Weekly Buzz: B.C. Foreign buyer conversation and land crunch

Western Canada's top commercial real estate stories, featuring coverage on the housing and rental markets, as well as industrial and agriculture land

By
Western Investor
January 19, 2018





Vancouver Homes

 

The week’s top stories cover the housing market – from Premier Horgan’s denouncement of a proposed foreign buyer ban, to a housing crunch for young students in Kelowna. On the commercial side, rental landlords are expected to push back against marijuana legalization allowing for pot to be grown in homes, while industrial land in Railtown and ALR parcels are under review.

Here is Western Investor’s pick of the top real estate stories published this week.

 

Premier Horgan shuts down idea of foreign buyer ban – Western Investor

Horgan is not in support of Green Party leader Andrew Weaver's proposed ban on foreign buyers, Glacier Media’s real estate division editor-in-chief Joannah Connolly reports.

Green Party leader Andrew Weaver has been pushing for a ban on non-residents buying B.C. real estate – but B.C.’s Premier poured cold water on the idea January 16, just days before his trip to Asia to discuss trade.

Premier John Horgan told a press conference at the B.C. Legislature January 16, “I just don’t believe that in an open economy [a non-resident buyer ban is] an appropriate way to proceed.

"I do believe we need to knock back speculation and make sure we are penalizing that behaviour in the interest of reducing demand and softening prices."

In response to the example of New Zealand introducing a foreign buyer ban in October 2017, he said, “New Zealand is a small set of islands in the South Pacific. B.C. is the gateway to Canada, and I don’t believe we should be curbing people coming here."

He added, "I'm a child of an immigrant and virtually everyone I see here is a child of an immigrant.”

The previous B.C. Liberal government introduced a 15 per cent foreign buyer tax in August 2016 on Metro Vancouver home purchases, which had the temporary effect of slowing down sales, but the market recovered within a year. However, the tax has likely been a factor in continued slowing price growth at the higher end of the detached-home market.

Horgan said that the upcoming B.C. Budget, to be announced in February, will offer a series of fresh measures aimed at the housing market.

[Western Investor]

 

Apartment landlords in B.C. lobby to nip pot in the bud – Western Investor

Landlord groups are pushing for the B.C. government to ban smoking or growing marijuana in rental housing, ahead of legalization.

B.C. landlords want the province to follow the lead of Quebec and ban marijuana growing in private homes when recreational marijuana becomes legal under federal legislation on July 1.

LandlordBC, an industry lobby group, is also pushing the B.C. government to introduce legislation that would outlaw the smoking of marijuana in rental housing, which would be a first such law in Canada.

Under Quebec’s proposed marijuana law, residents are allowed to use marijuana recreationally in their homes but won’t be permitted to grow cannabis for personal use.

The federal draft legislation, however, allows the growing of up to four plants up to a metre high in private homes. It also allows the consumption of marijuana in private residences.

As well, about 150,000 Canadians are registered as medical marijuana users and could claim discrimination against restrictions on production or use.

“I think there could be a constitutional challenge to an outright ban on growing marijuana [in a private residence],” said Scott Bernstein, a Vancouver lawyer and senior policy analyst at the Canadian Drug Policy Coalition.

He said B.C. could lower the number of plants that could be grown, but it would be difficult to have a blanket ban on people growing marijuana for their personal use, particularly for medical purposes.

B.C. landlords currently have the right to designate a rental building or unit as smoke-free of any combustible material and that would include cannabis, said David Hutniak, CEO of LandlordBC.

However, restrictions on tenants smoking cannot be done retroactively. If an existing tenancy agreement permits tenants to smoke, the tenancy agreement can’t be changed until the tenant vacates, Hutniak said.

“What we would like to see is all smoking being banned in rental units, including cannabis. We are even more concerned about the potential for personal grow-ops and are vigorously encouraging the B.C. government to ban cannabis grow-ops, and consumption, from rental housing.”

In a 2017 submission to the Cannabis Legalization and Regulations Secretariat, LandlordBC noted that even small grow-ops could cause ventilation and mould problems in a rental building and expose landlords to liability.

“Insurance companies currently tend to cancel insurance policies when they learn any marijuana has been grown. That leaves a landlord with no liability insurance. That also leaves the landlord and the mortgage holder with no coverage if the building is destroyed or damaged by fire, even if the fire is unrelated to the marijuana,” the submission states.

[Western Investor]

 

New industrial zoning reviving Railtown; ALR set for review – Business in Vancouver

New historic industrial zoning that came into affect last May has seen a surge in development in the area, while Agricultural Land Reserve parcels will be reviewed soon to determine any exclusion.

The new zoning brought the clarity needed to allow such uses to flourish in the future, said Justin Omichinski, a vice-president with Avison Young, and developers now have the confidence needed to create new space to serve them.

“It legalized a lot of the uses of tenants that had been operating … under software manufacturing,” he said. “Now there’s more clarity in the development community and from the tenants’ perspective on who’s allowed to operate under that new zoning. ... [It’s] really spurred on a lot of the new projects.”

Those projects include Bench, a 35,000-square-foot Rendition Developments Inc. development at 353 Railway Street that recently secured a building permit. It will be the first project built under the area’s I-4 zoning.

Billed as “a tribute to our past while looking to our future,” the project eyes retail and food tenants at grade and clothing and technology companies for the upper five storeys. Completion is set for fall 2019.

A few months later, Rendition expects to complete Maker Exchange at 488 Railway Street in partnership with Nicola Crosby Real Estate and Omicron Development Inc.

“Our property is probably centre ice,” said Tim Loo, an adviser to Omicron and former principal who led the planning for Maker Exchange, noting that it includes the original location of homegrown coffee roaster JJ Bean.

Loo expects creative product manufacturers and similar companies to take space in the 151,000-square-foot development, which should obtain a building permit in February and break ground this August.

“The city has a mandate to save industrial land, but what does industry mean going forward?” he asked.

With the proliferation of engineering firms and craft brewers in urban industrial zones from Mount Pleasant to Lake City, industry clearly isn’t what it was.

ALR, recharged

The province has struck a nine-member committee to review the 45-year-old Agricultural Land Reserve (ALR).

Many industrial brokers contacted last week were reluctant to comment pending the release of a consultation paper that will set the terms of the review, but a few things are certain.

One, the ALR’s division four years ago into two zones will likely be eliminated. Two zones were rejected in a 2010 report for the Agricultural Land Commission, and B.C. Agriculture Minister Lana Popham wishes to see this honoured – just as she made provision for meaderies, breweries and distilleries to operate within the ALR in keeping with a 2014 report.

Two, given that the committee’s mandate is “revitalizing the ALR,” exclusions from the reserve aren’t likely to become easier.

[Business in Vancouver]

 

Housing crunch squeezes students in Kamloops – Business in Vancouver

Hot real estate market collides with rising enrolment at Thompson Rivers University, BIV reports.

The 1.2% vacancy rate in Kamloops has created a housing shortage for students at Thompson Rivers University (TRU).

Glenn Read, the university’s director of ancillary services, said TRU’s on-campus residences are full, and administrators are aware that some students are staying in nearby hotels. He added that the university – B.C.’s fifth largest, with an enrolment of 25,754 students – expects demand for an additional 104 beds by 2021.

“We know anecdotally that it has been a challenge for our students to find affordable student housing in proximity to the university,” Read said.

As of the fall semester of 2017, TRU had 2,839 international students, a 30% increase from fall 2016. Most of the bump comes from students from India and China. The university overall is expanding as well, with TRU adding close to 4,000 additional students since the 2012-13 school year.

Percy Amaria, general manager of the Ramada Inn, which is located within walking distance of TRU’s campus, said the hotel has three international students in separate rooms. He said they showed up just after the holiday season and checked in when they couldn’t find rental accommodations.

“They just came in the last few days,” he said. “It was something that happened at the end of the summer as well.”

TRU has two on-campus residences, one of them an 11-storey tower with 570 units. The other, McGill Housing, comprises three dorm-style buildings, built privately three decades ago and accommodating 302 students. The McGill Housing buildings were bought in 2016 by the university, which spent $1.2 million renovating them.

But demand continues to outstrip supply, at a time when Kamloops’ real estate market is heating up dramatically. The city posted 185 real estate transactions in December 2017, up 28.5% from December 2016. This marked the best December sales figure on record, breaking the previous record, which stood for 28 years. Cyndi Crossley, president of the Kamloops and District Real Estate Association, noted in a release that, “combined with inventories that are as low as they were a decade ago, prices in the region rose by more than five and a half per cent in 2017.”

[Western Investor]


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