May 2, 2012

Kluckner – On the evolution of the Vancouver apartment building

In celebration of Michael Kluckner’s new book – Vanishing Vancouver: The Last 25 Years – I asked him to send along an excerpt.  Here he provides an overview on how the small apartment building has changed over the years – in design and price:

In the 1940s and 1950s many small builders and developers bought double lots—typically two 33-footers—and put up wood-framed 10-suite walk-ups, very modest little buildings that nevertheless have provided a lot of people with affordable accommodation for half the city’s life.

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 [Future mayor] Tom Campbell’s father built 15 or 20 of them in the West End; Campbell took over from his father and built several more in the early 1950s before deciding to develop more ambitious types of buildings.

The “10-suiter” was easy to build: four suites each on the upper two floors with a central corridor, staircases at both ends, two “basement” suites facing the front a half floor below grade, with the boiler, laundry, and storage lockers occupying two suites’ worth of space at the back (some managed to squeeze a small manager’s unit into a back corner). Each suite (click to enlarge floorplan, right)  had windows on two sides and shared a single common wall—typically the bedroom wall. Depending on the tenants, the buildings were comfortably quiet or horrid, as you could hear everything through the thin walls and ceilings, especially the clack-clack of high heels.

The South Granville area (map here) has the best collection of them in the city today. Like the West End a half century ago, the area has been a bastion of reasonably priced rental housing—just the sort of thing young people with low- to moderate-paying downtown jobs need. It’s a very urban little pocket, slowly being eaten away by more luxurious condos, some of which are 10-storey-or-higher concrete buildings more aloof from the street.

There was a glut of 10-suiters in the 1950s. The cost of a double-lot apartment site in the West End rose from $22,000 in 1954 to $45,000 in 1958. “Last winter you couldn’t find an apartment for love or money, but now we may have several vacancies on our books,” said a real-estate company representative. Rents were even lowered by $5 a month in one West End building.

Vacancy rates continued to be high as newer buildings came on the market. A particularly bad year for landlords was 1962, when depressed house prices helped keep rents low and the vacancy rate went to five percent (two percent is usually considered ideal).

“Many of Vancouver’s small-apartment landlords are being shaken out of the money tree by a few big operators,” said one news story. New high-rises were “like magnets” pulling tenants from the smaller, older blocks that had been a gold mine for the small investor a few years earlier. Landlords had both to modernize and reduce rents to compete for tenants. The only advantage the older places had over the new high-rise apartments was their larger size.

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The 10-suite walk-ups were particularly challenged. Bought for about $10,000 per suite, heavily financed with two mortgages, taxes, and maintenance, they experienced declining rental revenues that put some investors to the wall. One case study involved a building near Granville and 12th, built in 1951 and bought eight years later for a $46,000 down payment on a price of $102,000. High vacancies in 1960 forced the owner to move into the building with his family. Two years later, repairs and maintenance had created a deficit of about $1,000 a year, which the owner had to pay out of his salary. He was forced to consider dropping rents back to $85 a month, the same rate as those in a 40-year-old building.

Michael’s book launch is this Thursday, May 3rd, at 7 pm at the Co-op Bookstore, 1391 Commercial Drive.

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  1. Thank you for this…it is most interesting for those of us who were not around when such decisions were being made. All I can add is that my old friend Morris Wosk who built and owned many apartments in Vancouver was horrified when I suggested that we put in-suite washers and dryers in a new tower at Langara Gardens. “Of course not”, he said adding that it was the coins from the washers and dryers that sometimes made the difference between positive and negative cash flow on some properties! Yes, we did put in the in-suite W/D’s

  2. It is also interesting that the creation of high-rise towers in the 1960s resulted in the rents in the surrounding lowrise buildings going down. This is what economists predict — increasing supply will result in lower prices.”Landlords had to both modernize and reduce rents to compete for tenants”.

  3. Further to the Wosks: I quote Morris’s brother Ben elsewhere in the book, saying to Jonathan Baker, “Buy top land, pay top price and never sell!” This was the difference between the Wosks (and Tom Campbell) compared with the current generation of investors and developers: they were in for the long haul and believed that the successful management of their properties was the key to their long-term prosperity. My sense now is investors hang out for the capital gain, an upzoning and an eventual demolition. Evidence of that came in the city rental housing study of 2007, which noted that developers could obtain a 40 percent rate of return on condominiums but only 2 percent for purpose-build rental.

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