The week’s top stories focus on the NDP’s B.C. Budget 2019 announcement, primarily its housing measure – or lack thereof. Proposed rental housing regulations in Victoria and new rental housing developments in Vancouver also made our cut this week of the most-buzzworthy real estate stories.
Here is Western Investor’s pick of the top commercial real estate stories published this week.
Biggest new policy is a $76 million investment in modular housing for homeless; no sign of promised renters’ rebate.
The B.C. Budget 2019, announced February 19, proved light on new housing measures, with the only significant new spending a $76 million investment to buy land and build additional modular homes for the homeless.
Following 2018’s aggressive taxation measures and expansive affordable housing promises, finance minister Carole James firmly adopted a stay-the-course attitude in terms of housing, with the 2019 budget focusing instead on poverty reduction and family benefits.
The province took the opportunity to give an update on the progress of its existing housing plan, saying that of the 114,000 new affordable homes over 10 years promised in last year’s budget, 17,000 are built or “underway.” The ministry also pointed to the expanded and increased foreign buyer’s tax and the launch of the B.C. speculation and vacancy tax, and touted those measures as instrumental in helping to cool B.C.’s hottest markets.
The B.C. Budget 2019 Strategic Plan reads, “In less than a year, we’re seeing results. Over the past six months, the benchmark price for single-family homes in Greater Vancouver decreased by 8.3 per cent, condo prices are down 6.6 per cent, and townhome prices are down 6.2 per cent.”
There was no sign of the $400 annual renters’ rebate promised by the B.C. NDP government in its election platform – a policy that coalition partner the Green Party has firmly argued against.
However, the ministry said it would help tenants to avoid losing their homes by “providing funding to community organizations to operate rent banks, by providing short-term loans with little to no interest to low-income tenants who can’t pay their rent due to a financial crisis.” In her announcement, James said, “There isn’t any benefit to any of us if those people who do have affordable housing are thrown out on the street. This is going to make a huge difference.”
There will also be additional benefits to seniors living independently in rental accommodation, through the Shelter Aid for Elderly Renters (SAFER) program, by an average of $930 a year, said the ministry.
According to the 2019 budget, overall housing starts for 2018/19 were 40,857 units, and this will fall to 34,015 units for 2019/20, 31,946 units for 2020/21, and 30,517 units for 2021/22.
Income from the new speculation and vacancy tax is forecast to rise from $87 million in 2019/20 to $185 million for each of the three following years.
B.C. budget documentation for 2018/19 shows that the province is expecting a $400 million shortfall in its forecast Property Transfer Tax revenues, due to the housing market slowdown in major urban centres. However, overall residential revenues are forecast rise from $951 million in 2019/20 to $1.146 billion in 2019/20, $1.183 billion in 2020/21, and $1.219 billion in 2021/22.
Anne McMullin, president and CEO of the Urban Development Institute Pacific Region, said in a statement, “Sadly, Budget 2019 offers little to encourage more housing options for British Columbians and zero incentives for purpose-built rental homes. In fact, Budget 2019 forecasts a dramatic collapse in provincial housing starts, including rental homes, over the next four years. This slowdown in starts will result in less homes, taking us back to average levels in the 1990s, when we critically need more housing options... It’s difficult to see how government will be able to meaningfully improve the vacancy rate, while building fewer rental homes.”
Controversy about the project's future touches on the usual suspects — height, density, affordability, the housing crisis, to name only a few.
A would-be construction site on West Broadway at Birch is becoming the latest flashpoint in the polarizing debate surrounding development in Vancouver. Controversy about its future touches on the usual suspects — height, density, scale, consultation, planning processes, affordability, the housing crisis, the dismal vacancy rate and the push for the construction of more rental apartments.
The property at 2538 Birch St. (formerly 1296 West Broadway) is currently vacant. It was home to an old Denny’s until it was knocked down to make way for redevelopment.
Early last year, city council approved Jameson Development Corp’s rezoning application for a 16-storey building with 153 secured market rental units for the site, but Jameson has since submitted an expression of interest for a new rezoning application for a much higher tower — a 28-storey building with additional rental units and commercial space under the city’s Moderate Income Rental Housing Pilot Program (MIRHPP).
The pilot program aims to deliver new rental units across Vancouver geared toward households earning between $30,000 and $80,000 a year.
It’s limited to 20 rezoning applications for new buildings that provide 100 per cent of the residential floor area as secured market rental housing with a minimum of 20 per cent secured for households in that earning bracket.
Jameson held a pre-application open house for its proposal for a taller building with 262 residential rental units that would meet the requirements of the MIPHPP on Nov. 29 of last year. The city has not yet received a rezoning application for the new proposal but, if one is submitted, the details will be posted on the city’s website, and the project would need to be approved by council.
Doug Purdy, a president of LPA Development, a consultant firm working on the project, described the November open house as “the beginning of a good conversation with the city and the community at large,” in a recent email to the Courier.
“We are still in the midst of those conversations, particularly with city staff and are collecting as much feedback as possible. As such, we don't have any updated information at this time until we receive more feedback from city staff that will inform refinements to the proposal,” he wrote.
But critics of the higher tower proposal, including Ann Coombs, haven’t waited for an official application to be submitted to raise concerns.
They’ve already launched a petition and a website at 28floors.com opposing the proposal.
Coombs, who rented for 30 years in South Granville but now owns, said those against the tower include renters, owners, students, seniors and young families.
She told the Courier more than 500 have voiced concerns on the website. For her part, she maintains a 28-storey building is inappropriate and it would set a precedent in South Granville where a community plan isn’t in place.
Last summer, meanwhile, the city approved the Broadway planning process, which covers the area along Broadway between Clark Drive and Vine Street, centring on “opportunities to integrate new housing, jobs and amenities with future transit and around the Broadway subway.” It’s expected to take two years. Staff anticipate presenting the plan for council to consider in late 2020.
The 28floors group argues a higher building shouldn’t be considered before that process is completed.
One of their main objections to the tower is it would be twice the height of the tallest neighbouring building and, from the group’s understanding, it would be the tallest building with the greatest density of any on Broadway.
They argue it’s incongruent with the character of the surrounding neighbourhood, which is largely low and mid-rise buildings, rentals and heritage buildings, and that existing senior renters fear if the project is approved, other older low-rise rental buildings will be at risk of redevelopment and they’ll end up being evicted and won’t be able to age in place.
Other opponents worry about the “downtownification” of the neighbourhood, that shadows from the tower will extend as far as Molson Brewery, and that excessive density won’t create liveability over the long-term.
They also maintain infrastructure such as parks, schools, utilities, emergency services and transportation need to be addressed before the city approves such a project.
Coombs, meanwhile, isn’t convinced there’s a supply problem in the neighbourhood, pointing out she spotted more than 15 rental opportunities during a recent walk through South Granville.
She also insists residents support affordable housing being built and that they aren’t opposed to rental buildings.
“South Granville is predominantly a rental area, but it’s lowrise. There is nobody in this community that is against rental housing for obvious reasons… so the concern comes from the scale and the height and the fact it has not been included in the citywide plan,” she said, while echoing concerns that it would be precedent setting.
“The fact that now that the Broadway line has been confirmed — I was at that public hearing — from Arbutus through to UBC, [there is a concern] that it’s precedent setting not only for here but right along the corridor based on density.”
Vancouver mayor welcomes pet-friendly West End highrise, citing need for market rental buildings.
It’s unusual to see a pair of dogs — in this case Hazel and Trink — at a press conference packed with developers, real estate types and politicians. But not when you’re trying to underscore the fact a new development will be pet friendly in a city where it's notoriously difficult to find an apartment that accepts animals.
That was the case Feb. 20 at a ground breaking for a 21-storey market rental building going up at 1500 Robson St. in Vancouver’s West End.
The pooches got a front-row seat to hear speakers, including Mayor Kennedy Stewart, praise the tower, which will produce 128 rental units, a third of which (42 units) will be two- and three-bedroom family-sized apartments ranging from 753 to 978 square feet.
London Life Insurance Company is the owner of the project, which is being developed by GWL Realty Advisors and designed by IBI Group.
It’s one of the first rental towers to be built along Robson in decades, “in a city that’s in need of rental housing and in a neighbourhood of luxury condominiums,” according to GWL Realty, and the first rental project on Robson to be approved under the city’s West End Community Plan, which was adopted in 2014.
Ralf Dost, president of GWL Realty Advisors’ real estate portfolio, said it’s important to create more purpose-built rental apartments given Vancouver’s tight vacancy rate and the fact much of the existing stock is dated and in need of upgrades.
“We also know how challenging it is to make financial sense of multi-residential developments, especially in this West End neighbourhood, so all of these factors make the launch of this project today that much more gratifying,” he said.
Stewart agreed that increasing the supply of secured market rental apartments “is more important than ever” when more than 50 per cent of residents are renters and vacancy rates are at an all-time low.
“It’s the kind of ground-breaking we all like to come to because it is helping us with our key problem of [increasing] market rentals. We need all kinds of rentals in the city — we need affordable rentals, but market rentals are also a key part of fixing our supply problem,” he said, while adding that residents have also been pushing for the construction of units big enough for families.
“Increasing the supply as well as diversity of rental housing in our city will benefit all Vancouverites, especially young families. I used to rent right across the street so I know how vibrant this neighbourhood is, and bringing 128 more families in here is just going to really help the local merchants.”
The highrise, located at the corner of Robson and Nicola streets, is expected to be completed in 2021. It will feature “substantial” bicycle storage and maintenance facilities, as well as indoor and outdoor amenities, including fitness, yoga and lounge rooms, a rooftop patio and a common area for tenants on the penthouse floor.
It’s replacing a low-rise commercial building that used to face Robson, which featured a few residential units, as well as a residential building behind it that was mostly rented to international students. The 12 tenants who lived in the two buildings were relocated elsewhere with some assistance. GWL Realty Advisors provided tenants with the equivalent of two or more months’ rent based on length of tenancy, and support with moving expenses.
It’s too early to say what rents will be in the new building, but they will be at market rates.
City of Victoria's proposal to require all condo projects to include affordable rental units should be rethought, as policy could actually drive up prices, according to developers.
The City of Victoria should rethink its proposed policy to require all new condo projects to include 10 to 15 per cent affordable units, says a city-appointed working group studying the issue.
The city likely could realize more units of affordable housing by instead accepting cash-in-lieu from developers building multi-unit projects, says the working group, comprising housing advocates, non-profit providers, community associations, developers and strata housing advocates.
The Urban Development Institute even suggests that an “inclusionary housing” policy like that being considered by the city could have the perverse effect of actually driving up prices.
The working group was struck after the development community reacted with alarm in November at a recommendation from councillors Jeremy Loveday and Ben Isitt that the city immediately start negotiating with developers to require between 10 and 15 per cent of units in all new condo projects be built as affordable rental.
Council opted for more consultation but is committed to having a new policy drafted by March 31. Staff are seeking council direction on whether to pursue cash-in-lieu options.
In an interview, Loveday said he’s not ready to give up on the idea of requiring affordable units in all new developments. “Right now. the biggest concern in our community is affordable housing so we need to make sure that we’re implementing policies that will deliver the most affordable and adequate housing that we can,” Loveday said.
“I still see the inclusionary housing strategy as one small piece of that puzzle and, yes, I’m disappointed and frustrated at how long this has taken,” Loveday said, noting that the UDI has not been a fan of the policy from the outset.
“I don’t think this is an either-or conversation,” said Coun. Laurel Collins when asked about the possibility of the policy including a cash-in-lieu option.
“I do think that pushback from some of the development community is going to be expected.
“Developers who want to build 100 per cent luxury condos aren’t going to be happy with the policies we’re putting forward but there are developers who are willing to provide affordability and to provide community amenities,” she said.
In a letter to councillors, UDI executive director Kathy Hogan said there was a consensus among the working group members that the proposed policy “would not be an effective or efficient way to achieve affordability.”
But Emily Rogers, a legal advocate with TAPS (Together Against Poverty Society), said no such consensus was reached.