The week’s top stories focus primarily on the housing and lodging markets – namely a look at competitiveness in home markets across Canada and a stop work order at Gibson redevelopment of an older building into hotel. Meanwhile, Delta city council considers whether community amenity requirements are an effort to “buy” rezoning, while a Richmond home makes headlines for operating as an unlicensed hotel.
Here is Western Investor’s pick of the top commercial real estate stories published this week.
Tides have turned for Greater Vancouver and Fraser Valley, according to a new study by real estate site Zoocasa.
In its analysis of nationwide listings and sales data, Zoocasa found that, of the major real estate markets, only Newfoundland and Labrador was in a true buyer’s market, followed by Greater Vancouver and the Fraser Valley.
The website used sales-to-new-listings ratios to determine the state of the new market (as opposed to sales-to-active-listings ratios that are reported monthly by real estate boards). With this measure, a buyer’s market is indicated by anything under 40 per cent of new homes listed being sold that same month. Between 40 and 60 per cent it is a balanced market, and above 60 per cent it’s a seller’s market.
The study found that Greater Vancouver was at 43 per cent in July 2018, second-lowest only to Newfoundland and Labrador’s 35 per cent. The Fraser Valley was at 45 per cent.
The report said of these markets, “Those looking to ascend the property ladder in these cities will encounter fewer competitive hurdles such as bidding wars, as the sales are too few to outweigh new inventory.”
The regions in the strongest seller’s markets were London and St. Thomas at 78 per cent, Montreal at 73 per cent, and Ottawa and Trois Rivieres in joint third, both at 72 per cent.
The study also looked at the areas with the greatest year-over-year decreases in their sales-to-new-listings ratios. B.C. dominated the declines, with Fraser Valley seeing an annual decline of 15 percentage points, Greater Vancouver down 13 percentage points and Victoria dropping 12 percentage points (although still high at 62 per cent).
Zoocasa’s report said, “The last couple of years have been tumultuous in real estate markets across Canada, as a new mortgage stress test has further crimped affordability for borrowers of new mortgages. British Columbia, in particular, has weathered considerable challenges, as tougher mortgage hurdles compound with foreign buyer and speculation taxes, making steep affordability even more acute, and dampening homebuyer demand. [These markets] have seen the greatest year-over-year declines in their sales-to-new-listings ratios, indicating faster rates of cooling competition.”
However, the study doesn’t account for differences between varying property types. The region’s latest board stats suggest that while Greater Vancouver is indeed in a balanced market overall, that breaks out as a buyer’s market for detached homes, a seller’s/balanced cusp market for attached units, and a seller’s market for condos.
George Hotel and Residences project hits another hurdle over WorkSafe BC's asbestos concerns in demolition of existing building.
WorkSafe BC has issued a stop work order halting the demolition and removal of existing buildings at the site of the proposed George Hotel and Residences in Gibsons, citing a lack of proper measures to determine if there was any asbestos contamination.
The stop work order applied to the developer Klaus Fuerniss Enterprises and the demolition contractor Universal Land Services.
Asbestos was used in some building materials, in particular drywall, before it was phased out in the early ’90s. According to WorkSafe, “If performed incorrectly, demolitions can create harmful asbestos exposures to a variety of workers.”
Reports provided by WorkSafe say the worksite, spanning 409, 397 and 385 Gower Point Rd., was inspected on Aug. 9.
The reports say the building at 409 Gower Point Rd. has been demolished but the materials were still on site; 397 Gower Point Rd. has been partially stripped of drywall, insulation and other materials; and no demolition has been done at 385 Gower Point Rd. It also notes one load of drywall and other material has already been removed from the site.
WorkSafe determined that the hazardous material surveys submitted by the companies were not acceptable because “the sampling technique, walk-through survey and number of representative bulk samples collected were not consistent with recognized industry standards and principles of good occupational hygiene practice.”
The report goes on to say that, as a result, there were “reasonable grounds to believe there is a high risk of serious injury, serious illness or death to a worker at this workplace.”
As well as shutting down work, WorkSafe required the area to be isolated by barricades or fencing or some other measure to prevent access.
WorkSafe will allow the demolitions to resume once a qualified hazardous materials consultant completes a detailed risk assessment of the buildings and the bin of drywall already removed from the site.
If the assessment finds any asbestos contaminated material, the developer will have to bring in a qualified “abatement contractor” to handle the cleanup before work continues.
Requiring a community amenity as a way to secure rezoning approval is causing some concern among Delta council, Delta Optimist reports.
Is it providing an amenity or buying zoning?
That’s the question Mayor Lois Jackson posed once again during a recent Delta council discussion on a North Delta redevelopment application.
Council gave preliminary approval to a proposal to subdivide two lots containing older houses on 89A Avenue to build 16 townhouses. Among the questions raised was whether the project should provide some kind of community amenity.
Community planning director Marcy Sangret said staff members are still working on a report on a potential policy as requested by council earlier this year. She also noted the 89A Avenue proposal is consistent with North Delta’s area plan.
The amenity question was raised a few months ago during discussion on a four-storey condo building proposed for 51st Street in Ladner.
At that time, Coun. Jeannie Kanakos asked if the 51st Street application should perhaps provide some sort of community amenity given the applicant would enjoy a significant upzoning from what’s currently in place for the site.
Acting CAO Steven Lan said during that discussion it’s been his experience that community amenities have been negotiated for larger projects.
Council agreed not to require an amenity for either project.
During both discussions Jackson said the city had better be careful if it wanted to move ahead with a policy requiring something from most developments, warning it would appear the city is open to selling rezoning. She said she’s worried there could be legal implications as well.
“I do have some concern about the direction we may be going,” said Jackson.
Sangret noted the city has not been pursuing amenities since Delta has no formal policy and given most development proposals are consistent with the Official Community Plan.
Neighbour said hotel operator encouraged her to run a hotel in her own house and “wasn’t afraid” or repercussions of running the hotel.
At least one Richmond resident may finally get a decent night sleep now that the owner of a busy, illegal hotel next door to her has been fined $2,000 by the City of Richmond and told to close shop.
The Richmond News received a news tip earlier last week from a frustrated neighbour near Railway Avenue and Blundell Road, who said a house next door was listed as a hotel on various travel websites.
“It is very popular. So many cars are in and out every day, taking all the street parking, and some even parked on my driveway. At midnight, I can hear people talking very loudly, it’s so annoying,” Joyce Wang told the News.
The house at 7508 Railway Avenue is listed as a “Sports Home Hotel” on travel booking websites such as Booking.com, BedandBreakfast.eu and Agoda, which all cater to European travellers.
The posts show that the “hotel” has four different room types and can accommodate two to four guests in each room, with prices from $120 per night.
However, the property is not a licensed bed and breakfast, according to the city.
Wang said the operator never hid the fact that the hotel is illegal, and told Wang she is “not scared.”
“The owner bought this house in 2015 but never moved in. Some friends of the owner then rented the place and started operating it as a hotel and the traffic suddenly increased hugely this summer,” said Wang.
“When I went to talk to the operator and said I will report her, she said she is not scared, because no one is going to fine her. She even encouraged me to operate a hotel in my house.”
Since the operator doesn’t live there, very often the house is unsupervised and guests can access it through a keypad on the entrance door, according to Wang.
“I don’t feel safe with so many strangers coming and going in the neighbourhood. Once I was in my garden and saw topless people standing on the balcony of the house looking down at me. I was so scared,” said Huang.
“You can rent it out to anyone you’d like, but just not a hotel, please.”
This is not the first time the city has been made aware of an illegal operation on this property.
“We have issued the operator a warning letter previously and issued two tickets” last week “for continued non-compliance with our bylaws,” said city spokesperson Ted Townsend.
The city also gathered evidence necessary for further enforcement action if needed and will take “progressive enforcement action” as necessary, he added.