The changing face of southeast Metrotown, as seen from the platform of Royal Oak Station.
Look down and to the south of the station, literally across the street, and there’s a remnant of old Burnaby: M-B Grocery.
Look further down the track to the west, and there’s the rebuilt Metrotown Station and all the new super-tall towers:
Making Metrotown the poster child of high-density TOD – transit-oriented development.
It’s worth noting that the station itself is effectively brand new, save for a few platform tiles and the concrete guideway. TransLink reconstructed one of the busiest stations in the system without having to close it down – an engineering achievement for which it is unlikely to get much credit. (Hey, despite complications, nothing really bad went wrong. So frustrating to the critics.)
Can/should this be discussed without mentioning the incredible displacement of renters who had their homes demolished to make way for those towers? And I’m surprised there has been no post here dealing with Corrigan’s desperate attempt in an election year to quell criticism by floating the idea of creating BC’s first “rental only” zoning area.
How can you be surprised there hasn’t been a post here about Corrigan’s latest nonsense when there hasn’t been a post here about the entire city of Burnaby in years?
But the topic of different ways of increasing density and their impact on renters is a good one – it is not just Burnaby where this is the norm (although it is probably the worst case).
Unfortunately, renting is a temporary business relationship. The owners own the land, built (or bought) the buildings, pay the taxes year after year, pay for the mortgage, pay the maintenance / insurance (etc), put their millions or tens of millions of dollars in capital at risk, invest enormous amounts at low cap rates and are responsible for renewal of of the buildings when their useful life is at an end (while collecting lower and lower rents as the buildings get to 70+ years old). Those who rent can exit the relationship, and those who provide the rentals should be able to exit the business too (and it’s more burdensome and costly for the owners to make that exit). The owners don’t owe the renters an indefinite business relationship.
The 1971 Urban Structure book by Burnaby planner Gerhard Sixta was a very impressive study of alternative models for building a city. Combination of theory and practice. He went on to become Director of Planning in Surrey. Nice guy, too.
Thank you, Sir Joel, for your description of one of the last vestiges of feudalism. How many lashes for hunting on your land?
I supposed there may be a reason why they are called landlords. LOL. But let’s acknowledge the reality of why there is a shortage of rentals. Landlords who build and own these rental apartments pay tens of millions of dollars (plus interest & opportunity costs) to construct an apartment with expenses (taxes / maintenance / labor / insurance / heating & electricity) that go up faster than government mandated rent controls. They are collecting only half a month’s rent for deposit but non-paying tenants skip out on several months of rent until court bailiffs move their possessions out (not covered by that half month of deposit). The apartment landlords must do major renovations to keep building functioning without breakdowns, but can’t assess special levies (unlike what condos can charge owners for major maintenance) then require them to provide 3 or 4 months of compensation and relocation costs. There are enormous difficulties recouping any damage costs from tenants that don’t pay. And it goes on and on. What’s the incentive to put those tens of millions of dollars into building a rental apartment? Would you pool your savings into providing rental accommodation? We see so few rental apartment buildings being built. If another million people are coming to the Lower Mainland in the next 15-20 years, the occupants will have to commit their funds long-term to being part of the solution, and buy the residences they occupy (and benefiting from any value appreciation), because investors (who have their expectation of high returns and profits) don’t seem to be doing the building.
Your investment theories are unsustainable, Joel. Something we are all about to find out. The over- commodification of a basic human need – shelter – cannot work in the long run.
Tom, I wish it were otherwise. Unfortunately, it is reality, not theory. That is how things are in the Lower Mainland, majority of cities in North America (examples being Toronto, Seattle, San Francisco, San Jose, New York / Boston / Washington, etc., many of which have rents higher than we do here), and large cities in Western Europe, Australia (Sydney and Melbourne have even higher rents), New Zealand (Auckland, Wellington and Christchurch in particular), and Asia (most notably Seoul, Tokyo, Osaka, Shanghai, Hong Kong, Singapore), and it goes on and on. Wherever there is increasing population, increasing economic activity, land constraints, there is increasing demand and decreasing supply. I wish it were different, but that is the reality.
Won’t somebody think of the poor landlords? Oh the humanity!
We don’t have to shed tears for them: it’s business. But there’s fewer and fewer of them.
The more I read comments defending private landlords in an overheated housing market the more I want to see purpose-built public rental housing with 21st Century principles. The highly-centralized and subsidized McLean Park in Strathcona is not a model to aspire to. Nor are the slumlord-operated older tenements of Metrotown (with a few exceptions).
The middle ground could be found with rental rates in new buildings funded by three government levels set to a non-profit tune in a combo band with decentralized subsidized buildings or units within buildings sprinkled throughout market condo districts close to transit. Non-profit means that all costs are recouped with added replacement and inflation clauses. How many non-profit public rentals would it take to provide a counterweight to a heated market?
Alex, there seem to always be some unfortunate number of very poor, chronically marginalized welfare recipients who are homeless. Our governments and charitable organizations have created homeless shelters. There still aren’t enough homeless shelters and there should be more. Society can lift that small segment out of homelessness, by taking from the majority of taxpayers to hand to a small segment.
However, if government tries to provide homes for a majority, or a sizeable proportion of the population, then government would have to take from that majority of taxpayers, just to hand it back to the majority of taxpayers. As Winston Churchill once said, it would be “like a man standing in a bucket and trying to lift himself up by the handle”. Add the inefficiencies, cost of bureaucracy, etc., so it would mean handing back much less than what is taken.
The problem is the implementation rather than the concept. Vienna, Singapore and others have 60-80% of their population (rich and poor) living in state housing, so clearly, it can be done.
Homelessness is more than just some ‘poor unfortunate’ living on the street. It’s also the many thousands living in substandard and inadequate accommodation, to say nothing of the stress and terror of being a rent slave and paying a disproportionate amount of their income for shelter. I’m not going to get into the value to society of the rentier class, but if you can make a business case for homelessness I’d like to hear it. Although I am beginning to get the impression that I am feeding a troll.
Tom: I would appreciate if you would not cast insults with name-calling, when there is participation in a discussion/commentary board with meaningful and intelligent discourse.
Justin, Tom: Prior to being the Attorney-General, David Eby was previously the critic for housing, when the BC NDP was in opposition. He frequently named Singapore as an excellent model. Singapore used to have a housing crisis in the late 20th century because its land-base for housing was confined by the ocean, the mountains and an international border (see any parallels with the Lower Mainland?) Here is a YouTube example:
https://www.youtube.com/watch?v=T2j8WB00tDg&t=17m50s
I felt I had to learn more about this because David Eby constantly sang the praises of Singapore, Singapore, Singapore. Why?…I found out that about 80% of residential land in Singapore are set aside for use by the Ministry of Housing / HDB (Housing Development Board) publicly constructed apartments ranging from studios (single people) to 5 bedrooms (multi-generational), solely for citizens / permanent residents, housing not just low income, but middle and upper income. The same apartment can house the poor in smaller suites on lower floors with little view and smaller rooms, while the higher floors / penthouses can house the wealthy in large suites with incredible views with large & lavish rooms / more bathrooms / expansive living areas / balconies / elaborate kitchens & dining rooms. So social classes are mixed, and reduces ghettoization.
In simplified terms (setting aside complexities): Foreigners are barred from buying the Ministry of Housing / HDB-housing, so that removes foreign speculation. Such housing are owner-occupied: if you occupy, you own, and if you own you occupy (so no AirBnB, and no gaming the below-market pricing system to sublet), and each household can only have one at most: this removes domestic speculation. If this means that the corporate landlords or individual landlords can’t buy or rent out the HDB apartments, then who funds their constructions? Citizens and permanent residents (PRs) have to fund it, and they must buy (and save money by cutting out the landlord middle-man): employees contribute 20% tax-free to a “provident fund”, with employers matching with 17%, which must be used for buying a home, for medical expenses or retirement savings.
Singapore’s Ministry of Housing buys out a lot of detached homes, up-zones them (passing on the savings to the buyers rather than investors taking the rezoning profit), gets construction companies to competitively bid for construction using large-scale buying power of many projects (passing on savings that would have gone to developers and construction companies). Ministry of Housing also provide housing grants (BC used to have $37,500 interest-free loan for 5 years, but Singaporeans get outright $30,000 SGD grant), tax rebates (much like our first-time buyers get PST waived and GST reduced), loan guarantees (much like CMHC provides to Canadian mortgage lenders), default insurance (much like CMHC provides to Canadian borrowers), and other incentives (much like we get RRSP Home Buyer’s Plan and Home Owner Grants), making homes in Singapore cost about $240,000 ($SGD worth about $1 CAD presently). Citizens and PRs who live in HDBs nearly all own their HDB homes, often buying in their early 20s and paying off their mortgages 15, 20 or 25 years later, often in their 40s, paying the same amount every month, which goes down in inflation-adjusted dollars (unlike rent, which keeps going up, often faster than inflation and can be punitive after 40-45 years of increases). Nearly all Singaporean households own the HDB in which they live.
The other 20% of residential land is not controlled by Ministry of Housing / HDB, and can be freely bought, sold, rented by foreigners and ultra-rich. That provides an outlet for those who want the free market, and all the ravages that come with unfetter capitalism. Foreign speculators, foreign students and wealthy pied-a-terre foreigners don’t compete with citizens and PRs in HDBs. This makes foreign temporary workers much more expensive to hire and house, thus protecting domestic workers from imported labor as well.
In short, Singapore’s Ministry of Housing / Housing Development Board model is probably the best model, because the owner-occupants own, with a fixed monthly mortgage that decreases through inflation over time and gets paid off in 20 or 25 years then rent-free after that. This is much better than rents that increase and don’t stop after 20-25 years.
They increase supply (upzoning large tracts of low density to high density rather than individual lots through city bureaucracy & one-off negotiations / community amenity contributions / development levies, creates missing middle in less urban areas with medium rise buildings to large multi-building complexes / communities of apartments in urban areas, etc)
Here is the big key: they dramatically decrease demand (shutting out the foreign wealth buyers / pied-a-terre / foreign priced workers and students, foreign speculators, landlords that raise rents over time, domestic speculators that buy multiple units, vacant owners, etc.)
Thank you Joel for this information. It’s worth considering here in the Metro.