Vancouver View Cones - Reviews and Amendments

[Migrant_Coconut]

Originally Posted by Metro-One

Do we have a single 70+ floor tower built or U/C yet? Nope.

And will still take the actual graphs word over yours that it’s beyond 80 floors where the rise I BC costs actually start to become meaningful.

What we have is a competition between Onni/Bosa/Pinnacle to build the tallest building in the Lower Mainland. The current record is 82 floors. Granted, we only know the global optimal threshold (not for Vancouver itself, whose optimum may be higher or lower than ~60), but the fact that an 80+ is being proposed at all indicates that the driving force behind towers in the 'burbs is not affordability.

[WarrenC12]

Floorplate is probably a big part of the calculation too. If that is too small then all of your space is taken up with stairways and elevator shafts, limiting usable area.

[FarmerHaight]

Originally Posted by Metro-One

And will still take the actual graphs word over yours that it’s beyond 80 floors where the rise I BC costs actually start to become meaningful.

The graph is just an economic model. To apply it to an individual city you would need to input city-specific variables. The profit-optimization point would even be different for Vancouver compared to Surrey, since land prices differ.

[WALKIEBRO]

Yes that graph isn't for Vancouver. Land prices so heavily effect the equation. The more expensive the land, the larger proportion of costs it makes up, thus making building taller more economical to spread the land cost over more floor space. We all know how expensive land is in Vancouver, thus the optimal building height would at minimum be on the higher end of that range, especially downtown.

In terms of construction costs what really needs to be considered is the marginal work and cost required for the additional floors. The great thing is the free market will naturally optimize for the most economical building height in absence of overly strict zoning or view cones.

[FarmerHaight]

Originally Posted by WALKIEBRO

We all know how expensive land is in Vancouver, thus the optimal building height would at minimum be on the higher end of that range, especially downtown.

Yes, land is expensive, but what about other significant costs like concrete, steel, labour, and glass? What about technological constraints; is it worth it for a lower mainland developer to acquire the equipment necessary to build a 90-floor building if its current equipment can only handle 50 floors? Is it easier to handle the NIMBYs and is re-zoning processed faster by proposing a shorter tower? What about a company with multiple developments that doesn't want to overbuild and crater the housing market?

[Vin]

Originally Posted by Migrant_Coconut

The graph's low point is ~60 floors, and land and construction costs even out at ~40; downtown's newest and upcoming range from 38 to 57.

In other words (assuming the graph is accurate), optimal cost/sq ft is just slightly above the current status quo... and Burnaby's 70+ floor towers have everything to do with bragging rights and higher property values, and nothing to do with affordability. And I'd love to know how Kenneth Chan will spin that one next week.

Do you think every home should be built for poor folks? It's not like the 60++ towers are ubiquitous, even in the suburbs. There are only a handful proposed. Hence your argument is moot. There will be lots of 50-60 storey buildings for the medium income people to purchase in the burbs, versus the very expensive under-40 towers in Vancouver, as clearly shown in the chart. In fact, the most expensive would be those 6-storey junk buildings lining Cambie Street in Vancouver.

Originally Posted by Changing City

No, we haven't because the five-year-old Credit Suisse article is a generalized model applied across the entire world, but obviously different jurisdictions have different construction standards, construction codes, and seismic requirements that can have a huge impact on what the 'optimal' affordability for a tower might be.

Secondly, in Vancouver and most other municipalities, taller buildings are looking for higher density than the prevailing zoning, so they seek a rezoning. In doing that, they offer additional public amenities, social housing or similar benefits. Those offset the lower land price per unit that the graph implies, so going up to 80 storeys doesn't reduce the land cost shown in Greater Vancouver in the way the 'model' Credit Suisse created would imply.

Obviously the theoretical model is using 'affordability' as a measure of how much it costs to build a tower. It doesn't mean the tower units will be any cheaper. As we know, the higher up the tower you go, the greater the price asked. So in this case 'affordability' really means 'developer profitability', not that your 58th floor condo will be a bargain.

Fine and dandy about what you just said, but pray tell why many find the Onni towers at Gilmore more affordable than many of their counterparts? You said it yourself:" the higher the tower you go, the greater the price asked". Misleading claim isn't it?

The fact remains that in Vancouver, there is a movement where people are anti-tall, and they will claim anything to justify themselves, including nonsense like "shadowing", "seismic danger", etc. Enough of that already.

[Vin]

Originally Posted by Migrant_Coconut

What we have is a competition between Onni/Bosa/Pinnacle to build the tallest building in the Lower Mainland. The current record is 82 floors. Granted, we only know the global optimal threshold (not for Vancouver itself, whose optimum may be higher or lower than ~60), but the fact that an 80+ is being proposed at all indicates that the driving force behind towers in the 'burbs is not affordability.

Ever wondered why none of these are proposed in Vancouver proper where there are way way more rich folks who will pay a premium price?

Obviously cheaper for the developers to build such towers in the burbs, and hence affordability. Vancouver's policies have made it very expensive for anyone contemplating living here.

[WALKIEBRO]

Originally Posted by FarmerHaight

Yes, land is expensive, but what about other significant costs like concrete, steel, labour, and glass? What about technological constraints; is it worth it for a lower mainland developer to acquire the equipment necessary to build a 90-floor building if its current equipment can only handle 50 floors? Is it easier to handle the NIMBYs and is re-zoning processed faster by proposing a shorter tower? What about a company with multiple developments that doesn't want to overbuild and crater the housing market?

Just look at the chart, higher land prices shift the optimal building height higher. Obviously construction costs increase so there is a balance point. But a lot of the time and construction costs are more fixed in nature, like site preparation and digging underground for the parking and foundation. Of course taller will require a stronger foundation, but once you have already done all the work to dig a huge hole in the ground the marginal work isn't as significant. The above ground work of adding more floors isn't too hard because you just doing the same thing over and over. Basically you benefit from economies of scale by building higher.

Developers obviously want to build taller than they are currently allowed in Vancouver, are you trying to argue otherwise?

[WALKIEBRO]

Originally Posted by Vin

Ever wondered why none of these are proposed in Vancouver proper where there are way way more rich folks who will pay a premium price?

Obviously cheaper for the developers to build such towers in the burbs, and hence affordability. Vancouver's policies have made it very expensive for anyone contemplating living here.

It's not a matter of cost. It's a matter of they are not allowed to build such towers in Vancouver.

[GenWhy?]

Sorry, is the goal here to allow developers to make more money? I rent so I "don't care" and mainly work on making rental more affordable, but please vote to allow more height for condos in Van next election to help my rich clients make more money.

We're toping $1,700 psf on the West Side and over $2k psf downtown, $1,400-1500 in Cambie Corridor.

[FarmerHaight]

Originally Posted by WALKIEBRO

Just look at the chart, higher land prices shift the optimal building height higher.

Changing the land price will change the shape of the graph, not just shift the cost function higher.

Originally Posted by WALKIEBRO

Developers obviously want to build taller than they are currently allowed in Vancouver, are you trying to argue otherwise?

I'm saying there are a number of factors affecting total construction costs and that this universal graph cannot be applied to the Vancouver market without accounting for the different variables.

[FarmerHaight]

Originally Posted by Vin

Do you think every home should be built for poor folks?

This graph has nothing to do with housing prices, just construction costs. Costs are related to price, but they are not causal.

[Migrant_Coconut]

Originally Posted by Vin

Do you think every home should be built for poor folks? It's not like the 60++ towers are ubiquitous, even in the suburbs. There are only a handful proposed. Hence your argument is moot. There will be lots of 50-60 storey buildings for the medium income people to purchase in the burbs, versus the very expensive under-40 towers in Vancouver, as clearly shown in the chart. In fact, the most expensive would be those 6-storey junk buildings lining Cambie Street in Vancouver.

What I think is that anybody who considers Gilmore Place's $1.47+ million for 1085 sq ft "medium income" needs a reality check. Even the 50-60s are luxury condos, plain and simple.

$1,106-1,352/sq ft at Gilmore; $1,500 on Cambie, and 8X on the Park (35 floors) goes for as low as $1,470... clearly, there's more to price than just height and construction costs.

Originally Posted by Vin

Ever wondered why none of these are proposed in Vancouver proper where there are way way more rich folks who will pay a premium price?

Obviously cheaper for the developers to build such towers in the burbs, and hence affordability. Vancouver's policies have made it very expensive for anyone contemplating living here.

Because viewcones; get rid of them, you end up with taller towers all going for $3,000 sq ft. Again, removing them is an aesthetic argument, not an affordability one.

If building in the suburbs was about affordability and YIMBYism, it'd be easy to turn Royal Oak into one big Olympic Village. But that's not happening. They don't even want six floors, let alone sixty - and they just elected a council that feels the same way.

[chowhou]

Originally Posted by Migrant_Coconut

$1,106-1,352/sq ft at Gilmore; $1,500 on Cambie, and 8X on the Park (35 floors) goes for as low as $1,470... clearly, there's more to price than just height and construction costs.

Source for these numbers? My understanding was Gilmore was around $1000/sqft

[Migrant_Coconut]

Originally Posted by chowhou

Source for these numbers? My understanding was Gilmore was around $1000/sqft

The current asking price is $603,900 to "over" $1,467,900 for 545-1085 square feet. It's a free market, so we can assume anything cheaper would've been matched by now.

[GenWhy?]

If no viewcones eliminates a 545 sf "1-bed" going for $600k, then I'm all ears. What's that like.. $3k a month mortgage?

[WALKIEBRO]

More supply doesn't reduce prices overnight but it reduces them in the long run. That's just basic economics.

In terms of affordability of construction what people need to realize is that it has almost no bearing on the price charged by developers. They charge what the market will bear/the most they can get. Whether they built it for $500/sqft or $800/sqft if people are willing to pay $1500/sqft that's what they'll charge.

This means that allowing higher buildings will actually increase developer profits, at least in the short term, but also increase affordability in the long run due to more supply. Counterintuitive I know.

[Sheba]

Originally Posted by WALKIEBRO

More supply doesn't reduce prices overnight but it reduces them in the long run. That's just basic economics.

In terms of affordability of construction what people need to realize is that it has almost no bearing on the price charged by developers. They charge what the market will bear/the most they can get. Whether they built it for $500/sqft or $800/sqft if people are willing to pay $1500/sqft that's what they'll charge.

This means that allowing higher buildings will actually increase developer profits, at least in the short term, but also increase affordability in the long run due to more supply. Counterintuitive I know.

That assumes developers will keep building as much as they can crank out. When their profits start to drop then they start building less so the supply stays constrained - that way they can keep prices high for their captive audience.

[WALKIEBRO]

Originally Posted by Sheba

That assumes developers will keep building as much as they can crank out. When their profits start to drop then they start building less so the supply stays constrained - that way they can keep prices high for their captive audience.

That's not how competition and the free market system works. If one developer is unwilling to build, another one will step in and take its place. Obviously no one is going to build for no profit, but developers can still make profits at lower prices. Look at cities around the world that don't have Vancouver prices, plenty of people still building there.

[Migrant_Coconut]

While it helps, an extra ten floors in a single tower is a drop in the bucket - especially when the suburban tower craze only applies to the town centre malls & warehouses (and not the NIMBYs beyond them), so we're going to see Burquitlam, Metrotown et al dry up sooner rather than later. 28 floors is just as good as 82, so long as we approve a lot of them, and much faster than we're approving them right now.