City of Vancouver received a REPORT today on empty homes – a topic that’s been a lively point of discussion in blogs, newspapers, kitchens and coffee shops all over town. It’s always been my thinking that in order to solve a problem, like housing costs, it’s best to understand as much as possible about the problem, the issues and the causes before taking action. This report provides some clarity on one issue out of many that affect availability and pricing of homes. Mainly, the percentage of empty homes is not increasing. Despite significant price increases.
To date, much discussion has been based on anecdote, both about the number of empty homes, about the causes, and the effect on affordability. Hopefully, more data will emerge on other issues related to housing costs, and we can work on solutions that are appropriate to the size of each issue.
To quote the Globe and Mail
City staff and software company Ecotagious Inc. examined the electricity consumption of 225,000 homes in Vancouver over 12 years in response to growing public concerns that empty homes were driving up prices and leaving some neighbourhoods nearly abandoned.. .
. . . The report effectively dispels the notion that investors are buying single-family homes in Vancouver and leaving them empty, driving up prices and reducing supply.
CoV’s summary of the report:
The findings of the study, which looked at 225,000 homes in Vancouver, showed that:
- The percentage of unoccupied homes has remained steady since 2002 – about 4.8% for all housing types.
- 10,800 homes out of the 225,000 studied were empty for one year or more.
- 90% of the empty homes were condos and apartments.
- The percentage of empty single-family and duplex properties remains the same as 2002 at around 1%.
- Census data shows that the percentage of empty apartment and condo units in Vancouver is about the same as other large Canadian cities.
The consultants, Ecotagious, worked with BC Hydro to analyze anonymized electricity consumption meter data from homes in the City of Vancouver from 2002 to 2014. Like any method for doing anything, this has its flaws, but is vastly superior to unsubstantiated anecdote and speculation.
Ecotagious’ summary of their report:
Key Findings
The analysis of electricity consumption data in the City of Vancouver (CoV) between 2002 and 2014 reveals:
The Non-Occupancy rate across all CoV housing units has been flat (4.9% in 2002, 4.8% in 2014)
The CoV’s Non-Occupancy rate is consistent with and tracks the Non-Occupancy rate for the rest of the Greater Vancouver Regional District (not including the CoV)
The number of Non-Occupied housing units has grown from 8,400 in 2002 to 10,800 in 2014. This increase has been driven entirely from the growth in the overall housing stock
Apartments, which represent 60% of CoV’s residential housing mix, are driving Non-Occupancy in the City at 7.2% in 2014
The Non-Occupancy rate for Apartments has been consistently 2% higher in the CoV than in the rest of the GVRD
Single Family and Duplex Housing Units show low and relatively stable Non-Occupancy rates of 1% between 2002 and 2014. The CoV rate is in-line with the rate for the rest of the GVRD
Similarly, Rowhouses also show low and relatively stable Non-Occupancy rates of 1%. The CoV rate is in-line with the rate for the rest of the GVRD
All five of the city geographic sectors analyzed show similar rates of Non-Occupancy by housing type, with no significant divergence over time with the exception of the Downtown Peninsula that has seen a drop in Non-Occupancy from 6.9% in 2002 to 6.0% in 2014
Non-Occupancy rates increase as the period of Non-Occupancy shortens from 12 months (4.8%) to 4 months (6.0%) to 2 months (10.3%)
The non-Occupancy rates for each of these periods has remained stable between 2002 and 2014
There’s a “Methodology” section to the report that delves into questions around definitions and so on.
So I guess all the “pied-a-terre” condos used as vacation homes would read as “empty” if the survey is based on hydro usage.
Please, someone, send the City an FOI request to find the cost of this study.
No smoking gun found.
1 in 10 condos empty. Thats a lot. Us serfs are supposed to be fighting for the scraps of higher density tenements, but how when they are sitting empty:
http://www.vancouversun.com/business/affordability/more+than+vancouver+condos+empty/11770403/story.html?__lsa=7dd4-0fc0
The article said 7.2%. Where are getting 10% from?
…And I think I heard a report saying that strata rules forbidding rentals is pushing up that figure.
I also saw a Coquitlam city councilor complaining that the Province wasn’t doing enough to curb rising prices in his municipality when imo, the onus lies with municipalities to zone residential areas appropriately.
Thinking of Westwood Plateau, are we?
I can see a lot of people negatively caught in a poorly structured law. I live in a Condo and we have two units which are vacant. One owner’s father is not well and the owner went back to Hong Kong to help run his business for a couple of years. The other owner was sent overseas by his employer on an assignment for two years. Our condo bylaws permit a limited number of rentals and the maximum has been reached so both units are vacant.
I have a retired friend that now lives in a condo and goes south to Palm Springs for six months each winter.
“Only” 5%?! As the news tonight put it, that’s roughly 3 years of supply at current build rates. hardly an “only”!
The study analyzed data over 12 years and “… is vastly superior to unsubstantiated anecdote and speculation.”
Amen to that!
Presumably Victoria’s higher vacancy rate can be explained in part by its Snowbird habitat, though the data would dutifully record their seasonal 6-month migration cycle like clockwork. It’s not clear why Calgary’s, London’s and Windsor’s were higher over the 12-year study period. Overall, the study proves that vacancies are a national issue, not a Vancouver issue, and the Metro does not depart from the national averages. Moreover, the city rings in only 2% higher than the Metro averages.
My interpretation of the “12%” is that it pertains to the localized luxury (primarily waterfront or Big View) condo sites and cannot automatically be used to define vacancies in East Van, Surrey or Upper Lonsdale. Yet the downtown peninsula saw a decrease in vacancies of 1% over 12 years, which shoots down the rhetoric about all the dark windows in the West End, Yaletown and Coal Harbour, like they roll up the sidewalks after 5 p.m. This is significant; during the same period a major tower building spree was well underway and thousands of new units came on stream. One luxury waterfront tower with wealthy people on extended winter vacations does not skew the downtown average vacancies one iota.
The headline story in today’s Sun quoted some economics profs who proposed a 1.5% surtax on vacant houses and condos. It’s not clear how that can be implemented without jacking the prices a half notch even higher, or even if that will measurably lower vacancy rates. On the luxury side, the owners will just consider it a minor inconvenience, like having their Bentley’s in for servicing.
The condo vacancy rate in CoV is not 10%, it’s closer to 12.5%. 1 in 8 not occupied for a full year.
The published rates are for apartments, meaning rentals and condos combined. Since the apartment vacancy rate in CoV is close to 0, the condo rate is much much higher:
“The Apartment segment is in fact composed of two separate dwelling types: purpose-built rental units and condominiums. The purpose-built rental unit vacancy rate in 2014 was 0.5% in the CoV and 1.0% in the GVRD as a whole (footnote 8). For illustrative purposes, if the purpose-built rental unit vacancy rates are assumed to be 0% over a 12 month period, the implication is that the Non-Occupancy rates for condominiums are 12.6% in the CoV and 7.3% in the rest of the GVRD (footnote 9).”
The solution is to increase housing supply by reducing zoning rules such as view cones. Not pass illiberal laws targeting foreigners and trying to prevent people from buying investment properties or pied-a-terres.
We should respect the rights of owners to do with their property as they wish. Don’t regulate the limited supply of property – create new property! Develop new buildings. Better to create new wealth than try to redistribute the existing wealth from those who earned it to those with political connections.
Ken you need to read this follow up article by the Globe, as suspected the study is severely flawed….
http://www.theglobeandmail.com/life/home-and-garden/real-estate/poking-holes-in-vancouvers-housing-vacancy-study/article29181730/?cmpid=rss1&utm_source=dlvr.it&utm_medium=twitter
It was very clear the vacancy study done by the City of Vancouver was essentially rigged. Let’s face it, the city and the provincial government know the issues, they know the cause, they just have little to no interest in doing anything about it. End of story.
Author
Then there’s this, from Frances Bula.
http://www.francesbula.com/uncategorized/did-the-citys-report-this-week-on-empty-homes-bust-a-myth/
A great article pointing out the many flaws of the occupancy study and how it undermeasures empty homes:
http://www.theglobeandmail.com/life/home-and-garden/real-estate/poking-holes-in-vancouvers-housing-vacancy-study/article29181730/
It was rather pathetic how fast Councillor Jang was to trumpet that “there’s nothing to see here folks”. He and Councillor Louie could have been taking leadership roles on this, instead they remain in the background. (what exactly has Councillor Louie been doing lately….?)
I guess even Frances Bula missed what the methodology actually said…
“… Non-Occupied in a given year when that unit was unoccupied for each of the 4 months during the non-heating season (August, September, and the following June and July). A unit was deemed unoccupied in a given month when the unit was unoccupied for 25 or more days in that month. ”
So, a unit occupied for 7 days in August, and unoccupied the rest of the year is considered occupied by this study…
Whether it’s a myth or not is open to debate, but this study does nothing to contribute to the answer…