Olympic Village & Southeast False Creek Updates Discussion

[Vin]

Originally Posted by mukmuk64

If we followed this line of thinking that you suggest, keeping the amount of road space slightly larger than traffic, we'd always be gradually increasing the amount of road space. Of course in reality Vancouver has had a consistent decades old policy of not increasing the amount of road space for cars whatsoever. This has been incredibly successful and has resulted in the fact that the vehicle volumes entering the downtown core have not increased since the mid 1960s!

The reality is that people's behaviour adjusts with the amount of road space available. People don't just give up and sit in traffic, they seek out other transportation alternatives. Don't get me wrong, we still need places for cars and we still need a robust road network, but the various road closures we've had in Vancouver over the years has proven that our transportation is very adaptable.

I'll concede the point that, given that it's a good idea to keep the door open for distant future streetcar expansion, this particular road is fine as it is. The city is actually doing a better than normal job in putting in a protected bike lane along one side, though I question if they have any plan at all for the other.

However in general it is disappointing to see the City of Vancouver sort of just tinker around the edges of existing North American urban design methods instead of being more bold and moving in a different direction that has proven to be successful elsewhere. Roughly 33% of the surface area of Vancouver is roads and I think we've seen a lot of evidence that the city could still successfully operate if that number was lower. It's time to start seriously thinking about how we could be more efficient and repurpose (or shrink) roads that are not that significant to the flow of people and goods in the area.

Vancouver is indeed successful in reducing cars coming into downtown, but at the same time, it is not fast enough to provide better alternatives of transit. Our current system, although very good by North American standards, is a far cry from good transit systems in other parts of the world. There are many areas which need massive improvements, like the cleanliness of vehicles, overcrowdedness, frequent breakdowns, route coverage and frequencies, interconnectivities, pace of upgrades/improvements, safety concerns (allowing too many non-paying sketchy people in the system) etc. If these areas are properly addressed, then the traffic jams on our urban core streets would be justified.

Then there is OV, a half-hearted way of addressing transit connectivity in that area. Without the planned streetcar line, the community should at least be served by a very frequent shuttle bus service that runs around that high-density neighbourhood to encourage even more people to give up driving, and connecting the major skytrain stations. However, there is none. Such half-hearted ways of addressing transit concerns is still keeping lots of cars on the roads, as people rather drive or face congestions rather than dealing with transit's shortfalls.

[Smooth]

Just received an email regarding the Rezoning Application for the new MEC location at 2nd & Quebec.

Details can be found here:
http://former.vancouver.ca/commsvcs/planning/rezoning/applications/101e2ndave/index.htm

On a side note, West Point Cycles recently opened a new location at 2nd, just east of Main. Looks like this area could become a bit of an outdoor recreation retailer hub.

[WarrenC12]

Got an email on the next phase of The Creek (Navio) selling soon:



So, $900/sf and up, approximately. Big bucks.

So, two buildings as a part of this development, is that it or is there 1 more?

[Prometheus]

Originally Posted by WarrenC12

So, $900/sf and up, approximately. Big bucks.

How else did you think the developer was going to finance the "affordable housing" component of The Creek, which will be turned over to the city upon completion? You didn't actually think Concert Properties was just going to pay for it out their own pockets without recouping the losses elsewhere?

[WarrenC12]

Originally Posted by Prometheus

How else did you think the developer was going to finance the social housing component of The Creek? You didn't actually think Concert Properties was just going to pay for it out their own pockets without recouping the losses elsewhere?

So... they would be cheaper without the social housing component (which is actually a lot of market rental)? Not a chance. It's called profit maximization.

[Prometheus]

Originally Posted by WarrenC12

So... they would be cheaper without the social housing component?

Is this even a serious question?

Uh, yes, market prices for The Creek would be significantly less expensive if Concert Properties was not devoting a part of the project to "affordable housing" (whose ownership they are turning over to the city upon completion) and therefore didn't have to transfer the losses they are sustaining from its construction to their remaining paying customers. I have heard estimates of at least $100 per square foot.

But that could not have possibly been a serious question?

[WarrenC12]

So market price is $900/sf. Let's say build price is $500/sf with the rental building, $400/sf without.

At $400/sf, why would they sell at anything less than the $900/sf price that can be had in the current market?

They have no competition in the area. I think it's important to have communities that represent all kinda of socioeconomic status' in the same area. You're on a tired crusade against longstanding city policy.

I even found a handy link for you: http://www.env-econ.net/supply_demand.html

Note:

There are only 4 things that can change a price: Demand increases, Demand decreases, Supply increases or Supply decreases.

I hope you aren't suggesting the rental building could be magically made into condos. The city controls FSR and build-able square footage as a part of the rezoning process.

[logan5]

Originally Posted by Prometheus

How else did you think the developer was going to finance the "affordable housing" component of The Creek, which will be turned over to the city upon completion? You didn't actually think Concert Properties was just going to pay for it out their own pockets without recouping the losses elsewhere?

What are the details of this affordable housing? Is it welfare rate or HILS rate? How many sq feet are the social hoiusing units and what is the rent if it's not welfare rate?

[squeezied]

Originally Posted by Prometheus

Is this even a serious question?

Uh, yes, market prices for The Creek would be significantly less expensive if Concert Properties was not devoting a part of the project to "affordable housing" (whose ownership they are turning over to the city upon completion) and therefore didn't have to transfer the losses they are sustaining from its construction to their remaining paying customers. I have heard estimates of at least $100 per square foot.

But that could not have possibly been a serious question?

No, the developer charges market rates. It's not expensive because the developer has to recuperate losses from the social housing component. It's expensive because the market allows it. If the city demanded more social housing, CACs or DCLs will the developer start charging over market rates to recuperate losses? No because no one will then buy into the development.

Fyi, you need to lose the condescending and patronizing tone.

[logan5]

Anyways, the social housing building is a good thing for the city. If the market rate units sell out (which they probly will), who cares if there was a bit of a mark up to cover the costs of the social housing building. Though I'm not entirely convinced the social housing deal is costing market rate buyers all that much more.

[Migrant_Coconut]

Originally Posted by squeezied

No, the developer charges market rates. It's not expensive because the developer has to recuperate losses from the social housing component. It's expensive because the market allows it. If the city demanded more social housing, CACs or DCLs will the developer start charging over market rates to recuperate losses? No because no one will then buy into the development.

Exactly. The developers are in it for profit - social housing or not, they'll always charge the highest prices they can get away with unless regulations tell them otherwise. Selling something at "fair" prices out of the goodness of your heart is usually a quick way to lose out in the corporate world.

[urbancanadian]

I would have thought the City allowed Concert extra density on the overall site to cover the costs of the AH building. And maybe the CACs from the rezoning have been allocated towards it as well?

Regardless of whether or not you agree with the policy, I find it difficult to imagine the developer charging prices below what the market could bear...

[Prometheus]

Originally Posted by squeezied

No, the developer charges market rates. It's not expensive because the developer has to recuperate losses from the social housing component. It's expensive because the market allows it.

The developer charges market rates, but "market rates" are determined by supply, demand and the cost of production. And supply and the cost of production are the two things heavily influenced by city policy. In Vancouver, supply and the cost of production are both artificially supressed and inflated, respectively, by city policy, thus amplifying "market rates" in not one but two respects.

In a truly competitive market (i.e., one where there are no or relatively few artificial barriers to efficient supply and inflators of costs), the question is not just "Why would sellers sell for anything less than they have to?" but also "Why would purchasers purchase for anything more than they have to?"

Understanding that what the market "allows" is a function of how competitive a market is (which in turn is largely a function of government policy, that is, whether it is liberal or restrictive) helps answer the following "riddle":

Why is the "market" for tooth paste $3.50 and not $7.00, notwithstanding the fact that no one would stop brushing their teeth if tooth paste did cost $7.00? If people would not stop brushing their teeth, then why would manufactures sell for anything less than $7.00 per tube? The answer is because no one would purchase toothpaste at $7.00 per tube when another manufacturer is offering the same tooth paste at $3.50 per tube.

The economic factors which apply to the tooth paste industry apply to the housing industry and in a similarly competitive market the question would not just be "Why would a developer sell anything at $800 per square foot that could be had at $900 per square foot?" but also "Why would a purchaser purchase a comparable at $900 per square foot that can be had at $800 or $700 or $600 per square foot?"

The cost of production will determine how low the developer can go, while the supply in relation to the demand will determine how low the developer must go when the market is relatively competitive and unrestricted. And both those things (i.e., the cost of production and supply) are massively influenced, for good or for ill, by city policy.

FYI, you need to lose your uncritical approach to city-policy and the potent role it plays in determing what the "market rate" of housing is. It is not doing you any favours, other than increasing the value of your home, if you are a home owner. But you cannot have super-high real estate prices and affordable housing for the middle classe at the same time. It is one or the other.

As real local economist and the authors of the BC Housing Affordability Fund (BCHAF) have pointed out:

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

[Krissy]

Market rates are relative to those in the surrounding neighbourhood. Removing the social housing component will hardly make a dent in the market rates, if anything it will probably raise it due to the stigma of social housing.

[marlou_aquino]

There's a proposal to build some of the first modular homes at the lot across Mc Donald's, beside Fiat. Why are they putting most of the socialize housing projects in our area???

[Migrant_Coconut]

Originally Posted by marlou_aquino

There's a proposal to build some of the first modular homes at the lot across Mc Donald's, beside Fiat. Why are they putting most of the socialize housing projects in our area???

It's a "new" neighbourhood. Put "poors" and "ethnics" in the established West Side, and the NIMBYs mutiny.

[Migrant_Coconut]

Seriously, prefabs? This probably won't end well.

[WarrenC12]

Originally Posted by Prometheus

In a truly competitive market (i.e., one where there are no or relatively few artificial barriers to efficient supply and inflators of costs), the question is not just "Why would sellers sell for anything less than they have to?" but also "Why would purchasers purchase for anything more than they have to?"

You're trying to compare a single development that we are discussing to the entire real estate market, if it existed in a complete vacuum. Continuing to list the names of a bunch of professors like you are some kind of genius is tiresome and laughable.

The simple fact remains that the development in question (The Creek), would not be any cheaper if the rental building was removed from the plan, all else equal.

[Vin]

Originally Posted by WarrenC12

So... they would be cheaper without the social housing component (which is actually a lot of market rental)? Not a chance. It's called profit maximization.

Concert built the LEED high-rise Salt building downtown without the affordable housing component. Each unit was sold at a way lower price. A combination of extremely high density and lack of gifts to the City ensured its affordability.

Olympic Village is way overpriced at all times. City policies make it way worse. I'm sure the Creek offerings won't be "sold out in a day".

[WarrenC12]

Originally Posted by Vin

Concert built the LEED high-rise Salt building downtown without the affordable housing component. Each unit was sold at a way lower price. A combination of extremely high density and lack of gifts to the City ensured its affordability.

Olympic Village is way overpriced at all times. City policies make it way worse. I'm sure the Creek offerings won't be "sold out in a day".

Buildings that sell out in a day are underpriced for the market. The only rational explanation for this type of pricing IMO would be to build hype for future phases, etc.

Your statements of "way lower price" and "way worse" need a little detail. Was the development missing a mall?