Canada's 'housing bubble' deemed close to bursting

[geotag277]

I'm curious legislatively what powers the Mayor (of the CoV) actually has in dealing with the issue? IMO It seems microscopic in actual influence. A very marginal voice in metro Vancouver and hardly any powers to change things within his own borders, due to provincial purview over much of the situation (like taxation aka foreign buyer tax).

[lio45]

Originally Posted by geotag277

It's almost impossible to overstate how absurd the SFH housing situation is in Vancouver.

Still, dleung doesn't seem to be getting it. (despite my efforts.)

I'm genuinely curious: does anyone here think that if Manhattan was mostly zoned for SFHs outside the big business areas, housing in Metro NYC would not on average be even pricier than it currently is? The relationship seems obvious (to me).

[geotag277]

I am now picturing a modern Manhattan full of basement suites and laneway housing.

[lio45]

Originally Posted by whatnext

Unfortunately municipalities in BC don't have the power to zone for rental-only development. Do they in other provinces?

A quick way to reset affordability would be to rezone huge swaths for multi-family but rental only. Let some speculators get burned.

I know they have the power to force a certain % of the units to be rentals at artificially low rents in new buildings. Not sure what mix of carrots and sticks they use for that in Montreal, but it sometimes works. Pretty sure NYC does it too.

(I did a quick google search to see how it worked legally in Mtl but came out empty.)

[p_xavier]

My understanding it's for condo units only and not rental and it's a percentage (20% of extra zoned units). Also community housing is also available and these units are partially owned by the resident as rental units were being left in a bad state. Being the owner puts the job on the resident.

[someone123]

A lucid article on "foreign buyers" that explains how foreign financing is what is really important when it comes to housing affordability: https://www.theglobeandmail.com/report-o...ata-do-and-dont-tell-us/article37562481/

The article points out that Richmond BC's house price to reported household income ratio hit 25 in 2017. A typical ratio was traditionally in the 3-4 range.

[dleung]

Originally Posted by geotag277

It's the city of vancouver adjacent to mt pleasant, bigger projects are appropriate for the area.

Edit: To re-iterate, if you are spending 200k per unit on a development, your land use guidelines aren't making any sense, and you should be able to build more units to even out affordability on that land.

I thought you were Asian but clearly you're not, because if you've been keeping up with your math, the numbers break down like this:

You liked the 25-units on 4 floors on 120x160' site in Calgary
120x25' site in East Van = $1.6M, so Calgary site would've been $9.6M in East Van.
Divide by $40K/unit = 240 units required
= 40 stories required...

...On every lot in East Van. Much taller in the West Side. Hundreds of stories downtown. A 20-story Coruscant covering all of Metro Vancouver, just to keep land prices at $40k per unit...

[geotag277]

Originally Posted by dleung

To reiterate, if you've been keeping up with your math, the numbers break down like this:

Model: 25-units on 4 floors on 120x160' site in Calgary
120x25' site in East Van = $1.6M
Calgary site would've been $9.6M in East Van.
Divide by $40K/unit = 240 units required
40-stories required in East Van. 20-stories in Metro Vancouver

I'm not sure where you are getting your math regarding the Elements lot size - can you show your work? I'm eye balling it from Google maps and the footprint would easily fit on 3x 1.5 million properties that I already pointed out, which makes it $4.5M.

It's already clear you could cut half the units in half, maintaining a good mix of 2 bedroom, 3 bedroom and 1 bedroom, pushing it to 36 units over 4 floors. Raise the height a bit and you are easily at 50-60 units, in a small footprint, which works out to 81k per unit.

Regardless, 77 units might be more appropriate for the scale of CoV developments, in a midrise form factor, like the Kensington I pointed out. In Calgary it's 6 stories, 77 units. In Vancouver maybe 10 stories 130 units. Looks like about 8 lots. At 1.5m per lot, that's right at 100k per unit, still high, but we're talking centrally located in CoV. These lots should have been redeveloped about 2 decades ago.

Of course, part of the problem is that developers can't even build these things. The city could do several things which overnight would reduce the land value of these things.

First, force developers to build dedicated rental as a percentage of all new units coming online.

Second, rezone so resident to resident resale isn't even an option for these areas. Force a redevelopment when property changes hands. This would cut out both domestic and foreign speculation, and the only speculation left is developer speculation, which can easily be fixed by a vacant lot tax to encourage developers to quickly redevelop instead of holding properties.

Cutting out vast swaths of speculation, all of a sudden those 1.5M lots in CoV aren't worth 1.5M any more, and you open the door to density, dedicated rentals, affordable housing, and more.

[mistercorporate]

Originally Posted by dleung

i thought you were asian but clearly you're not.

Lol

[Acajack]

Everyone keeps thinking geotag is Asian! This is not the first time this has happened.

OTOH the Asian superiority complex some people have about numbers and math might be worth further study...

[WhipperSnapper]

Originally Posted by lio45

Still, dleung doesn't seem to be getting it. (despite my efforts.)

I'm genuinely curious: does anyone here think that if Manhattan was mostly zoned for SFHs outside the big business areas, housing in Metro NYC would not on average be even pricier than it currently is? The relationship seems obvious (to me).

First of all, it's an absurd question in the context of Vancouver having too many SFHs. Manhattan is a borough of New York City and the downtown area of a city of 20 million. Does Vancouver have tons of SFHs in its downtown? Manhattan is also old and extremely wealthy. They have lots of SFHs. They just don't look like your typical post war SFHs. Their apartment buildings look likely to 50 to 100 units a piece but,in actuality it's more likely closer to 10 to 15 units.

[dleung]

Originally Posted by geotag277

I'm not sure where you are getting your math regarding the Elements lot size - can you show your work? I'm eye balling it from Google maps and the footprint would easily fit on 3x 1.5 million properties that I already pointed out, which makes it $4.5M.

It's already clear you could cut half the units in half, maintaining a good mix of 2 bedroom, 3 bedroom and 1 bedroom, pushing it to 36 units over 4 floors. Raise the height a bit and you are easily at 50-60 units, in a small footprint, which works out to 81k per unit.

Regardless, 77 units might be more appropriate for the scale of CoV developments, in a midrise form factor, like the Kensington I pointed out. In Calgary it's 6 stories, 77 units. In Vancouver maybe 10 stories 130 units. Looks like about 8 lots. At 1.5m per lot, that's right at 100k per unit, still high, but we're talking centrally located in CoV. These lots should have been redeveloped about 2 decades ago.

Of course, part of the problem is that developers can't even build these things. The city could do several things which overnight would reduce the land value of these things.

First, force developers to build dedicated rental as a percentage of all new units coming online.

Second, rezone so resident to resident resale isn't even an option for these areas. Force a redevelopment when property changes hands. This would cut out both domestic and foreign speculation, and the only speculation left is developer speculation, which can easily be fixed by a vacant lot tax to encourage developers to quickly redevelop instead of holding properties.

Cutting out vast swaths of speculation, all of a sudden those 1.5M lots in CoV aren't worth 1.5M any more, and you open the door to density, dedicated rentals, affordable housing, and more.

We're going in circles because you keep ignoring lot dimensions, and insisting that three 25'-wide lots add up to one 160'-wide one. And moved the goalposts from a 4-storey low-rise with family-sized units to a 10-storey collection of shoeboxes...

And we're assuming land prices from SFH zoning. Upzoning to multi-family only raises the land value, arguably not as much if enough areas are upzoned to the point of lowering the rarity-premium of multi-family zoning. But those 1.5M lots won't ever lose their value from the supply-side of things.

[geotag277]

We're going in circles because you keep ignoring important sections of my comments. There are techniques the city can implement to remove large swaths of speculation from the land, and limit it's resale value, driving down the value for developers.

For the record an elements style development went from 4 to 6 stories, and those "shoe boxes" were splitting 1400 sqft 2 bedrooms into 1 bedroom 700 sqft units - still extremely generous, while maintaining a bunch of 1400 sqft 2 bedrooms, and 1600 sqft 3 bedrooms.

Who's "not asian" now?

[dleung]

Originally Posted by geotag277

In Calgary it's 6 stories, 77 units. In Vancouver maybe 10 stories 130 units. Looks like about 8 lots. At 1.5m per lot, that's right at 100k per unit, still high, but we're talking centrally located in CoV.

Yeah you said 10 stories. Ok, so instead of 4-storeys, 25 units, $40k land cost per unit, it's 10 stories, 130 units, $100k land cost....

I agree with the general concept that densification will help the affordability issue, but yeah, seriously...

[geotag277]

You can see that I was talking about two different developments, across two different lot sizes, targeting two different styles of development, can't you?

I can't help if you can't understand basic english.

[dleung]

Originally Posted by geotag277

You can see that I was talking about two different developments, across two different lot sizes, targeting two different styles of development, can't you?

LOL when did you say that?

I can see that you pointed to the Calgary example as a way to drive down unit prices in Vancouver to $40k in land per unit. I showed that the actual number is closer to $200-400k... after which you started doing that thing Sarah Huckabee Sanders does to facts...

[lio45]

Originally Posted by WhipperSnapper

Does Vancouver have tons of SFHs in its downtown?

It indeed has tons of SFHs right in the inner core, yeah. That's the point. Density falls to SFHs basically right outside downtown.

Calgary's even more extreme, for the record. And I understand it's an expected characteristic of a younger city. It's not as easy nowadays to completely transform the urban fabric; people don't like change.

Manhattan is also old and extremely wealthy. They have lots of SFHs.

Hmmm, no. There are only a handful of them on the island and none is private, AFAIK.

[lio45]

Originally Posted by dleung

And we're assuming land prices from SFH zoning. Upzoning to multi-family only raises the land value,

Not if the only thing you can do on the land is build high-density rental housing. In fact doing just that would devastate land values. (And since I'm pretty sure homeowning boomers are an important voting demographic in Vancouver, that won't ever happen.)

[GlassCity]

Yeah, put me down as someone who doesn't understand why it's strange for Vancouver to still have lots of single family houses. Still seems to me that it's way ahead of the rest of the ~2-3 million population pack. Of course it seriously lags behind Montreal, but that doesn't really strike me as a fair comparison.

[lio45]

Originally Posted by GlassCity

Yeah, put me down as someone who doesn't understand why it's strange for Vancouver to still have lots of single family houses. Still seems to me that it's way ahead of the rest of the ~2-3 million population pack. Of course it seriously lags behind Montreal, but that doesn't really strike me as a fair comparison.

BTW, I'm not even saying this is something that should change, I'm merely pointing out that it's obviously a factor that helps make the city even less affordable.

As I'm fond of saying during such discussions on SSP: if we completely razed San Francisco and covered all the land of the former city with high-density soulless commie blocks, it would do absolute wonders for affordability in San Francisco.

Also, the comparison isn't that unfair, seems to me. Greater Montreal's at 4 million, right? Isn't Van close to 3 million?