Regular PT commenter Thomas asked to have this analysis he wrote of the ‘speculation tax’ posted on Price Tags, to provide a more complete overview of his thinking, with some specific examples.
So here it is.
TWO IDEAS FOR MORE AFFORDABLE BC HOUSING – RATHER THAN A NEW TAX
by Thomas Beyer
There is much debate these days about the new so called “speculation tax” in BC which levies 1% onto Canadians and 2% on foreigners who own houses or condos in BC that are not rented 6+ months. It also levies a 20% foreign buyer tax and expands the taxable region from MetroVancouver to 4 others regions (Victoria area, Nanaimo, Kelowna including West Kelowna and Fraser Valley).
The purpose is to allegedly improve affordability in BC – by reducing demand. To me, it is really an #EnvyTax to buy votes that will do little, if any, to increase affordability. Who really benefits if a home in West Vancouver drops from $4 million to $3.5 million due to these new taxes, or if a golf course condo on Bear Mountain that is vacant for eight months of the year is now sold in the market and drops from $800,000 to $725,000?
The predicable result: These new taxes merely cause many Albertans (and some foreigners) to sell, causing a short-term sell off in markets like Kelowna or Victoria, with a result of much less supply in the coming years and a negative impact on local retailers, restaurants and the construction industry. Add enforcement costs and the much envisioned additional several hundred million in taxes will likely not appear, as investors are not dumb. How ? Rentals are easy to fake to family members or friends, and it is easy to create local income taxes paid for a Canadian spouse of a non-resident foreign investor that owns multi-million dollar properties in the Lower Mainland.
Also keep in mind many immigrants [me included] come here because they can buy property, including land and many love large lots or large houses, not just tiny condos. It is part of the appeal to immigrate to Canada. Have a drive through Richmond, Surrey, Vancouver Island, Sunshine Coast or Fraser Valley for ample proof of that theory.Not everyone wants a small shoebox in the sky. Many want land. That puts an upwards price on land. Many immigrants come with money, and many more have connections from back home to friends, family and business associates with money.
Not one politician has mentioned immigration in their speeches about well-meant but poorly thought through legislation. Not one. Immigration is the number one driver of high house prices. Canada might even increase immigration. That will make homes more affordable?Totally exempt has been the agricultural sector in BC thus far, so money now will move into that space and drive up agricultural land prices, endangering our local food supply even. Look no further than to spiraling vineyard and orchard prices in the South Okanagan or to farmland prices in the Fraser Valley.
To create affordability we need more supply. Not just more, but also inexpensive supply. The only way to make new supply more affordable is by lowering all-in build costs and speeding up approval cycles, as time is money.Rather than taxing existing homes more, in an attempt to reduce demand somewhat, in an immigration society like Canada, and especially BC, the warmest part of Canada and closest to Asia, the BC Government should focus primarily on cost reduction and new land supply – the true source of our unaffordable housing in BC today.
So, let’s look a little closer at these two aspects: build costs and land availability.
Costs have several sub-components, such as:
- physical material costs (concrete, wood, fridges, wires, windows, doors, siding ..)
- labour & shipping costs to get those physical materials on site
- labour costs to install those materials
- design costs
- planning & approval costs
- finance costs incl upfront fees and ongoing interest
- fees paid to various municipal or provincial (and sometimes federal) entities
- land costs [with its own design, planning, financing, fees, labour and material costs]
- sales costs
- marketing costs
- risk costs [such as this new EnvyTax, also referred to as speculation tax, that now has substantially increased risk of sales for condos to Albertans in Victoria, Kelowna or Nanaimo]
Since time is money, delays cost money. Often planning and getting approvals is a multi-month to often multi-year process with often unknown timelines or outcomes even. It is here where a lot of emphasis has to be placed to increase affordability: fees and timelines. If land could be used for 17, 22 or 25 units, it will make a big impact on home prices down the road, for example. If a serviced road approval can be shortened to six month from 18, that is a huge win. If density and associated CACs (community amenity contributions) are known upfront – rather than being negotiated over a 2-3 year period of time – that is a huge win.
A few specific examples:
On a recent large condo project in Vancouver [where I was involved in a few years ago, in the early conceptual stage as a member of the steering committee] now called the Butterfly, as part of the re-zoning approval the City of Vancouver levied almost $90M in CACs onto the 300 unit tower, well over $290,000 per condo just in CACs alone. No wonder prices are through the roof in Vancouver. The idea was born five to six years ago, with conceptual plans three to four years ago. The construction will start at best next year with estimated occupancy in 2022. A ten-year planning-to-occupancy timeline. No wonder condo prices without views start at a mere $1500/sq ft. This is affordability these days in Vancouver?
For another example, I am currently involved in a land development project in Oliver, BC where we have to slightly widen a curved road by cutting across a very small (say 3 to 5 sq meter or 35 to 55 sq feet) plot behind some sheds to connect to a new road with new underground services on non-ALR land. This 3 to 5 sq m however is on ALR land (agricultural land reserve). Usually the ALR provincial planning department gives such permission but it is a four-to-six month process with substantial paperwork, with unknown outcome, that substantially increases project risk and thus, serviced land costs, thus housing price. [For those interested here are the allowed ALR uses in BC .. ours would be section 3 (permitted uses in ALR) item (4) d.1 ]
In a second project I am involved in the building inspector outright refuses new building material as he is not familiar with it, also causing massive delays, thus costs. One can appeal it to the BC ombudsman, which is a delay of two months or more, or one can hold one’s nose and switch to more expensive but known materials.
A fourth example is the building code that restricts or disallows certain common-sense approaches such as spiral staircases to create cheap attic space for use. I have written about this example here a while ago here.
So, plenty of options to streamline building code, timelines and fees. Let’s talk about land, the other major cost driver in cities.
ALR is a big issue in BC and touching ALR for housing is essentially taboo, even in high-density regions like Richmond or Surrey where 10-storey buildings routinely stand besides blueberry farms. A earnest debate about opening up select sub-par ALR land near cities, or land swaps, especially in Metro Vancouver or the Fraser Valley is in order.
Also a discussion how to create more land from ocean or river flats would be very useful. We did that in BC 80+ years ago as much of a then small muddy island in the tidal plains of the Fraser River delta was wrought from the Fraser River via dykes. This island is now called Richmond. Massive housing developments, industrial land and massive newly created fertile land has been created.
But we could do even more today, for example, we could expand further west by easily one km into the Salish Sea (formerly Georgia Straight) where the ocean is very shallow, as could Surrey by going south into Boundary Bay or Tsawwassen by going east. Plenty of new land could be created in the Lower Mainland, in the Fraser River or along its shoreline, with rapid transit, very walkable, with beaches and scenic shorelines, with a mix of retail, recreation, subsidized and high-end housing. Venice did that. Holland did that. San Francisco Bay Area did that. Singapore is doing it. But not in BC ?
City-owned Langara golf course in the heart of Vancouver is another example where valuable land worth billions sits within blocks of a subway, the Canada Line. Why is there not affordable housing on it ? Where are the plans, almost ten years after Canada Line opened? Do we have a golfing crisis, or a housing crisis ?
As such, rather than taxing existing homes driving away investment capital, why not look at sensible cost reductions in the planning process or building code, and more land creation where it makes sense ?
Hi Thomas, how much did those CAC fees compare with the land lift from the rezoning process? Funny you left that part out.
It’s great that you like large lots instead of an apartment, but it’s not clear how it follows that we need a land use policy that requires large lots and bans apartments everywhere, which is the status quo.
You often come across like a market oriented guy – why not let people use land for large lots or for apartments and see which one the market chooses?
You aren’t worried that if apartments were legal, lowly renters (represented by the developers who will build market rental) might outbid you for a large lot.. are you?
Awesome to have folks build rental properties, and as you may know I own quite a few in AB. However, look at Cambie for example: many or most new buildings are condos because the price to build is almost the same and the subsidies aren’t there to make it economically viable.
I used to own a large building near Dallas, TX and when researching the apartment market in Texas I was amazed how many subsidy programs exist in allegedly capitalist, redneck, market oriented pro-Trump (then anti-Obama) red state Texas. Here’s a few https://www.tdhca.state.tx.us/developers.htm plus the federal HUD program .. massive massive programs to build rental properties profitably for little money invested. That is s.th. to study and bring here: loan guarantees especially as it is VERY hard to get financing for rentals today with land prices where they are in Lower Mainland. Far far easier to build condos and blow them out in a weekend, to locals or foreigners alike and then get cheap builder financing. I might write about this more next as financing is a major cost item (or prohibitor) for building more rentals ! Huge.
Thomas always tells us that BC is vast VAST !
Why would we spend $billions on sea-level-rise-vulnerable expansions into the ocean with all the environmental problems that would come with it?
Also, because people cheat on their taxes is not a good argument to not have taxes.
Maybe the people who want large lots should be the ones paying for sea reclamation rather than making it a government function?
Seems strange that the people who are willing to live in apartments are only allowed, by law, to occupy a tiny percentage of the region’s land but would be asked to subsidize the cost of land for Thomas &co’s large lots.
Because immigrants and in-migrants want to live in MetroVan or Victoria, NOT in Prince George or Telegraph Cove or Williams Lake or interior even. New immigrants move where simialr immigrants have moved to. For example in Oliver, the largest center of worship is a Sikh temple, and they own many orchards or vineyards or local businesses. So some Sikhs move there, however, most would move to Surrey. Or many Chinese immigrants to Richmond, or Iranians to N Van .. we see quite a bit of clustering around existing immigrants. Why would this change all of a sudden [ unless we force it ie before you can legally move to Richmond you have to live in Winnipeg for 5 years .. but I think that is unlikely but certainly worthy a debate ]
If ALR is untouchable (as it should not as I argue – we need a debate what can be released for housing or swapped for other parcels ) then we ought to look at other nations that have successfully converted near ocean, marshland or river land into ag land, industrial land, recreational land or residential land. Where is the committee to look at this ? I can envision another “Richmond” in Boundary Bay for example, with nice beaches, restaurants, seawalls walk & pedways, with affordable and high end housing, green and essentially car free. Another Venice basically, or Redwood Shores in SF Bay area https://en.wikipedia.org/wiki/Redwood_Shores,_California If in green California, why not in green MetroVan ?
Why is it the government’s job to provide land for people with large lot fetishes?
Is it also the government’s job to provide land for apartments? If it is, why has so little new land for apartments been provided over the last 90 years? The zoning map is almost unchanged since Bartholomew put pen to paper.
Why can’t you imagine a world where large lot buyers have to compete for land with people who prefer apartments?
I can. That is called Vancouver today.
I am merely stating what people want. I am an immigrant like so many others here. I have lived in crowded (sometimes ugly) cities with tiny apartments and have visited many more. Far worse in the slums the world over that I have not visited. People do not move to Canada for small condos. They want to improve their lot in life. Pun intended !
To accommodate more people we need MORE LAND and/or MORE DENSITY and/or MORE CHEAP NEW SUPPLY. My point is that its absurd to reject outright the idea of ALR studies and new land creation. Both areas ought to be looked at every so often.
Large lots are being used for condos or apartments now, along Cambie or Granville for example. Not cheap in case you haven’t noticed.
Wait a minute Thomas, weren’t you the one who used to argue that we should be monetizing foreign buyers by taxing them?
Yes we should absolutely. What I am saying is that it is easy to rent or create fake rentals, or it is easy to use a BC corp or a BC resident (say a student or spouse) that pays some very modest income taxes. Immigrants are very crafty. As we will see with the Vancouver vacancy tax 50% by next year will be magically “rented” yet still are vacant.
And yes, we will see some folks bail and sell and thus create some inventory and therefore, we will see some prices come down, say $4M to $3.5M in places like W Van or Point Grey. You will see massive negative impact in Victoria, Kelowna and Nanaimo where many Albertans have condos and they will unload by the dozens and buy in Comox, Campbell River, Sunshine Coast, Oliver, Kamloops etc .. wait for bankrupt builders and massive drop in new supply next year and 2020.
However, in an immigration country we need to look MAINLY at NEW SUPPLY and cost of supply ie streamlining building codes, approval time lines and fees. It’s great that Vancouver collects $90M in CACs from the Butterfly owners, but where are the affordable units on city owned land, for example Langara Golf Course or these 6 downtown parcels here ? http://vancouversun.com/news/local-news/three-decades-ago-six-big-lots-in-vancouvers-trendy-false-creek-were-reserved-for-affordable-housing-they-remain-empty-today-will-these-600-homes-for-families-and-seniors-finally-be-built
The better solution would have been to raise all property taxes somewhat, say 0.2% and more on high end, starting at $1M, say another 0.2% per $1M ! That would also monetize seniors who often live mortgage free is shiny $2M homes in Victoria thanks to the recent runup in prices. Then lower or eliminate income taxes like they do today in booming US states like WA or TX ! That would also benefit renters as they would have more money in their jeans.
Thomas makes an excellent point. Satellite families can easily setup fake rental agreements. We should raise property taxes for everyone and increase personal exemptions on income taxes to keep those tax changes progressive.
TX and WA do that today. No state income tax, but very high property and state consumption taxes, plus mortgage deductibility. That gives resident income earners at least two advantages over foreign owners or affluent immigrants that own but do not produce much local income. A model for B.C. to look at to monetize its new gold, residential real estate, far far better.
@thomasbeyer808080
One question, you don’t mention this housing being rental or anything that separates it from market.
So, what magic allows these efficiencies/cost savings you propose to not disappear on the first or second selling of a property?
The classic claim about modular housing is that it is cheaper to build … thats great for either the builder, or the first owner, but after that, it reverts to market with no real benefit except some additional profit for someone.
Building costs really aren’t that much of a problem in Vancouver. Land costs are a problem. Even if you dropped Vancouver building costs to Toronto costs (which are about 10% less, you would only cut a few % off the total because of the land cost component … if you dropped it to Montreal costs (which would be dubious, as there is no seismic requirement … worldwide comparables to other cities in shakey areas are about where Toronto is for cost) then you’d reduce overall costs by about 10-15% … but then again, who would get the benefit? The first owner? The developer? Why wouldn’t the cheaper unit just sell for market?
Unless you propose adding so many units to tank the market, which no-one is going to deliberately do … what mechanism makes these cheaper units stay that way?
This cheaper construction has to be combined with some non-market-ness to have any real benefit.
In Texas the rent levels are capped (usually well below market) or you can take in only folks up to a certain income level, for example, if you want these state or federal subsidies. These come off in 10, 15 or 20 years.
Caveats can be placed on property titles if condo, such as one attempted by UBC ( see here https://planning.ubc.ca/vancouver/news-events/newsletter/2013-07-30/ubcs-workforce-housing-model ) with a goal to provide staff with rights to buy below market housing, but upside is capped. Not sure if they got this program ever off the ground though. Let me get back to you here.
Here’s what Calgary did for “attainable housing” http://attainablehomescalgary.ca/ Essentially subsidized housing but the gain is capped and split with not-for-profit society when sold and then re-invested into more houses by that society http://attainablehomescalgary.ca/ or here http://attainyyc.com/boost/?keyword=attainable%20housing%20calgary&placement
So, essentially in all three models, if you buy you get in cheaper but have to give up a portion of the gain to the original society (often provincial or city agency, but could conceivably be a for-profit firm)
Excellent points!
It is entirely misleading to suggest that “as part of the re-zoning approval the City of Vancouver levied almost $90M in CACs onto the 300 unit tower, well over $290,000 per condo just in CACs alone.”
CACs don’t work that way, and the Council can’t ‘levy’ anything. A CAC is offered by the developer and negotiated based purely on the increased land value – the ‘land lift’ associated with the project. That land lift reflects the price the developer says will be charged for the units. (In recent years they can often get an even higher price and make an even greater profit). It doesn’t capture all the increased profit that results from allowing greater density, just a proportion of it.
Without the CAC payment of an average $290,000 per market unit, the condos wouldn’t be $290,000 cheaper. (Even if they were, they wouldn’t be particularly ‘affordable’ as they’re seriously high-end units). It would just mean the developer would make 91,305,225 more profit.
The report you link to says: “Contributions are negotiated and evaluated by staff considering the increase in land value expected to result from the rezoning proposal. As part of this application, the applicant has offered a total CAC package of $91,305,225. Real Estate Services staff have reviewed the applicant’s development pro forma and concluded that the total CAC value offered by the applicant is appropriate and recommend that the offer be accepted.”
$26 million is covering the seismic work on the heritage First Baptist Church. $6.5 million is going to the rental housing being provided to make them more affordable than they otherwise would be. As a result two thirds of the units (that will be owned and rented by the church) will be at rents below the HILs rental rates. Another $2.8 million will go to the city-wide affordable housing fund, and $6 million is supporting other Council priorities, for example acquiring a social housing site on East Hastings. $10.5 million will go to childcare, $10.5 million to local (West End) park improvements, and $21 million to other West End recreation and community facilities. $8 million is for improved local bike and pedestrian infrastructure like the Bute Street Greenway.
So the developer will charge exactly the price for the units that the market will bear. Because there will be more units, with better views (as it’s a rezoning with a much higher density) some of the additional profit will go back to the community to benefit the area, and the city as a whole.
Thank you for clarifying it. Yet most of these CACs land in the city’s coffers. My understanding is that CACs are calculated to create 75% of the additional land value lift to the city, 25% to the land owner. Correct?
As such, the major beneficiary of additional density is the city, to pay for new employees, services, amenities, etc .. As such the much propagated myth that higher density provides cheaper housing is just that: a myth. It certainly provides more housing, but not cheaper housing. The new forced 25% rental for new buildings makes the 75% market condos, and thus existing condo inventory, more expensive, too.
I am trying to stimulate a discussion how we can reduce build & land cost. More suggestions please.
The developer would not make $91 million more profit with the CACs. That’s just a silly statement.
I suggested the developer would make $91 million profit if the CAC
I suggested the developer would make $91 million profit if the CAC wasn’t paid to the City. The developer is going to charge the same for the units with or without the CAC – why would he not?
(Note to new editor – research how commenters can edit their comments when their computer decides to post them, before the commenter is finished typing).
@ ChangingCity
Great info! It’s plain to see that most CAC’s have great utility and large social benefits, and that developers are stampeding to offer them in exchange for additional density. This is clearly an excellent trade off.
I would agree that increased supply for one property will not lower prices. However if we had a massive city wide increase in density the market would bear lower prices. This is what we need.
Not necessarily as builders have only a certain capacity, as does the planning department as does the buyers market. As you will see very soon in Victoria, Kelowna and Nanaimo with disappearing Albertans as buyers, new supply in 2019 and 2020 will drop very hard and prices will not budge much, maybe 5-10%.
Supply will adjust to demand. Whether it is cars, bread, toothpaste or condos !
To make supply cheaper we need cheaper build costs.
If the market price is higher than the cost of building the unit more supply or/and less demand will lower the market price. If cost is higher than the market price due to government interventions as I believe you incorrectly believe then lowering the cost will lower the consumer price. I respectfully believe the primary statement is true and the secondary is false.
Not entirely Alex. Am I the only one surprised that $26 million of this is going to the church, which I assume was paid for the land by the developer? Why is the public money being used for a “private” church? Why isn’t First Baptist funding improvements on their building out of the proceeds of the sale of the lot?
I also find it dangerous that the city seems to becoming reliant on these CACs to fund so many things. That locks us into a cycle of ever escalating development or risk budget shortfalls.
Real estate construction is huge business. Many more winners than losers: sellers, realtors, cities, province, plumbers, truck drivers, lawyers, elevator installers, property managers, painters, carpet industry, window manufacturers, architects, interior designers, engineering firms, etc .. huge business. With these new taxes imposed we will see less of it, thus less employment and less taxes collected. Prices will not drop much, if at all.
Only cheaper build cost (along the 10 or so cost items listed) or more (subsidized or free) land will lower ownership costs or encourage more rentals. Not an easy task. Many levers have to be moved to make an impact. https://biv.com/article/2018/03/housing-crisis-complexity-defies-sloganeering-and-quick-fixes
Suggestions for cost reductions, folks ?
I cannot disagree with the goal of creating more inexpensive supply, however I want to correct one statement made in the article, that there is a lack of overall housing supply in Vancouver (or in most other international locations, for that matter). This simply isn’t true:
From the Globe and Mail: https://www.theglobeandmail.com/real-estate/vancouver/vancouver-housing-supply-isnt-the-issue-affordability-is-data-shows/article31794288/
“Too often, the argument for supply focuses on a shortage of housing units as a response to increased demand. But if we are to look at the number of housing units being created and the net population growth that is occurring in the region, supply in itself is not the issue. There is an average of 35,842 newcomers into Metro Vancouver every year and 16,332 housing starts.
That means for every unit of housing started each year – purpose-built rentals included – there is an average of 2.4 people arriving in Metro Vancouver. That’s a lower ratio than Toronto (2.9) or Calgary (2.6).
And that average ratio for Metro Vancouver spans the past 25 years, according to data supplied by planner Andy Yan, acting director of Simon Fraser University’s City Program. Mr. Yan was in Ottawa this week to take part in a round-table discussion on real estate data as part of the federal government’s Let’s Talk Housing conference, which is doing the early groundwork for a new national housing strategy. Mr. Yan’s data are also part of an upcoming book to be released by the University of British Columbia’s School of Community and Regional Planning.”
As for your methods, it’s my opinion that the lack of affordable housing in Vancouver is caused by market factors and not government interventions. Without addressing the market factors behind these increases, affordability cannot be improved. We’ve seen this with the absolutely incomprehensibly large increases in land costs in the Vancouver region, as well as the bidding wars of investor buyers driving up prices. No government cutting of red tape will ever address these issues, nor will it solve the problem if these issues aren’t addressed in tandem.
So, Tessa, what is your suggestion then to create more affordable housing, both rentals and owner-occupied, in Vancouver ?
A provincial or city housing authority with the task of creating affordable housing, perhaps co-op, perhaps simply rental at-cost and with finishings aimed at the middle of the market, similar to the model in Singapor though likely not as wide-reaching. This authority should also have the power to step in when property is sold to buy it instead of a private owner.
A blanket rezoning of large areas of the city into low-rise medium density multi-family housing, with an acceptance that this area will not be further rezoned. At the same time, the zoning should make it much easier for smaller lots to redevelop into projects similar to the passivhaus on Rupert Street: http://urbanyvr.com/monad-rental-apartments-east-vancouver This would help eliminate the need for large land consolidations, thus reducing the bargaining power of individual homeowners to drastically drive up their value and hopefully, by greatly increasing the supply of available land, reduce the high premium paid on land at the moment. I would love to see a provincial housing authority tackle smaller projects throughout the city rather than big projects in a single area, as well.
But frankly the demand has to be addressed, because the demand is artificial and unrelated to population. That’s why I wholeheartedly agree with the goal of the provincial government to reduce international demand and demand from investors and second-home owners. Deterrants in this regard are a neccessary part of the picture. Foreign ownership bans are a good next step. Ideally, though, the money from these deterrents will go to a provincial housing authority rather than to the general government coffers.
But I also think City Council needs to get serious about denying projects that are too expensive. A good example is the tower at Kingsway and Main that’s going up. As that was proposed, the residents revolted, claiming it was too high and would result in gentrification. What did the developer do? He reduced the density but at the same time increased the ceiling height, resulting in a higher per-square-foot cost. What did council do? Approve the project, despite the fact that it had been made worse for the city as a result of the changes. If council starts demanding affordable prices as part of the approval, that would make a difference.
Finally, I wasn’t sure in the above-mentioned post if I should even touch on that, but our ALR is untouchable for a reason and should stay that way. We don’t have to sacrifice our liveability for affordability – that is a false dichotomy. Buildings islands in the sea is also an expensive waste of time that will only reduce quality of life while creating overly expensive, earthquake-susceptable playgrounds for the rich. No.
Vancouver is only now just starting to talk about rezoning large areas and this is an election year, so nothing will happen until at least the middle of next year.
Meanwhile building of the now called “Missing Middle” will continue out in the suburbs.
Keeping the ALR is fine. People like driving to work and back home through blueberry and cranberry fields, pumpkin and corn. The trade-off means there will have to more roads (and bridges) and/or very comprehensive rail links to the city.
It’s all options and choices.
The 2016 Census showed that, For the first time in the country’s history, the number of one-person households has surpassed all other types of living situations. They accounted for 28.2 per cent of all households last year, more than the percentage of couples with children, couples without children, single-parent families, multiple family households and all other combinations of people living together.
Blending numbers for Metro Vancouver:
35,842 newcomers, means ~11,600 living alone (based on Stas Can average).
16,332 housing starts, less 11,600 living alone, leaves 4,732 housing spaces for the rest who number 24,200.
They would need to be a little over 5 per household to make the numbers work.
Were there 3 people per household, this is still 2,136 fewer being built each year than needed.
Yay math 🙂
So the argument proceeds on the basis of envy? In the next step the argument proceeds to assign blame for high prices to immigrants. In the following steps unrealistic suggestions are made to reduce costs, increase housing and land supply. In reality approvals to build is a community processes, buildings must meet safety code requirements and environmental standards, ALR land cannot be developed, the sea is rising, and Venice is sinking.
Given conditions in Vancouver the best response to the affordable housing issue by far that I have seen to date is the deployment of factory production processes for the manufacture of modular construction. The advantages of this delivery strategy are many including very low neighbourhood disruption, building permit pre approvals and a controlled construction environment (a factory) with full recycle capability, a source of local employment, a new industry.
Component housing can take on many appearances. Architects, artists, product designers, masters of the object in space, all can play parts in what can become an architectural renaissance for the city. To kick start an examination process, I call for an International Architectural Design Competition: an exploration of modular housing design, its’ function, its’ appearance, its’ possibilities in Vancouver. Comments?
Yes prefab makes total sense.
ALR debate has to happen. I am not advocating a wholesome dismantling, of course, but a committee that studies land use in MetroVan including ocean / river flat land reclamation potential. We can’t just stick our head in the sand and not touch it. As societal needs change land use has to change with it. That debate ought to happen every 20-30 years. MetroVan today is very different than in the 1980s or 1950s.
Immigration is the no 1 reason for rising house prices in Vancouver. That too needs a debate ie what is an appropriate immigration level as it not only causes rising home prices but puts enormous pressure on school system, healthcare system, policing, public transit and roads. That debate today is totally avoided. Why ? Is 300,000/yr the right number for Canada? Maybe 400,000 but not all cities are allowed to move to for the first 5 years? Maybe only 150-200,000? Maybe pre-paid healthcare for five years? Canadians pay an ever rising price for immigration, not just in housing but in schools or in the doctors’ or hospitals’ waiting rooms. There are pro’s and con’s to it.
Safety codes, building codes and approval processes need to be looked at, too, as they strike me as overly complex in many cases. See 105 Keefer rejection debate here on PT late last year https://globalnews.ca/news/3847327/105-keefer-defeated-chinatown-vancouver/ as one example. A very lengthy approval process and potential rejection raises risks, thus price substantially.
City owned land exists today as linked above in Vancouver that could be sold for $1 or leased for rentals or coop housing for example.
Loan guarantees, from a CMHC like B.C. crown corporation could reduce financing risks for rentals, or give seniors cheap reverse mortgage.
In Canada immigration is, just about, all federal. I have never heard of immigration ever being mentioned in a Canadian federal election campaign.
we can increase access to low cost beautiful housing almost immediately by following the strategy outlined below:
We should turn housing into a desirable industrial design product, a fully equipped light weight space pod that morphs with options and features, cool design in a shape and configuration that is stand alone inhabitable, that is marketed in showrooms like cars are today. Such a product would be simple to construct in a factory compared to say a vehicle which requires thousands of moving parts. Could we expect to produce living pods at costs similar to vehicle costs? material simplicity balanced against machine complexity. hmm. could amount to low cost affordable living all across the city in back yards and on the acres of flat roof tops as seen from above.
Yes we could. Yet they still have to be shipped, stacked, connected to the power, water, sewage, fibre optic and gas grid, plus connected via hallways or elevators on land that someone owns and that has to be prepared for it.
Here is one such complex, namely one in Edmonton, assembled by my good friend AJ Slivinski , based on containers. http://edmontonjournal.com/business/real-estate/edmonton-company-building-citys-first-shipping-container-apartment As it turned out, the construction was not any cheaper than a conventional stick built one. That’s the reason we do not see them all over the place.
Some higher end condo buildings allow you to customize the interior. You buy the floor plate, and then customize the interior.
We are also looking at prefab homes at out second project in Oliver, BC. Doable but not a lot cheaper than wood frame once you count all extra costs such as roof, decks, basements, exterior lighting, connections, landscaping etc. Of course it’s really just a modern fancier successor to what we call “the trailer park”. Just more modern and more high end. Trailer parks, aka mobile home parks, aka modular home parks, aka prefab or pre-engineered still need land, even if you stack them. But yes I think we can build far cheaper, especially if land is city or province owned, and owned as coops or with land leases. http://www.prefabmarket.com/10-prefab-buildings-built-less-month/ Certainly a model for Vancouver to look at.
there is a lot of space in the city yet to be occupied, we do not need mega projects on the ocean or on farm land. an invasion of space pods landing in all the right places is all that is needed for seniors, for families with young children, for students, for artists, inventors, for the inventors of culture, the creatives, for any free spirit living on and exploring this planet.
Short term, yes. Long term, we have to think bigger. If Canada is a 100M society by 2100 then MetroVan will be 7-9M people, triple today’s numbers roughly.
Short term, where are all the affordable units that could be built on city owned land, for example Langara Golf Course or these 6 downtown parcels here ? http://vancouversun.com/news/local-news/three-decades-ago-six-big-lots-in-vancouvers-trendy-false-creek-were-reserved-for-affordable-housing-they-remain-empty-today-will-these-600-homes-for-families-and-seniors-finally-be-built
Long term, Vancouver will be more like Hongkong is today. Higher and higher and ideally with new Oceanside lands like Redwood Shores in SF Bay Area linked above ?
100M people by 2100 is a distinct possibility https://www.thestar.com/business/2016/10/23/finance-ministers-key-advisers-want-100m-canadians-by-2100.html as such these long term land reclamation projects should be conceptualized now.
To actually collect significant new taxes for social or affordable housing, taxes on all properties have to go up. Not just on evil Albertans who dare to own a golf course condo or foreigners, as it is hard to track, easy to cheat and tough to enforce the BC Speculation Tax.
The so called “school tax” ie wealth tax is really a progressive property tax, which is a very a novel idea in Canada.
This tax is far better than the so called BC Speculation Tax actually. Easy to collect & administer. A real revenue generator.
Right now it is set at 0.2% for values over $3M, and at 0.4% for values over $4M. It should have started far lower though, say 0.2% > 1M, 0.4% >$2M, 0.6% > $3M, 0.8% > $4M and then 1% over $5M.
Then eliminate BC inc taxes to 100k, then 10% over $100,000 to compensate.
That would make a real impact, creates jobs, creates money for social housing and creates disincentives to buy very large homes. Monetizes foreign, even illicit, wealth stored in real estate far far better and easier. Thoughts?
More doubtful opinion about this tax
By a leading accounting firm https://www.thor.ca/blog/2018/03/bc-leaves-much-to-speculate-about-the-so-called-speculation-tax/
In the Gobe and Mail, regarding part-time residents https://www.theglobeandmail.com/news/british-columbia/part-time-bc-residents-fear-they-may-feel-full-sting-of-new-speculation-tax/article38205444/
From a US buyer perspective https://biv.com/article/2018/03/foreigners-perspective-bc-budgets-housing-program