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Vancouver’s bold new housing plan calls for massive rental construction — but the people who would build it say the city makes it almost impossible. Some are giving up

December 17th, 2017 · 1 Comment

This story is an example of how following a trail of breadcrumbs on a story can lead to outcomes you never expected.

I started out planning to write something about yet another West End site selling for a crazy price — $79.5 million to newbie developer Vivagrand, with only one messy project so far on its resume in Vancouver — as the latest in what has turned into a boom in West End construction that even city planners can hardly believe. I think this is something like the 26th tower, making this take-up of new density as a result of the West End plan something no one had envisioned. It was supposed to take decades to get to the number of units projected. Instead, it’s taken a few years.

But as I was working on that story, along with some casual conversations as about the city’s plans to suppress speculation, people in the industry kept repeating the same story they had heard — that a number of developers had actually cancelled rental projects because of requirements from the city’s real-estate services department that they pay tens of millions in “community amenity contributions.” That’s something that has normally only been charged on condo projects, as part of the city’s model for development, which asks developers who are going through a rezoning to give back about 75 per cent of their “land lift” to the city to pay for the community services that will be needed as new residents move in.

My Globe story on this is here.

But, after years of Vancouver working to incentivize developers to build rentals — a form of housing that had almost stopped dead after everyone turned to condos in the 1980s — some were liking the rental thing so much that they started to plan projects that didn’t ask for city incentives. One example was the 43-storey Wall apartment tower at 1310 Richards, where the company paid almost $24-million in a CAC equivalent.

Then a demand for CACs became part of every rental project that came to the city.

At the same time, land prices were skyrocketing because condo prices were going up — especially downtown, where the Alberni/Georgia corridor seems to be transforming into some kind of luxury investor sculpture garden row of towers.

So landowners who had previously been attracted to rental now found that, not only were they being asked for millions in CACs, but the money on the other side of the equation had changed. Even after paying huge taxes on an outright sale or condo project, they’d still be further ahead than by building rental.

So they started backing out.

That’s only the beginning of the city’s problems when it comes to the ambitious plans to encourage the construction of 20,000 private-market purpose-built rentals. (i.e. permanent rental buildings, not condos that can be sold any time the investor thinks that would work out better.)

The companies with the most experience building rental, like, say, Cressey, are finding it nerve-wracking to go through the permitting process of building rental. A recent project that Cressey got approved near Olympic Village, something that the mayor touted this week as part of the city’s success in getting new kinds of lower-cost housing, almost didn’t make it.

After receiving assurances that the project wouldn’t have to pay a CAC and would qualify for a waiver of normal development-cost levies the city charges on all new construction (part of the incentive for rentals), Cressey got midway through the project and then was asked to provide its budget for the building to real-estate services — usually the opening move when real estate is going to ask for a CAC.

Cressey spent some time convincing real estate that there was no land lift. Once that was done, the company was told that it wasn’t going to qualify for the DCL waiver. Why? Because the city says that construction costs have to be under $250 a square foot for a company to qualify for Rental 100 incentives. That’s to prevent developers from building getting the waiver, then building expensive rentals that, after the first turnover, are rented out for top dollar.

But construction costs have been soaring. So the city decided Cressey likely couldn’t build for the required amount. (Presumably, that would mean no one could). Cressey then had to hire experts to testify that the company, in spite of the current rise, could still build for that amount.

But that’s only the tip of the iceberg, really, when it comes to rental problems. There were so many others that people ended up talking to me about.

One is the city’s plan for False Creek Flats, which many had thought would be an ideal location for rentals — close to downtown, likely to serve local populations working in the city’s booming tech businesses, easy to mix with the current industrial uses on the flats.

But the False Creek Flats plan has essentially made that a no go.

Then there is the rezoning in other areas, which limits heights no matter whether the building is rental or condos. That ends up forcing condo development on those sites, because the land prices make a rental building impossible unless extra density can be added.

David Taylor at Colliers said he had an ideal rental site for sale at 12th and Commercial, an area that is a natural gathering place for renters. But the city’s plan limits the site to six stories. He had a lot of buyers interested in building rental if they could get a couple more stories. But the answer was, Absolutely not. So the site was sold to a condo developer.

I’m sure some people will judge developers who spoke out for this story as just a bunch of privileged whiners who are unhappy they can’t make as much money as they’d like.

Whether they are or not, however, it’s doubtful whether the city is going to be able to meet its rental targets by hoping that developers will build rental as philanthropy. A few are doing it. But likely not enough to build 20,000 units in 10 years.

This whole exercise underscores a problem that I’ve been observing at the city for several years. That is: the people at the top are saying — and even trying to do — all the right things. The city’s housing plan, while not perfect, is a real effort to shape housing supply to better match the needs of people planning to live and work here.

But those goals are undercut when it gets down to the ground level — what happens when a project becomes the subject for negotiations with the real-estate services department, what happens when that project is in the hands of a mid-level planner who is trying to follow sometimes contradictory rules.

That’s why the city is going to succeed or fail, not on the basis of its much-covered policies, but on the basis of how the engine runs, or doesn’t, behind the scenes.

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Beedie goes for appeal to Board of Variance on controversial 105 Keefer project. Appeal letter included here.

December 17th, 2017 · 3 Comments

Every retired planner I talked to in the last month was convinced that the development company Beedie Living would take the city to court after the surprise decision from the development-permit board in early November to reject the proposal.

The board has never completely rejected a proposal before.

Many of us wrote that it had been 12 years since there had been a rejection, but former city-hall staffer Phil Mondor did some research and found out that, actually, that project ended up going through, using even the same application number. So, really, there has been no rejection since the DP board was formed in 1974. Some people may see that as evidence of a bad system. But people familiar with the DP board say the whole point is to wave off/discourage/get rid of bad applications long before they get to the DP board, so that by the time a project gets there, it is approvable.

Anyway, the DP board decision was a subject of much chatter by city-watchers afterwards, because the heads of planning and engineering made the case that, although the building complied technically with the basic requirements of Chinatown zoning, it didn’t meet the requirement to be sensitive to the context. Both talked about it having too much bulk — a criticism that meant that, if Beedie were going to come back with a revised project, it would almost surely have to lose some valuable square feet, likely off the expensive upper floors.

Anyway, I got a tip this week that the company was going to appeal to the Board of Variance instead. That will mean another big public showdown, for sure. The board was considering setting a date in February, but pushed it to March, anticipating that at least a couple hundred people will show up.105-Keefer-Street-Appeal-Info-PDF

I wrote a Globe story about the appeal here. The actual appeal letter from the company is here. 105-Keefer-Street-Appeal-Info-PDF



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City loses lawsuit to Chinese owners wanting to demolish Shaughnessy house

November 27th, 2017 · 2 Comments

I’m surprised more media didn’t report on this Supreme Court decision that found the city at fault for delaying so long on a decision about a Shaughnessy house (whether to allow demolition or designate it as heritage).

Perhaps it didn’t take off because there were no easy heroes to cheer for. It pitted some offshore buyers of the historic Walkem House at 3990 Marguerite against city planners.

At any rate, here is the full decision.

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A round-up of the stories about 105 Keefer

November 27th, 2017 · No Comments

Catching up on posting some stories here, so that this blog can continue to be a useful archive.

As we all know, the development-permit board made a historic decision on Nov. 6, with a 2-1 vote by the city’s top officials to reject the proposal.

Although I and many other reporters had written that there was a previous rejection of a project in 2005, that project in fact ended up going ahead. As former city staffer Phil Mondor discovered, it even proceeded with the same identifier number. So, in fact, there had never been a project turned down by the DP board since it was created in the 1970s.

I have three stories here: one noting in advance that it was going to be a historic decision either way according to former DP board members and city planning directors, one about the decision itself, and one follow-up a few days later, with more from city planning manager Gil Kelley and the site owners. (Headline was a little off because it says the developer will be revising the project but, in fact, Beedie people hadn’t decided yet.)

I’ve run into more than one former city planner since then who says that there is no way the city is not going to get sued over this. (Some people think that that won’t happen, not because the developer doesn’t have some grounds, but because he won’t want to alienate the city.) This story is not over yet.

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Impact of out-of-town investors: yes, increases prices; increases them more when supply restricted

November 8th, 2017 · 4 Comments

If you want to be guaranteed loads of clicks in this town, write about how everyone is being driven out by high real-estate prices (caused by heartless politicians, shadowy foreign investors, the real-estate cartel, etc etc) and/or about a study that tries to bring real data to the anecdotes.

So this recent study from UBC got loads of attention all around, though some didn’t like the author’s comments (made separately from the study) that the solution was supply first, and then, a poor second, restricting demand.

The study noted that, yes, out-of-town investors (whether from Chilliwack or Chengdu) who buy properties and leave them empty as second homes or investments do drive up prices. Some people were scornful that it took an academic study to come to this conclusion, but the point was not, do they or don’t they. It was: If they do, by how much.

This quantified the increase, noting that it is greater in Vancouver, where there is more of a supply problem, than in New York, where much more supply was already available and more is being added all the time.

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The archive of by-election coverage

November 8th, 2017 · 1 Comment

Catching up on posting some older stories here. First up: the stories before and after the Oct. 14 by-election, which provided a story with endless interpretation possibilities (Vision dead; no, progressive vote on the rise; no, NPA on the rise; no, people-power politics on the rise; coalitions the politics of the future; yada yada).

First up was the story that focused a bit on how many people working the campaigns were reporting a complete lack of interest or knowledge on the part of voters. That worry turned out to be justified. Just under 11 per cent of people voted. I talked to many knowledgeable, politically engaged people afterwards who completely forgot to vote on the Saturday, saying it had just slipped their minds because there was so little coverage and/or because they never received any kind of reminder from the city in the mail.

Then there was afterwards, with the endlessly fascinating results, as the NPA’s Hector Bremner won the council seat but progressive parties took most of the seats on school board. That set off a frenzy of speculation (two examples here and here) that Vision was dead, a trope that was repeated a couple of weeks later when Vision Councillor Andrea Reimer announced she wouldn’t be running again — an announcement that I understand some tried to get her to delay making because of the damage it would do coming so close after the by-election loss.

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My tour of the underground — underground Chinese restaurants, that is

October 10th, 2017 · 3 Comments

One of the great pleasures of my life is connecting with a wide variety of students as a journalism teacher at the University of B.C. and Langara College.

International students, in particular, bring a different eye and an ability to connect with communities here that many of locals aren’t always capable of.

My students at UBC have come up with a number of interesting stories over the years that have opened my eyes to lives in sub-communities of Vancouver that I have known little about.

One story that one of my students came to me with last year was about underground Chinese restaurants. She had discovered that many of her fellow international students from China were getting their home-cooking fix from impromptu take-out restaurants around the city. The operation she patronized was being run by a couple of Chinese parents who were visiting their daughter, a student, long-term and who had decided to keep themselves busy by turning her kitchen into a take-out operation.

Yes, I know, illegal. Unlicenced. Just like the underground restaurant I used to go to in a bungalow off Commercial Drive, where an aspiring young chef served eight-course meals to select groups of foodies.

Anyway, my former student, Si Chen, tracked down information for me on how many of these there were in the region, what kinds of food, and how to get in touch. And, since my Mandarin is limited to counting to 10 and a few stray words like “central” and “people,” she ordered for me from one particular operation, whose mother/daughter team I got to meet.

Here is my little story that appeared recently in Vancouver magazine about my foray into this little-known (to us white people, anyway) world.



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Vancouver, usually at forefront of hipster trends, finally catches up with outdoor ping-pong

October 10th, 2017 · No Comments

A friend who visited Montreal recently commented on the number of outdoor ping-pong tables there when he came back. Out of idle curiosity, I asked on Twitter if there were any in the Lower Mainland.

The answers I got made me realize that, yes, there were some scattered around but, more fun, there seemed to be a lot more on the way.

Researching this (which included driving around to various new parks and tables) made me realize how much parks are changing — not just big empty fields with a tennis court on one side and a slide on the other. The Slidey-Slide Park next to the roller coaster is filled with different kinds of activities. (Also made me realize a lot of other cities hopped on the outdoor ping-pong thing quite a while ago.)

In the meantime, here’s the story I wrote for the Globe on this little urban trend.

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City puts on a big push to demo new programs for lower-cost housing: rentals geared to income, infills

July 25th, 2017 · 1 Comment

The Vision council is using the slow summer months to push out lots of news on its planned “housing reset” — new policy aimed at trying to shape supply in the city more than it has in the past to create lower-cost housing. The target market, planners and politicians keep saying, is the households with incomes of $30,000 to $80,000.

First off earlier last week was the expected policy on allowing infills (backyard houses that will be bigger than laneways) behind pre-1940s houses, a measure intended to both encourage owners to retain existing houses and add new stock. As I tweeted the day of, this housing, which the city will allow owners to stratify and sell (contrary to laneways), is probably a good option for a certain group of households in Vancouver, say the $80,000 to $120,000 group, but hard to see what it does for the target market of the housing policy.

Sunday, the city unrolled a new initiative — one that aims to figure out a mechanism to require or incentivize developers to have 20- to 25-per-cent of the rentals in a rental building go for rates lower than the market, i.e. geared to the incomes of the 30-to-80 group.

It’s a piece of policy that’s been surprisingly slow in coming. I asked the mayor (twice) why it hadn’t arrived sooner. His answers are in the story.

It’s true that Vancouver — indeed, all Canadian cities — are hampered compared to American cities in being able to get this kind of housing. That’s because the U.S. federal government has, for decades, offered investors tax credits if they invest in low-income housing, where a certain percentage of units in a project have to be rented out at rents affordable to those making below the median income in a city. As well, in Washington, the state government has empowered cities to offer a property-tax abatement to developers with those kinds of projects. I did a story on that a while ago.

So it will be interesting to see what the city can do with its limited array of policy tools here to try to copy that.

Vancouver could lead the way on this. But it won’t be for a while. Given that it can take up to five years to get a rental project approved, I wouldn’t expect to see anyone break ground on this kind of new project until well after next year’s civic election.

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A hidden wrinkle that will make the group decision to sell your condo building even harder

July 19th, 2017 · 3 Comments

There are about 70 groups of residents in the Lower Mainland at present thinking about selling their buildings to developers. That process is already stressful enough. I’m told that, no matter what price sellers get, they are always convinced the developer is somehow ripping them off and making a huge profit.

Then there are the concerns that people in their buildings, or on their strata councils, might be making side deals with developers.

Now, to top that off, it turns out that the share that each person gets is likely going to be based on some strange formula that no one paid any attention to until now. Proceeds don’t get divided up according to assessed value, which most people expect.

Here’s my complicated story on this from the Globe.

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