived, CMHC was administering this affordable ownership program. I remember accompanying my boss to a meeting in Surrey since some homebuyers were upset their single-family home didn't have doors on the closets. I told them they shouldn't be complaining when they could buy a 1200 sq.ft. detached house for $47,000. Hopefully they remember this, since today those homes are worth 30 times what they paid!

How many homes can we build each year?

In 2023, the Trudeau government announced its new affordable housing plan which included the promise of 3,870,000 new homes by 2031. This equated to an average of 483,750 homes every year.

To put this in context 257,243 homes were built in 1974 across Canada. This is more than have been built in any year since. 

According to CMHC, approximately 240,000 homes were started across Canada over the past 12 months. However, Vancouver starts were down 18% from 2023 due to increased construction costs, higher municipal fees, and higher interest rates.

Higher Interest rates?

In 1974, the prime rate reached 11% and a 5-year fixed mortgage was 12%. Seven years later, in August 1981, a 5-year fixed mortgage peaked at 21.75%. 

1974 was also the year the NDP government introduced Rent Controls in BC. That year the annual rent increase was capped at 12%. Yes, 12%. The legislation linked rent to the unit.

In 2024, annual rent increases were limited to 3.5%. The 2025 limit is just 3%. Rents are no longer linked to the unit. Instead, they are linked to the tenant, and consequently, when a tenant moves out, rents usually increase to make up for inflation.

The Green Party and others are now proposing that rents be again linked to the unit, not the tenant. While this seems like a good idea for renters, it may not be since it would most certainly result in a significant decline in rental housing starts. 

Unless two things happen. 

The first is if allowable rent increases reflected increases in taxes, energy costs, and other maintenance and operating costs. 

The second is if British Columbia follows Ontario and allows new construction to be exempt from rent controls all together. This has been its policy since 2018.

While the first idea will not happen in 2025, I would urge the provincial government to consider implementing the second idea.

In my 2023-year end article I wrote that as we approached 2024, many British Columbians, especially those facing mortgage renewals, would be worried about future interest rates, house prices and rental costs.

I reported that although most economists agreed interest rates were not likely to increase, there appeared to be little consensus on what else might happen. I expected new housing costs to increase, with a corresponding increase in existing housing prices, since a rising tide lifts all boats.

In fact, interest rates did come down. Home prices were little changed, although rents declined. This has been attributed to a combination of increased supply and decreased demand since many renters left the province or moved in with parents.

In 2025, three factors could impact home prices and rents. 

These are whether the federal government achieves its reduced immigration targets; what happens to municipal fees; and whether Canada experiences a recession, or remains in a recession which former Bank of Canada governor Stephen Poloz believes we are already in.

Prices could also be impacted by Bills 44 and 47. Bill 44 allows multiplex homes on every single-family lot throughout the province in communities with a population greater than 5,000. 

Bill 47, also known as the Transit-Oriented-Area Act allows much greater building heights and densities within 200 m, 400m, or 800 m of a transit station or bus loop. 

Last year I wrote there was considerable uncertainty about the potential impacts of this legislation since if municipal engineers determined sewer and water infrastructure was inadequate without upgrades, projects would not proceed.

As we look to 2025, we need to consider two related questions. How should municipalities fund the cost of these services, and how might Bills 44 and 47 and other zoning changes impact property taxes?

Publicly funded infrastructure

Without new infrastructure being funded by government through taxes and local improvement charges, rather than by private developers and new homeowners and renters, I predict that we will not see the tens of thousands of new rental and condominium homes that so many are hoping will be built.

My Annual Vancouver Sun Forecast 2024

In advance of preparing this article, I reread previous Westcoast Homes year-end columns and discovered Yogi Berra was right. It is tough to make predictions, especially about the future.

That said, here are observations from past forecasts and what to expect in 2025.

Car share and parking

In 2012, I noted that with the success of Car2Go, Modo and Zipcar, more people discovered car-sharing to be a convenient and cost-effective way to get around. At the same time, there were growing concerns about traffic congestion, pollution, climate change and unaffordable housing. I therefore proposed that minimum parking requirements should become maximum requirements.

What I did not expect was that these car share programs would not survive. Nor did I predict that a decade later, a provincial government would tell municipalities they could not impose any parking requirements for new multiplex developments or those near transit.

In 2025, I expect new projects will have reduced parking. Some developers will tell residents they can park on the street. However, existing neighbourhood residents will vociferously complain about the reduced availability of street parking.

While I hope this does not lead to the paving of front yards, which happened in some Toronto neighbourhoods, I do expect the municipalities to put in place more pay parking on residential streets.

Rental apartments

In recent years, municipalities have successfully encouraged new purpose-built rental housing developments comprising market and below-market apartments.

As they are completed, landlords may discover some market suites are difficult to lease at required rent levels and leave them vacant until their desired rents can be achieved.

While this could have the positive effect of bringing down rents, a negative result will be that new projects do not proceed.

To address this, the provincial government might consider copying the policy in Ontario, where, since November 2018, new rental buildings have been exempted from rent controls. While the jury is out on how effective this has been, there is no disagreement that the policy has allowed many new rental buildings to be built, and fewer suites left vacant.

Fee-simple row housing

Whenever I give a talk or write about housing choices, many tell me they are ready to move out of their single-family house but are not yet ready for a condominium.

They prefer to decide when to replace the roof or choose the colour of their front door. They also do not want to deal with a strata council that may be headed by someone who had hoped to become prime minister of Canada but had to settle for strata president.

Since 1999, I have annually advocated for the development of “fee-simple” individually owned row houses that are not part of a condominium. In each year-end column I have predicted that they would become as popular in Vancouver as in Toronto. I have always been wrong.

One reason is that developers will not build them here because municipal regulations conspire against them. These row houses require subdivisions that take time and money. Also, unlike Toronto, municipal engineers demand individual sewer and water hookups for each dwelling, which is costly. Development Cost Levies are also a problem since they are often the same as for a large single-family house.

I would like to predict that in 2025, B.C. municipalities will finally change their regulations to facilitate this type of housing, especially since it fits well with the intent of Bill 44, the multiplex legislation.

Bitcoin is up; condos are down

As I was preparing this article, I received a blog from Brandon Donnelly, a Toronto blogger who I read daily. He observed that many are rushing to buy bitcoin at unprecedented prices, but few are buying Toronto presale condominiums due to the soft market.

The situation in Vancouver is not that different.

In 2025, presale programs will get underway for new condominium projects throughout the region. Smart developers will be designing these projects to appeal primarily to “end-users” rather than investors.

Given the state of our condominium market, I expect developers will offer the initial units for sale at reduced prices to build momentum for the sales program. This could result in good buying opportunities for those ready to move into a condominium and in a position to wait for their home to be completed.

Recently, Vancouver City Council approved a motion by Mayor Ken Sim to invest in bitcoin and allow bitcoin to be used for municipal payments. I will leave it to others to comment on this.

Price impacts of Bills 44 and 47

Bill 44 allows multiplex homes on every single-family lot throughout the province in communities with a population greater than 5,000. Bill 47 allows greater building heights and densities on properties, depending on whether they are within 200 metres, 400 m or 800 m of a transit station or bus loop.

Last year I observed there was considerable uncertainty around how this provincial legislation might impact housing markets. The key reason was that few projects would proceed if municipal engineers determined sewer and water infrastructure was inadequate.

In recent years, municipalities have demanded that developers fund infrastructure upgrades through a combination of Community Amenity Contributions and Development Cost Levies and engineering fees. Developers then passed on these costs to homebuyers or renters.

However, given higher construction costs, it is increasingly difficult to pass these costs onto consumers. Consequently, tens of thousands of housing units have been approved, but stalled, since they cannot be financed.

This is not just a local problem. A similar problem exists in Ontario where municipalities are beginning to reduce fees so that projects can proceed. They realize that if new housing prices increase, existing housing prices also increase. A rising tide lifts all boats.

In 2025, the province and municipalities need to rethink how best to finance growth. Rather than expect developers or new homebuyers and renters to fund new infrastructure, costs must be shared more broadly through property taxes that are paid over time.

Property taxes

Some of us have been questioning whether the additional development rights offered by bills 44 and 47 will result in higher property assessments and taxes.

So far, the consensus is that Bill 44 will not likely increase assessments, except for larger lots in locations where there has been sales activity at higher prices.

However, single-family lots close to transit stations or where zoning changes allow greater building heights and densities could increase in value. This happened along the Cambie Corridor and will happen along the Broadway Corridor.

Property owners in these locations who are ready to sell will feel like they have won the lottery. However, those preferring to stay but faced with higher taxes will feel otherwise.

Fortunately, single-family homeowners who have lived continuously in their homes for at least 10 years, and whose property values have increased can seek tax relief under Section 19(8) of the Assessment Act. However, they must apply before March 15, 2025.

Since most municipalities are expected to increase 2025 property taxes by at least five per cent, this could be highly beneficial.

Regardless of whether property assessments increase, homeowners over 55 might want to consider deferring their property taxes and let the province pay them. Yes, the province will charge interest, but the rate is prime minus two per cent.

On this happy note, my best wishes for an affordable 2025.

Michael Geller is an urban planner, real estate consultant and property developer. He serves on the adjunct faculty of SFU’s Centre for Sustainable Development and School of Resource and Environmental Management. His blog can be found at gellersworldtravel.blogspot.ca.

Here is a link to the article. https://vancouversun.com/homes/michael-geller-b-c-real-estate-forecast-for-the-year-ahead

I am happy to share this year's Holiday Greeting Card that is all about sharing!

This year's card was inspired by my longstanding interest in flexible housing designs and the benefits of sharing when it comes to making homes more affordable. Some will notice that the card incorporates several ideas included in last year's and previous years' cards. 

I should add that I am currently working on a District of North Vancouver project that incorporates a variety of ownership and rental units incorporating both flex-unit designs and lock-off suites. Hopefully it will be approved in 2025.

My 2023 Holiday Greeting 'Card' - 12 Housing Concepts for the 12 Days of Christmas

For the past decade I have sent out a holiday greeting 'card' offering 12 housing related ideas for the 12 Days of Christmas. Before sharing my 2024 card, here is what was sent out last year. I hope you find some of these concepts of interest.

Vancouver City Council orders demolition of 500 Dunsmuir - Holborn schemes again.

It seems that as I get older I get crankier. 

Perhaps this is why I became quite upset when I read that Vancouver's Chief Building Official (CBO) was recommending that the owner of 500 Dunsmuir be required to demolish the building for safety reasons. While I have not had any involvement with this property in the past, I am interested in the city's heritage, and knew that this was one of the few significant heritage buildings in the downtown. I also knew that the owner, Holborn Properties had no interest whatsoever, in heritage, or good urban planning for that matter. 

If the owner's name sounds familiar, this is the company that 

• took far too many years to develop what was supposed to be a Ritz Carlton, then the Trump Tower property; 
• then allowed the Little Mountain property to remain vacant for more than a decade without paying any Empty Home Taxes, (and eventually getting concessions from the city on the timing of the replacement social housing); and 
• finally let this heritage building remain vacant and rot so that it could be demolished, rather than be incorporated into the company's future redevelopment of this and nearby lands.

Sadly, the owner put council in a very difficult position with what they thought was little choice but to listen to its CBO and approve the demolition.

In fact, there was another option. They could have required the owner to prop up the walls as occurs with heritage properties around the world that are undergoing redevelopment. 

While I rarely write to Council, I did so this time, after reading a note from former councillor Jean Swanson who questioned why the city's SRO policy requiring a $300,000 fee PER UNIT, when an SRO unit is allowed to deteriorate to the point that it has to be demolished, did not apply to this property. Had it applied to this building, the fee would have been $50.1 million, for a property assessed at $8.1 million, which is another matter!

While there are various opinions on whether the fee should apply, councillors did take notice and eventually approved the motions set out below.

I will offer just one final comment. Reference is made to the future rezoning. I would question why the owner should be allowed to rezone this property, after demolition. It is zoned Downtown District C2. This allows commercial development at a 7 FSR. 

This zoning was put in place a decade or two ago when the city was concerned there wasn't adequate capacity for office buildings in the CBD. (Ironically, Chuck Brook and I spoke to Council at the time opposing this zoning change since we thought mixed use was preferable from an urban planning perspective.)

That said,Holborn Properties cleverly avoided having to pay the Empty Home Tax and the SRO demolition fee since residential uses are not an outright use. So I say, once the building is demolished, tell them they can build as per the existing zoning. Don't allow a rezoning. And talk to former City Planner Michael Gordon who wrote on X that the conservation of this heritage building in any future redevelopment was a requirement if the owner wanted residential uses on the Bay Parkade property, another of their downtown holdings.

Property assessment. One other thing. I have become fascinated by property assessments in my old age. I have even successfully appealed a few. That's why I was surprised to see the assessment for this 12,000 sq.ft. property in the CBD was only $8.1 million. The land was assessed at only $6,345,000 but the building improvements, that are so deteriorated and unsafe the building must be demolished, were assessed at $1,757,000.

Meanwhile, a vacant lot next door half the size, (that may also be owned by Holborn), is assessed at over $10 million. 

Finally, a special thank you to councillors Rebecca Bligh and Sarah Kirby-Young who took a particular interest in this unfortunate matter, and are trying to see if there's some way to punish Holborn for what was described as a 'despicable act'. Agreed.

Update December 18, 2024: Today, City Council adopted a resolution, with amendments, to declare the building at 500 Dunsmuir Street a danger to public safety. The property owner, 500 Dunsmuir Property, owned by Holborn Properties, will be required to demolish the structure. The owner is also required to preserve certain heritage features to be reused in any future development of the site, provided that can be accomplished safely.  

Note to editors: Please see amended motions below. This is a draft copy provided for your understanding and the published minutes are the official record of the meeting.   

Declaration of Dangerous Building at 500 Dunsmuir Street, Vancouver 

  

MAIN MOTION AS AMENDED 

MOVED by Councillor Kirby-Yung 

SECONDED by Councillor Bligh 

  

1. THAT Council declare that the vacant, dilapidated building on the property located at 500 Dunsmuir Street, Vancouver, B.C., with the legal description of: 

PID: 015-471-624, LOT 40 BLOCK 44 DISTRICT LOT 541 PLAN 210;  

PID: 015-471-616, LOT 39 BLOCK 44 DISTRICT LOT 541 PLAN 210;  

PID: 015-471-608, LOT 38 BLOCK 44 DISTRICT LOT 541 PLAN 210; and 

PID: 015-471-594, LOT 37 BLOCK 44 DISTRICT LOT 541 PLAN 210, collectively the “Property”;  

is a danger to public safety pursuant to section 324A of the Vancouver Charter, S.B.C. 1953, c.55. 

2. THAT Council approve the resolution attached as Appendix “A” to this report, and thereby order the registered owner of the Property to demolish the building, remove the demolition debris from the Property, and fill in the basement on the Property within 21 days of a copy of the resolution being served on the owner pursuant to section 324A and 324D of the Vancouver Charter. During the demolition of the building the owner is to safely preserve the heritage defining cornice, dentils and bracket elements of the building fronting Dunsmuir and Richards streets as shown on the diagram attached to the resolution, and store them at the owner’s expense until such time as they can be reused in-situ as part of any future redevelopment of the site.  

FURTHER THAT the following sentence be added to the end of clause 2 of the Resolution as contained in Appendix “A”:  

“During the demolition of the building the owner is to safely preserve the heritage defining cornice, dentils and bracket elements of the building fronting Dunsmuir and Richards streets as shown on the attached diagram, and store them at the owner’s expense until such time as they can be reused in-situ as part of any future redevelopment of the site.” 

3. THAT if the owner fails to comply with the order of Council within 21 days of being given notice of the resolution, Council further authorizes the City Building Inspector or the City Building Inspector’s designates to take any and all actions necessary to do the required work, including entering onto the Property and engaging private contractors, to demolish the building on the Property, remove the demolition debris from the Property, and fill in the basement on the Property pursuant to section 324A of the Vancouver Charter. 

4. THAT Council direct staff as part of their planned regulatory task force related to unoccupied buildings to consider building inventory, monitoring process, standards of maintenance bylaw for vacant buildings, and taxation options. 

5. THAT Council direct staff to report back on any legal avenues the City of Vancouver may have to seek recourse for the apparent neglect of the subject building and loss of heritage by the property owner; 

  

AND FURTHER THAT Council direct staff to report back on any avenues Council has to seek compensation as part of future rezoning applications the property owner may pursue. 

///

Open Letter to Vancouver City Council regarding Broadway Plan from former Vancouver City Planners and other experts - December 9, 2024

While I have been expressing concerns about the negative impacts of certain aspects of the Broadway Plan, I am by no means alone. Indeed, many former City of Vancouver planners, as well as private sector architects, planners, and other experts in planning and urban development also have concerns. However, for various reasons until now, they have chosen not to speak out.

However, with the approval of the first towers replacing older rental apartment buildings and duplexes and triplexes on low-scale leafy residential streets, and forthcoming Council consideration of modifications to the plan, it was decided that it was time for more people to speak out. This led to the preparation of an Open letter to Vancouver Mayor and Council that was issued yesterday, December 9, 2024. The following is the text of the letter, and some additional comments from the signatories. 

We, the undersigned, write with concerns about the Broadway Plan and especially the staff report to further expand the Plan. We appreciate and support the good intentions of bringing more housing and affordability to Vancouver’s crippling housing crisis, but as experts with years of high level experience in planning, development and architecture, we write to ask that Mayor and Council pause and consider the many issues with the particulars of the Plan and how it will impact our city.

•    The Broadway Plan promised a measured buildout over 30 years, but we are seeing a frenzy of profit speculation, land banking, flipping and land inflation into the heart of vulnerable established, mixed use neighbourhoods due to the plan which, by the city’s own estimates, will demolish thousands of existing, affordable homes, resulting in forced resettlement to thousands of people in pursuit of what may be little if any net increase in affordable housing. This does not meet the City's own affordability needs requirements in the Housing Needs Assessment released last June 25, as required by the Province.

•    In a 30 year build out, existing good, affordable housing should be protected, not demolished. Renewal of aging housing can happen later in the plan when replacement housing is there for impacted tenants to transfer directly to.

•    The destabilizing impact of evictions extends far beyond the people who are directly impacted as many in similar buildings live in fear of the same outcome. “when am I next?”. This is causing considerable emotional distress for thousands.

•    The “Enhanced Tenant Protections” are helpful, but do not consider the many issues being experienced by tenants who are subject to eviction. The disruption and anxiety for many vulnerable renters is considerable and the protections do not adequately compensate or address meaningful failures in the Tenant Protections. Under the plan, many tenants are not being offered anything like equivalent replacement units when they do eventually return at some point in the future. The best ‘tenant protections’ is not to evict tenants!

•    The experience of years of good planning practices, which Vancouver has been lauded for, are being ignored in favour of a reliance on one type of housing; small, expensive units in towers. Towers concentrated on Broadway and the immediate areas near transit make sense, but as we move blocks away from transit, we encourage a range of housing which will suit families; low rise apartments, row houses, townhouses and infill which is sympathetic to neighbourhoods and organically enhances the community and social fabric so highly valued, instead of in conflict with it by dropping towers in the middle of RT and RM zones.

•    Staff insist that the public consultation was robust, but much of the consultation took place at the onset of the pandemic and the vast majority are only now appreciating the extent and scope of this detailed plan. Residents understood the broad concept of a revitalized Broadway and towers adjacent to transit nodes, but are shocked to learn of evictions, demolition and towers on residential streets many blocks away from the actual transit area. A meaningful public consultation about how the Plan is going so far and where it will go next is vital.

•    The 350 page Broadway Plan amendment report was made available on December 4th and subsequently revised further the next day, adding 53 more pages. This leaves a scant 3 business days for public and experts to analyse and respond before Council considers the report for approval on December 11th. This is not a reasonable amount of time to consider the implications of a 353 page amendment document.

•    The city signed on to the Regional Planning Strategy which supports job creation across the region. The Broadway Plan’s idea of attracting jobs to the Plan area is counter to the agreed strategy. The Broadway Plan seeks to bring people closer to their jobs in the Plan area, but instead it serves to drive families further away because they seek ground oriented and more spacious housing for their families, something which The Broadway Plan makes less attainable, not more. This means more commuting, more congestion and more emissions, not less.

We write to ask that the city pause the plan and consult more widely with the public and experts with many years of experience in planning, housing and development to discuss how to do the Broadway Plan more effectively to achieve the goals we all share, to build “A Better City” and to truly address our housing crisis.

Signed:

Ralph Segal, Former Chief Urban Designer, City of Vancouver.

David Ley, OC, FRSC, PhD, Urban Geographer, Professor Emeritus UBC, Order of Canada.

Christina DeMarco, Urban and Regional Planner, former lead planner for the Metro Vancouver Regional Growth Strategy.

Dr. Penny Gurstein, Professor Emeritus and Former Director, School of Community and Regional Planning, UBC.

Larry Beasley, CM, FCIP, Former Co-chief Planner of Vancouver, author Vancouverism.

Scot Hein, Former senior urban designer/development planner for the City of Vancouver, led the city’s Urban Design Studio for most of his 20-year career, founding board member of Urbanarium. Adjunct Professor Urban Design UBC, Recipient of the Architectural Advocacy Award from the Royal Architectural Institute of Canada.

Brian Palmquist, Award winning architect and auther, AIBC MRAIC BEP CP LEED AP

Arny Wise, B. Comm., M.Sc.(Planning) U of T, Professional Planner MCIP, RPP (retired), Board of Directors, Toronto Economic Development Corporation (1990-1999).

Sean McEwen, Architect, AIBC,  FRAIC. Affordable housing advocate.

Patrick Condon, Professor UBC School of Landscape and Architecture, author Broken City. Former city planner, James Taylor Chair in Landscape and Liveable Environments.

Barbara Gordon, Retired Architect AIBC and retired Director of Capital Planning, UBC

Lance Berelowitz, AA Dipl RPP MCIP, Principal Urban Forum Associates.

Elizabeth Murphy, private sector project manager formerly with the City of Vancouver’s housing and properties department, BC Housing and BC Buildings Corp

Michael Geller, FCIP, RPP, MLAI, Ret. Architect AIBC, Adjunct Professor, SFU Centre for Sustainable Development; School of Resource and Environmental Management, Faculty of the Environment.

Bill McCreery, BArch UMan; Sub Lt. RCNR, helped create North and South False Creek and thousands of units of developer & public housing in Vancouver.

Tom Phipps, Retired Senior Planner City of Vancouver (33 years)

Elvin Wyly, Urban Geographer, Housing Researcher

Graham McGarva, Architect AIBC, AIA, AAA, OAA, LEED

Sandy James, LEED AP City Planner, Managing Director Walk Metro Vancouver

Vancouver Sun story about Section 19(8) of BC Assessment Act - Derrick Penner- December 2, 2024

In a way, I'd likd to claim responsibility for this story. I discovered this section of the Act by accident several years ago when carrying out an assessment appeal for a Cambie Corridor project. I couldn't understand why the two lots adjacent to the Savoy project had significantly different assessed prices. I subsequently told everyone I knew about the section of the act that allows certain properties to be assessed below market value.

This year I did a couple of interviews about it, and wrote a blog. I mentioned it to Douglas Todd at Vancouver Sun who in turn mentioned it to Derrick Penner. While the November 30, 2024 deadline to make application has passed, there is still an opportunity to seek relief next year. It's just a more convoluted process. Here's Derrick Penner's story that appeared on line today.

Longtime Metro Vancouver homeowners nervously watching their property values rise due to B.C.’s transit-oriented development legislation have an option to avoid being side-swiped by higher property taxes.

The B.C. law that establishes automatic transit-oriented zones within 800 metres of transit stations increases the development potential — and value — of land within them, even if homeowners have no plans to cash in.

B.C. Assessment, however, does give owners the option to apply to have their properties assessed on actual use, rather than potential use.

It has helped homeowners, such as those on Cambie Street who faced dramatic spikes in property value when Vancouver approved its Cambie corridor plan to upzone most of the street to higher-density housing.

For the moment, the development market in areas affected by the transit-oriented zones law has cooled substantially due to uncertainty around how municipalities will enact its requirements, according to appraiser and tax expert Paul Sullivan.

“We’re not seeing changes in land value,” said Sullivan, tax agent and regional leader for the tax-technology firm Ryan. “In fact, we’re seeing substantial declines in land value (in) an environment where there are no presales, high interest rates and high construction costs.”

But Sullivan says homeowners should be aware of the little-known Assessment Act actual-use provision because when the development market turns around, “we’re going to see some pretty spiky upturns in value.”

Long-term residents in a neighbourhood that is changing can apply to B.C. Assessment requesting a special assessment on their properties that recognizes the value of what the property is being used for is less than the “highest and best use” associated with its development potential.

The provision is part of B.C. Assessment’s assessment review process and can be triggered by various reasons, not just new development, according to Bryan Murao, area assessor for the Lower Mainland.

“Even in quite simple scenarios — if you have, for example, a large lot that could be subdivided into two houses,” Murao said. “We have that kind of situation going on every year.”

Who is eligible for a special assessment?

Any long-term homeowner in a changing neighbourhood who owns a property that is less than two hectares in size, is used only for residential purposes and where no more than three families can qualify.

To be considered, the owner or spouse has to have lived in the home as a principal residence for a minimum of 10 years.

Also, the sales history of the neighbourhood has to show that the property has greater value for redevelopment than its existing residential use. Murao said rezoning approvals or provisions of new community plans are often not enough to trigger changes in value.

“The market has to first react to that (change),” Murao said. “We really try to pay attention to at what point are we seeing sales of houses in that neighbourhood not being bought for continued use as a house.”

How do homeowners apply?

Homeowners who are eligible can contact their local B.C. Assessment office to request the application, which is considered under the authority’s property assessment review panel process.

A description of the process on B.C. Assessment’s website highlights a deadline of Nov. 30 to submit applications for an assessment review, but Murao said that isn’t an absolute cutoff for 2025 assessments.

“All that Nov. 30 deadline is is a deadline to get it included in the completed (assessment) roll,” Murao said. “We have an early December cutoff for what you’re going to see on your assessment notice.”

Under the legislation, however, Murao said homeowners have until Jan. 31 of the following year to submit applications, which will be handled a little differently.

“(That) just means we have to process it through the (assessment) appeal process, not that the owner has to appeal,” Murao said. “But (we) put it through that so they can get the benefit, if they meet all the other conditions.”

How big a difference can it make?

Retired architect and developer Michael Geller highlighted on his blog https://gellersworldtravel.blogspot.com/2024/11/how-to-avoid-letting-bills-44-47.html a comparison he came across on the Cambie corridor a couple of blocks from the Oakridge/41st Avenue Canada Line Station. Whereas the duplex at 5407 Cambie St. was assessed last year at just under $4 million for “actual, not potential, use,” the property next door, of a similar size, was assessed at $7.6 million.

“(That) means the taxes are significant and significantly more because of something that people often forget about called the additional school tax,” Geller said, referring to the additional school tax rate that starts to kick in on homes worth more than $3 million.

Geller added that he’s heard the comparison that owning a home in one of these zones is like “essentially winning the lottery.”

“However, if they don’t want to sell and want to stay in their home, then they don’t necessarily want to win that particular lottery.”

depenner@postmedia.com

x.com/derrickpenner