Vancouver View Cones - Reviews and Amendments

[WALKIEBRO]

Originally Posted by 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.

It all makes a difference. Imagine for a second that every 10-19 storey building had an extra 5 stories, every 20-39 storey building had an extra 10 and every 40+ storey building had an extra 20 stories. That would have a massive impact on supply and thus the affordability of homes.

[Prometheus]

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.

Excellent series of responses.

As Henry Hazlitt pointed out in Economics in One Lesson, some of the most basic economic truths are the least intuitive, while the worst economic fallacies are often the most seductive. Hence, society’s growing economic ignorance.

[Migrant_Coconut]

In the long term, by all means. In the short term, building expensive housing in the hope it'll get cheap... isn't as good for the middle class as building cheap housing in the hope it'll get cheaper.

Originally Posted by WALKIEBRO

It all makes a difference. Imagine for a second that every 10-19 storey building had an extra 5 stories, every 20-39 storey building had an extra 10 and every 40+ storey building had an extra 20 stories. That would have a massive impact on supply and thus the affordability of homes.

I didn't say that it wouldn't make a difference, just not a comparably big one. Building a bunch of midrises or short highrises is a lot more effective in closing the supply gap than building one tall one.

We're quibbling over 40,000-50,000 square feet per highrise (using the Jenga tower reduction as reference), when we could be rezoning entire SFH neighbourhoods for Olympic Village/West End level density, or even just walkup apartments and rowhouses, and getting tens of millions of sq ft. You'd need hundreds of tall highrises to match that much potential supply.

[WarrenC12]

Originally Posted by Prometheus

Excellent series of responses.

As Henry Hazlitt pointed out in Economics in One Lesson, some of the most basic economic truths are the least intuitive, while the worst economic fallacies are often the most seductive. Hence, society’s growing economic ignorance.

I agree the responses are excellent.

The base premise of supply and demand should be easily understood, no? Definitely some of the nuance isn't quite so intuitive.

[WarrenC12]

Originally Posted by Migrant_Coconut

In the long term, by all means. In the short term, building expensive housing in the hope it'll get cheap... isn't as good for the middle class as building cheap housing in the hope it'll get cheaper.

What is the alternative? Doing nothing while more and more people compete over the same number of units?

Absolutely new supply will be expensive. Very expensive. The "wealthy" will move in and affordability will roll on down the line.

Today's reasonable rentals are 1995's luxury condos.

We have good mechanisms in place (FBT, Empty homes tax) to make sure we take a cut for more non-market housing if those new units are not providing the housing space we need.

[FarmerHaight]

Originally Posted by WALKIEBRO

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.

Are you implying the construction business is a perfectly competitive free market?

Of course building will always occur, but what type of building? The skyscraper building craze in Vancouver is fueled by the high prices. If prices were low, you would see more six floor wood framed buildings and fewer high-rises. You would especially not see architectural marvels (Vancouver House, Alberni by Kuma) and developers trying to break the height record every couple years.

[FarmerHaight]

Originally Posted by WALKIEBRO

It all makes a difference. Imagine for a second that every 10-19 storey building had an extra 5 stories, every 20-39 storey building had an extra 10 and every 40+ storey building had an extra 20 stories. That would have a massive impact on supply and thus the affordability of homes.

If every project was larger you would see fewer projects. Developers' resources would be tied up for longer and the supply would place downward pressure on price.

[GenWhy?]

Originally Posted by WALKIEBRO

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.

Not quite... what most did when prices dropped in 2017 and 2018 we just cancelled projects or delayed and waited until the $psf went back up!

Again I think most of the issues folks are pointing out is the City's zoning more-so than viewcones which impacts prohibitively expensive land already.

[jlousa]

The solution to high prices isn't more supply it's less demand. Been saying it for a decade now.

[chowhou]

Econ 101 tells us that prices reduce when demand decreases or when supply increases. Assuming we want continued investment and growth in the local economy, I'd rather have a supply increase over a population decrease.

[WarrenC12]

Originally Posted by jlousa

The solution to high prices isn't more supply it's less demand. Been saying it for a decade now.

Based on the opinions around here, you'd think the City of Vancouver is doing it's best to chase people out, yet here we are.

What's your solution to lessen demand?

[jlousa]

We wouldn't even need a population decrease. We've been building more units then the population growth for over 2 decades now. (units starts*average occupants per dwelling) > population growth. It's not even close, even when accounting for less people per unit now.

[WarrenC12]

Originally Posted by jlousa

We wouldn't even need a population decrease. We've been building more units then the population growth for over 2 decades now. (units starts*average occupants per dwelling) > population growth. It's not even close, even when accounting for less people per unit now.

So why aren't vacancy rates increasing?

[GenWhy?]

Originally Posted by WarrenC12

So why aren't vacancy rates increasing?

Because $psf keep increasing which prices out would-be homeowners, and rents keep going up and (I think this stat is from the last 2 years) 50% of renters live in non-secured rental housing, so condos and SF homes. We're building condos to rent out but they lack rental protections like secured rental buildings do. It's a lose-lose.

I'd like a stat on what % of the City the viewcone affects. In most of the viewcones you can till build 20-30 storeys.

[WarrenC12]

Originally Posted by GenWhy?

Because $psf keep increasing which prices out would-be homeowners, and rents keep going up and (I think this stat is from the last 2 years) 50% of renters live in non-secured rental housing, so condos and SF homes. We're building condos to rent out but they lack rental protections like secured rental buildings do. It's a lose-lose.

I'd like a stat on what % of the City the viewcone affects. In most of the viewcones you can till build 20-30 storeys.

Jlousa said we are building more units than the population is increasing by. This would mean more vacant units.

[GenWhy?]

Originally Posted by WarrenC12

Jlousa said we are building more units than the population is increasing by. This would mean more vacant units.

Sorry, thought you meant rental vacancy. I guess the last data I saw was 8% "home" vacancy.

[Migrant_Coconut]

Originally Posted by WarrenC12

What is the alternative? Doing nothing while more and more people compete over the same number of units?

Absolutely new supply will be expensive. Very expensive. The "wealthy" will move in and affordability will roll on down the line.

Today's reasonable rentals are 1995's luxury condos.

We have good mechanisms in place (FBT, Empty homes tax) to make sure we take a cut for more non-market housing if those new units are not providing the housing space we need.

MIRHPPs? Social housing? Mass timber? Removing parking mandates?

Of course, most of these are band-aid solutions, but the CoV's at least trying to create cheaper options while prices go down... given that Burnaby's got practically nothing in the pipeline except spot-zoned condo towers, their affordable housing plan is apparently "tough it out until Brentwood gets cheaper."

Originally Posted by jlousa

We wouldn't even need a population decrease. We've been building more units then the population growth for over 2 decades now. (units starts*average occupants per dwelling) > population growth. It's not even close, even when accounting for less people per unit now.

Any statistics or studies? Not doubting you, just wondering why the hell that's been the case for 20+ years and the main argument is still about supply.

[Vin]

Originally Posted by WALKIEBRO

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

Exactly my point! Taller towers if allowed in Vancouver will actually help lower the price.

Originally Posted by FarmerHaight

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

Wouldn't it make sense for willing developers to build at a lower cost before they can even make it cheaper for buyers to own? Obviously in Vancouver, developers have been charging high-end for buyers because there are so very few sites that they can build tall. These sites have land costs driven up to new heights, and the only way to recoup is to sell the completed condos to the rich folks. In addition, penthouses in tall buildings can fetch higher revenues too, and therefore the few that can be built will be sold to the highest bidders so to speak.

Again not building very tall in Vancouver has nothing to do with building costs because it is actually cheaper to do so, but it has everything to do with backward City policies.

[GenWhy?]

Originally Posted by Vin

Wouldn't it make sense for willing developers to build at a lower cost before they can even make it cheaper for buyers to own?

I'd build at a lower cost and charge the same $psf. My Clients and marketing folks would demand nothing less from us. Not sure what this has to do with viewcones that are mainly in the DT peninsula

[logan5]

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.

We've been building hundreds of towers for decades now, and I don't see this affordability materializing.

The vast majority of the market can't bear 1500/sq foot. There is a huge untapped market out there that simply cannot afford a condo, but could afford a lower cost (to build) ground oriented unit, we just need a land use policy that favours the majority and not the top 5%.

Every industry that I can think of that sells something has a high end product, but their bread and butter is the lower cost product that is affordable to the masses - ie Honda Civic, or a lower end TV. In Vancouver real estate, it's almost exclusively the luxury product that is available.