General Vancouver Updates

[WarrenC12]

Originally Posted by Bdawe

If you go over land value maps, you'll notice that residential arterials are notably less valuable than commercial arterials, and that residential arterial land is much less valuable than land off the arterial, while commercial is much more. Zoning allowing up to mixed use with apartments would allow for a use which *benefits* from an arterial location, rather than being degraded by it, and still allow more housing.

I'm not sure what this means. Nobody wants to live on a busy street?

I certainly wouldn't want to live on 1st Ave or 12th Ave in Vancouver, but I didn't think the houses and land on those streets was worth less.

[BodomReaper]

Originally Posted by WarrenC12

It's true in theoretical economics, and certainly over the long term. But look at what's happening around Metrotown, with affordable 3 story wood apartments being torn down and replaced with higher density concrete condos, which are far more expensive to rent.

How is the Metrotown example at all relevant here? Replacing single family homes with any multifamily project increases affordability immediately as well. It's safe to say that if Vancouver allowed housing to be built consummate to demand, there would be far less pressure to redevelop relatively dense buildings in the suburbs. When Vancouver mandates single family homes to surround 2 of their rapid transit stations, of course demand is going to get pushed further down the line into Burnaby. It's maddening, but that's what happens when densities are totally arbitrary.

And squeezied, of course "there's nothing wrong with townhomes." What is wrong is forcing densities down to an arbitrary level dictated by political expediency rather than demand for housing. It is clear here, and all along Oak unfortunately, that we only have townhomes because nothing more is permitted by the city. Translink found a few years ago that transit ridership among residents adjacent to the Frequent Transit Network is nearly as high as for those adjacent to rapid transit - and here we are wasting an entire FTN arterial in the centre of the city with 3-storey townhomes of a density not far off what can be found in most suburbs.

[Bdawe]

Originally Posted by WarrenC12

I'm not sure what this means. Nobody wants to live on a busy street?

I certainly wouldn't want to live on 1st Ave or 12th Ave in Vancouver, but I didn't think the houses and land on those streets was worth less.

The land they sit on is literally worth less

See map of 2014 Assessed land values per m^2

http://1.bp.blogspot.com/-aNiNIyF_g4...alues+area.png

[Prometheus]

Originally Posted by WarrenC12

It's true in theoretical economics, and certainly over the long term. But look at what's happening around Metrotown, with affordable 3 story wood apartments being torn down and replaced with higher density concrete condos, which are far more expensive to rent.

It's not just true in theory, but in fact. And if you do not understand that the future welfare of Metro Vancouverites (especially those original renters in Metrotown) will be better than what it will be if liberal densification is not permitted in a market where the population is growing, then you do not even understand the theory.

If densification does not take place in a growing market, then the low rents those original Metrotown tenants were paying would not remain that way for very long as better-financed individuals in search of housing outbid the original tenants, thus displacing them and leaving them with nowhere to go, since no new housing has been built. But by building much more housing than existed before (i.e., liberal densification), the original Metrotown tenants will have places to go as individuals from around Metro Vancouver (who are making the next economic steps in their lives) vacate a greater number of affordable rental units than had originally existed in old Metrotown to move into the new, denser developments.

So not only do displaced low-income renters have a variety of places to go in a growing city with liberal densification policies (unlike a city with restrictive densification policies), there will even be downward pressure on the rents of the available stock. Thus, depending on how liberal the densification policies are, such renters may end up paying less rent than they did before.

[logan5]

It's true we have to keep building to keep up with demand, but tearing down those walk-ups for towers is wrong and completely unnecessary. Row-house and town houses are a lot cheaper to build because they are a much smaller scale project; they are made of less costly wood; and they don't have huge underground parkades. In fact no underground parking at all.

So if Mike Corrigan or Gregor Robertson were really concerned about affordability and were concerned about retaining affordable housing (in Corrigan's case, he truly doesn't give a shit), we should be building row houses in place of detached homes. As seen in the Norquay plan, each row-house can be built with a secondary suite, which would cost far less to rent than a condo suite. And the row-house itself would cost 30% less (per sq ft) than a condo.

The few row-houses we do see built along Oak are just a drop in the ocean. Except for some historic neighbourhoods, all of Vancouver and Burnaby should be upzoned to row-house and townhouse.

[WarrenC12]

Originally Posted by Prometheus

It's not just true in theory, but in fact. And if you do not understand that the future welfare of Metro Vancouverites (especially those original renters in Metrotown) will be better than what it will be if liberal densification is not permitted in a market where the population is growing, then you do not even understand the theory.

Do you have proof of this? Are rents in Metrotown going down as a result of the replacement of old apartment buildings?

Are you implying that the entire reason for the price increases of local real estate is due to population growth?

Originally Posted by Prometheus

If densification does not take place in a growing market, then the low rents those original Metrotown tenants were paying would not remain that way for very long as better-financed individuals in search of housing outbid the original tenants, thus displacing them and leaving them with nowhere to go, since no new housing has been built. But by building much more housing than existed before (i.e., liberal densification), the original Metrotown tenants will have places to go as individuals from around Metro Vancouver (who are making the next economic steps in their lives) vacate a greater number of affordable rental units than had originally existed in old Metrotown to move into the new, denser developments.

In the very long term, yes.

The reason the property development is happening is because of the massive increase in real estate prices (likely a bubble at this point). This makes it worthwhile to purchase large pieces of land, rezone, redevelop, and sell at an even higher price, because of where the market is going. None of this contributes to lower rents until such a time as real estate drops.

I agree that densification is important, but the downward pressure on prices, that you alluded to, does not exist in a vacuum. It is critically linked to the change in property values, which in Vancouver are entirely detached from local population increases.

[squeezied]

Originally Posted by Prometheus

Densification (i.e., the efficient creation of greater supply) does guarantee downward pressure on prices, which is precisely what Vancouver needs.

By contrast, restricting density restricts supply, and restricting supply increases prices, precisely what Vancouver does not need (but precisely what city policy is doing).

That is economics 101.

Basic economics can't be applied to everything especially in complex real estate markets. Supply is only one factor in addressing affordability. Manhattan isn't affordable even with all that density.

I'd argue demand has a bigger factor in addressing affordability. What's driving demand for real estate isn't just growth. If it were, the market wouldn't be this unaffordable. Frankly I believe wealthy offshore demand, local's fear of being price out, and other factors (many of which I'm not aware of) are keeping the market elevated and rising. Again real estate is a complex world and simply increasing supply is only one factor in affordability.

I don't see any issues with townhomes. There's lots of apartments on one end of the spectrum and lots of single family housing on the other end but not many townhomes in the middle. Diversity of housing types is important for any healthy city.

[osirisboy]

Squeezied. Do you really think that it shouldn't be denser?? I'm not talking towers. I'm talking higher density that they are proposing. That could mean stacked town homes. 41 units for that massive whole block is pretty low. Are you saying your against it being increased to say 80 townhomes?

[whatnext]

Originally Posted by Prometheus

Densification (i.e., the efficient creation of greater supply) does guarantee downward pressure on prices, which is precisely what Vancouver needs.

By contrast, restricting density restricts supply, and restricting supply increases prices, precisely what Vancouver does not need (but precisely what city policy is doing).

That is economics 101.

LOL, Bob Rennie, is that you?

Real Estate Shilling 101.

[Jebby]

Originally Posted by whatnext

LOL, Bob Rennie, is that you?

Real Estate Shilling 101.

Actually it's sound economic theory.

[Jebby]

Originally Posted by WarrenC12

Do you have proof of this? Are rents in Metrotown going down as a result of the replacement of old apartment buildings?

Either you're not reading what Prometheus wrote or you simply do not understand it.

[BodomReaper]

Originally Posted by whatnext

LOL, Bob Rennie, is that you?

Real Estate Shilling 101.

Wake up, sheeple! Anyone opposed to arbitrary restrictions on new housing is a shill for Rennie and teh condo developers, amirite?

I don't know how many times the elementary supply and demand model has to be 'proven'. It's not theory, it's math.

Members of these boards have pointed out that their condos in Surrey Centre and Lonsdale didn't appreciate this year. I guess they just happen to be in areas where there are no restrictions on new housing supply - amazing. In Seattle, a pro-development utopia compared to Vancouver, rents are actually falling despite a strong economy.

For those saying foreign capital is the problem, the onus is on you to show that we're not experiencing an actual immigration wave. 2011 census data shows that our vacancy rate is perfectly in line with the national average, and everything since then has been anecdotes or localized cherry-picking.

For the "there's not enough data" crowd, it's amazing how we have to start with the presumption that waves of faceless foreigners are buying our housing stock so they can let it sit empty as they pay thousands in property taxes per year and forgo rental income in a very hot rental market, and not have to disprove the much simpler + logical claim that Vancouver is a growing city (GDP, population, jobs) with an inelastic housing supply caused by prohibitive zoning laws.

[Prometheus]

Originally Posted by squeezied

Basic economics can't be applied to everything especially in complex real estate markets. Supply is only one factor in addressing affordability. Manhattan isn't affordable even with all that density.

I'd argue demand has a bigger factor in addressing affordability. What's driving demand for real estate isn't just growth. If it were, the market wouldn't be this unaffordable. Frankly I believe wealthy offshore demand, local's fear of being price out, and other factors (many of which I'm not aware of) are keeping the market elevated and rising. Again real estate is a complex world and simply increasing supply is only one factor in affordability.

I don't see any issues with townhomes. There's lots of apartments on one end of the spectrum and lots of single family housing on the other end but not many townhomes in the middle. Diversity of housing types is important for any healthy city.

There are so many confusions in your post. Let me start with two:

1) Supply is just one factor in determining price. But it the most fundamental one. If something is expensive because it is instrinsically scarce, such as a rare comic edition, then you are powerless to affect the market price. In a free society, the demand will be whatever the demand will be. But if something is expensive not because it is instrinsically scarce but because its current rate of production is tight in relation to the current demand, then you have the power to bring prices down by increasing the rate of supply (or elevate prices even further by artificially restricting the rate of supply even more.)

And it just so happens that the rate of supply of housing (and the cost of producing that housing) is precisely the factor that local city governments inhibit or incentivize depending on whether they adopt restrictive land use policies and lengthy approval processes (like Vancouver) or liberal land use policies and efficient approval processes.

Artificially low interest rates which encourage speculation and wealthy foreign investors are simply aggravating factors in a restrictive and inefficient redevelopment environment because they increase demand even further while the ability to create abundant supply in relation to that demand remains stifled. But those aggravating factors and Vancouver's real estate affordability crisis could be neutralized and even reversed if the city adopted liberal land use policies and efficient approval processes that permitted rapid and highly efficient redevelopment of land and thus an increase in the rate of supply in housing that outstripped the increase in demand.

What Vancouver needs right now is a glut of efficiently produced housing. And that is exactly what Vancouver would get if the city liberalized its restrictive land use policies and simplified its lengthy approval processes.

2) You are conflating density with abundant supply. Densification is an efficient means of increasing supply; it is not abundant supply itself. Whether densification is creating abundant supply depends on whether the rate of increase in supply is outstripping the rate of increase in population growth and demand. As dense as New York City is, the supply of housing is still not abundant enough in relation to its high population and high demand to bring prices down. If New York City was less dense, housing prices would be even higher.

[WarrenC12]

Originally Posted by Jebby

Either you're not reading what Prometheus wrote or you simply do not understand it.

I understand supply and demand perfectly. It's an economic theory that is currently not being proven out in his examples. He's talking about reducing rents via supply, which simply isn't happening.

[Jebby]

Originally Posted by WarrenC12

I understand supply and demand perfectly. It's an economic theory that is currently not being proven out in his examples. He's talking about reducing rents via supply, which simply isn't happening.

Just as I thought, you didn't understand what he's saying.

The reason Metrotown rates have not come down (in fact, they've gone up) is precisely because the demand far outstrips supply within Vancouver. Otherwise those people who can afford $500,000+ condos wouldn't be buying in Metrotown and pushing prices in that less desirable area up.

Let me put it to you in an easier to understand way:

Not enough supply in Vancouver -> Money goes to Metrotown -> Demand increases for Metrotown -> Prices go up in Metrotown

You literally learn this in the most basic economics class they teach at even the crappiest community colleges.

[jlousa]

The only way that really works is to curtail demand. Full stop.
Supply is only provided when there is demand. When the market paused a few years ago, what happened? Developers stopped providing supply, there was no downgrade in zoning. There were no buyers so the developers cut new supply. Developers will only build if there is demand, zoning isn't what's keeping costs up. There is so much underdeveloped lots in Vancouver that even if they were just built to their existing zoning without rezoning it would keep builders busy for a couple of decades minimum. The issue in Vancouver is demand people. Increasing zoning will not have developers flood the market and bring prices down. Developers can draw a supply and demand chart as well and decide where they want the points to meet, the professors can build their charts but they aren't building buildings...

[WarrenC12]

Originally Posted by Jebby

Just as I thought, you didn't understand what he's saying.

The reason Metrotown rates have not come down (in fact, they've gone up) is precisely because the demand far outstrips supply within Vancouver. Otherwise those people who can afford $500,000+ condos wouldn't be buying in Metrotown and pushing prices in that less desirable area up.

Let me put it to you in an easier to understand way:

Not enough supply in Vancouver -> Money goes to Metrotown -> Demand increases for Metrotown -> Prices go up in Metrotown

You literally learn this in the most basic economics class they teach at even the crappiest community colleges.

You're missing the entire argument. If we are talking about housing, it is linked to rents, which go up dramatically when you replace old wooden apartments with new concrete condos. Instead of ~50 apartments at an average of $800/month rent, you have ~100 condos at an average of $1500/month... if you can fill them.

The reason they are bought up and replaced is due to the high value of land and rapid appreciation of real estate prices, far beyond what any rental investment would support. That's the supply/demand equation that is way out of whack, and destined to come back to a long-run average. Real estate is notorious for bubbles because the supply can never keep pace with the demand once speculation takes hold. New supply is too slow to come online and there's always a hangover when demand weakens.

But it takes a lot of financing over many years to build a concrete tower full of luxury condos. Rock bottom interest rates make this easier for developers, along with a rising real estate market that is encouraging them to take the risk to do so.

In the meantime, cheap rental housing is getting gutted. The reason there is so much development around Metrotown is because those older buildings have a single owner and are far easier and cheaper per buildable square foot to purchase and re-zone. Similar development is happening along the Cambie corridor but it's slower due to the fact that parcels have to be assembled from multiple SFH lots.

jlousa's point is well taken. Developers aren't dummies, and they have an army of finance people looking at every angle.

Vancouver just approved another massive re-zoning:

http://vancouver.ca/files/cov/norqua...n-displays.pdf

It will take decades to see this area built out.

[squeezied]

Originally Posted by osirisboy

Squeezied. Do you really think that it shouldn't be denser?? I'm not talking towers. I'm talking higher density that they are proposing. That could mean stacked town homes. 41 units for that massive whole block is pretty low. Are you saying your against it being increased to say 80 townhomes?

If it were up to me, there wouldn’t be any single family houses in the whole neighbourhood in the first place. The block in question would be substantially higher in density than 41 units if I had it my way. It could be stacked townhouses, mid-rises or high-rises for that matter. However, the form of development, and ultimately density, depends on the context of the site.

Good developments provide a variety of housing types and increase housing stock all at the same time complimenting and relating to the existing neighbourhood. The fact is the block in question is located in an area surrounded by single family houses. To ignore this fact and build something completely out of scale for the sake of density is a big FU to the community.

The city has set out the Marpole Community plan where the Oak Street corridor that calls for Oak and 67th to be the urban node with mixed use buildings up to 8 storeys. North and south of this node, buildings step down to 6 storeys and 3 storeys townhouses buffering between the 6 storeys buildings and existing single family houses. I think this is a sensible approach to add a variety housing types and density while still respecting the existing single family neighbourhood. So to rephrase your question, do I think that the 3 storeys townhouses buffering between the existing single family houses and 6 storeys midrises shouldn’t be denser? I think 3 storeys townhouses are suitable at this block given the context of the overall approved plan. I do also think 4 storeys stacked townhouses are appropriate buffers.

The Marpole Community plan (with corridors along Cambie, Oak, Granville and Hudson) calls for a range of housing types, with higher density types located at key areas (neighbourhood centres, existing commercial zones, proximity to transit) and lower density types transitioning to existing neighbourhoods. This 41 unit townhouse development just so happens to be located in the transition zone.

Link to the Marpole Community plan: http://vancouver.ca/files/cov/marpol...unity-plan.pdf

[csbvan]

They're not building towers at Oak and 63rd?! Ugh pathetic. Stupid view cones

[Klazu]

Originally Posted by squeezied

Updates on the Molson Brewery site:

http://www.theprovince.com/business/...medium=twitter

Missed this earlier, but thanks for posting. What a shady case and especially the people involved, like Julia Lau.

I just wonder how many billions of dollars have been laundred on Vancouver real estate market...