Vancouver Infill & Lowrise Updates Discussion

[GenWhy?]

Originally Posted by Vin

With such low density and being a concrete building, I'm not surprised the units are going for $2.3 mil and up. If they can't sell, this will definitely discourage other developers to build low density buildings in Vancouver proper.

No it won't.

[Vin]

Originally Posted by GenWhy?

No it won't.

Saying it with so much confidence does not mean you are right.

https://thetyee.ca/News/2019/11/22/Vancouver-Housing-Plan-Not-Working/
"The city is also falling far short of its targets for social and supportive housing targets (just 529 units approved, compared to a target of 1,200) and condos (844 units approved, compared to a target of 3,000)."

[squeezied]

Originally Posted by Vin

Saying it with so much confidence does not mean you are right.

Posting a link as a rebuttal does not mean you are right.

Did you even read the article? Explain your point (so we can then have some fun and point out all your flawed thinking)

[whatnext]

Originally Posted by Vin

Saying it with so much confidence does not mean you are right.

It doesn't matter how much you build anyway. That's a fallacy perpetuated by developers and realtors. Certainly vastly overpriced units aimed at Mainland Chinese buyers are never going to sell in today's market.

[Changing City]

Originally Posted by whatnext

It doesn't matter how much you build anyway. That's a fallacy perpetuated by developers and realtors. Certainly vastly overpriced units aimed at Mainland Chinese buyers are never going to sell in today's market.

I don't think the developers of expensive condos care who they sell them to. On the west side they seem to be marketed to house owners from the same area, downsizing by selling a valuable house that needs constant maintenance. Obviously a condo needs constant strata fees, so the owner is buying that 'convenience'.

It's an interesting question that hasn't really been relevant until very recently - when are the developers liable to pay the vacant home tax? In the last downturn when West Broadway condos weren't selling in one project the developer switched them to rentals. I guess that might happen to some of these - either that or they'll end up on the market at less than the first buyers paid for equivalent units. That doesn't make for a happy strata.

[Vin]

Originally Posted by squeezied

Posting a link as a rebuttal does not mean you are right.

Did you even read the article? Explain your point (so we can then have some fun and point out all your flawed thinking)

I think it is you who fail to read and think.

From the article:
https://thetyee.ca/News/2019/11/22/Vancouver-Housing-Plan-Not-Working/
Dan Garrison, a housing planner with the city, said Vancouver is also struggling to add enough new rental units aimed at people who make between $30,000 and $80,000 a year.

That’s despite the introduction of a new program, the Moderate Income Rental Housing Pilot Program. It gives developers a break on things like parking requirements and density limits if they agree to rent 20 per cent of the building at more affordable, below-market rates.

If you are able to even ponder a little, you would see that the lack of density still does not make economic sense for developers to risk their millions on residential/rental projects in the Vancouver proper. Burnaby offers developers benefits as well as density. So where do you think developers will prefer to head to, genius?

At least I have a logic. You don't have any whatsoever, and do not even bother to provide any.

Originally Posted by whatnext

It doesn't matter how much you build anyway. That's a fallacy perpetuated by developers and realtors. Certainly vastly overpriced units aimed at Mainland Chinese buyers are never going to sell in today's market.

Yet the suburbs are still building comparatively more affordable housing for the region, and sales are actually doing well.

[Migrant_Coconut]

For anybody out of the loop re: MIRHPP, there is a similar-sized building that was recently approved, 100% rental and 20% below-market on a $12 million property. Economics is definitely not the problem.

[Feathered Friend]

Originally Posted by Migrant_Coconut

For anybody out of the loop re: MIRHPP, there is a similar-sized building that was recently approved, 100% rental and 20% below-market on a $12 million property. Economics is definitely not the problem.

Based on an outside prospective, it's very challenging to make the economics of MIRHPPs work. The recently approved trio certainly won't be making anyone rich, and there's more than a few projects that haven't work out.

[Feathered Friend]

Originally Posted by Hmoob

I'm curious how you think this is an effect of existing zoning and what changes you think would help. I wonder if we may have some similar ideas on the topic, but I don't follow your connection in this case. I'd be happy to learn from your insight and significant experience observing the city development process.

I would say part of the problem is that zoning often limits multi-family housing to sites that already offer it. That means even with the Tenant Replacement and Protection Plan, there's no other option to create new housing than to displace the old stock. That's true whether it's rental or strata.

Plus, without the right incentives, many will choose to go through a quicker Development Permit process rather than risk the time/funds to attempt a rezoning, especially in area's known to be hostile to growth. This also usually results in builds that are targeted to a more high end market.

Ironically, much of the opposition comes from those afraid that they won't be allowed to do something similar with their property. Even allowing an update to allow long term homeowners in these areas to offer something like Mole Hill could lessen that fear.

Then again, it's the holidays so I might be way off track

[whatnext]

Originally Posted by Changing City

I don't think the developers of expensive condos care who they sell them to. On the west side they seem to be marketed to house owners from the same area, downsizing by selling a valuable house that needs constant maintenance. Obviously a condo needs constant strata fees, so the owner is buying that 'convenience'.

It's an interesting question that hasn't really been relevant until very recently - when are the developers liable to pay the vacant home tax? In the last downturn when West Broadway condos weren't selling in one project the developer switched them to rentals. I guess that might happen to some of these - either that or they'll end up on the market at less than the first buyers paid for equivalent units. That doesn't make for a happy strata.

There are exemptions for the provincial Vacancy Tax:

Owners of property that is under construction are exempt from speculation and vacancy tax if reasonable steps are taken without undue delay to develop or renovate the property.

These exemptions also cover phased developments that occur over time, vacant new inventory and heritage properties where conservation work is taking place.

To be eligible for an exemption, the owner must be carrying out eligible building activity.

"Building activity" is defined as the following types of activities:

Applying for financing
Applying for a permit or other necessary approval
Entering into contracts for designing, building or engineering
Demolishing or removing existing improvements
Clearing or excavating the site
Constructing or placing the residence on the property or substantially renovating the residence (“substantial renovation” is when no one can live there because of renovations)
Any other activity necessary for the construction, placement or substantial renovation of the residence

https://www2.gov.bc.ca/gov/content/taxes...n-and-vacancy-tax/land-under-development

[Changing City]

Originally Posted by whatnext

There are exemptions for the provincial Vacancy Tax:

Owners of property that is under construction are exempt from speculation and vacancy tax if reasonable steps are taken without undue delay to develop or renovate the property.

These exemptions also cover phased developments that occur over time, vacant new inventory and heritage properties where conservation work is taking place.

To be eligible for an exemption, the owner must be carrying out eligible building activity.

"Building activity" is defined as the following types of activities:

Applying for financing
Applying for a permit or other necessary approval
Entering into contracts for designing, building or engineering
Demolishing or removing existing improvements
Clearing or excavating the site
Constructing or placing the residence on the property or substantially renovating the residence (“substantial renovation” is when no one can live there because of renovations)
Any other activity necessary for the construction, placement or substantial renovation of the residence

https://www2.gov.bc.ca/gov/content/taxes...n-and-vacancy-tax/land-under-development

We're off topic here, but that suggests that when the building is complete, the developer has a very short period to sell the remaining units, rent them out, or pay the vacant property tax on top of the strata fees and property tax. That might help establish what they're really worth. It might put a few inexperienced developers from starting construction without a solid proportion of pre-sales.

[whatnext]

Originally Posted by Changing City

We're off topic here, but that suggests that when the building is complete, the developer has a very short period to sell the remaining units, rent them out, or pay the vacant property tax on top of the strata fees and property tax. That might help establish what they're really worth. It might put a few inexperienced developers from starting construction without a solid proportion of pre-sales.

Vancouver’s EHT puts a firm six months on the developers’ time to sell. The provincial one seems a bit looser. I agree that this may force developers to sell at the market price rather than hang on. I’m ok with that, after all other businesses don’t get a tax break on inputs if the market for their goods slows.

[Hmoob]

Originally Posted by Feathered Friend

I would say part of the problem is that zoning often limits multi-family housing to sites that already offer it. That means even with the Tenant Replacement and Protection Plan, there's no other option to create new housing than to displace the old stock. That's true whether it's rental or strata.

Plus, without the right incentives, many will choose to go through a quicker Development Permit process rather than risk the time/funds to attempt a rezoning, especially in area's known to be hostile to growth. This also usually results in builds that are targeted to a more high end market.

Ironically, much of the opposition comes from those afraid that they won't be allowed to do something similar with their property. Even allowing an update to allow long term homeowners in these areas to offer something like Mole Hill could lessen that fear.

Then again, it's the holidays so I might be way off track

That makes sense to me.

As far as attempting rezoning, I wasn't aware that the city entertains rezoning proposals outside of the planning office's vision, regardless of neighbourhood sentiment.

The new Vancouver Secured Rental Policy seems to allow additional density across much of the city that may help keep up with demand for housing. It's unfortunate that there isn't similar policy allowing strata development; The current approach limits the economics of potential projects and may ultimately reduce the amount housing that gets built vs a less constrained policy. Some may argue that rental housing is the right kind of housing, but with the empty homes tax in place, all housing will ultimately add to real supply.

[Hmoob]

Originally Posted by whatnext

Vancouver’s EHT puts a firm six months on the developers’ time to sell. The provincial one seems a bit looser. I agree that this may force developers to sell at the market price rather than hang on. I’m ok with that, after all other businesses don’t get a tax break on inputs if the market for their goods slows.

You may be ok with developers getting hit with economic surprises, but that works against the interest of providing more housing.

A developer worried they may have to sell at reduced profit or a loss is less likely to start a project. It's not economical to build unless we're in a housing crisis. The EHT doesn't lift us out of our crisis, it ultimately constrains development and complicates the economics of developing new housing.

[GenWhy?]

Originally Posted by Migrant_Coconut

For anybody out of the loop re: MIRHPP, there is a similar-sized building that was recently approved, 100% rental and 20% below-market on a $12 million property. Economics is definitely not the problem.

Economics (barely) work when you get 3x the density. That's what the industry said to the City and that's what we got.

[whatnext]

Originally Posted by Hmoob

You may be ok with developers getting hit with economic surprises, but that works against the interest of providing more housing.

A developer worried they may have to sell at reduced profit or a loss is less likely to start a project. It's not economical to build unless we're in a housing crisis. The EHT doesn't lift us out of our crisis, it ultimately constrains development and complicates the economics of developing new housing.

Why should developers be treated differently than any other business?

[cov]

Originally Posted by whatnext

It doesn't matter how much you build anyway. That's a fallacy perpetuated by developers and realtors. Certainly vastly overpriced units aimed at Mainland Chinese buyers are never going to sell in today's market.

Every unit built will either be rented out, owned by the person living in it or pay taxes that fund affordable housing. Every unit helps. Everybody dreams that they can own a useful asset at below-market prices without competing offers. This isn't a mutually consenting interaction and simply won't happen unless in extremely rare circumstances.

Zoning policies in the Metro area specifically reward putting as much money in the housing market as possible. It's only a matter of time before housing prices go out of scale. People are acting like housing bubbles never existed before Chinese people but that's intentionally ignorant. Blaming the Chinese can only go so far in providing affordability for people in need.

[Galaxy]

Also, Investors buy new units and as they get older they are resold on the market to people and over time these older units become affordable to others while the initial investor moves onto newer units and the cycle continues.

[Hmoob]

Originally Posted by whatnext

Why should developers be treated differently than any other business?

They are treated differently. Other businesses aren't punitively taxed on their unsold inventory. But lots of businesses treated differently through industry specific regulations so it's not really about fairness.

The empty homes tax was implemented to increase housing availability. It acts to complicate the business of creating new housing.

[whatnext]

Originally Posted by Hmoob

They are treated differently. Other businesses aren't punitively taxed on their unsold inventory. But lots of businesses treated differently through industry specific regulations so it's not really about fairness.

The empty homes tax was implemented to increase housing availability. It acts to complicate the business of creating new housing.

Plenty of businesses have paid some sort of tax on their inventory. The EHT end goal was to enhance affordability. Forcing a developer to sell at the market price rather than hold the unit will do that. Similarly the city should scrap the ridiculous community garden tax dodge for developers. It just encourages land banking.