Real Estate discussions

[Changing City]

Originally Posted by whatnext

So again, how do you "spend "Nearly $1.6 billion over 10 years – matched by British Columbia for a total of up to $3.2 billion – to lower development charges for multi-unit housing by up to 50% in priority communities". You've just regurgitated their press release. Are they just handing the taxpayers' money over from one hand to the other?

They're going to pay for some of the infrastructure that municipalities (and Metro, presumably) currently collect development fees to cover. Municipalities have to reduce those fees from their current level. Don't forget municipalities also have targets to hit to keep the province happy, so they want to see development being built. The targets are a stick; the fee subsidy is a carrot.

Whether that makes a significant difference to a developer going ahead with a project, or reducing the price of strata units on offer, remains to be seen, but that's the intention. Developers say fees are an impediment to them building - the Feds and province just created a mechanism to reduce those fees.

[simons]

Originally Posted by whatnext

So again, how do you "spend "Nearly $1.6 billion over 10 years – matched by British Columbia for a total of up to $3.2 billion – to lower development charges for multi-unit housing by up to 50% in priority communities". You've just regurgitated their press release. Are they just handing the taxpayers' money over from one hand to the other?

Isn’t that how it works generally? Whether it’s grants, transfers, bailouts, etc., each public entity (whether a municipality, TransLink, ICBC, etc.) has its own budget and its own fees to cover their budget, and instead of having the developer (and indirectly purchasers) pay those fees that go towards funding, for example, infrastructure, the federal and provincial governments are saying that they’ll pay for a portion of those fees instead? I don’t think it’s particularly novel as a general practice…

[CanSpice]

Originally Posted by whatnext

So again, how do you "spend "Nearly $1.6 billion over 10 years – matched by British Columbia for a total of up to $3.2 billion – to lower development charges for multi-unit housing by up to 50% in priority communities". You've just regurgitated their press release. Are they just handing the taxpayers' money over from one hand to the other?

Developers currently have to pay DCCs to municipalities, which pays for infrastructure like sidewalks and sewers, to help accommodate the larger population. These DCCs will now be reduced, but the senior governments will be providing offset funds so that municipalities can still pay for the infrastructure.

[chowhou]

Tying infrastructure spending to new development was always short sighted and bad policy.

[Alex Mackinnon]

Originally Posted by whatnext

So again, how do you "spend "Nearly $1.6 billion over 10 years – matched by British Columbia for a total of up to $3.2 billion – to lower development charges for multi-unit housing by up to 50% in priority communities". You've just regurgitated their press release. Are they just handing the taxpayers' money over from one hand to the other?

Probably municipal subsidies to replaces the fees? The cities are the ones that typically charge those fees.

[CanSpice]

Originally Posted by chowhou

Tying infrastructure spending to new development was always short sighted and bad policy.

Yeah, well, that's kind of what happens when Metro Vancouver's got some of the lowest property taxes in the country. They need to find some kind of way to pay for infrastructure, and people lose their shit when property taxes go up so...

[chowhou]

Not sure where else to post this:

The federal and provincial governments also agreed to launch the new Canada-British Columbia Partnership on Condo Conversion. Together, through Build Canada Homes and BC Housing, we will leverage innovative financing tools to convert more than 2,200 vacant condo units in priority growth areas into affordable homes. This is one of the fastest and most efficient ways to increase housing supply – welcoming British Columbians to new, affordable homes as quickly as possible.

https://www.pm.gc.ca/en/news/news-releas...olumbia-forge-new-partnership-accelerate

Not exactly sure what they mean by converting condo units into affordable homes.

[Migrant_Coconut]

Do they mean buying the homes from the private sector and selling/renting at a loss? It's a dumb guess, but every other one sounds even dumber.

[Changing City]

Originally Posted by Migrant_Coconut

Do they mean buying the homes from the private sector and selling/renting at a loss? It's a dumb guess, but every other one sounds even dumber.

Here's what the prime minister was reported to have said “Looking out at condos that have been built, that are unoccupied, that are going to sit there potentially for another couple of years; we are going to go and use the right financing mechanisms and convert those into affordable housing so people can move in and use those,” said Carney.

Carney added “models” will be released in the fall.

“Effectively what you are doing is buying them at a price and spreading out the financing because you can do that for the underlying condo at our financing rate, but targeting at a level that is affordable," he said. "It is a way to clear off on the books this overhang.”

The unsold condo situation is far worse in Toronto, and presumably something similar will be proposed there.

[chowhou]

Originally Posted by Migrant_Coconut

Do they mean buying the homes from the private sector and selling/renting at a loss? It's a dumb guess, but every other one sounds even dumber.

The only scheme I can think of that makes sense is the government proposing to buy condos in bulk for Costco discounts to then rent/sell on their own.

What other "innovative financing tool" is there other than bulk discount?

[SpongeG]

they talked about this stuff yesterday on CKNW and one of the things, It was a guy from the building/developer/real estate side and he said without Foreign investors he's worried if anything will happen but he mentioned that maybe if we did waht Australia has done it might help, apparently they allow Foreign buyers to only buy Pre-sales and they are not allowed to buy houses or properties.

Wouls something like that help here? Let foreign investors buy into pre-sales, thus helping the projects to sell and get built because so many projects are just stalled or not going to happen.

[chowhou]

Originally Posted by SpongeG

they talked about this stuff yesterday on CKNW and one of the things, It was a guy from the building/developer/real estate side and he said without Foreign investors he's worried if anything will happen but he mentioned that maybe if we did waht Australia has done it might help, apparently they allow Foreign buyers to only buy Pre-sales and they are not allowed to buy houses or properties.

Wouls something like that help here? Let foreign investors buy into pre-sales, thus helping the projects to sell and get built because so many projects are just stalled or not going to happen.

This is what I've said since the beginning. We should want foreign investment and foreign capital to flow into the country, but if we're afraid of foreign money influencing resale costs the answer is to ban foreign money from resales.

[whatnext]

Originally Posted by chowhou

This is what I've said since the beginning. We should want foreign investment and foreign capital to flow into the country, but if we're afraid of foreign money influencing resale costs the answer is to ban foreign money from resales.

Then why don’t foreign investors invest in building purpose built rental.

Carney’s plan just prolongs the market distortion offshore money caused. Property owners need to wake up to the fact they won’t be getting 2017 prices, municipalities need to realize they can’t keep squeezing developers for CACs reliant on foreign money and developers need to build for Canadian incomes.

[chowhou]

Originally Posted by whatnext

Then why don’t foreign investors invest in building purpose built rental.

No one was really building purpose built rentals until recently, but your favourite British royal family member built one in the early 2000s at Cambie and Broadway. They eventually converted it to condos for sale though.

[Changing City]

Originally Posted by chowhou

No one was really building purpose built rentals until recently, but your favourite British royal family member built one in the early 2000s at Cambie and Broadway. They eventually converted it to condos for sale though.

Really? What development is that?

[chowhou]

Originally Posted by Changing City

Really? What development is that?

Grosvenor built The Rise at 485 W 8th with the explicit intention to rent out the units. The units are all technically stratified, but the building is being treated as a rental apartment by Grosvenor.

https://casestudies.uli.org/wp-content/uploads/2014/05/The-Rise-PDF.pdf

[Changing City]

Originally Posted by chowhou

Grosvenor built The Rise at 485 W 8th with the explicit intention to rent out the units. The units are all technically stratified, but the building is being treated as a rental apartment by Grosvenor.

https://casestudies.uli.org/wp-content/uploads/2014/05/The-Rise-PDF.pdf

It's a stratified building, but Grosvenor still chose to lease the apartments, so it's debatable whether it's a purpose-built rental. There are other examples where developers have done the same thing, like Wall Financial's Yaletown tower.

There are plenty of examples of purpose built rental buildings in the city that are not stratified, developed as a rental asset, often with a legal housing agreement to retain them as rental for 60 years, or the life of the building. You said that no one was really building purpose built rentals until recently, and I wasn't sure what you meant by 'recently', but the City initially had a program to encourage rentals called STIR from 2009 to 2011, and that has been continued as a purpose-built rental policy.

Examples include the two West End towers by Westbank and Crombie over the Davie Safeway, and the earlier Lauren tower on Broughton, developed by Westbank with Peterson as part of STIR. GWL developed a purpose built rental tower for London Life in 2019 on Robson Street. There are several rental buildings on Granville, Downtown, like the Standard completed in 2013, developed by Bosa and now owned by Concert.

(The Duke of Westminster isn't part of the royal family, just a friend of Prince William).

[Chirpythecougar]

Originally Posted by whatnext

So again, how do you "spend "Nearly $1.6 billion over 10 years – matched by British Columbia for a total of up to $3.2 billion – to lower development charges for multi-unit housing by up to 50% in priority communities". You've just regurgitated their press release. Are they just handing the taxpayers' money over from one hand to the other?

With development charges the burden is placed solely on the home purchaser/renter. If the gov begins subsidizing the charges then the burden is spread out across all forms of taxpayers, hence lessening the burden on home purchasers/renters. Seems pretty obvious to me what the difference is.

[ecbin]

Originally Posted by whatnext

Can you spell developer bailout?

I am also curious how you spend $3.2 billion to cut fees.

I prefer the term homebuyer bailout considering these fees reductions are nearly entirely passed through to the buyer.

[Changing City]

Originally Posted by ecbin

I prefer the term homebuyer bailout considering these fees reductions are nearly entirely passed through to the buyer.

Don't the fee reductions apply equally to rental projects? Over half the housing starts in Metro Vancouver this year are purpose-built rentals.