Chinatown Updates Discussion

[WarrenC12]

Originally Posted by Smooth

Speaking with someone familiar with the project, they have said the social housing component will add approximately $100 psf to the market units. This is in addition to the other City of Vancouver Development Cost Levies. All those costs are passed directly on to the purchaser.

That's just not how supply and demand works. Sure there is an additional cost to building the entire development, but if another development is built next door without that social component, they will just make more profit, not sell for a lower price.

[logan5]

From the last page... What kind of social housing are we talking about here because there are 3 different levels of social housing. Shelter rate would be costly, but the other 2 levels would be profitable would they not?

[Smooth]

Originally Posted by WarrenC12

That's just not how supply and demand works. Sure there is an additional cost to building the entire development, but if another development is built next door without that social component, they will just make more profit, not sell for a lower price.

Are you saying that policies that increase costs for one development will also result in prices going up on similar product nearby when demand outstrips supply? Can you concede that additional development costs will not decrease housing prices/affordability?

[WarrenC12]

Originally Posted by Smooth

Are you saying that policies that increase costs for one development will also result in prices going up on similar product nearby when demand outstrips supply?

I'm saying prices would be the same regardless of costs. Sale price will be whatever the market will bear. If costs escalate to such an extent that they exceed sale price, or risk/reward is not worthwhile for the developer, new
developments stop coming on the market.

So no, cost increases do not lead to sale price increases, in a well-performing market. Anybody who increases their prices risks lower sales. Some can consistently sell at higher prices (think Rennie marketing), but why is a mystery to me.

Originally Posted by Smooth

Can you concede that additional development costs will not decrease housing prices/affordability?

True if you assume "affordability" only equals sale price, not rent. Nothing will reduce prices exempt reduced demand or excess supply. However those subsidized units do allow for housing in specific areas where those people would never otherwise be able to afford. It creates diverse communities of mixed socio-economic status. Without this type of "forced" integration, we'd have more ghettos.

[Smooth]

Originally Posted by WarrenC12

I'm saying prices would be the same regardless of costs. Sale price will be whatever the market will bear. If costs escalate to such an extent that they exceed sale price, or risk/reward is not worthwhile for the developer, new developments stop coming on the market.

So no, cost increases do not lead to sale price increases, in a well-performing market. Anybody who increases their prices risks lower sales. Some can consistently sell at higher prices (think Rennie marketing), but why is a mystery to me.

So if I understand you correctly, you're saying that if development costs are too high then developers will opt to restrict new supply until a time where demand (the price people are willing to pay) increases until it becomes profitable to build again? I think this is what will happen here; the developer will wait to start construction until a time where their product can be sold at the returns they expect.

Originally Posted by WarrenC12

True if you assume "affordability" only equals sale price, not rent. Nothing will reduce prices exempt reduced demand or excess supply. However those subsidized units do allow for housing in specific areas where those people would never otherwise be able to afford. It creates diverse communities of mixed socio-economic status. Without this type of "forced" integration, we'd have more ghettos.

I do not take issue with including some social housing in new developments to protect the poor and disadvantaged; however, I believe that the situation we are currently in is one where only the wealthy and a limited number of poor have access to certain locations in the city. I would argue that does not promote diverse communities.

I believe officedweller posted this article a few years back about the situation San Francisco was (and still is) facing regarding housing affordability:
http://techcrunch.com/2014/04/14/sf-housing/
It's a long but interesting read about affordability problems associated with supply & demand. The parallels to Vancouver are quite fascinating.

[WarrenC12]

Originally Posted by Smooth

So if I understand you correctly, you're saying that if development costs are too high then developers will opt to restrict new supply until a time where demand (the price people are willing to pay) increases until it becomes profitable to build again?

Yes. But the city has the control valve. Right now they are trying to extract benefit out of the high housing market by mandating additional costs to benefit city residents, primarily at the expense of developers, but enabled by high housing costs. You could think of it as win-win-win.

Originally Posted by Smooth

I do not take issue with including some social housing in new developments to protect the poor and disadvantaged; however, I believe that the situation we are currently in is one where only the wealthy and a limited number of poor have access to certain locations in the city. I would argue that does not promote diverse communities.

I believe officedweller posted this article a few years back about the situation San Francisco was (and still is) facing regarding housing affordability:
http://techcrunch.com/2014/04/14/sf-housing/
It's a long but interesting read about affordability problems associated with supply & demand. The parallels to Vancouver are quite interesting.

They don't have to stipulate "social housing", which could mean a ton of different things. For example in The Creek there are a number of units set aside at "market rate" rental housing. Which in theory should help rental supply. Again, rents are set by what renters will pay, not what landlords want to charge. Rental rates have only increased modestly in Vancouver, nothing like RE prices.

San Fran is completely NIMBY and the city council has bowed to those wishes. There are plenty of NIMBYs here, but they are the ones complaining at the same time that Vision and the local RE developers are in cahoots with each other. Meanwhile others complain that they aren't allowing enough development. I think there is a good amount happening all over Vancouver, but they could speed up the pace of density changes across the city. It's a careful balance though. Opening things up wide immediately would be a mistake.

[urbancanadian]

Haven't seen this render before, from the Province:


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

[Vin]

Originally Posted by WarrenC12

That's just not how supply and demand works. Sure there is an additional cost to building the entire development, but if another development is built next door without that social component, they will just make more profit, not sell for a lower price.

That's how speculators drive up prices. All they need is for the first property in the hood to sell high, then it becomes a domino effect thereafter. If, as smooth has stated, the $100psf isn't factored into the cost of this project, then subsequent projects have to compete with lower prices. What we're talking here is Chinatown after all: a traditionally low-income neighbourhood. Just like the OV, an area that started with deflated prices, but then came OV Village that jacked up prices for the whole neighbourhood. So what you paid for your new pad may seem reasonable, but it isn't. The amount you invested is still nuts (especially for a former piece of industrial wasteland), but only seems "reasonable" only when you compare to the Village proper with insanely high prices to begin with, where many residents are still stuck with their properties, possibly for life, for units that will sustain heavy loses if sold. By not able to sell, they also help maintain the high average property price of that neighbourhood.

The fact is, you can't justify what is happening here in Vancouver as a "market demand", knowing that there is not only local demand, but an insatiable international demand where the very wealthy globe-trotters can price you out on anything if they wish to. There is just no limit, at least at this moment.



This phenomenon of property price-jacking is happening in many parts of the world. Ultimately, the middle class suffers where more of your income goes into interests and mortgages, and you being held hostage by banks for the rest of your working life. This system has benefitted so many in power, including government officials, developers, bankers, realtors, etc, that no one is really doing anything about it.

[WarrenC12]

Originally Posted by Vin

That's how speculators drive up prices. All they needs is for the first property in the hood to sell high, then it becomes a domino effect thereafter. If, as smooth has stated, the $100psf isn't factored into the cost of this project, then subsequent projects have to compete with lower prices.

The fact is, you can't justify what is happening here in Vancouver as a "market demand", knowing that this is not just a local demand, but an international demand where the very wealthy globe-trotters can price you out on anything if they wish. There is just no limit, at least at this moment.

Demand = demand = demand. Doesn't matter if it's local or international.

Speculators driving up demand = demand. But then it's more of a bubble situation that will eventually pop.

[jlousa]

Been saying it for numerous years now, the solution isn't creating more supply but can only be curtailed by cutting demand. Of course no city council seems to have the appetite to limit demand by making the city less desirable, although some can argue that Vision is trying.

[Prometheus]

Originally Posted by jlousa

Been saying it for numerous years now, the solution isn't creating more supply but can only be curtailed by cutting demand. Of course no city council seems to have the appetite to limit demand by making the city less desirable, although some can argue that Vision is trying.

From the authors of the BC Housing Affordability Fund (BCHAF):

The fundamental drivers of local housing prices are high demand and limited supply. The only way to have a decisive impact on affordability would be to weaken the building restrictions that sharply restrict new housing supply in most of Vancouver and the Lower Mainland. Major improvements in affordability are only possible by allowing supply to respond to changing demand. This proposal [i.e., a tax on owners of vacant properties and those with limited economic or social ties to Canada] is a modest step to help out, but won’t address the underlying problem of supply restraints.

Signatories:

Thomas Davidoff, Sauder School of Business, UBC
Tsur Somerville, Sauder School of Business, UBC
Anthony Boardman, Sauder School of Business, UBC
Sanghoon Lee, Sauder School of Business, UBC
Elena Siminitzi, Sauder School of Business, UBC
Jack Favilukis, Sauder School of Business, UBC
​David Silver, Sauder School of Business, UBC
David Green, Vancouver School of Economics, UBC
Hiro Kasahara, Vancouver School of Economics, UBC
Angela Tardif, Vancouver School of Economics, UBC
Sumeet Gulati, Food and Resource Economics, UBC
Paul Schrimpf, Vancouver School of Economics, UBC
Francesco Trebbi, Vancouver School of Economics, UBC
Yaniv Yedid-Levi, Vancouver School of Economics, UBC
Alvaro Parra, Sauder School of Business, UBC
Jim Brander, Sauder School of Business, UBC
Keith Head, Sauder School of Business, UBC
Werner Antweiler, Sauder School of Business, UBC
Masao Nakamura, Sauder School of Business, UBC
Jim Vercammen​, Food and Resource Economics, UBC
Vanessa Alviarez, Sauder School of Business, UBC
Florian Hoffmann, Vancouver School of Economics, UBC
​Matilde Bombardini, Vancouver School of Economics, UBC
Joshua Gottlieb, Vancouver School of Economics, UBC
Henry Siu, Vancouver School of Economics, UBC
Paul Beaudry, Vancouver School of Economics, UBC
​Mukesh Eswaran, Vancouver School of Economics, UBC
Yoram Halevy, Vancouver School of Economics, UBC
Siwan Anderson, Vancouver School of Economics, UBC
Joe Henrich, Vancouver School of Economics, UBC
Ashok Kotwal, Vancouver School of Economics, UBC
Mauricio Drelichman, Vancouver School of Economics, UBC
Giovanni Gallipoli, Vancouver School of Economics, UBC
Kevin Milligan, Vancouver School of Economics, UBC
Vitor Farinha Luz, Vancouver School of Economics, UBC
Thorsten Rogall, Vancouver School of Economics, UBC
Jesse Perla, Vancouver School of Economics, UBC
Vadim Marmer, Vancouver School of Economics, UBC​
Margaret Slade, Vancouver School of Economics, UBC
Chuck Blackorby, Vancouver School of Economics, UBC
Sam Hwang, Vancouver School of Economics, UBC
Thomas Lemieux, Vancouver School of Economics, UBC
​Jamie Mccasland, Vancouver School of Economics, UBC
Tom Ross, Sauder School of Business, UBC
Jose Pineda, Sauder School of Business, UBC
Andrey Pavlov, SFU
Shih En Lu, SFU

Source: http://www.housingaffordability.org/faqs.html
​

[whatnext]

Originally Posted by jlousa

Been saying it for numerous years now, the solution isn't creating more supply but can only be curtailed by cutting demand. Of course no city council seems to have the appetite to limit demand by making the city less desirable, although some can argue that Vision is trying.

Christy Clark apparently didn't get that memo. They're really the most egregious offender in pimping the city out. Ottawa is so far away that the Feds are probably barely aware of the issue.

[logan5]

Amazing to think that little Victoria has housing prices in the same realm as Toronto. There is no flood of Chinese money coming into Victoria and the population is growing at a fairly moderate rate. So what could possibly be the cause of such high housing costs in Victoria. It has to be that it's because, like Vancouver, Victoria is very land constrained. And municipalities do nothing, except maybe laugh at fools who keep blaming Chinese money launderers.

[mcminsen]

Originally Posted by mcminsen

245 East Georgia Street

From Gair Williamson Architects website:

"245 E Georgia Street is a nine storey infill project on a 25' wide site in Vancouver's Chinatown.  The design is for 40 studio apartments ranging in size from 320 to 360 square feet and a commercial unit at the ground level.
 All units have floor to ceiling glazing with either juliet windows or a balcony, there is also a communal roof deck providing opportunities for urban agriculture. 
The building provides compact, well designed housing while responding to the heritage of Chinatown and mitigating the drawbacks of inner city living."


http://www.gwarchitects.ca/245-east-...gn08ksgz4aniul



March7 '16, my pics

245 East Georgia Street appears to be topped out now.



May 10 '16, my pics

[mcminsen]

Originally Posted by mcminsen

Framework (231 Pender)


March 16 '16, my pics

Click on the link in the quote above for previous pics of Framework.


May 10 '16, my pics

[mcminsen]

Originally Posted by officedweller

From Changing City Updates:




http://changingcitybook.com/2014/06/13/450-gore-avenue/

Excavation for 450 Gore Avenue is well under way.


May 10 '16, my pic

[mcminsen]

Originally Posted by Prometheus

Model of the proposal for 288 East Hastings (southwest corner of Hastings and Gore):


Source: http://changingcitybook.com/2016/01/...stings-street/

Originally Posted by mcminsen

April 12 '16, my pics

Excavation for 288 East Hastings (SW corner of Hastings and Gore).


May 10 '16, my pic

[Smooth]

Just thought I'd put out a reminder that the Keefer open house is this afternoon/evening.

Keefer Public Open House
Date: Today (May 16)
Time: 5pm – 8pm
Location: Chinese Cultural Centre Auditorium (50 E Pender St, Vancouver)

[Smooth]

Just thought I'd put out a reminder that the Keefer open house is this afternoon/evening.

Keefer Public Open House
Date: Today (May 16)
Time: 5pm – 8pm
Location: Chinese Cultural Centre Auditorium (50 E Pender St, Vancouver)


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

[nefc]

Originally Posted by Smooth

Just thought I'd put out a reminder that the Keefer open house is this afternoon/evening.

Keefer Public Open House
Date: Today (May 16)
Time: 5pm – 8pm
Location: Chinese Cultural Centre Auditorium (50 E Pender St, Vancouver)

Did anyone go to this?