Category Archives: 12. Effects of Development

Overdevelopment? Misallocation of resources? Positive effects?
The consequences of the boom on the urban/suburban landscape and our society.

“Nothing Wrong Here!”

Maple ridge, lougheed highway and 223rd aldus huxtable
Maple Ridge: Lougheed Highway and 223rd [image and post title care of Aldus Huxtable]

Trump on Vancouver – “Your people, they go to New York, they go all over the world, and they speak so highly.”

“I love Vancouver. I have had so much experience with Vancouver and with people who live here. You don’t even realize how important it is in terms of a destination and also your people they go to New York, they go all over the world and they speak so highly.”
Donald Trump, as quoted in ‘Trumps announce exclusive tower deal in Vancouver’, CBC.ca, 19 Jun 2013 [hat-tip jesse/YVR]

Did he try to say that people in New York speak highly of Vancouver, but just couldn’t?
– vreaa

“My best guess: this property is now an ‘investment hold’ and will be built ‘when prices recover’. Good luck on that!”

“The dominos start to fall: SFR Project on indefinite hold in Van West!
This is a property I have been watching for some time: 4988 Chancellor Boulevard in University, Vancouver West. A 7,700 square foot lot with an old house in an exclusive area of mostly older homes, with a few new builds. Sold under MLS V951758 in June 2012 for about $2,600,000 listing was at $2,688,000; by June 2012, properties in Van West were already coming under some price pressure. After it was sold, a sign appeared on the site, advertising a new 4,500 square foot modern architectural home to be ‘built in 2013′ with completion by 2014, priced at $5,188,000 under V989612 still active, but listing now says ‘completion in 18-24 months’. However, after about 6 weeks the sign disappeared and from June 2012 through last week the house was vacant and there were no signs of construction. Then last week April 10, several large U-Haul trucks arrived and a pickup toting a boat. Now, there is furniture in the house, a new ‘beware of dog’ sign on the front and from the shoes outside the front door, it appears it has been rented to a family plates on vehicles are BC. Normally, a family doesn’t move lock, stock and barrel into a house on a month-to-month tenancy, so I’m guessing they have a longer lease, but I cannot find a rental listing. The developer of the new house, Natural Balance Premium Home Builders, does not list this house on its website and the purported architect, Frits de Vries’, website does not mention this project.
My best guess: this property is now an ‘investment hold’ and will be built ‘when the prices recover.’Good luck on that!”

RFM at VCI, April 15th, 2013 at 7:37am

‘Vancouver City Hall: Housing Report Card 2012′; Plus Revised Version

The following ‘Vancouver City Hall: Housing Report Card 2012′ appears at VanCityBuzz 8 April 2013.
The cheekily truthpacked revised version below that is from a source that is as yet unknown to us (but was passed on via e-mail by ‘B’, 9 Apr 2013).

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Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]

Poster ‘DNAspark99′, [on the forum bcsportsbikes, 22 Mar 2013 and onwards; hat-tip RE Lurker] has posted images of a ‘building’ that is under construction, with this commentary: “So, my landlord has taken it upon himself to build a ‘toolshed’. For a roto-tiller. At least, that’s the entirety of what he told us – there are, however, some inherent communication issues. (He’s Korean, and not yet well versed in English (though certainly much better than my Korean)). There’s one door so far, and a lawnmower will not even fit through it. (I don’t think he knows that yet though)
So, this is the ‘project’ thus far. For one, the ground it’s being built is mushy moist marshland – your feet sink with every step. Which is always ideal for a good foundation – or complete lack thereof.
It may not be immediately obvious, but I don’t think this man has a background in construction.
It appears he owns a hammer and saw, perhaps a measuring tape, perhaps not. Certainly nothing like a square, straightedge, or level.
I guestimate that he has seen no more than 3 episodes of various home improvement shows, and maybe at best he’s driven by a construction site atleast once in his life. After all, “How hard could it be?”

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And now, in time-lapse video:

More:

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A second time-lapse video [posted 2 Apr 2013], worth the watch for casual efficiency, for the horse, for the stuff falling off the roof, and for the paint-job:

Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”

James writes [via e-mail to VREAA, 12 and 14 Mar 2013]:
“A couple of properties that I’ve been watching in my neighborhood with interest...

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Unit #1 2482 W 8th Ave; 1132sqft; Ask $699K
Granted this is a garden suite (but a nice one at that), I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen since I’ve lived here (5 years) priced below the 700K mark in Kits. MLS blurb states: “NO HST & PRICED $146K BELOW ASSESSED VALUE!”

History:
Nov 2012 list price: $810K
Dec – price reduced: $799K
Today’s price: $699K -> -14% in 4 months! ouch!”

“Two other units in the same heritage-tear-down-and-subdivide Kits special..

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Unit #2 2488 W 8th Ave; 1331 sqft; Ask $899K
This one is great because it’s a 2 bedroom and yet priced at a full $200K above the one above…but still “PRICED $106K BELOW ASSESSED VALUE & NO HST!”

Previous list price: $950K -> I wasn’t able to find a date on this…
Current list: $899K
Price Reduction: -5.4% in 4 months. Though I bet any money that the $950K price was an interim price drop given the obvious desperation on the other units.”

“Third still listed on one site but not Realtor.ca which means that some poor sucker paid too much money or they are in the process of relisting it:

kits row houses
Unit #3 2486 W 8th Ave; 1197sqft; Ask $950K
3 bedrooms but $250K more than the “garden suite”. “PRICED $79K BELOW ASSESSED VALUE & NO HST!”

La piece de resistance as they say.
Previous list price November: $1,050,000 (!)
Dec price reduction: $998,000
End of Feb price reduction: $950K
-9.5% haircut on a property that the city has deemed to be worth $1,030,000.
If it did sell, I would bet money it was NOT at $950K and therefore was probably -10% below assessed value at the time of sale. I’m sure all the other people on that street that are trying to sell , and there are a number of them, are not thrilled with this…”

“So, total $110K + $100K + $50K = $260K of assumed profit vaporized in 4 MONTHS.
Further, I managed to stumble across cached web pages with original purchase price of the property that was sold in May 2008 and subsequently torn down and replaced with the 3 “heritage style” Kits units above.
The original house looks like it was sold back in 2008 for $1.388M. Here it was then:

2486 w 8th 1.388M 2008

“I’m certainly not well versed in what it would cost to tear down to the foundations and then some, rebuild, subdivide and then flip a ~4K sq ft home like this, but an educated guess would be somewhere around ~$2-2.3M total for the 3 units once it’s all said and done including costs to sell each unit.
For the original list prices that WOULD have worked out to ~$500K profit. I didn’t consider cost of carrying the original mortgage since I’m not sure how these things work for developers, but 5 years of interest would be significant on a $1M+ mortgage.
Current list prices that profit drops to ~$200K.
And that’s with an assumed 1 out of 3 units sold and the nicest unit at that. No wonder they are getting desperate.”

Thanks to James for the above info and thoughts.
Anybody else got ideas on the math on a development such as this? -vreaa

“Interprovincial migration is not saying good things about BC’s economy.”

extraprovincial flow

- the above table via e-mail from ‘JJ’, 27 Mar 2013. Thank you, JJ.
JJ adds: “Did you need another reason to be bearish on Vancouver real estate? I’m guessing not but here you go anyway. Interprovincial migration is not saying good things about BC’s economy – looks like net international immigration ticked up slightly in 2012 (+1000 or so vs. 2011) but this was more than offset by departures to other provinces.
Q4 was worse than the year as a whole and suggested an annualized rate of negative ~13,500 or something along those lines.”

These figures reflect (1) paucity of good employment opportunities and (2) high cost of living (especially, of housing). Ask any migrant.
– vreaa

“Rogers Communications is expanding into RE; aiming to relaunch website; providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.”

“Rogers Communications is expanding into the real estate business.
The mobile and cable giant has applied to become a licensed real estate brokerage right across Canada and is aiming to relaunch its five-year-old website Zoocasa.com in May as a unique, one-stop-shopping site for homebuyers.
It’s aimed at going far beyond U.S.-based property listing services such as Zillow and Trulia which have revolutionized house hunting south of the border by providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.
… The rebuilt Zoocasa site will have “the most complete list of property information that can be provided to consumers, including neighbourhood and related information,” said real estate maverick Lawrence Dale who quietly folded his Realtysellers private sales online listings site a few months ago and started working with Rogers as Group Head, Real Estate Business.”

– from ‘Rogers to step into the real estate business’, thestar.com, 25 Mar 2013

We welcome any moves that result in availability of data regarding for-sale properties.
A Zillow-like system in Canada would represent a great improvement.
– vreaa

For A City To Have That Kind Of Vacancy, It’s Like Cancer – “Downtown, the vacant unit rate is so high that it’s as though there were 35 towers at 20 storeys apiece – all empty.”

bc-empty-condos-0320
UBC planner Andrew Yan’s research raises questions about whether the city is turning into a high-end resort or a haven for offshore investment. [image from Globe and Mail]

“Nearly a quarter of condos in Vancouver are empty or occupied by non-residents in some dense areas of downtown, a signal that investors play a significant role in the city’s housing market.
And the city overall has a much higher rate of empty apartments and houses than other Canadian cities, with a rate closer to places like New York and San Francisco at the height of their mortgage crisis in 2010.

Downtown, the rate is so high that it’s as though there were 35 towers at 20 storeys apiece – empty.

That’s the latest discovery that adjunct UBC planning professor Andrew Yan made when he analyzed 2011 census numbers to try to add more information to the contentious debate over whether Vancouver is turning into a high-end resort or offshore investors’ holding tank.

He revealed those numbers Wednesday night, as a capacity crowd turned out to listen to speakers on a panel at SFU Woodward’s talk about “foreign investment in Vancouver real estate.”

In all, the city of Vancouver appears to have about 7,500 more vacant housing units than what would be expected in most other Canadian cities. For Metro Vancouver, there are around 15,000 to 20,000 more.

That sign of high vacancies and non-resident-owned units, which contradict some other studies and assurances that Vancouver is not being flooded with investors, should give the city pause, analysts say.

“What kind of community are you living in if there are that many empty? For a city to have that kind of vacancy, it’s like cancer,” said Richard Wozny, a real estate consultant, during an interview Wednesday. “It distorts density and it’s delaying the impact. It raises the question ‘Are we over-building?’”

Mr. Yan, who specified that it’s not possible to know exactly why so many apartments were empty, said data indicate Vancouver is creating neighbourhoods that appear to be very dense, but actually don’t have an active full-time population.

That gives a skewed picture of, for example, the amount of commercial activity they can support.

In Coal Harbour, where up to one in four condos is empty in the tower-dominated waterfront neighbourhood between Stanley Park and the downtown convention centre, the scattered shops in the area often struggle to stay in business. By contrast, the West End, which has a low rate of empty residential units, is bounded by three streets – Davie, Denman, and Robson – that are packed with busy small shops and restaurants.

Mr. Yan said that the high numbers of empty apartments don’t prove there’s a problem with foreign investors, but they do indicate that Vancouver has a large proportion of general investor buyers, be they offshore or Canadian.

Housing analyst Tsur Somerville, director of UBC’s Centre for Urban Economics and Real Estate, said the data he has seen also indicate that Vancouver built more housing in the 2006-2011 period than the number of new households that were added to the city’s ranks.

That means investors. There’s nothing wrong with that, as long as those units are occupied, said Mr. Somerville, also on the panel.

“The problem is vacant units since that’s demand for real estate without housing people.”

Mr. Yan’s analysis entailed isolating the census data on dwellings that showed up as either “unoccupied” or occupied “by a foreign resident and/or by temporarily present persons” on Census Day 2011, which was May 10.

“These units could be non-resident occupied because their occupants were just away for the Census Day, between rental tenants, or moving in a just-opened building, but there is also a chance that they are someone’s pied-à-terre, vacation home or empty investment holding,” observed Mr. Yan.

In the city of Vancouver, the rate of those kinds of dwellings stood at 7.7 per cent overall, with some parts of the downtown as high as 23 per cent. In the city of Toronto, the rate was 5.4 per cent; in Calgary, 5 per cent.

If Vancouver’s “non-resident” category had the same rate as Calgary’s, it would have had only about 16,500 empty units on Census Day – the level to be expected in a regular city, where some part of the housing stock is always going to be empty for one reason or another. Instead, more than 22,000 units showed up in that category. An analysis for the whole Lower Mainland shows that it has between 15,000 and 20,000 more empty units, proportionally, than the Calgary or Toronto metropolitan regions.”

- from ‘Vancouver’s vacancies point to investors, not residents’, Frances Bula, Globe and Mail, 20 Mar 2013 [hat-tip Nemesis]

Thanks to Andrew Yan for the research and to Frances Bula for the article. Usually we quote brief snippets from articles, here it is all succinct and interesting enough that we’ve quoted it in its entirety.
The phenomenon described represents an important sub-type of RE speculation in Vancouver.
The most crucial form of speculation driving our spec mania has been regular folks over-stretching to buy their primary residences. That represented the vast majority of transactions in the RE markets, and served as the most important engine to drive prices skywards.
A more obvious sub-group is the flipper, who buys to resell within a year or two, with or without renos.
This article deals with yet another sub-group, the speculators who buy and hold properties (in this case condos but also applies to SFHs) as, essentially, gambling chips. They are betting they can sell at almost any time later, and win. Up until recently, preternatural price gains have made this a profitable method. Not so anymore. We believe that a weak market and falling prices will cause much of this ‘shadow inventory’ to come to market in coming years, with dire implications for prices. This is part of the reason that price drops will beget price drops.
By the way, note how Yan says that he can’t be sure who is holding these units. My own bet is that far and away the biggest holders will prove to be local gamblers. That distinction is not, however, of any particular importance when it comes to predicting outcome. All of this is more evidence of the Vancouver RE market representing a speculative mania, and the outcome is inevitably going to be a collapse in prices.. that’s how manias everywhere always end.
This work is also pertinent to discussions regarding population growth and densification: “Vancouver built more housing in the 2006-2011 period than new households.” Perhaps Vancouver is significantly less constrained than many fear.
– vreaa

Attaining Escape Velocity For The Constructive Evolution Of Imbalances In Order To Leverage The Opportunity And Break Through In Thought Leadership ["You know what I'm saying?"]

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“..and that’s one of the things that I enjoy most, ah, about this convention… It’s not so much, as so little, as to do with what everything is… but it is within our self interest to understand the topography of our lives unto ourselves. The future states that there is no time other than the collapsation of that sensation of the mirror of the memories in which we are living. Common knowledge, but important nonetheless. As we face fear in these times, and fear is all around us, we also have anti-fear… it’s hard to imagine or measure… the background radiation is simply too static to be able to be seen under the normal spectral analysis. [Accent alters from British to that of deep-voiced American soul singer] But we fuse though there are times when.. a lot of us.. you know what I’m saying? cos, like, as a hip-hop thing, you know what I’m saying, like TED be rocking, like, you know what I’m saying?.. so I wrote a song, and I hope that you guys dig it… it’s a song about people, and sasquatches, and other French science stuff… Okay, here we go.”
Reggie Watts, TED, March 2012, Long Beach, California. This piece was preceded by a passage in Spanish and then one in French.
—-

“Escape Velocity” – measure of the amount of newly concocted liquidity required to allow Canadian RE to cast off the bounds of gravity and remain afloat; coined by BOC Gov. Mark Carney

“Constructive Evolution Of Imbalances” – [household debt increasing at a slower rate; the tap on the brakes that presages a housing price crash]
“With a more constructive evolution of imbalances in the household sector, residential investment is expected to decline further from historically high levels.” – Bank of Canada statement, March 2013

“Breaking Through In Thought Leadership” – [over-reaching optimism, with a twist of Orwell]
“This is a game-changer for Vancouver. We’re known as a world-class tourism destination but this shows we’re breaking through in thought leadership. I’d like to explore how we can best leverage the opportunity to vault Vancouver into the spotlight and endear us to the leading thinkers who come here.” – Mayor Gregor Robertson, commenting on Vancouver buying the TED conference, March 2013

Who writes this stuff?
The above three samples added to our growing
bubblexicon.
PS: We Love the subversive Reggie Watts. He was in Vancouver recently.
– vreaa

Realtor On Marketing Deceit – “They could have just found a waitress or whatever, somebody who didn’t obviously work for them.”

“Amazing quote here [in this article in 'The Vancouver Observer'], regarding the MAC Marketing scandal, from a Vancouver realtor:
“It’s not just what they did, but that they did it so badly. They could have just found a waitress or whatever, somebody who didn’t obviously work for them.”

Nick at VREAA 5 March 2013 at 10:00 am [Thanks Nick. -ed.]

[For those readers unfamiliar with the "Mac Marketing scandal", see VREAA 13 Feb 2013.]

Interesting that a realtor would make this kind of comment after such a scandal.
It strongly suggests that he sees deceit in marketing as simply being part of the game.
– vreaa

“There are up to 40,000 illegal suites in the city of Surrey — nearly double the 20,000 previously reported.”

“The appraiser stands at the foot of the empty lot, asked to assess its value — as if the home to be is already built.
He comes armed with floor plans sent to the city for approval.
In his eight years on the job in Surrey, he’s now seen thousands just like this.
The plans show an outlying deck and a basement with rec rooms, kids rooms, sewing rooms — “all these rooms that make no sense,” he tells The Province.
He is then handed another set of floor plans, either by the builder or homeowner.
“The revised floor plan? They show secondary suites going in,” says the appraiser, who estimates there are up to 40,000 illegal suites in the city — nearly double the 20,000 previously reported.
“The day (homeowners) get their final occupancy, the day it’s done — they enclose the rear patio and now you’ve just added another 1,000 square metres to your house.”
Not only are thousands of Surrey’s homeowners collecting undeclared income, he says, they are also saving on taxes when the suites are popped into place after city approval.
The owner of an in-demand design firm in Surrey says he’s aware of the illegal suite issue, but insists his company creates plans in accordance with zoning requirements.
“We discuss with the homeowners/ home builders as to their requirements and then prepare house plans,” he said.
“Our design company plays no role during or in the construction of the homes.”

“Of the nearly 4,000 residences developed in Surrey in 2012, 1,500 were single family units, namely in Newton and South Surrey.
The city issued permits for 427 secondary suites at 67 coach houses in 2012.
Surrey’s manager of bylaw enforcement, Jas Rehal, says his staff and the city’s building department communicate their bylaws and policies to developers.
“Generally, they’re abiding,” he said.
“These suites in Surrey, they’re all over the city,’ said Rehal. “When brought to our attention, we go out there, state the fee … once a suite is identified, we start billing.”
Annual fees for a secondary suite range between $500 and $1,300, which includes infrastructure costs such as garbage pickup and water use.
It can cost a homeowner up to $10,000 to properly outfit a home with separate piping, wiring and a firewall to make a suite legal.”

- from ‘Surrey’s illegal suites look like an epidemic to some’, Mike raptis, The Province, 4 Mar 2013

Jesse (YVRHousing) calls these suites ‘townhouses rotated 90 degrees’, and we think that’s spot on.
They are products of high prices: owners build and manage them to allow themselves to over-reach on price in the hope of further price increases.
This is an inefficient, clumsy and ugly way for a city to increase density.
– vreaa

High Paid Vancouver Workers Choosing To Live In The U.S. – “The cost of housing is four to five times what they are accustomed to; He did not want to move because he can have his $400,000 mansion in the U.S., versus getting a little home for $1-million in Vancouver; There are other really pretty places out there.”

Eric Murray is chief executive officer of growing clean-tech company Tantalus Systems, based in Burnaby, B.C. Mr. Murray, however, lives in Raleigh, N.C., where he owns a 3,500-square-foot house and puts his three kids through private school.

He is a Canadian, with several family members in Vancouver. But when his career trajectory sent him to Raleigh, he decided to stay put. Mr. Murray is one of a growing number of workers in the Lower Mainland who live in the U.S. You could call them cross-border jobbers.

“My father’s entire family is in Vancouver, so for our relationship, it would be great if I lived there,” he says in a phone interview. “But for me to pick up and move from Raleigh, where I have a fully wooded lot, and a very nice home, and I can send my kids to private school, this sort of stuff – to do that in Vancouver, I just can’t swing it economically. When we looked at this whole thing, we knew we would have to compromise on housing.

“Absolutely, I would live in Vancouver if I could afford it.”

Technology is the third-largest contributor to B.C.’s gross domestic product, says Bill Tam, president of the B.C. Technology Industry Association. He says there is demand for about 4,000 more employees in the industry, and the majority of qualified people come from the U.S.

“Especially in the Vancouver area, technology has been one of the faster growing industries,” he says. “So when companies have had to expand and recruit managers to come here from the U.S., some have relocated to places like Blaine, Wash., close enough to commute on a daily basis. That’s the level of creativity they’ve had to resort to.”

Others, he says, fly in from more distant U.S. locations, like Mr. Murray. Mr. Murray used to fly into Vancouver every other week. These days, he’s flying in every third week.

“When they come across and recognize the cost of housing is four to five times what they are accustomed to, they end up being commuters,” says Mr. Tam.

Sierra Wireless CEO Jason Cohenour, who was travelling and couldn’t be reached for comment, works in Burnaby and lives in the U.S. Tom Ligocki, CEO of Richmond-based Clevest, says he has several employees who live in a golf course community at Semiahmoo Resort, near Blaine. One of his engineers, Jeremy Westbrook, commutes from his home near Blaine to work in Richmond. It takes them about 30 to 40 minutes to make the drive.

“None of the folks in the U.S. want to move to Vancouver,” he says. “The simple example that I heard from one gentleman is that he did not want to move because he can have his $400,000 mansion in the U.S., versus getting a little home for $1-million in Vancouver.” …

“There’s no point in even talking about the Vancouver market. We are just talking to them about directly moving to the Semiahmoo resort,” he says, on the phone from a conference in New Orleans. “If you can’t bring them to Vancouver, that’s the only option we have.

“And they do certainly make very good wages,” he adds. “These are high-end experts that we are hiring.

“But all these folks are used to living in a house. They are used to American comforts, and they are well paid, and they can afford to have a nice luxury home wherever in the U.S.”

“I get into this discussion all the time with guys. Vancouver is great. The mountains and ocean are super. I get that. I would love to live there. I have a lot of family there. But I don’t see how the economics would work for a young person trying to do both of those things, unless they had a similar opportunity in another really pretty place.

“And I have been in a bunch of different countries and there are other really pretty places out there.”

- from ‘Some Vancouver workers have been priced right out of the country’, Kerry Gold, Globe and Mail, 22 Feb 2013 [hat-tip Aldus Huxtable]

Smart business people know: Vancouver RE is woefully overpriced.
– vreaa

‘Vancouver Is Awesome’ “Community-Based Social-Venture” Blog Actually A Stealth Paid Promoter Of Olympic Village

vancouver2010olympics
Above from a 12 Feb 2013 post on the ‘Vancouver Is Awesome’ site

“Marketers of the in-receivership Olympic Village are paying the editor of well-known local culture webzine VancouverIsAwesome.com to blog about the joys of life in the village – but it does not say on the website that he is being paid to do so.
Rennie Marketing Systems awarded the deal after receiving a single pitch from VancouverIsAwesome.com editor Bob Kronbauer, who says feels like he won a contest to be paid to flog the Village in False Creek – much like the public contests held by Vancouver International Airport and Tourism Richmond to find paid bloggers to promote them.
“I was visiting the Village a lot as a resident of Mount Pleasant before we moved in and fell in love with it and wanted to share the stories of all the positive things that make it great,” Kronbauer said.
“Beyond the budget and all this stuff I really have no idea about as an average citizen, (I wanted) to sort of expose stories about what it’s like to actually live there.”
Kronbauer lives in a market rental unit at the $1.1 billion complex, marketed by Rennie Marketing Systems, but declined to disclose his rental rate. He began a $2,475 per-month, six-month contract in May 2012 that was renewed in November. The year-long gig is worth a total $29,700.
“Beyond this, beyond my contract to promote the Village, we’ll be staying there in our suite because we love it so much, that was the intention to move there,” Kronbauer said.”

– from ‘Life in the Village pays off for local webzine editor’, Bob Mackin, Business in Vancouver, 14 Feb 2013

Elsewhere in the same BIV edition, Glen Korstrom suggests this is part of a broader trend of media manipulation by the real estate industry:
“Such tactics seem to be part of a trend of real-estate marketers manipulating media perception to sell condos.
Business in Vancouver has learned that VancouverIsAwesome.com editor Bob Kronbauer is being paid by the in-receivership Village on False Creek, formerly the Olympic Village, to promote life in the village – even though nowhere on his website does it make it clear that he is being paid to do so.”

“Vancouver Is Awesome, and we are dedicated to everything that makes it that way.
A community-based social venture sharing positive stories of arts, culture, lifestyle, and everything awesome about Vancouver. No bad news.
If you want to read ugly, bad news about this beautiful city of ours, you’re going to have to look to traditional media and other blogs; V.I.A. promotes everything that makes our city awesome, from old to new and everything inbetween. We’re like the human interest piece on the news… only different.”

vancouverisawesome.com

We’ve previously tried reading the V.I.A. blog, but each time we break out in a terrible rash and can’t continue.
Advertising is irritating enough when it’s clearly advertising; when it’s in a stealth ‘product-placement’ form, far more so. And the ‘trend’ of media manipulation by the Vancouver RE industry is something that has been going on for years, it’s only coming to light now because the current state of the market makes people ‘ripe’ for the realization.
For the record, we ourselves aren’t paid anything, by anybody, for anything we archive, post, or say on this blog; it’s a labour of love and morbid fascination. We actually pay a small fee to wordpress each year to keep ads off the blog.
When news is “bad”, we call it “bad”; when something is “ugly”, we call it “ugly”; and that’s precisely how the RE market here looks to us right now – ugly.
A grand spectacle is playing out in our town, and we’re keeping notes.
– vreaa

If you are interested in developing your own ideas about the truth of the Vancouver RE market, and whether it is ugly or otherwise, read as broadly as you can about the market. If you don’t already do so, make sure you also consider the opinions expressed in posts and discussion on the following sites:
Vancouver Condo Info
Whispers From The Village On The Edge Of The Rain Forest
Vancouver Price Drop
Vancouver RE And Then Some
Housing Analysis
The Economic Analyst
and, of course,
Vancouver Real Estate Anecdote Archive

Update – Westside Old Favourite Sells For Same Price As In Feb 2011

Here’s an update on a Westside SFH we’ve featured here before:

4411 W 11th; 4,696 sqft SFH; 63×121 lot (7,623 sqft; 0.175 acres)
(Old Timer; Backs onto alleyway behind 10th Avenue stores.)
Listed 9 Oct 2010 $2,980,000
Price change 6 Dec 2010 $2,890,000
Sold 15 Feb 2011 $2,830,000

Listed August 2012 with $3,180,000 ask price
Remained on market for rest of 2012, unsold

Relisted 24 Jan 2013 with $2,998,00 ask price
Sold 24 Jan 2013 $2,850,000

Anybody care to calculate carrying and transaction costs over the last 2 years?
We can’t verify this, but we are told that nobody has lived there over this period.
Will this property now be utilized as a residence, knocked down for a new build, or is it being purchased to sell again later at a hoped-for higher price?
– vreaa


This house was first featured at VREAA 6 Dec 2010 when we noted that, at an “Ask Price of $2,890,000″, “10% downpayment ($289K); 4% rate; 25yr amortization” would result in “Monthly mortgage payments: $13,681.79″
In a later post, 5 Jan 2010, we cited it as the kind of house that would sell for less than $1M in the coming trough.
This house was also featured representing our fair city in ‘Unashamed House Porn: Seattle Vs Vancouver’, VREAA, 11 Aug 2011.

“J.J. Miller and his brother William made their fortunes in real estate, and built giant houses in East Vancouver in 1908. They then lost everything in the crash of 1913.”

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“It’s a natural that the conversion of big old mansions into multiple-unit housing can boost density and protect our heritage in the process.
As one of Vancouver’s developers found out the hard way, one of the biggest sticking points is if the neighbourhood will allow it.
Developer James Evans and architect Timothy Ankenman, who are old friends, are also responsible for two recent conversions: one in the hotbed of community activism, Commercial Drive, and the other in the polar opposite prestigious hood that is Kerrisdale.
Anybody who’s lived around Commercial knows the Jeffs Residence at 1240 Salsbury Dr. It’s a hulking three-and-a-half-storey, 1907 house that’s provided rental housing to the area since the 1920s. It was built as both residence and doctor’s office for Dr. Thomas Jeffs and his wife Minnie and their kids. The popular doctor, also a city council alderman and police commissioner, moved out of the house shortly before he died in 1923. It may be considered an old working-class neighbourhood now, but in the early part of the 20th century the Commercial Drive area was a rich person’s enclave, and the Jeffs Residence was surrounded by many other Queen Anne Revival grand houses with turrets, pitched pyramid roofs and hipped dormers.
Mr. Evans lives about a block away, so he’d walk by the house all the time and think about restoring it. One day, he contacted the owner.
“We put together a deal and went through a rather painful approvals process, ended up buying the site, and here we are today,” says Mr. Evans, standing on the job site.
The painful process he is referring to is community reaction against the loss of rental stock.
“It’s a pretty reactionary neighbourhood with anything that smells like development, so here I am, getting launched in the middle of the thing,” he says, sounding dismayed at the memory. “A lot of people in the neighbourhood know who I am, and so I was walking around the neighbourhood with a bull’s-eye on my back over the course of the year I went through it.
“Loss of rental continues to be a sensitive issue,” he adds. “And I looked into trying to use this as rental and I figured the only way I could do it was to spend $1-million on the site, which would have bumped everybody’s rents by about 30 per cent, and that’s not affordable housing anymore.”
Instead, he and Mr. Ankenman went through the process of getting the house added to the heritage registry in exchange for density and other variances. The result is a seven-unit house comprised of mostly two-bedroom units, except for the top unit, which will be one bedroom, with an amazing view from the turret. The price starts at $400,000 for a 750-square-foot condo, and Mr. Evans says he’s already pre-sold three of the units. It’s about two months away from completion.”

I ask him if he would do the Jeffs Residence project over again, having gone through a year under the hot spotlight of contention. He pauses.
“This one is unique,” he finally says. “There’s only one of these in Vancouver. And I’ll be able to walk past this thing in 10 years and it will look great and continue to look great, and I will get some personal satisfaction out of that.
“Will I make any money out of it? I don’t know yet. Time will tell.”

– from ‘Vancouver developers of heritage properties convert homes and hearts’, Kerry Gold, Globe and Mail, 10 Feb 2013

Thanks for the link to the above article goes to regular reader and commenter Aldus Huxtable, who adds:
“I used to live right by this development and have watched it for some time.
It’s a fun story we can watch play out over the next few years.
Down the block is J. J. Miller’s Kurrajong, a heritage house [photo below].
It’s also really important to read the heritage waymarker [see below].
J.J. Miller and his brother William made their fortunes in real estate, and built this giant house on Salsbury in 1908. They then lost everything in the crash of 1913.”

800px-J.J._Miller's_Kurrajong

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Reader Opinion On Construction Trades – “It takes a 2-year trade diploma, a 1 year co-op, and a 4 year apprenticeship to become a fully licensed plumber. This skews the supply and demand curve and allows older workers to bid up their wages.”

DonDWest, a 31 year old Canadian, left this opinion post regarding construction standards as a comment at VREAA 9 Feb 2013. Headlined here as food for thought and fodder for debate:

“Shoddy and overpriced construction/engineering is a big problem in Canada, but I have a different take on what’s the cause. Not to sound like a Republican, but I believe corrupt unions have played a large part. I’ve experienced this first hand from a “young” person trying to enter the trades and then realizing the traditional route to getting in the trades is now economically infeasible at my age (31 years old).

Speaking of leaks, for example, it takes a 2-year trade diploma, a 1 year co-op, and a 4 year apprenticeship in my province just to become a fully licensed plumber. That’s the equivalent of a PhD equivalent level education in terms of time spent. No offense to the plumber, but you’re just a plumber, it shouldn’t take over 7 years to get licensed.
I don’t know about you, but starting a plumbing career at age 40, considering these are physical jobs where the retirement age is much sooner, doesn’t seem economically feasible. I laugh at people who tell guys now entering their late 20′s to early 30′s to “just get a trade” if you’re having difficulty breaking out of the low wage service sector mould.

What the unions have done is significantly convince the government to raise the barriers of entry into the trades for our young. This skews the supply and demand curve and allows older workers (who are mostly baby boomers) to bid up their wages. Ironically, this doesn’t result in better quality work, as there’s less competition coming from the young pressurizing the older workers to back up their wages. The older workers know their jobs are secure and this reflects in their work that’s poorly completed at a snail’s pace.

Oddly enough, due to the incidents of shoddy construction that result from this corruption, this is used by the unions as further leverage that the government needs to increase the levels of qualification in order to enter the trades. The unions created the problem, and their solution is to further reinforce the problem by upgrading credentials on the young, because perpetuating the problem is profitable for the unions and their workers. If the government just took a look at the average age of a construction worker and engineer today – they could easily see that the problem isn’t newbies coming on the scene messing things up.

I’ve come to the conclusion that if a young person wants to enter the trades, he is better off taking the small business route right away. He could start small by restoring old houses in rural Canada for example. I doubt it will take him 7 years just to figure it out, and he won’t be in so much debt due to education requirements, nor will he have to spend years upon years listening to condescending baby boomers that will only serve to hurt his confidence.”

Whatever measures are being taken to ensure sound construction standards in the lower mainland, they don’t appear to be working very well. Witness the tarps, even on buildings constructed after the leaky-condo scandals.
Obviously there have to be some basic standards to which the trades adhere. Over and above that, it is ironically likely that fewer restrictions to entry, and more competition (along with greater consumer expectations, and greater accountability for work quality), may well result in a better quality of construction than we are currently having to tolerate.
– vreaa

Newsflash For Residents Of Vancouver – “Gravity Exists; You Are All Mortal”

EUqjbpINzkCzFjz-556x313-noPad

Petitioned The City of Vancouver
The City of Vancouver: Stop a funeral home from moving into 450 W 2nd Ave!

Petition by
Concerned Citizen
Canada

Property owners in the neighbourhood are concerned that property values will be negatively affected and that the City of Vancouver failed to consider this before approving a change of use for the commercial property in question.

To:
The City of Vancouver, Board of Variance
Stop a funeral home from moving into 450 W 2nd Avenue!
Sincerely,
[Your name]“

- posted at change.org approximately 6 Feb 2013 [hat-tip Aldus Huxtable]

Comments below the petition thread:

“Will negatively impact my property value” – Beth McNeil

“I am a resident of the adjacent condo building and I am concerned about the changes this funeral home will bring to our neighbourhood.” – Samantha Cuncliffe

“I am concerned about the impact the funeral home will have on the neighbourhood.” – Concerned Citizen

“impact of a funeral home on the neighbourhood, sales, and also the risk of health impacts caused by the funeral home.” – Laura MacCormack

“the parking!!. we have the police station right by us already. they already took up all the parking and parking anywhere they want . also the bike line just add in few months ago. there is already no parking for the owner and the visitor and for the business… that will effect our property value. so is that mean we allow to pay less tax.??…we pay tax for our community. we want to enjoy it. the funeral is right by the main traffic road. when they have a event. i cant imagine the impact for the location. they are on the route for Sunrun. and couple of the running event. is going be a nightmare.” – janet wong

“There is no reason to put a funeral home in such a thriving neighborhood. No one benefits from this, not even the funeral home because it’s a terrible location for one…no parking, police station operations that will likely disrupt any funeral services going on, frustrated neighbors who will not support them, etc etc.” – Emily Ng

Yes, we are all mortal.
And, while we’re dismantling ridiculous fantasies..
..our real estate is in a massive speculative bubble.
– vreaa

“I live in the new Wesbrook village on UBC campus and finally stopped by the Wesbrook Welcome Center. I wonder how long they will keep up this rate of construction?”

NTRcsdX

“I live in the new Wesbrook village on UBC campus and finally stopped by the Wesbrook Welcome Center. They have a map of all current and planned development, (captured here with my) camera phone. The grey ones have been approved but haven’t been started, apparently they should all be completed in 10-15 years. That’s a rate of .67 – 1 highrises and 2 – 3 lowrises a year. Since I moved in 6 months ago none of the show rooms or open houses have closed. I wonder how long they will keep up this rate of construction?”
LazyCanadian at VCI 8 Feb 2013 12:24pm, image posted here.

“UBC has gotten totally out of control. I graduated there a couple years ago, and it was getting a little ridiculous with the amount of construction, but now it’s even worse. When I visited for the first time in 2005, it was beautiful and was one of the reasons I wanted to go there.
The whole campus is under construction now, and they’ve cut down massive parts on the endowment lands (a.k.a. woods) to build million dollar houses and condos (which is just what the generally poor students need).
Most of the open green spaces are now huge condo towers. You can barely walk across campus anymore, with all the detours. Some people recently hung up a bunch of signs. [see below]
Back in 2007 they permanently cancelled the annual big party students have on the last day of classes, because the people in their million dollar homes on campus didn’t like the students drunkenly walking through to the stadium. Apparently the realtors didn’t tell them that they lived on a campus…
Nothing against UBC, I loved the school when I went there, but now when I visit campus, I feel bad for the current students.”

Andrew at VCI 8 Feb 2013 2:38pm

Guerilla signs protesting construction on UBC campus, images from blog post ‘Anonymous snarker channels construction anger into guerilla memes’, Ubyssey Social Club, 12 Oct 2012. Archived here for the chronological record:

constructionsign2

constructionsign3

constructionsign4

Usual Suspects – “Nothing To See Here” – “When they realize they’re not going to see significant declines in pricing, they’ll get on with their lives and move on with purchasing decisions.”

“January’s numbers are not a surprise. Some buyers may be sitting on the sideline waiting for a deflationary spiral to develop. When that doesn’t develop, when they realize they’re not going to see significant declines in pricing, they’ll get on with their lives and move on with purchasing decisions.”
– Cameron Muir, chief economist for the B.C. Real Estate Association.

“January’s numbers suggest that there is a possibility the decline in sales should well flatten out.”
– Tsur Somerville, director of the centre for urban economics and real estate in the Sauder School of Business at the University of B.C.

“When a home seller isn’t receiving the kind of offers they want, there comes a point when they decide to either lower the price or remove the home from the market. Right now, it seems many home sellers are opting for the latter.”
– Eugen Klein, president of the Real Estate Board of Greater Vancouver

Above quotes from ‘Lower Mainland home sales continue downward trend’, Derrick Penner, Vancouver Sun, 5 Feb 2013

The tune doesn’t change, despite the substantial change in the backbeat.
Perhaps this is the first time that Muir has used the term ‘deflationary spiral’.
And, we’ll say it again: it’d be nice to see Sommerville at least sketch out a few alternative scenarios for the benefit of Vancouver citizens. The lack of critical analysis of this market from local academics remains one of our bubble’s most remarkable features.
– vreaa

‘The case for strata ownership of secondary suites’ – “It will reduce the number of rental apartments, but if it also reduces the number of renters by allowing some of them to buy, what’s the problem?”

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Basement space can often be converted into a suite but building-regulation issues may arise when considering strata ownership.

“North Shore realtor Dave Watt and Vancouver developer and consultant Michael Geller, are independently and in different ways starting to push for changes to happen.
Watt has written to the three North Shore councils noting that, although secondary suites are well accepted, “these are the only form housing where our governing bodies mandate that the residents must remain tenants forever.
“Why?”
Geller, an architect, planner, consultant and developer who’s attempting to get City of Vancouver approval to practice what he preaches with a small new housing project, says the problem tends to be zoning law, not strata law.
He hopes to replace an existing single-family home just off West 4th in Point Grey with a duplex-plus project. Each half of his new duplex would have a high-end, 800-square-foot secondary suite, and the property would also have a coach house — a total of five homes in all. And each would be sold as a separate strata unit.
“It’s a way to gently increase density,” he told me. “And it would work especially well in what I call transition zones, just off major arteries in the buffer areas between them and single-family residential areas.” …
I guessing the main argument against moving in this direction will be that it will reduce the number of rental apartments on the market. And it may. But if it also reduces the number of renters by allowing some of them to buy, what’s the problem?

– text and image from ‘The case for strata ownership of secondary suites’, Don Cayo, Vancouver Sun, 30 Jan 2013

See also:

Basement Suite In East Vancouver Sells For $590K
VREAA 24 Feb 2012

Basement Suite In Vancouver Ask Price $900K – “Currently the garage is being used as an office and storage and is included in the square footage.”
VREAA 11 May 2012

Bears Care, Too


“…the schadenfreuden stories on Vancouver Real Estate Anecdote Archive. Always good for a bitter laugh.”Bill Lee at francesbula.com 26 Nov 2012

“I never did give anybody hell. I just told the truth and they thought it was hell.” – Harry S. Truman

All the very best for the festive season to all readers, and wishing you all a fine, peaceful 2013.
Regular readers know that we foresee challenging times ahead for the Vancouver RE market. This opinion is not a wish, it is simply the result of an analysis of all the available evidence. And it is most definitely not to be confused with a desire for bad things to befall anyone in our community.
The speculative mania in housing (2003-2012) has been detrimental to Vancouver. It has misallocated human and financial capital, and distorted the economy of the city. It has inconvenienced many, and, unfortunately, in the end, it will have financially and psychologically hobbled a good number of citizens. This outcome is inevitable. Again, please don’t confuse this observation with a wish, it is simply part and parcel of a spec mania: a messy resolution has been ‘baked in’ since prices hit the afterburners in the mid 2000’s. When asset prices are artificially inflated by a chain of ever increasing debt-financed transactions, there will always be a large group left ‘holding the bag’ when it all runs out of oxygen.
There is, unfortunately, no other way things can resolve, and nothing that can be done to significantly ameliorate the bubble’s consequences. It is too late for that. The problem was letting it develop in the first place; and not allowing it to unwind earlier.
Anybody who is wishing for soft-landings, or hoping that some form of kindness will somehow allow for a resolution that involves no damage, needs to answer this question: Who do I expect to do the buying that will let everybody down gently? Who do I expect to step in now, borrow (or ‘donate’) large sums of money, and agree to purchase properties that are still woefully above their fundamental values? (and thus exposing themselves to very large losses ahead). Who do you suggest should be the sacrificial lambs?
Those wishing for fantasy bullish, Pollyanna-ish outcomes may be well-meaning, but they are simply ignorant of bubble market dynamics. You can’t simply call the game off and hope that everybody wins; it doesn’t work like that after years of ever-increasing over-extension.
All that said and done, we hope that readers fare as well as possible. All citizens, owners or not, will feel some of the economic effects of a RE downturn. Non-owners will suffer less direct personal impact, and there are a good number of owners who will survive the RE bear market with just a scratch or two. We are most concerned about modest net-worth households who have almost all of their savings in their homes; often with leverage. We know it is a painful fact that they can’t all get out ‘whole’, but we fear for them nonetheless. Particularly vulnerable are those close to retirement who are relying on the value of their homes for a comfortable future.
We hope that Vancouver can find a way to make the transition from overvalued market to a fairly, and sustainably, valued market with as little damage, and as peaceably, as possible. In fact, for us, the ‘peace’ bit is paramount. Economic stress puts groups at risk of highly-charged fractures, and we sincerely hope that as a large and diverse group we’ll be able to avoid scapegoating, in-fighting, and division.
So, to emphasize: Bears care, too. They may come across as grumpy and (per force) contrarian, but they care as much for family, friends, neighbours, and fellow citizens as anybody else. Sure, the occasional bearish commenter will express the opinion that they will gain pleasure from the losses of speculators, but this is far from the commonest position. The very few Vancouverites who have seen this speculative mania for what it is most commonly express genuine concerns about the potential consequences for themselves, their families, and their fellow citizens.
– vreaa

“I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.” – Benjamin Franklin

“I think you’ll need another sidebar category to capture the mounting “why do you hate families/wish misery on others?” accusations that are going to come in increasing numbers. Long time bulls – and new visitors to this site – may trot that one out more and more, accusing you and posters here of schadenfreude, hating home “owners”, etc. Even if it doesn’t happen here, mind-bending statements in this vein will increasingly pop up elsewhere and be worth collecting. May I humbly suggest a sidebar icon with a picture of Helen Lovejoy and the words “won’t someone PLEASE think of the children?!?” to link to the post you ultimately create addressing this topic?
Past even-handedness will matter little to desperate people who will misinterpret many sentiments expressed here. The archive will be useful to a subset of these people who are willing to be taught the historical mechanics driving this bubble.”

– paraphrasing of Royce McCutcheon at VREAA 17 Sep 2012 8:50am [We'll call such a sidebar 'Bears Care, Too' -ed.]

Vested Interests Meet Over Hors d’Oeuvres – “Only the best booze and culinary treats were good enough, to ensure another year of rubber stamping developments.”

“This may be a little off topic, but I found out that the Richmond Developers were wining and dining Richmond City brass last Friday.
Only the best booze and culinary treats were good enough, to ensure another year of rubber stamping developments.”

Real Estate Tsunami at VREAA 17 Dec 2012 10:36pm

Not off topic at all. A central thread to the whole speculative mania has been the confluence of the interests of all the different parties who benefited from the run up in prices.
Note that this is not to suggest any form of elaborate or sinister or illegal collaboration. It is simply to point out that many local entities together benefited from years of debt-fuelled RE spending: government and lenders; developers, realtors, owners; advertisers & media; retailers; all sorts of individuals & organizations that experienced short-term benefit from the immense amount of capital flow that resulted from buyers taking out large mortgages and spending the proceeds. It is completely natural that all of these parties would work together to perpetuate a situation from which they were all gaining short-term benefits. Humans are like that. This is why speculative manias burn so bright for a period; so many come together to fuel the flames of the same fire.
– vreaa

Avocados and Christmas Trees – Vancouver Land Use; ALR; Food

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In view of yesterday’s spirited and informative discussion (thanks, all), we have withdrawn this morning’s teed-up anecdote and invite the continuation of yesterday’s discussion here today. [Here are a few comments from yesterday's thread]:

“There seem to be some misconceptions about the size and capacity of the ALR.
“The minimum amount of agricultural land necessary for sustainable food security, with a diversified diet similar to those of North America and Western Europe (hence including meat), is 0.5 of a hectare per person. This does not allow for any land degradation such as soil erosion, and it assumes adequate water supplies. Very few populous countries have more than an average of 0.25 of a hectare. It is realistic to suppose that the absolute minimum of arable land to support one person is a mere 0.07 of a hectare–and this assumes a largely vegetarian diet, no land degradation or water shortages, virtually no post-harvest waste, and farmers who know precisely when and how to plant, fertilize, irrigate, etc. [FAO, 1993]”
Total hectares of ALR in fraser valley: 132,760 in 2009 (stats canada) (less today)
132,760/0.07 = 1.9 million people. That’s how many the ALR can support, best case scenario. That’s for people fed a subsistence, almost vegan diet, where one crop failure means famine.
Keeping current diets up: 265,500 people. (That’s 0.26 million).
Current lower mainland population: 2.6 million.
While fishing adds to the total number of people, we are nevertheless completely dependent on food imports. Any food supply chain disruption is going to cause a slight… inconvenience to the normal process of cellular respiration. Worth keeping in mind when we look at the planned growth strategy for the region – was it 4 million by 2050?”

– The Poster Formerly Known As Anonymous

“Out of anything that should be outsourced and diversified for stability shouldn’t food be? Locavore sentiments are great, but in reality, being able to transfer food from areas of plenty to areas with little is sort of a fundamental requirement for stable societies. Starving people tend to get pretty cranky.”
– UBCghettodweller

“The issue is transportation. We are wholly dependent on liquid fuels for that, and they just quadrupled in cost in a decade. It’s an awfully long way by sailboat or horsewagon from the places that have the food to those that don’t. The second issue are chemical fertilizers, which will also become scarcer, diminishing yields per acre everywhere.”
– The Poster Formerly Known As Anonymous

“The ALR is not about locavore sentiments. It’s about security. It’s well and good to diversify and outsource food production, but if one day one of the areas with plenty can’t or won’t send the food shipments for whatever reason, a shitload of people get very cranky, very quickly.”
– The Poster Formerly Known As Anonymous

“Acquaculture? More factory chicken farms? Electrified railways supplied by nuclear or hydro power? Nuclear generated hydrogen for transport? Not to be flippant or anything, but I’ve been hearing about the end of the world for over 2,000 years, and science has proven that mankind is unsustainable for 200 years. Yet our food production and productivity continues to grow, birthrate is declining in most countries, and we’ve always solved our problems before. I think it’s a bit egotistical to think that, even though everything, been (comparatively) skittles and beer for our species for 200,000 years now, it’s all going to go pear shaped before this generation passes the baton.”
– Ralph Cramdown

““Running out of land”. “Immigration”. “Mountains”. “Water”. “Hard asset”. The list goes on. What these rationales have in common, besides being fallacious, is that they’re nice ‘n easy for folks to understand, and make handy talking points for promoters. And how about this gem, heard from a senior RBC advisor, in defence of Vancouver’s current real estate prices: “Well, everyone needs a roof over their head!”
– El Ninja

“We are completely dependent on food imports.”
Then, why are we growing Christmas trees instead of wheat in the ALR?

– Cyril Tourneur

“Christmas trees? That’s part of what the Fraser Institute calls “human ingenuity and market forces.” Have you all considered that this obsession with being self-sufficient in the lower mainland is just a group version of ‘Prepper’ madness?
“Britain has not been fully self-sufficient since the eighteenth century. It imported large quantities of wheat, eggs and sugar during the Victorian era, growing an increasingly small proportion of what it ate until World War II, when millions of consumers followed the plea to “dig for victory”. This self-sufficiency trend was immediately reversed after the war ended, however.”
Even at the height of the Battle of the Atlantic, people weren’t starving in Britain. Those in the cities weren’t eating well, but they weren’t starving. And, not to put too fine a point on it, commodity and shipping prices were rather high at that point. Y’all are wanting to prepare for a worse scenario than that?”

– Ralph Cramdown

A few thoughts from a non-expert in this field:

This all looks like a problem with dietary behaviours as much as it is a problem with land use.
As an example, Vancouver Island apparently imports 90% of its food. We suspect that number could be reduced by a lot, but people choose not to produce the food and/or change their diets.

It seems people enjoy having access to the dietary variety offered by foods sourced globally. Who wants to give up avocados and bananas unless necessary? Consequently, dietary behaviour will likely be shaped by circumstance rather than choice: people will only give up certain items when they become unavailable, or prohibitively expensive. Fuel costs and other such considerations will likely apply natural pressures in this regard. People will have to adapt. If such changes happen in a precipitous fashion, that could be a problem.

As a society, should we put the effort and resources into developing an arrangement where we ensure that adequate ongoing protein and calories supplies for our entire population are available from BC & Canadian sources? We could do this, but there would be substantial expense involved. A bit like earthquake preparation, or forms of insurance. A diet from such sources would likely be far less diversified than we currently enjoy; it’d be more an emergency measure than an immediate and total replacement for current diets. Surplus during non-crisis periods (such as the present) could be exported, perhaps making the system partly self-supporting.
How close are we to having such a plan working right now?
If we had to immediately stop all food imports/exports, what would our diets look like?
Would we have enough calories/protein to sustain the Canadian population?

Even if we did set up such a plan, we’d expect people to continue to enjoy the diversified globally-sourced diet, while it was still available. Ingenuity may allow for current circumstances to continue for far longer than many anticipate.

Yesterday I expressed the opinion: “I think that the ‘scarcity’ of land (in Vancouver) is greatly over exaggerated, even within the ALR restraints. At the same time, I suspect that the ALR applies even further artificial limitations on land that is available… I suspect that there is massive amounts of land available for the accommodation of people, AND enough land to meet our agricultural needs.” Perhaps I’m wrong on the latter bit, as TPFKAA has suggested.
But what percentage of Vancouver’s food supply currently comes from the ALR?
If the ALR is only supplying us with a small fraction of our current diets, how important is it as part of any future food supply plan?
If the ALR is being used to grow Christmas trees, to support ‘hobby farms’, and to grow crops that are largely exported, why not more strongly encourage it to be used it for local food supply, or, alternatively, use it for housing?

- vreaa


Pre-emptive retort from TPFKAA:
“We need to start creating infrastructure that can tap other sources, or changing our profligacy with energy use, or both. While in principle there may be enough alternative energy to supply our needs, it takes many, many years to put the machinery in place to tap into these energies. You can’t build the port mann bridge in a day, nor can you replace the energy from oil at the pace of market forces. Market forces will lead to an abrupt cutoff, with not enough time to put that infrastructure in place. It’s hard to build and design shit when you hungry, the lights don’t work, and trucks can’t carry yo shit around. S’all I’m sayin, y’know?
The ALR is a damn important piece of land that needs not to have condos and sprawly mcmansions slapped onto it. It is a part of the solution.”

“Vancouver has a finite amount of land. The prices are only ever going to go up.” – Douglas Coupland, 2000

“Vancouver has a finite amount of land. The prices are only ever going to go up.”
– from ‘City of Glass’, [p22], Douglas Coupland, 2000
[hat-tip 'proteus']

Documenting the life of the “Vancouver is running out of land” meme.
We are particularly interested in trying to find record of its earliest mention.
Local historians, help us out. – vreaa

This question previously raised here:
‘Vancouver Housing Affordability – Century Long Crisis or Boom ‘n Bust Cycles?’
VREAA 25 Nov 2012

We Need More Evidence – “Pooling data sets from BC Hydro, the 2011 census, the Provincial Home Owner Grant and BC Assessment, along with whatever numbers the region’s real estate associations are willing to make public, would create one giant playground for local analysts.”

“When questions about foreign ownership came up at the City’s housing affordability meetings earlier this year, task force members realized the issue was large enough to warrant a separate report. A working group of business and architecture academics was assembled to learn more. Its volunteer members met several times over the course of three months to explore the issue and recently penned a five-page summary of their findings.
The result is underwhelming if you were hoping for closure on the matter, but here’s the takeaway: we still don’t know how foreign investment impacts local real estate, but we have researchers in the city who have developed methodologies to study and interpret the data needed to clarify the situation.
Their conclusion put another way: if the City really wants to understand foreign ownership, it needs to pay researchers and quit relying on the generosity of volunteers.
“At the end of the day, we still have no real idea what the impacts are and if they are good or bad and what that actually means to the city,” says Erick Villagomez, adjunct professor at UBC’s School of Architecture and Landscape Architecture and chair of the academic working group behind the report. “We need more evidence.”
The City is hesitant to pledge more money in order to clarify the issue of foreign ownership, at least until it’s sure further study would improve Vancouver’s affordable housing stock in a concrete way.” ..
“Villagomez wants researchers to crunch more numbers to strengthen understanding of the matter. He points to data available from BC Hydro, the 2011 census, the Provincial Home Owner Grant and BC Assessment. He says pooling those data sets along with whatever numbers the region’s real estate associations are willing to make public would create one giant playground for local analysts. The only trouble is finding a pot of money to buy whatever data sets aren’t free and another pot to pay researchers to analyze them.”

‘To Solve Housing Foreign Ownership Puzzle, Someone Must Pay’, Luke Brocki, The Tyee, 19 Nov 2012
[hat-tip 'poster with infinite number of handles']

Evidence is good. There is easily accessible information out there that could shed an immense amount of light on the RE market. ‘Play’ in the ‘playground’ of data could be very revealing. We’re all for that.
Foreign ownership is one thing; at least as important is utilization.
BC Hydro data likely already reveals how many units in the city are vacant or under-utilized. Interesting, eh?
Perhaps city council is hesitant to uncover information that threatens the strength of the market.
– vreaa

Three Vancouvers? – “A recent report paints a picture of a city riven with inequality and the growing geographic segmentation of its classes.”

“The 21st century is shaping up to be the century of the city. But global cities are not only becoming increasingly-important economic forces of the world economy. They are also becoming increasingly divided and segmented. …
A new report, by David Ley and Nicholas Lynch of the Cities Centre, takes a detailed look at Vancouver’s growing class divides and geographic segmentation. Vancouver is a very different city than Toronto. It is a city of tremendous natural assets and physical beauty, noted for its mild climate, perched on the Pacific coast. It is widely thought of as an affluent city, with some of the highest housing prices in North America. It has attracted a huge influx of immigrants, especially from the Pacific Rim. It is a frequent winner of “livable cities” titles, as the study notes. This city is sometimes referred to as “Dream City” or “Lotus-Land.”
But their recent report, “Divisions and Disparities in Lotus-Land: Socio-Spatial Income Polarization in Greater Vancouver, 1970-2005,” paints a Vancouver riven with inequality and the growing geographic segmentation of its classes. …
City #1 is affluent Vancouver, made up of neighborhoods where average individual incomes grew by more than 15 percent of the metro average between 1970 and 2005, comprises roughly 30 percent of the region’s census tracts and covers three distinct areas: the central core, the North Shore suburbs, and scattered areas with high-priced condos and houses close in proximity to valued amenities, such as waterfronts, views, and green spaces.
City #2 is middle class Vancouver, with income changes of plus or minus 15 percent of the metro average. It includes nearly half (47 percent) of the region’s census tracts.
And City #3 is disadvantaged Vancouver, areas where incomes fell by more than 15 percent of the metro average between 1970 and 2005. These areas account for some 22 percent of the region’s census tracts; and as the authors note, they “are relatively concentrated in the southern and eastern neighborhoods of Vancouver and extending out to the southern and eastern suburbs.”
While City #1 consists overwhelmingly of native-born Canadians and is more than three-quarters white, City #3 has an immigrant majority and is 61 percent minority. It has the highest population densities too, as well as the lowest gross incomes, and despite its lower property values, a lower share of homeowners. More of its residents are employed in working class and service occupations than in either City #1 or #2. …
The study concludes:
As a result, the dominantly middle-income City of 1971 is now divided three ways: one-third lower income, one-third higher income, and one-third middle-income. The middle-income city of the 1970s has become the polarized city of the 2000s. …
Even the city widely recognized as the world’s “most livable” cannot escape the growing class polarization of our increasingly spiky and divided world.”

– excerpts and image from ‘The Growing Urban Class Divide, Vancouver Edition’, Richard Florida, The Atlantic Cities, 14 Nov 2012 [hat-tip Aldus Huxtable]

Poster in Dunbar – “LOST… my faith in City Hall. The Mayor has handed over our communities to private developers.”

“LOST… my faith in City Hall.
The Mayor has handed over our communities to private developers.
Tell City Hall that you oppose 6+ storey high-rises on Dunbar.
3-4 storey apartments on every arterial street.”

- poster seen on Dunbar streets, Nov 2012

‘The State Of Construction In Vancouver’ – “The townhouses are for sale for $2M to 6M, they are unsold, and, it seems, already in need of repair.”

“I live on the top floor of a high rise in the South Granville area and can see the roofline of the new townhouses at 16th & Granville from my living room. Yesterday, in the teeming rain, I spotted someone tossing a white sheet of plastic over the edge of the facade in what appeared to be an attempt at blocking a leak. The townhouses are for sale from $2 to 6M, they are unsold and, it seems, already in need of repair. This is the state of construction in Vancouver.”
Observer at VREAA 1 Nov 2012 9:59am

When a market rewards workers more for quick, shoddy work than it does for genuine honest craftsmanship, building quality will obviously drop. That’s human nature.. why do it right when you can get paid the same (or even more!) for doing it poorly, and doing it quickly?
– vreaa

“How is it Seattle, just 3 hours away, can produce the people and capital to create and run such great engines of capitalism, but in Vancouver all you have are greedy rats flipping their homes and telling themselves it’s the best place on Earth?”

“I just looked at a beautiful 580 sq foot first floor studio in Seattle’s Capitol Hill, about a 10 minute walk to downtown, for $179,000 dollars.
Here in Seattle there is Boeing, Microsoft, Amazon, Costco, Jones Soda, Starbucks and a company that every real estate board in Canada would prefer that you never ever ever know exists, namely zillow.com.
All of these companies were founded in Seattle. There are dozens of others that have their US base here like Nintendo, Expedia and Holland America Line.
How is it Seattle, just 3 hours away from Vancouver, can produce the people and capital to create and run such great engines of capitalism and in Vancouver its like greedy rats flipping their homes and telling themselves its the best place on Earth?
My reading of the situation is simply that the level of cognitive dissonance and delusion is just absolutely beyond comprehension.
Please Vancouver, explain yourself. Actually, never mind: the market and its natural forces will deliver the explanation to you in a hurricane like catastrophe soon enough.”

Bob at VREAA 6 Oct 2012 at 5:59pm and 6:07pm

It is fair to compare Vancouver RE with that in Seattle, and we come up sorely overpriced.
– vreaa

Gord Goble – A Glimpse Of Our Future?

These photos from Gord Goble, following up on ‘South Surrey Building Blitzkrieg; Thoughts and Images’, March 2012. Gord writes: “I took a little time late this afternoon to grab some more pics of the crazed (and horrid) construction going on in my insane little neighbourhood (and the telling signs of a real estate bubble pop). Pretty eerie. A glimpse of the future.”
Sombre images. Many thanks, Gord.

The Mayor – “This is further evidence that Vancouver’s economic action strategy is working to create highly skilled and high-paying new jobs” [... in RE related industries.]

“While the news is full of warnings about a national housing slowdown and shaky global economic future, the Vancouver region has had a building boom almost equal to pre-recession years.” …
“Some cities are crowing about their success, as Vancouver did last week, noting that it has processed building permits worth $1.1-billion in construction value for the first six months of the year.” …
That prompted Mayor Gregor Robertson’s office to issue a statement about the encouraging numbers and the reasons.
“After keeping taxes low, and maintaining permit processing times despite higher volumes, this is further evidence that Vancouver’s economic action strategy is working to create highly skilled and high-paying new jobs,” he said.

– from ‘B.C. building boom nears pre-recession levels’, G&M, 3 Sep 2012

We’re hearing innumerable stories about existing condo stock that isn’t selling, and yet there seems to be more construction going on than ever before. It appears our city has become even more overly dependent on the RE industry in recent months; it’s almost the only game in town.
Throw gasoline on a waning fire and things look bright for a few seconds more.
– vreaa

Increased Density Features Prominently In COV Affordable Housing Contest – “It brings down the cost of housing through sub-division and shared equity.”

The City of Vancouver recognized thirteen entries from a competition launched in May.
The designs set out a variety of plans to increase density while dropping real estate prices, from building long houses in lanes to constructing bridges of housing atop existing buildings.


Christina DeMarco’s Thin Streets concept, which pitches narrowing streets and adding row units, took home an award.
“I came up with the idea by cycling to work across the city every day and I realized there was a lot of under-used road space in the city,” she said. “There’s still enough room for a sidewalk, a road, and street trees.”


“UBC student Andrew Neuman won an award for his shared equity concept, which divides properties and adds housing where residents would buy shares in co-ownership.
Neuman says it could reduce the price of a dwelling on a $1-million lot to as little as $100,000.
“So it brings down the cost of housing through sub-division and shared equity.”
Neuman said the issue of affordability in Vancouver hits close to home.
“Unless something like this sorta comes about, I will not be able to afford to live here,” he said.
“I’ve been an architect student … my wife is a teacher. We have three kids and on those salaries alone, based on … the cost of housing in the neighbourhoods that we’re currently living in, in a small basement, we won’t ever be able to afford to buy anything like that or move up in that way.”


– from ‘Vancouver eyes new affordable housing ideas’, CBC, 31 Jul 2012
[hat-tip Jeff Murdock]


Let’s not forget that we’re still near the peak of a speculative mania in housing prices, and that most current ‘increase density’ plans also have the effect of maintaining the high relative cost of housing; they amount to “pay a bit less; get a lot less” plans.
– vreaa

600,000 square feet is to be dedicated to office space packed in around Rogers Arena and BC Place – “We have our work cut out for us to fill that space.”

“The city’s planning department, concerned about the loss of key office sites on Vancouver’s small downtown peninsula to the condo boom of the 1990s and 2000s, decided several years ago that the last bit of undeveloped former industrial land that was the site of Expo 86 – Northeast False Creek – should include 1.8 million square feet of commercial space.
Of that, 600,000 is to be dedicated to office or, as the planners call it, “job space,” packed in around Rogers Arena, the home of the Vancouver Canucks hockey team, and BC Place, the government-owned stadium where the B.C. Lions play football and Whitecaps play soccer.
That 600,000 square feet is the equivalent of a whole Park Place tower in Vancouver’s business district or the new PricewaterhouseCoopers tower on York Street in Toronto.
Now, landowners in that area are trying to figure out who they’ll get as tenants.
“We have our work cut out for us to fill that space,” says David Negrin, president of Aquilini Development, one division of the Aquilini family empire that includes the Canucks, Rogers Arena and a host of other businesses and development projects. “It’s just a tough location because it’s on the edge of the [central business district].”

– from ‘Canucks owners gamble on new office district in Vancouver’, Globe and Mail, 30 Jul 2012

Dunbar House Moved To Vancouver Island – “Everyone asked if we really were knocking the old home down. We said we’d rather not, but to make money in the development world, you have to build a new home.”


CBC Announcer: “Moving is often a hassle, but moving a whole house takes some special expertise.”


Announcer: “And so the journey begins for a 97-year-old Dunbar heritage house, picked up, put on a trailer and [taken] out of town. It’s quite the sight for all the neighbors.”


Neighbourhood Lady 1: “I love these old houses. I really wish that we could keep it.”


Announcer: “However, it’s that typical Vancouver real estate story of a small house on a big lot. But, rather than the usual tear-down, this one was saved.”


Neighbourhood Gentleman: “It’s fabulous moving it..”
Neighbourhood Lady 2: “Nice to save it … Very good to save it.”


Neighbourhood Lady 3: “I wish it was in the neighborhood, I would feel less annoyed about having my power out if I’d known it was staying. It would have made a dandy lane-house.”


Announcer: “It’s too big for that, almost too big for this journey. Boulevard trees had to be cut back, Hydro had to down power lines to make way.”


Mover: “We have a lot of obstacles on the way, wires to drop and raise back up, and it is a little slower with all of the pedestrians that are here.”


George Puusepp, Former Owner: “You wouldn’t be able to afford to reproduce it that’s for sure. You can’t find the timber that they’ve got in it now.”


Ben Ford, New Owner: “We figure it’s about $140,000 for the house.”

Announcer: “That is some deal. Inside, stained-glass, old-growth fir moldings & floors. Only one room upstairs is painted. Jean Rouday’s grandfather built the house in 1915. She grew up there.”


Jean Rouday: “I painted the woodwork, so I’m the culprit… the nerve of me, right?! (laughs)”

Announcer: “The 4 km trip to the Fraser River took 5 hours. Next week it gets barged to Union Bay on Vancouver Island where, let’s face it, it will be a welcome sight.”

- from ‘Entire house moved out of Vancouver’, CBC News, 26 Jul 2012 [hat-tip to Nem]


The same story covered by the Vancouver Sun, with further perspective:

Heritage home makes incredible journey
Dunbar house transported by truck and barge to its new location on Vancouver Island

Shawn Conner, Vancouver Sun July 27, 2012

When George Puusepp heard the Dunbar house he had lived in for almost two decades was being moved, he travelled from his new home in Kamloops to witness the event.
On Thursday, Puusepp was among the onlookers who watched as the pine green heritage house, which had been freed from its foundation at 3725 West 37th Ave., was loaded onto a transport truck to make its way to the Fraser River where it would be placed on a barge.
“It’s very strange, but very gratifying,” said Puusepp, as the 1,800-square-foot home inched through the streets of Dunbar.
“I’m really glad they didn’t tear it down,” the 69-year-old retired high school teacher told The Sun.
The house, built in 1915, was the first home in the area to be built out of lumber. “The inside is all first-cut fir – wide planks, no knots,” said Puusepp, who lived in the home between 1986 and 2003. “You never see that any more.”
Dozens of neighbours came out to watch the slow journey of the sturdy structure, which has original stained-glass windows on the side and a veranda out front. Crews from BC Hydro and Telus, as well as from moving company Nickel Brothers, came out to ensure that power and phone lines did not interfere with the truck and its cargo, which measured more than 10 metres at its height.
The salvation of the house is a triumph for all involved, said Guy Taylor, of Averra Developments, which purchased the house and lot in December.
“When we said we were going to build a new house on the site, everyone asked if we were really knocking [the old one] down,” said Taylor. “We said we’d rather not, but to make money in the development world, you have to build a new home.”
Averra contacted Nickel Brothers, who agreed to take it off their hands. As luck would have it, co-owner Jeremy Nickel knew just the right buyer.
Ben and Jen Ford had hired the company to move a house before, and had helped with a few others. The Dunbar house was exactly the kind of classic home the professional renovators were looking to purchase for their family.
“This is the kind of house we’d been hoping they could find for us for years,” said Jen Ford, who had come in to watch the move from Gabriola Island, where the couple now lives with their four daughters.
The family will move into the house once it reaches the community of Union Bay on Vancouver Island.
“It’s got all the period features and the character,” said Ford. “It’s in such good shape for its age. Usually at this stage a house is pretty rundown.”
Nickel Brothers sold them the house for the cost of the move, she added, an estimated $130,000. “You couldn’t build it for that, that’s for sure.”
The move wasn’t without its snafus. Spectators and technicians waited patiently in the July heat Thursday, while crews lowered a power cable that stretched across an intersection so the house could get through.
“I’ve been doing this about 25 years,” said Rick Picard, sales manager at Nickel Brothers. “It’s one of the most complicated moves I’ve been involved with.”
BC Hydro field inspector Bob Coulter was at the site to sign off on the temporary removal of power lines by a contractor. As the house once again began its westerly progress Coulter remarked, “Sure is a beautiful home.”


So long; Adieu.

“i wish vancouver would go back to how it was when i was growing up. i’m 35. there was some freedom. now, the love is gone, rules abound. complainers run everything. we have to compete with the entire world to buy a house.”

“i wish vancouver would go back to how it was when i was growing up. i’m 35. i liked living on the westside. it’s too expensive now. kits beach used to be empty on a satuday in july. it was nice. now it’s full of douches, and the culture is more transient than anything, lots of people from australia or just arrived from out east. ick. there were lots of small stores in cute old buildings on 4th and on robson. it was nice. now it’s just the same old crap that can be found in any generic mall or cruise ship port. people were mellow, cleaned up after themselves, and would congregate on the beaches at night during the summer, and were free to have a fire and drink a beer. there was some freedom. now, the love is gone, rules abound. complainers run everything. we have to compete with the entire world to buy a house. everyone wants to come here, but what about the people who lived here before? pushed aside, a humble cuture, overrun. who cares about the money! let’s stop whoring our city out to the world. i propose limits on foreign property ownership. if your not canadian, you can’t buy land in vancouver. good ruloe i think. we wouldn’t be the first place to do it, and for the same reasons..good reasons.”
‘go love your own city’, at straight.com, ’29 Jul 2012′ [hat-tip Adam]

Entities Are Aligned In Perpetuating The Speculative Mania Regardless Of Political Stripe – “The only decisive action taken by politicians has been to add more layers of finance to the teetering system of debt and precarity. Elites in Vancouver continue to prolong the system and extract super-profits.”


‘Imagine. A financial institution that lets everybody profit. Now that’s an idea I can live with.’ – Vancity Billboard, Vancouver, July 2012

“A brief recount of recent history is necessary for understanding why and how the local government under Vision Vancouver can be expected to aim towards re-mortgaging the housing crisis, deferring the current crisis of value underlying overinflated housing assets citywide. When the market crashed in 2008, many saw an opportunity for the city to meet its promised housing goals, including its promise to take actual concrete measures to end homelessness. After years of land speculation and high prices created by unprecedented consumer debt, properties finally started showing signs of affordability, with housing activists calling on the municipal government to buy newly-priced lots throughout the city.
In effect the opposite occurred, with sections of the property elite buying up land from the province in private deals, like at Little Mountain in 2009, or selling land back to the government at inflated pre-crash levels, like the land trading of Robert Wilson, who bought dozens of buildings and sold them back to the public. Fundamentally, Wilson and Holborn’s extraction of public funds and assets represents the spirit of the broader post-2008 period.”


“Looking back on the past half-decade, what stands out is that since the onset of the financial crisis of 2008, no effort has been made in policy and elite circles to re-evaluate the fundamental contradictions of state-backed housing privatization, despite the rampant inequalities produced by Vancouver’s real-estate market, and despite the volatility of that system. The market, towering over an exploitative rent-extraction economy, has only been the recipient of ever-new supports from the neoliberal state. The only decisive action taken by politicians has been made to add more layers of finance to the teetering system of debt and precarity. The recent experience in Vancouver has shown that while elites continue to prolong the system and extract super-profits, radical change can only come from below. Only a movement led by renters will be capable of taking action to halt the circuits of the exploitative real-estate economy and replace it with something new.”

– excerpts from ‘Re-financing the housing bubble: Strategies of the neoliberal state’, Nathan Crompton, rabble.ca, 20 Jul 2012 [hat-tips to 'joe_blown_away_by_high_housing_costs' and Jeff Murdock]

“My biggest complaint with the article is placing onus on Vision Vancouver for perpetuating the bubble when it’s the nature of the City’s finances, not the political stripe of council, that’s the problem. Ultimately cities derive revenue from permits and other real-estate-related activities and, if that is not present, either need to increase revenues in other areas or cut back. …
So at the local level, because of how the tax base is matched to the expenses, regardless of who’s in power, there will be pressure to kowtow to the real estate industry to keep revenues flush. And it’s not some “neoliberal” trend in my view, it’s what the populace votes for…”

– from a comment by jesse, VREAA, 20 Jul 2012

Our thoughts:
As a speculative mania develops and takes hold, more and more individuals and institutions in a society become aligned in their interest to perpetuate the bubble. This occurs on all levels, from the citizen to the federal. Home-owners, RE investors, landlords, contractors, developers, realtors, universities, credit unions, banks, municipal government, provincial government, central banks, federal government…
The entities are co-opted, not by some plan, but rather because all interests become aligned in a dependence on ever increasing prices, and the debt financing necessary to keep that going, and the temporary artificial easy ‘wealth’ that results. Ever expanding borrowed funds being spent into the economy certainly seems better than having to generate genuine wealth from true productivity; and it seems good to the naive, while it lasts.
It is crucial to realize that the majority of individuals and institutions become aligned in this interest, regardless of political stripe.
In the mature stage of a speculative mania, the vast majority of citizens and institutions are heavily dependent on the bubble continuing, and almost all those in positions of political power will have been thoroughly co-opted. This is a market effect. This is also why bubbles are never, ever legislated away. The majority always votes to shore up the mania, to perpetuate the bubble; any dissenting voices will be voted down; any protesters ejected.
Government intervention, from the civic to the federal, can extend the life of bubbles, but cannot dismantle them safely. This is not an ideological, or a pessimistic observation, but one made based on mathematic law and knowledge of market dynamics. Like a chain-letter or a Ponzi scheme or a raging forest fire, the engine runs out of fuel, eventually.


Of course, there will be all sorts of flavours and differences in the finer points of this process, so it is arguably of value to discuss how exactly local government is choosing to perpetuate the bubble. In this regard Nathan Crompton’s article is of interest. We respectfully submit, however, that the large overarching picture is far, far more important, and that differences in local approaches will pale into insignificance in the face of the broad implications of a collapsing speculative bubble. After the dust settles, the exact details of local policy will again become important.

– vreaa

Retail Rents Compared – “Vancouver’s Robson $150, Toronto’s Bloor $300, NYC’s Fifth Avenue $2,250″

Despite the departure of anchor tenants such as HMV and Starbucks, Robson Street — the second-most-expensive retail street in Canada after Toronto’s Bloor Street — is far from dead, according to local retail experts.
The street is a vibrant area going through a time of transition and speculation, with landlords wanting to get top dollar, but retailers hesitant to pay high rental rates, said David Ian Gray, retail consultant with the firm DIG360.
“It’s an interesting time. Robson is in this state of flux,” Gray said. “But when you see the J Crews, the CB2s and the Forever 21s coming in, it’s not a dead street.”


However, a new report by Colliers International found the price of rent on Robson fell by 25-per-cent year over year on leases signed during the nine months ending March 31, but the decline is not an indication the street is losing its cachet, according to James Smerdon, Colliers’ director of retail and strategic planning in Vancouver.
Monthly retail rents for new lease deals on Robson averaged $150 per square foot — a bargain price for international retailers, who pay an average of $2,250 per square foot on New York’s Fifth Avenue, which tops Colliers’ global list.
The drop in rent on Robson is a result of a few large stores opening in mid-block locations on the upscale street, rather than on the corner, where rents are typically higher, Smerdon said.


“This isn’t an average rate, it’s a survey of recent and notable transactions,” he said.

According to the Colliers’ survey, new leases were most expensive on Toronto’s Bloor Street, where rents averaged about $310 per square foot, followed by Robson Street, Alberni Street, and Montreal’s Rue de la Montagne, where new lease rates averaged $80 per square foot.

– from ‘Don’t write the obit for Robson St. just yet’, Tracy Sherlock, Vancouver Sun 10 July 2012 [Hat-tip Joe_Blown_Away_By_High_Housing_Costs]

Average or not, it seems Robson is available at $150/sqft.
Vancouver’s Robson $150, Toronto’s Bloor $300, NYC’s Fifth Avenue $2,250.
Perhaps accurately reflecting the relative economic and cultural importance of these centres?
– vreaa

Giant 2000 Condo Arch Proposal For False Creek North

“James K. M. Cheng Architects Inc. submitted a rezoning application to the City of Vancouver that outlines a plan for a multi-use site at 750 Pacific Blvd., known commonly as the Plaza of Nations. Commercial use would include small-scale retail, hotel, office, restaurants and cafes, while community use would include a sports-science centre, a daycare and an ice rink that could serve as a part-time practice arena for the Canucks.
The proposed pièce de résistance is a residential structure, with between 1,700 and 2,000 units, that takes the form of a giant arch. The development would provide a mix of housing types and include private ownership and purpose-built rentals for residents of various ages and income levels, according to the application.
James Cheng said the arch-shaped building will serve as a window through to BC Place. “Vancouver has been criticized for having so many towers, and everything looking the same,” he said. “What we tried to do is create an urban piece that is strong enough to stand up to the stadium, but still have a relationship to it.” —
“The developments in that section of our city, which is our largest and last big waterfront property, should be a special place,” said Councillor Raymond Louie. “For a long time, it sat empty. This is an opportunity for us to develop it in a sustainable fashion where it is able to serve the people who will eventually live there, but the wider community as well.”
– from ‘Proposed complex would pump life into dead zone’, G&M 4 Jul 2012 [hat-tip Joe]

A tad reminiscent of Paris’ ‘Grande Arche de la Defense’ (above), only even more poorly proportioned and even less pleasing on the eye.
Bad sci-fi design. (“Could I get my star-fighter through that?”)
– vreaa

“About a year ago someone bought the house and did a total reno. Then the house went on sale for months with no takers. Then off the market. Then on sale again. Now they are tearing it down. No attempt to salvage anything.”

“Talked to an old friend in Burnaby today. About a year ago someone bought the house next door and spent several months doing a total reno. Then the house went on sale for months with no takers. Then it went off the market. Then it went on sale again.
And now they are tearing it down. No attempt to salvage anything. Remember in decades past you could drive around the city and go to the demo sales where they spent a week or two selling off the fixtures and stuff first.
This is wholesale destruction of wealth. Question is who took or will take the hit – the previous owner, the builders, or the next owner, or some combination of the above.
It’s doesn’t get any crazier than this.”

patriotz at VCI 29 Jun 2012 1:01pm

“Wholesale destruction of wealth”, agreed.
Part of the terrible misallocation of resources that is part of a speculative mania.
It should be obvious to all that this is bad for our society.
– vreaa

“Wages are just not enough to entice anyone to Vancouver. Everyone we’ve interviewed so far says “Hey, I need at least $X to get the same thing I already have”. And no company here that I know of can afford to pay $X.”

“I have to agree on the difficulty in attracting good, well skilled, engineers or technicians here… our company is looking to hire at least 3-4 people right now (pneumatics, electronic, electrical, PLC… that kind of stuff) and wages just are not enough to entice anyone to Vancouver… everyone we’ve interviewed so far says “hey I need at least $X to get the same thing I already have”… and no company here that I know of can afford to pay $X. Tough spot for companies in Vancouver.”
BurbsBoy at VCI 28 Jun 2012 10:20pm [hat-tip jesse]

It is best for a society and for its economy for housing to be priced near fundamental value, as judged by local incomes and price:rent ratios. Vancouver prices are two to three times higher than those determined by fundamentals.
– vreaa

Spokesman for Homebuilders of BC: “This industry is a massive contributor to British Columbia’s well-being and future success, as well as a huge indicator of the province’s economic climate.”

“Here are some facts about residential construction.
Nine per cent of all employment in British Columbia is in the residential construction field. That’s 192,400 jobs related to new home construction, home renovation and home repair. The home building and renovation community earned $10 billion in wages last year, while $22.7 billion in investment value was created by residential construction.” …
“We can easily see that this industry is a massive contributor to British Columbia’s well-being and future success, as well as a huge indicator of the province’s economic climate. Just think: For every single home we build, 3.5 person years of employment are created and more than $60,000 is generated in spinoff spending.” …
“The next time the housing market in B.C. comes up in conversation – and we know it will – let’s try to remember that without such a successful industry, our economy would be in much rougher shape.”

– excerpts from ‘Benefits of home buying’, M.J. Whitemarsh [CEO of the Canadian Home Builders' Association of B.C.], The Province, 17 Jun 2012

We fully acknowledge BC’s dependence on residential construction — when you add in other aspects of the RE industry, and knock-on spending in household goods, a very substantial percentage of our economy is driven by real estate. Under normal circumstances we would celebrate a robust construction industry, and we certainly wouldn’t wish for anything other than prosperity for BC Homebuilders.
It must be realized, however, that this sector of the economy has ballooned unnaturally with the speculative mania in housing; an example of the misallocation of resources that results from a massive asset bubble. In BC, if 9% of employment is in residential construction (as Mr Whitemarsh reports), this is strikingly large compared with 7.5% for the whole of Canada, and 3.5% for the US currently (they hit 6% at the peak of their bubble) [see chart below].
This overgrowth will shrink back with the demise of the bubble. We don’t ‘wish’ for this, and we don’t point to it to be difficult to the builders; it simply is part of the inevitable boom-bust cycle that comes when speculative manias in RE develop and then dissolve. Unemployment as a result of loss of jobs in this sector will be part of the unfortunate fallout.
– vreaa


[Chart source: BNN interview with David Lepoidevin, 8 Jun 2012.]

More Social Isolation In Vancouver Than Other Cities? – “Residents feel increasingly estranged from their friends, their neighbours and their communities. More than half of respondents agreed that Vancouver is becoming a resort town for the wealthy.”

“A survey conducted by the Vancouver Foundation and released today found Metro Vancouver residents feel increasingly estranged from their friends, their neighbours and their communities.” …
“Affordability factored heavily in the survey results, with roughly equal numbers of people reporting living comfortably and finding it difficult to get by.
Significantly, more than half of respondents agreed that Vancouver is becoming a resort town for the wealthy and that there is too much foreign ownership of real estate. This view was particularly common among people aged 25-34, a group whose responses to many survey questions revealed a marked cynicism about the state of their communities compared with other age groups.”

– excerpt from ‘Social isolation has far-reaching effects on us and our neighbours, survey says’, Tara Carman, Vancouver Sun, 18 Jun 2012

“I am in that age group and this accurately describes how I feel.”
joe_blown_away_by_high_housing_costs at VREAA, 18 Jun 2012 9:25am [Thanks for the link to the article, joe. -ed.]

The Vancouver Foundation survey itself available from their website as a pdf:
Connections and Engagements, A survey of metro Vancouver, June 2012, Vancouver Foundation

More from the Sun article:
“Bob Cowin spoke about losing a sense of connection with his neighbours over the years. Cowin moved into a new subdivision in Coquitlam in the mid-’80s where the developer had landscaped the front yards, but the backyards were nothing but mud. Neighbours got to know each other creating their back gardens and building the retaining walls that were necessary because most properties backed onto a mountain slope.
“Swinging a sledge hammer and dashing down to the local building supplies store for a different drill bit resulted not only in walls but also relationships,” Cowin wrote in an email.
A year after the retaining walls were finished, Cowin noticed a new kind of wall going up: cedar fences between properties that made the neighbourly conversations that used to happen over the fence impossible.
A burst of young children brought the adults in the community together in a different way, forming child-minding co-ops and walking school buses, Cowin recalled. The elementary school became a social hub, and the neighbourhood held yearly block parties.
Then the children started middle school and didn’t need their parents as much, he said.
“The street was extended, and the sense of a local place disappeared. Houses started being sold, and a different, and increasingly multicultural, demographic moved in.”
Cowin feels the increasing ethnic diversity was a mixed blessing for his neighbourhood.
“It has been great for our kids, who, thanks in large measure to the schools, have developed a tolerance and intercultural competence that I admire,” he said. “For the adults, language and other barriers have made it tougher. My new neighbours are still fine people, but it takes more effort and intentionality to maintain relationships.”

The entire Sun article is worth the read, as is the comments section below it.
The phenomenon of “isolation in the city” (“water water all around but not a drop to drink”) is by no means new. Is Vancouver really any different from other big cities in this regard?
We don’t know of any data that could allow one to objectively compare. Are the findings in this survey very different from similar surveys elsewhere?
We are certain, however, that there is a substantial subgroup of locals who feel strained by Vancouver’s housing prices: either by the financial burden of ownership, or from the distress of feeling ‘priced out’ and (for many, but not all) the consequent sense of ‘not belonging’. And we know that such strain is not good for the health of individuals, families and communities.
Also, the very high cost of housing creates an implied large wealth disparity across the owner/non-owner divide that would not be present in times of more normal housing markets. Such a disparity is closely correlated with dissatisfaction within a community.
– vreaa

Blogger From South Of The Border – “There’s no question that Canada’s gigantic housing bubble is going to burst. It’s just a matter of when.”

“There’s no question that Canada’s gigantic housing bubble is going to burst. It’s just a matter of when.
Housing prices in Canada have more than doubled in the last 10 years, and in cities like Toronto and Vancouver, prices are up more than 140 per cent. But the soaring prices have nothing to do with wages which have remained relatively flat during the same period. What’s really driving housing prices is debt. Low interest rates and lax lending standards have created a speculative frenzy that’s pumped up a monstrous asset-price bubble that threatens to crash the economy and send unemployment skyrocketing.”

“We’ve seen it all before, right, in Ireland, Spain, UK, the US and now Canada. And every time, the government twiddled its thumbs while the little guys were ripped off by speculators. 


On May 22, 2012, the Organization for Economic Co-operation and Development (OECD) called on the Bank of Canada to raise interest rates saying that “negative real short-term rates are stoking a housing bubble.” 
 
Naturally, the recommendation has been shrugged off, as has any attempt to stiffen lending rules to put a damper on speculation. So, what should we make of this? Why are policymakers–who have access to the same data as us– refusing do anything to mitigate the effects of what is likely to be a very excruciating meltdown? 
 
Could it be that it’s all part of a plan to use the crisis as a means to dismantle the welfare state and reduce Canada to 3rd world poverty? 
 
Yup. That sounds about right to me.”

– excerpts from ‘Canada’s Housing Market Smackdown’, Mike Whitney, eurasiareview.com, 15 Jun 2012 The author “writes on politics and finances and lives in Washington state.”
[hat-tip to S, who sent this link via e-mail]

We are in agreement that there is a large bubble, agree it will inevitably burst, but disagree that there is a “plan” to induce a “crisis” and then use it for political advantage. Policymakers have far less control than people imagine. We believe the BoC and the politicians would dearly love to organize a soft landing (they benefit from the status quo, after all) but that they’ll be unable to do it.
Also, in Canada, the little guys have been the speculators, too… every housing market participant has been a speculator.
– vreaa

“I work in the software industry. I’m preparing to move away. Other high tech employees with the skills and talent to get better work opportunities elsewhere are leaving the company due to the stupid cost of living here.”

“I’m one of those so called bitter renters. I have chosen to rent because I believe that living close to work is important for family health reasons. Our household is also loosely budgeted with the idea that the wife can stay home if she chooses. As we have a young child now, she is choosing to do that for the near future.
An opportunity came up at work for a company transfer to the US of A. Company transfers are pretty sweet. Most expenses are covered. Moving to a state with 0% state income tax, and homes cost oh, 75% less than they do here.
It’s a tough decision, lol. But you know, sacrifices have to be made.
I work in the software industry, and as I’m preparing to move away, I’ve been in informal discussions with some of the higher ups in my company, and in the discussions I’ve heard that other high tech employees are leaving the company (and the lower mainland) due to the stupid cost of living here. These are the shining star employees that are fleeing, as they are the ones with the skills and talent to get better work opportunities elsewhere.
Just in regular meetings, it’s come up with the upper level management, that the housing in vancouver is just CRAZY, and they worry for their children’s futures. Not only do they consider the housing to be CRAZY, but the also point out that salaries are out-of-proportion low. (Those two are likely related.) Also other general feelings that commutes are taking longer. Commutes from white rock to richmond used to be 30 minutes outside of rush hour, but in the past few years, it’s consistently been 45 minutes instead. (outside of rush hour)
VREAA I know you’re reading this, and I’d likely be interested in contributing to a series about my experiences in this new place outside of the ‘Best Place on Earth’, if you deem my writing style and content worthy of publishing.
In any case, after waiting so long and quite a large amount of marital stress over housing, we’re moving away.
I gotta say, at first it was a hard sell with the spouse. She didn’t want to leave her friends, but then she saw the shopping, the beaches (wow!) and um, the housing down there. And she came around.
There’s a lot more to write about. Differences in taxes, health care, car insurance, property taxes, and those HOA fees. Bottom line though, I’ll be paying a LOT less interest when I purchase down there. Credit ratings may be a bit of a challenge. Seems even with large DP’s you need a good credit rating for the best mortgages.
Good luck to all intelligent posters. I’ll still be hanging around these forums. I’ll just have to observe from a distance as the meltdown progresses.”
“I think we will choose to rent for at least the first year.
It just makes sense to take a little bit of time to get familiar with the area before committing to buying a place we have to live in for a long time. It does seem that monthly costs are really high in the area we are moving too.
Maybe we won’t like it down there. Who knows, leaving may open our eyes to the truth that Vancouver really is the BPOE. I’m thinking likely not. I’m looking forward to the adventure of being someplace new and different. Life should be fun and exciting. 30+ years of debt is just not for me. It’s really amazing how much Vancouver demonstrates the ‘emperor has no clothes’ children’s story.”

‘curious lurker’ at VCI 6 Jun 2012 5:27pmand 8:12pm

Thanks for the story, curious lurker. All the very best for the move and with future endeavours. We’d certainly welcome hearing more of your experience living away from Vancouver. Send updates via your own blog (see White Rock renter’s suggestion below) or by e-mail to us (see ‘contact’ above) and we’ll post them here.
Needless to say, we are saddened by the ongoing process of skilled individuals being pushed away from Vancouver due to housing costs, and we look forward to a time when housing here becomes more reasonably priced and less of a hinderance to the health and growth of the city.
– vreaa

“CuriousLurker – If you blog about your experiences moving stateside, I know I’d be interested. My family is in the exact same position as you, except husband hasn’t formally started applying for jobs there yet (software engineer). The only thing that keeps us here is family, really. I would love to know how education and health care measure up from someone actually making the switch. I think too often we dismiss the US as a non-option because of the assumption that schooling is terrible and health care is too expensive. I’m betting with better salaries, cheaper cost of living, and affordable housing that maybe healthcare costs and even private school costs would balance out and maybe we’d still come out ahead. I don’t know. I’m just sick of it here, the rain, and the attitude that somehow its different here. Let us know if you start a blog.”White Rock renter at VCI 8 Jun 2012 3:05pm

“Talked to a friend tonight who just moved into a $700K rental apartment at UBC. The wood-framed building, on leased land, is two years old and floors are already sagging.”

“Talked to a friend tonight who just moved into a rental apartment at UBC. Building is two years old and floors are already sagging, so much that her closet doors keep opening by themselves, and drawers have a hard time staying closed…
Market value? $700,000, for a wood frame condo on leased land.”

jumpin in at VCI 30 may 2012 10:48pm

On The Value Of Buildings


“A 122-year-old, 6,200 tonne building in Zurich is being moved 60 metres westward (over two days) to make way for the expansion of a nearby railway.”
BBC, 22 May 2012


“Need to demolish a house in the US? Rent a tank.
A tank has been hired to demolish a house which was scheduled to come down in Kasota, Minnesota.
The job was accomplished in less than 30 minutes.”

BBC, 3 May 2012

City Of Vancouver – re:THINK HOUSING Competition – Call for Proposals

“As part of the work being done by the Mayor’s Task Force on Housing Affordability, re:THINK HOUSING, an open ideas competition, is being launched to generate a broader discussion of possibilities for Vancouver’s affordable housing crisis. Aimed at everyone who has an interest in affordable housing, from the general public, to designers, planners and architects, to philanthropists, non profits and financial institutions, the Ideas Competition seeks to create the space for provocative, bold new ideas that address Vancouver’s affordability challenge head-on. It’s a chance to get new perspective on how we build an affordable city in Vancouver, and to garner ideas and possibilities for neighbourhood belonging and better connections across the City.”

“Vancouver is a growing and diverse city with significant housing challenges. Whether it’s homelessness, a lack of new rental homes, or high prices for single-family homes, Vancouver residents face housing pressures across the financial spectrum.”

– from re:THINK HOUSING Competition, City Of Vancouver
[Thanks to terminalcitygirl for bringing this to our attention, and who adds "Have you checked out this COV initiative? It seems unnecessarily complicated to me but at least they are asking for input from beyond the usual suspects..."]

We’d encourage all readers to take a look at the re:THINK HOUSING website, and to enter proposals if they see fit. We’re considering possibly submitting one ourselves.
Submissions close 29 Jun 2012.
– vreaa

“Vancouver faces a loss of its brightest painters, dancers, designers, makers and performers to greener pastures. There just isn’t much affordable space. It’s an unsustainable bubble at this point, I don’t think anybody can disagree with that.”

Underneath the vibrant, diverse surface of a thriving arts and culture scene, Vancouver faces a loss of its brightest painters, dancers, designers, makers and performers to greener pastures.

As property values skyrocket higher than any other city in the country (second place worldwide), Vancouver’s artists are facing stark choices about their future. Many find day jobs, paint and create in their bedrooms, or gradually drift to the suburbs. But an increasing number are leaving the city in what Red Gate’s founder, Jim Carrico, describes as a “steady migration of artists.” They’re going to Montreal, New York, Los Angeles, Toronto, even Berlin, Germany.
“The shortage isn’t of expensive space!” Carrico says, laughing sardonically as he describes Red Gate’s Kafkaesque quest navigating city permits, applications and bureaucracies, both before their eviction and now in the search for a new home. “There’s lot of expensive space around. There just isn’t much affordable space. . . It’s an unsustainable bubble at this point, I don’t think anybody can disagree with that. When median prices in Vancouver are more than twice as any other city in Canada, and yet median salaries are lower.”

“The majority of corporations said to us, ‘Arts and culture isn’t where we put our money.’ Vancouver is notorious for a wait-and-see attitude. It’s very hard to convince anybody in this city to get involved in something before it happens.”

The fear of a Vancouver becoming a hollow Disneyland of a city is one shared by many artists.
“It’s a great point, I totally agree,” Kate Armstrong reflects. “There’s a way a city can become so expensive that it (becomes) empty.
“This is such a beautiful city, and it’s a huge risk the way real estate is going here. It’s becoming a postcard of itself – so smooth that no one can afford to live in it. It risks becoming increasingly one-dimensional. If we really lost our artists – and we do take them for granted – we would feel it in ways that we can’t begin to describe.”

The loss of Vancouver’s talent to LA, Montreal, New York and Toronto is something that should concern us all, says artist, lawyer and recent independent City Council candidate Sandy Garossino.
“We’re draining the lifeblood out of our city with the disappearance of the artists,” she says. “By the time you’re at a certain point in your life, you can’t afford to live here.
Garossino rattles off the pros and cons of the various art Meccas on the continent which are pulling some of the city’s creatives away: New York City (expensive, but renowned arts scene); Montreal (mind-bogglingly cheap, and a real arts “incubator”); LA (relatively affordable, great community).

– from ‘Vancouver’s arts and culture bleeding out in “steady migration”, warn city creatives’, David Ball, Vancouver Observer, 9 May 2012
[hat-tips to 'Aldus Huxtable' and  'granite countertop']

FP Quotes ‘Insider’ Who Claims “Systemic Tax Fraud” By Condo Assignment Flippers

“The condo bubbles in Toronto and Vancouver are caused by foreign speculation and are making housing unaffordable and creating financial risk for the country in terms of government-insured mortgages. But there’s another issue of vital concern to taxpayers.
There are three times more condo high-rises being built in Toronto than in New York City and seven times’ more than in Chicago. This boom is not the market at work, but is manipulation by “hot money” from abroad.
“I have come across something that I find astonishing, and which amounts to systemic tax fraud by investors, mostly foreign, on a massive scale,” wrote an investor involved in the industry.”

“Condo brokers tell me I can flip my assignment and pay no tax and there is no paper trail. They say we do it all day long,” said the investor who asked to remain anonymous.
Under CRA rules, foreigners making Canadian-sourced income are fully taxable by the federal and provincial governments. In Ontario or BC, the total tax bill would be 46% or $46,000 in tax for $100,000 profit.
The unpaid taxes could be staggering, said a real estate agent. In Toronto, 20,000 condo units have been sold each year for the past five years. Let’s assume one-quarter were sold to foreign speculators who flipped the assignment and made $100,000 profit without paying taxes. Their Canadian-sourced income would total $500 million a year, and they would owe 46% of that in taxes or $230 million.
– from ‘Taxpayers also victims of ‘hot money’ behind Canada’s condo bubbles’, Diane Francis, Financial Post, 4 May 2012