The week’s top stories cover the much theorized and debated topic of housing affordability in the Lower Mainland, B.C.’s recreational home market, and the potential redevelopment of a transit-oriented lot at high-exposure Vancouver intersection. Conversation on housing affordability measures flirted around the idea of temporary modular housing, while some wonder if increased density outlined by the Cambie Corridor Plan will impact affordability. Meanwhile, a parcel of land at West Broadway and Cambie is up for sale, with potential for an “iconic” mixed-use development.
Here is Western Investor’s pick of the top commercial real estate stories published this week.
Vancouver’s recent approval of the third phase of the Cambie corridor redevelopment plan sets the stage for the biggest transformation of the area, reports Peter Mitham. But will it lead to affordable housing?
City plans for the Cambie corridor call for 32,000 homes, of which 6,500 units will be secured rental and non-market housing, as well as jobs space for 9,200 people. This is where redevelopment of the Oakridge mall site stands alongside its counterparts in Burnaby, because it will represent a sizable portion of the jobs space – up to 3,000, by current estimates, spread over 1.8 million square feet of office and retail space. Approximately 2.8 million square feet of residential space in 2,914 units is also planned, including 580 units of secured market and non-market rental housing.
Undertaken by QuadReal Property Group in partnership with Westbank Corp., the Oakridge makeover will be joined by 2,100 units of housing at Langara Gardens, a 20.5-acre site Concert Properties Ltd. plans to remake with Peterson Investment Group Inc. Concert expects 1,000 of Langara Gardens’ units will be rental.
Redevelopment plans for a third major site, the Oakridge transit centre acquired in 2016 by a joint venture of Intergulf Development Group of Vancouver and China’s Modern Green Development Corp., have yet to be announced.
The local chapter of the Urban Land Institute (ULI) hosted a candid panel discussion in partnership with marketing firm MLA Canada, coinciding with MLA’s latest survey of the pre-sale market.
Kudos for the best quote go to Brendan Piovesan, associate counsel with the law firm Farris, Vaughan, Wills & Murphy LLP.
“If the development community got everything it wanted, in the long run it would be shooting itself in the foot. It would be detrimental,” Piovesan remarked, encouraging a balanced approach that must surely resonate with every opponent of greater density.
MLA partner Cameron McNeill didn’t embrace the endorsement of moderation, however, urging no minimum size for condo units. Homes need to shrink to accommodate everyone who wants to live in Vancouver, he argued.
“They’re buying into the city, not the 200 square feet,” he said.
His comments echoed those of Tsur Somerville, director of the University of British Columbia’s Centre for Urban Economics and Real Estate, at another ULI event in September 2010.
“They’re finding public experiences that replace private experiences,” Somerville said of people embracing smaller condos as the region’s population expands.
Yet regardless of unit size, all four panellists last week felt affordability was elusive, if not impossible.
The most optimistic speaker was another lawyer, Richard Bell of Avesdo Inc., who questioned Vancouver’s bid to ensure 25% of new units are affordable to households earning $30,000 to $80,000 a year.
“I don’t believe what they hope to achieve,” he said.
The City of Vancouver is planning on spending Empty Homes Tax revenue on affordable housing initiatives, flirting with the idea of investing in temporary modular housing.
The City of Vancouver expects to collect $30 million from the tax. Implementation and operating costs are expected to be $10 million, leaving $20 million to be invested in affordable housing initiatives.
In recent weeks, the public was invited to submit ideas through the city’s website about how and where to spend that $20 million, while 60 residents and housing advocates were invited to Thursday’s "idea jam" to dream up more options, six of which were presented to a three-person panel in a friendly Dragon’s Den-style process. The remaining three of the six proposals included creating an innovative infill housing lab, creating a city finance agency to provide loans to non-profits for housing projects and creating more “real” social housing.
The co-op housing proposal, which was most popular, envisions using the $20 million to invest in new housing co-ops on city-owned land and creating new units in existing co-ops.
The idea behind “temporary modular colleges” is to create a pilot project to end the cycle of homelessness. Using the temporary modular housing model, residential educational communities would be created at eight sites scattered throughout the city. Each would house under 40 people and feature peer-to-peer mentoring so residents could learn life skills such as fixing bikes, small appliances or computers from each other. Lengths of stays would be time limited — residents would graduate and go — hence the term “college” in the name. One of the proponents noted the importance of having a goal because people who are chronically homeless “lose the future” because they’re too busy surviving.
The rent-to-own proposal, meanwhile, imagines a scenario where a tenant rents the unit but doesn’t own the debt; rent contributes to equity towards the purchase price.
The panel evaluating the suggestions included Jill Atkey, acting CEO of the BC Non-Profit Housing Association, Abi Bond, the city’s director of housing policy and projects, and UBC professor Paul Kershaw who founded Generation Squeeze.
Kershaw wouldn’t say which idea he favoured, but said it’s important the money from the Empty Homes Tax is not just used to build new affordable homes projects, but spent on a movement to get bigger policy change and bigger investments from provincial and federal levels of government.
“Because that’s how we can scale up. The city does not, in and of itself, have the revenue capacity to solve the affordability challenges,” he told the Courier. “We need broader policy change. Using some of the dollars from the empty homes tax to actually invest in the movement-making and the building of the political will to create cover for politicians to make courageous decisions would be one of the most important parts of what we do with this money.”
B.C. retirees are driving demand for recreational real estate, according to a new survey by Re/Max.
In the survey of brokers and agents across the country, respondents in more than 91 per cent of recreational markets said that older buyers were the driving force in buying vacation properties in that area – in stark contrast with one year ago, at 55 per cent of markets.
The survey found that in B.C., Ontario and Atlantic Canada, an increasing number of boomers are cashing in on their high-priced principal residences and buying recreational properties outside of urban centres to live in year-round in their retirement year. This trend is “increasingly blurring the line between recreational and residential properties,” said the report.
“Last year, we found that baby boomers and retirees were increasingly selling their homes in urban centres like Toronto and Vancouver," said Elton Ash, regional executive vice-president, RE/MAX Western Canada. “It’s clear that many put the equity they received from those sales into the purchase of a recreational property with the intention to retire in comfort and away from the city.”
Aside from an “affordable purchase price,” which was Canadians’ biggest priority, “waterfront access” was rated as the most important must-have when choosing a vacation property, pushing “reasonable maintenance costs” into third place.
In B.C., it was a similar story to the national picture, with retirees making up most of the purchasers in the province’s recreational hotspots. But the survey also found an emerging trend of younger professional couples and families also making the most of significant uplifts in the value of their primary residences to buy vacation homes.
Re/Max added that the vacation property market in B.C. remains a strong seller’s market, with not enough available vacation homes to meet the demand.
The site is one of the last remaining parcels along the in-demand intersection of Cambie Street and West Broadway that has yet to be slated for redevelopment.
The one-storey Wendy’s restaurant building at the high-exposure, transit-oriented corner of Cambie Street and West Broadway has been listed for sale, with potential for an major mixed-use development.
The site is located at 480 West 8th Avenue – just across the street from a future transit hub that will include an underground Broadway Extension station stop on the Millennium Line, in addition to the existing above-ground Broadway–City Hall station entrance on the Canada Line.
The restaurant site is one of few parcels in close proximity to the new transit hub that is not already under proposal for redevelopment. The Vancouver City Hall at 453 West 12th Avenue is expected to expand its campus, while several mixed-use developments have been planned for lots along the Cambie Street and West Broadway intersection.
The 22,237-square-foot lot is located in a prime location for an “iconic” development, according to CBRE, who have listed and are marketing the site.
The parcel’s current zoning allows for office, retail and residential use, but potential rezoning under the yet-to-be-unveiled Broadway Corridor Plan could allow for higher density development.
According to BC Assessment, the property has a value of $39.53 million. CBRE anticipates significant interest from national and internationalbuyers.