Six months after Vancouver City Council approved a plan to transform the Cambie Street corridor, homes in the area have nearly tripled in value and some residents fear development will ruin the neighbourhood. Ten homes on Cambie Street near 41st Avenue recently sold for $3.4 million each, nearly three times their assessed value.
City planner Brent Toderian says the city is trying to cool down land speculation in the neighbourhood. Toderian says the city has been meeting with developers and realtors to discuss land transactions after getting wind of some very high deals negotiated in the months after the Cambie corridor plan was approved.
He says the final prices didn’t appear to have factored in community amenity contributions the city negotiates with developers in order to pay for infrastructure and services associated with increased density
“People were overpaying for land — thus we sent messages out into the marketplace to say you’re going to have to adhere to the expectation of the plan if you wish to succeed in development.”
- from CBC 27 Oct 2011 [hat-tip 'subterranian']
this is not speculation. These properties were bought by a developer who intends a change in use from single family to condo.
Brent Toderian does not know what he is talking about. It is his and his planners proposal for the area that has achieved these prices and by proposing an increase in density, the land value increases either for a developer or foreign buyer who wants a nice lot in the heart of the city. As I live here, OK I will take 2.5 times the assessed value and leave but its not what I really wanted but at that rate, I will sell. I will take some jobs with me as I will take my company too. Hey no problem, there not minimum wage jobs either. There will not be affordable rental, social housing or reasonable priced condos. Some high market rental housing and million plus condos. After all they are paying a premium. Oh and the density plan for the city is wrong and does not have the support of the community. The community has not been listened too for years.
Density increases close to transit. Density is coming, it’s a matter of where it goes.
Just think for a minute about the variance in density between these units and the ones 2 blocks over. Can you say “stratification”?
So what exactly is Toderian’s concern? Does he think developers will try to weasel out of providing community amenities? Can’t the city just say too bad so sad?
It seems he’s saying they’ve gotten their math wrong, and overpaid.
And if they’ve gotten their math wrong and can’t complete the project, then the city ends up with partially completed eyesore along the Cambie corridor. Similar to the partially completed eyesore (can’t recall the development name) that stood on a major street in Kelowna for three years before someone took it over.
I say, let the developers take the risk – nothing wrong with that. If they build it and nobody wants to buy that’s their tough luck.
As regards the two blocks away houses … yes, these will rise somewhat in value but unless a large number are converted into multiple rental units the effect will be muted: rich people don’t take public transit.
How much commission did that realtor just make – 10 homes x $3.4 million?
People have been speculating on the Cambie Corridor for years… the lower prices (relative to latest sales) were with the risk baked in that the plan may not go forward or be delayed. As soon as the plan was getting closer to fruition the values spiked and are actually pretty representative of what other high density area lands go for. Long-term talk has been to turn this area into a “Metrotown” type area. This has been in discussion for at least the last 15 years. At 34mil for that much land and the potential high density of some serious towers… not bad at all. Of course, there’s still risk that the market falls or the density is not pushed forward due to NIMBYism. Much higher risk that a market fall/property value collapse happens making these prices look foolish than the city not going forward with the densification.
Anybody know how these sales were financed?
A ‘Tale of Two Cities’… (It was the best of times. It was the….)
[CBC] – 71 tenants on Downtown Eastside facing eviction
“Dozens of low-income tenants in two hotels in Vancouver’s Downtown Eastside are facing an uncertain future, as their new homes might soon be sold out from under them, CBC News has learned.”
http://tinyurl.com/3ggtjzq
What’s Bono doing on the Downtown Eastside?
usually single family close to condo projects are worth less money – far less.
I’d be willing to guess that as condo towers rise the values of the homes within a four block radius plummets.
Is this guy mad that home owners extracted so much money from developers??
Part of the problem, as you may have seen on other blogs, is that the cabal of developers that work with the City are upset at outside “speculators” driving up the cost of business for them. They are trying to exercise oligpolistic pricing (read collusion) on homeowners there to make re-development more profitable. These outsiders are ruining their business plans. Someone should really do some investigative journalism on their asses.
This might be a good project to watch to see if it ends up stalling due to a falling market (assuming that it might take a couple years to complete.) If one accepts that the market may be turning, there are projects in planning or under development starting now which will go bankrupt.
From the city’s standpoint, you just hope the building is finished. If the units have to be sold at deep discount it’s not the city’s problem. If the project stalls when it’s just a muddy hole in the ground or a steel skeleton, that’s the city’s problem.
Good for these homeowners though. Take the money and run.
I just watched the CBC video clip which explains the heart of the concern. Toderian, and local residents, are afraid land costs will prevent development and we will have a bunch of derelict houses (in a prime location) owned by Chinese investors.
It is investors from Mainland China who are paying these prices, not the developers themselves. Toderian believes these investors don’t understand what they’re doing, and will scare off developers.
Basically he wants his developer buddies to get the gravy, not the outside Chinese investors who are likely going to hire Chinese subcontractors, etc and market directly to the Chinese market and freeze his buddies out. Kind of like how Concord Pacific basically went from a non-existent outfit to a huge local developers selling mainly to HK and then all Chinese customers??
Beyond Debt commented above: “I just watched the CBC video clip which explains the heart of the concern. Toderian, and local residents, are afraid land costs will prevent development and we will have a bunch of derelict houses (in a prime location)….” Jross observed: “And if [the city has] gotten their math wrong and can’t complete the project, then the city ends up with partially completed eyesore along the Cambie corridor.” Snats adds: “If one accepts that the market may be turning, there are projects in planning or under development starting now which will go bankrupt.
From the city’s standpoint, you just hope the building is finished. If the units have to be sold at deep discount it’s not the city’s problem. If the project stalls when it’s just a muddy hole in the ground or a steel skeleton, that’s the city’s problem.” And Hazu Chan suggests: “Part of the problem, as you may have seen on other blogs, is that the cabal of developers that work with the City are upset at outside “speculators” driving up the cost of business for them. They are trying to exercise oligpolistic pricing (read collusion) on homeowners there to make re-development more profitable. These outsiders are ruining their business plans. Someone should really do some investigative journalism on their asses.”
So the city is worried NOW about investors overpaying for property, developers not completing projects, and the possibility that there might be land going unused, e.g. empty houses or condos? With all due respect, might the city have worried about similar phenomena a little earlier, a little more diligently, and in many other locations? I mean, hasn’t a version of this been happening for 20 years in many neighbourhoods?
And where on earth is MSM reporting on these issues? The entire summer I saw a local realtor named Danny Deng publishing several pages’ worth of ads every week in the Real Estate Weekly touting these Cambie properties for sale. What’s going on in this city that its elected leaders and its residents seem to be the last to be informed or to act on some of what’s happening? What kind of catastrophe will it take for all this to change?
The only way the City will change the way it does business is if there is a complete collapse of the housing market. This has happened previously in Vancouver’s history – in the 1930′s many people couldn’t afford to maintain the high life they had created for themselves by gorging on debt in the 1920′s. They walked away from their homes because they couldn’t afford to pay the property taxes.
In the past you could see how the economic times were reflected in the different housing styles around the City [Unfortunately now the character of most neighbourhoods is being obliterated because of development mania throughout the City.] But the same pattern is repeating itself. In the 1920′s, people built large houses with high ceilings and many rooms that ultimately became very expensive to maintain. From the 1930′s on, houses became much smaller and much more utilitarian. This trend continued through the 1940′s. In the 1950′s and 1960′s, houses were slightly larger and built to suit average families. The houses along Cambie and in the area surrounding Oakridge were built during this time frame. The houses of this era were probably the best built houses in the City – constructed primarily of old growth fir and oak, as well as other natural materials.
I think the City’s planning activities over the past 10 years, in handing established neighbourhoods over to developers, have been incredibly short-sighted and destructive. They’ve pushed a lot of the small businesses out, the families out and the long time residents out. And none of this is “green” or “affordable”, despite the rhetoric.
As a long time resident I feel an incredible sadness when I see what all this development is doing to the environment of this once beautiful and truly green City. It’s as if the geniuses at City Hall don’t realize that once you take away the forest, you just have the rain.
Michael Geller provides some perspective. See his blog (don’t have link right now)
here you go, jesse
http://gellersworldtravel.blogspot.com/2011/10/cambie-street-corridor-and-community.html