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Empty condos not the problem downtown — it’s lack of room for families

May 24th, 2009 · 48 Comments

An interesting new piece of research from BTAworks, a foundation connected with Bing Thom’s architecture firm, has finally got hold of the famous BC Hydro data on electrical use to find out how many apartments downtown show signs of no habitation. That has been seen as the smoking gun to prove the truth of Vancouver’s most famous story about itself — that all of our downtown condos are dark at night because there’s no one living there. They’re all owned by offshore investors just speculating in our real estate.

Those who read my blog regularly will recall there was a cascade of blogging and stories last fall about “18,000 empty condos” in the city — a cascade that was powerful enough to prompt then-mayoral candidate Gregor Robertson to muse about the need for a possible speculator tax to prevent investors from allowing condos to sit empty.

The research, done by Andrew Yan, found that there is not a plague of empty condos. Instead, his examination showed other problems being created by current patterns of condo-building and ownership downtown. You can read my story here. I don’t expect this study will end the debate, but it will certainly put a dent in the urban myth of the empty condos, one that I’ve been hearing repeatedly for the last two decades.

That myth is so prevalent that I find myself staring at downtown towers everytime I drive through the central city at night, trying to figure out if they have a reasonable number of lights on. It’s funny, because it’s not something we ever thinkg of doing with three-storey walk-up apartments or houses in single-family neighbourhoods. You never hear people walking through Kitsilano or Champlain Heights going, “Aha — no lights. It must be speculators!” And yet there are a lot of dark apartments and houses in those areas too.

Personally, I’ve always felt it was more an expression of our fears about Vancouver, that we are really just a Miguel de Allende of the north, a little peasant town being taken over by outsiders who think we’re cute and then drive the prices sky-high.

The BTWworks full study is available on their website at www.btaworks.com, where all of you astute critics can scrutinize it yourselves. I’m sure Andrew will be happy to answer questions, if there are any.

Categories: Uncategorized

  • not running for mayor

    I think even the people that wanted to beleive in the 18K figure knew deep down inside that the number wasn’t factual.
    Glad someone has taken the time to squash it, although like a correction in the paper I imagine the original story will continue spreading while the correction is ignored.

  • Joseph Jones

    A sample of thirteen buildings …
    Is that a stratafied sample?

  • Yes…we attempted to stratify the sample to reflect the overall population of Downtown Vancouver (excluding the West End) along age of buildings, type of building (office to residential conversion and new construction) and geographic location (False Creek North, Downtown South, Coal Harbour, etc) to represent the diversity of condos in Downtown.

  • Yes…we attempted to stratify the sample to reflect the overall population of Downtown Vancouver (excluding the West End) along age of buildings, type of building (office to residential conversion and new construction) and geographic location (False Creek North, Downtown South, Coal Harbour, etc) to represent the diversity of condos in Downtown. The sample focused on patterns in the high density towers and did not focus on townhomes or midrise developments.

  • “The research, done by Andrew Yan, found that there is not a plague of empty condos.” Really!

    Some 60% +/- Vancouverites are tenants.

    They cannot afford to buy in their own city! Off shore speculators can: hence the confluence of speculator/tenant.

    Yes, those many condos are occupied. Yes, there are few families. Evidently, most sensible people prefer kids to real estate. Hence checking hydro use is a pretty useless exercise.

    I am far more concerned that a local magazine fetes a realtor’s morph “to marketer to developer’s consultant to city builder.”

    When realtors are city builders the town absolutely is in deep “do do.” Huh! Couldn’t do worse than VPD!

    Why would an architecture connected research firm be interesting in disputing the “myth”? It isn’t a myth!

  • PS Why? . . . to dispel the “myth” off-shore speculators own the city?

    They do!

  • PPS

    Back in 1987, after Expo, Grace MacCarthy was fetéd, wine and dined by the Jardine Matheson crowd and . . .

    Mira!

    The town, today, is owned, lock stock and barrel, by off shore speculation . . .

    It wasn’t as though there was no eager local talent: wow did they ever cause a ruckus. Sadly, though, they were shut out by Gracie who was gobbling too much caviar and custard!

    And here ladies and gentlemen, may I present, the city, we pay through the nose, live in today . . . “doggie runs” and all . . .

  • Who is Jardine Matheson? They taught Li Ka Shing the wiles of the British Umpa way back.

    I was offered a job with them in 1950. Thanq God I didn’t take it: came here instead.

    I now fear, because Gracie et. at. were totally hypnotizes by the colour of easy cash instead of building on a, then, healthy productive economy . . . .we are about to hit in the face pretty hard in the coming months . . .

    Despite Bobby’ R’s “green shoots” hallucinations.

  • Good article Frances. I forwarded it to some work colleagues in TO who follow the condo rental market.

    I think the key issue came up near the end of the article: the imbalance in favour of 1 bedroom units. This contributes to unaffordability (if that’s a word). A typical 1 bedroom place might be $1000 while a 2 bedroom would be $1500. Two friends can therefore live less expensively in the two bedroom. Two young couples without kids could all live quite inexpensively in a two bedroom. And, as your source points out, 2 bedroom units create good options for families to live in condos.

    At the housing affordability summit a month or two back, did anyone discuss creating more two bedroom units as part of the solution?

  • Wendy,

    It ain’t that easy! Read . . .

    http://thetyee.ca/Life/2009/05/25/RentRatRace/

    Cool doesn’t work anymore . . .

  • anonymous

    A sample size of a couple hundred would probably be adequate but, if the units weren’t randomly selected, are the numbers in this report statistically relevant at all?

  • Frothingham

    I think the sample size could be statistically suspect. As far as “dispelling a myth” … this study is but one part of the equitation. Two years in one Apartment block near the Burrard bridge was verified by the strata cttee to be 35% EMPTY! Now it could be that after a few $$ crises that these apts are now rented out…

    Gracie and company sold out… short term gain for long time pain.

  • foo

    I notice no-one has taken up the point that this survey, while apparently dispelling the myth of the 16k empty condos, also dispels the myth of the 1/2% vacancy rate that CMHC and the other powers-that-be like to promote.

  • I rent: not in Vancouver. Vancouver number crunching would be more revealing of owner/rental interests.

    Last year we were given option: leave or accept assisted ownership. The owners were about to convert.

    The ownership offer came with a sweetener: down payment gratis.

    The rental offer: rents will be raise but will try to keep you in your home: but only if it is not sold then we will try to locate you in another suite.

    I am sure everyone had the best of intentions.

    If my suite were converted, my rent would transmog., with down payment, to mortgage/tax/strata well over double my, as is, rent.

    Mercifully the market nixed conversion.

    The point: two-bedroom sharing is no solution.

    At current building costs, I’m in the biz, rents and mortgages are unsustainable for any occupancy configuration.

    Renter sharing, as the lady describes, http://thetyee.ca/Life/2009/05/25/RentRatRace/ is tricky. Even family sharing is tricky.

    Eventually the system will flush the market out. Until then green shoots are a long way off . . .

  • This is actaully bad news for those hoping for high prices. A supply of “dark matter” condos kept off the market would crimp supply; now we know almost all the supply built in the past few years is going into active service.

    A high ratio of newly completed units to population growth and pressure on total city income as employment drops. And now no pied a terres to justify the oversupply. I can do the math on that.

  • Folks, the vacancy rate is NOT 0.5%. That is the CMHC vacancy rate, which excludes basement suites, houses that are rented out and most importantly, all the condominiums rented out. Based on information provided to me from developers and housing analysts, I previously reported on this blog that the true vacancy rate was between 5 and 6%.

    While I cannot comment on the statistical accuracy of the sample, I was not surprised to see that this study concluded that 5.5% of the units were ‘dark’. Surprise, surprise….

    You might also want to check my comments on this blog last year when Gregor first suggested there were 18,000 empty condos…but then, maybe it’s best to let bygones by bygones!

  • foo

    Yes, Michael, that’s what I was trying to point out. The media, you will notice, is not falling over itself to put a stop to the 1/2% mythology…

  • foo

    And I guess we can expect to see some articles in the media real soon now putting the notion of the “rich foreigner buying condo’s a half-dozen at a time, for cash” to rest.

  • I dunno . . .

    January this year I got occupancy for a 65 unit condo. One guy from Edmonton bought 8 . . . is he a rich foreigner?

  • jesse

    I think the vacancy rate being around 5% deserves way more press than the CMHC data we keep seeing cited. 0.5% vacancy rate makes absolutely no sense compared to all other evidence.

    One thing to note is that often condos can be vacant even though they are rented. This can be the case as tenants move and end up paying rent for two places for a month while only occupying one.

  • Michael;

    “Folks, the vacancy rate is NOT 0.5%. That is the CMHC vacancy rate, which excludes basement suites, houses that are rented out and most importantly, all the condominiums rented out.”

    That’s a bit weird.

    Of course CHMC isn’t going to report occupied basement suite, house and occupied condos as vacant: the operative word is “occupied.”

    If they are occupied they ain’t vacant!

    Capiché!

    PS basement suites are often illegal: hence not officially recorded!

  • LP

    CHMC has no way of tracking condo rentals, whether occupied or vacant.

    That is a huge chunk of rental units in this city and the 0.5% is a useless figure.

    Capiche’

  • Hello friends. This is a good study and I agree with Michael Geller that Vancouver’s true vacancy rate is around 5-6 percent. It’s actually not a new finding that most condo buying comes from local investors, but it’s an inconvenient truth that didn’t fit the hype during the boom. For years, Landcor data repeatedly exposed the myth of the foreign buyer.

    CMHC rental statistics are all but useless when it comes to Vancouver. Their methodology ignores condos unless the owner has three or more units in the same name. This is a joke for a city where the last 30 years of new rental stock has been provided by strata units.

    Thanks for reporting this story, Frances.

  • Thank you for the thoughtful comments and critiques on this blog. It is important to note that this study does not look at vacancy rates. It was an unfortunate wording in the article as unoccupied does not necessarily mean vacant. Indeed, the unoccupied units may not even be available for rent. Page 49 of the CMHC’s Rental Housing Survey for Metro Vancouver and Abbotsford (http://www.cmhc-schl.gc.ca/odpub/esub/64467/64467_2008_A01.pdf) provides their stats on vacancies for condo apartments in the region. Beyond these condo apartments, estimate of the other parts of the secondary market rentals seem to be difficult to find.

    This study is also not a representative sample of all the condos in the City of Vancouver nor Downtown Vancouver, but a highly focused examination of ownership patterns in the high density residential towers of Downtown Vancouver (excluding the West End) — a major element of Vancouverism. The study sample is a stratified indicative sample which attempts to cover some of the age, type, and geographic diversity found in these towers.

    After completing this study, there are really more questions than answers that will require further quantitative and qualitative research by the various housing researchers in this region with likely the need for bold and creative, but pragmatic housing and economic development policy.

  • Michael, Foo et. al.

    Somewhere in this conversation I get a suspicion someone is promoting and agenda: huh I wonder why?

    Prior to coming here, and after 35 years Vancouver practice, I lived two years in La Ciudad de Mexico: ostensibly the largest, not largest, chaotic, sublime, dangerous, safe, ugliest, most beautiful city in the world: assessments all correct.

    Vancouver: sound familiar?

    CMHC numbers? Pricey rentals? Reasonable rentals? Tight condos? Condos, plenty! Market in recession? “Thu hall” freezes hiring? Green shoots a-sprouting?

    I dare only speak from my professional experience as of 2009: but not in Vancouver.

    Award winning Vivo Gallery Residences: 65 units 3.5 storey urbanely integrated mixed use.

    Views? . . . of course!

    We commenced marketing, I say we, I am only the architect, in 2006. Reasonably priced, no frills, it was a mad house: sold out in a matter of days!

    Then somewhere along the line oil spiked, owners hesitated.

    Defaults, but not many. Now the place is fully occupied with some rentals.

    In my own rental, not in Vivo, we are happy for the time being: we live a life of luxurious poverty: magnificent views 270⁰.

    Conversion plans, mooted last year, on hold. The owners can thanq their lucky stars we blocked their plans ‘cos if they gone ahead they’d be fighting bankruptcy now!

    And Michael y Foo thanq your lucky stars too. You bought before the bubble.

    Paz

  • fbula

    Hi all and especially Andrew,

    Sorry if my wording confused the issue. I did go on to specify in my story that “vacant” units would include normal turnover of apartments between tenants, second homes, people temporarily out of the country and so on, which is, of course, different from long-term unoccupied.

    A good example for me to use in my journalism classes about the need for precision in words.

  • michael geller

    “Somewhere in this conversation I get a suspicion someone is promoting and agenda: huh I wonder why?”

    What can I say? My ‘agenda’, if you like, is to ensure that we make important decisions based on accurate data…it was for this reason that I questioned whether it was necessary to implements measures to force people to rent out their empty apartments, when I questioned whether there really were 18,000 empty apartments being held off the market.

    I am entering this conversation now since the City of Vancouver is looking at a number of initiatives to increase the supply of rental housing based on the CMHC 0.5% vacancy rate (including a possible prohibition on Strata Councils that want to restrict units from being rented). It is my contention that there is not a shortage of rental housing in the city and region. However, there is a shortage of AFFORDABLE rental housing. It is important to distinguish between the two.

    I know from personal experience, and discussions with landlords that the market has changed quite significantly since last September. At that time, there were long line ups for one bedroom suites renting for $1200 + near 14th and Fir. Today, there are quite a few ‘for rent’ signs on the very same buildings. Just as the stock market, and condo market have changed in the last 9 months, so has the rental market.

    The city is also considering a range of other ‘incentives’ to get more rental housing built….including either reducing or deferring permit fees, development cost levies, etc. As a taxpayer, and based on my real estate knowledge, I do not think my City Council should be forgoing such fees. If it feels it must do something, to be seen to be doing something, there are other far more effective things to consider….such as:

    1. Change the parking requirements! For well located buildings, I would advocate requiring visitor parking, but not necessarily mandating the number of resident spaces. (Mandate parking for co-op cars instead.) This could significantly reduce the cost and rent for a smaller suite, and potentially contribute to a reduction in the number of cars on the road.

    It might also facilitate new rental housing developments on existing well-located parking lots…shopping centres, churches, etc.

    Offer density bonuses for rental housing. Yes, there is a ‘cost’ to the city when additional density is provided, but it may be less costly than forgoing permit fees…and this initiative will work as long as any required rezonings do not take forever….

    Other solutions? laneway housing; relocatable modular housing; reduced suite sizes; and most importantly, lobby the federal government to eliminate tax provisions and CMHC insurance fees that PENALIZE developers of rental housing.

    OK agua Flor…I hope this helps clarify my ‘agenda’….over to you!

  • Thanqxz Michael,

    You’ve made some pretty compelling points: I respect your point of view: coming from decades of experience, I know!

    I’m off to your town today: work and meeting.

    After the weekend I’ll check in with you . . . Paz

  • not running for mayor

    Condohype, I disagree with your assesment that the CHMC numbers are worthless. Although they aren’t completely accurate they do provide a picture. As it’s unlikely that the vacancy rate between apt buildings and condos vary significately over the medium term. Id anything the CHMC figures provide a very good picture of affordable rentals as the condo units tend to carry a premium.

  • Gassy Jack’s Ghost

    Perhaps the most telling stat isn’t the vacancy rate (whatever it is) but the fact that 50+ per cent of the towers are owned by speculators, and therefore aren’t owner-occupied. I’d be interested to know how that compares to Victoria, Seattle, Portland, San Fran? Vancouver has always been boom/bust because of our rich history of land speculation (hello railroad!), and as MG points out, there has been a pretty radical contraction going on the past 6 months. It would be very illuminating to re-do the study in 2-3 years (post-Olympics) and see exactly what changes.

  • Rand Chatterjee

    Has not anyone seen a problem with these numbers? The report states “the definition of an “empty condo” was suggested by BC Hydro where a unit that uses less than 75 kilowatts (Kw) of electricity usage per month is classified as empty.” Kw [sic] (kilowatt, or kW) is not a measure of electrical energy or usage, but of electrical power. This is no subtle distinction.

    The proper unit, as BCHydro employees and anyone working on such a study as this should well know, is kWh (kilowatt-hour). For the sake of argument, let’s assume this is what is meant, for the numbers presented are at least in the right order of magnitude.

    For example, modern Energy-Star-rated refrigerators will draw 40-60 KWh per month (source: http://www.energystar.gov). In the survey’s 5 pre-2000 buildings with somewhat older appliances and in newer apartments not outfitted to highly green standards, apartment refrigerator draws will fall within 70-100 kWh per month, roughly half of the efficiency.

    Of course, an occupied apartment with lights, heat and/or air conditioning, and maybe an electric stove, a dishwasher or laundry, will–according to BCHydro PowerSmart–drive average monthly power usage in a 500-999 sf apartment with a single occupant to just over 200 kWh. This is of course an average, and PowerSmart shows a low of 150 kWh average usage for average, “profile” apartments without electric heating of any kind.

    So, setting the bar at 75 or 100 kWh (vice “Kw”)–half of BCHydro’s suggested average–for defining the lower limit of occupancy appears ludicrously low and statistically indefensable. It is no surprise that so few units fell below these numbers, and thus hardly proof of anything.

    The real finding here was that over a half of these units were bought as investments, and investments with significant and ongoing operating losses, not the kind of assets people tend to hold through recessions.

  • The full report provides a sensitivity range to cover such a range from 75kw to 150 kw to deal with such an issue. The BC Hydro folks recommended this 75 kw threshold through their work in examining consumption patterns in the Okanagan as well as single occupied condos who just use very little power. Moreover, BC Stats uses 1100 kw a year as their low consumption threshold which is slightly under 100 kw a month. Interestingly, if one was to raise the threshold to 150 kw, then 17 percent of units would suggest an empty condo. It was a challenge to set an adequate threshold that would be responsible consequently, we have used a range of 5.5 to 8.5 percent as a conservative estimate for empty condos.

  • not running for mayor

    Guess we’re below average, I was scanning my bills and according to them my monthly average is below 100kw/h in fact I only surpassed that figure twice in the last year. Mind you we have a gas stove and central heat/hotwater. We are also out of town a far bit both on business and pleasure which reduces our comsumpation. Wonder how much that plays a factor with others. Perhaps my suite is “vacant”.

  • JP

    Andrew,

    I’m quite surprised that the BCH people working with you didn’t correct you (repeately) on the unit for energy, it’s kWh or kW.h or kW/h, not kW or Kw.

    The former is a unit of energy which is measured for residential customers, and the appropriate measure for this study.

    The latter is a measure of demand or power. A threshold of 75 kW would be more appropriate for measuring the number of grow-ops, or if the study was based upon electricity demand for the entire strata, rather than individual units.

  • JG

    The rat race story is actually a good six months old. She lives back east now and the rental market has shifted since then. At that price point, you’re still hard-pressed to find something decent. However, if you walk downtown enough you will notice that you can see “for rent” signs in neighbourhoods and buildings where these used to be quite scarce. The tides are turning.

    I still don’t believe a 13 building sample is conclusive. There is data available to see what demographic is buying into our downtown condos. The most common summary is along these lines, “primary purchasers have been Persian and Indo Canadian investors from Vancouver, Surrey and the North Shore. These buyers have purchased with the intention of renting out or selling their units at a later date. ”

    You can browse the craigslist “for sale” listings for anecdotal proof of this.

    Meanwhile, other buildings are favoured by overseas investors and there are a few that are primarily purchased by vancouver-based professionals who make good coin and like a certain neighbourhood. Because each building has a different preferred buyer, my own feeling is that this study is highly dependent on the sample selected. The size and location can sometimes have less impact on “emptiness” than the ethnic background of the developer.

    Regardless of the intentions of the study, the Vancouver media can always be counted on to spin a story to the benefit of it’s advertisers….

  • fbula

    Everyone is doing such a good job of deconstructing arguments on all sides that I hesitate to wade in, but … just one question for JG. Your last sentence indicates that I and/or other media have spun this story to benefit the advertisers. I must be exceptionally thick, but I am not getting what our alleged agenda would be in doing so. What’s the benefit to advertisers?

    I should point out, by the way, that I read the study, did my interviews, wrote my story and then afterwards looked at how BTAworks had framed their news release. The title was “empty condos a myth,” so that was their conclusion on this as well.

  • JG

    The figure I’ve heard is that Bob Rennie was paying $7 million a year in advertising. You can look at westcoast homes in the sun for proof of the spending power. Full-page ads don’t come cheap. Since the once profitable classifieds business was lost to craigslist, something has to pay the bills.

    Even if the pressure isn’t direct and overt (i’m not suggesting death threats from realtors and developers here), it’s hard to see the editors pushing anything through if it might threaten their life line. Journalism is pretty fragile these days. A lot of people are worried about their jobs, and I know this because there is a ridiculous amount of news on the industry. The odd “balanced” housing story might squeak through, but the overwhelming trend is to side with the industry that is signing their paycheques.

    Conspiracy theory #2: the city’s most esteemed journalists have benefited from the bubble and have a serious stake in protecting their investments. Housing is a hard thing to be impartial about because the sides are drawn quite plainly. We’re all either renters or home-owners. Demographics indicate that a large cohort is nearing retirement with a near-zero savings rate. Extending upon this, the dot-com bubble scared the hell out of a generation and caused a lot of boomers to reallocate their wealth from intangible equity holdings to real estate, an asset that has two things going for it: It is less affected by the innumerable Bernie Madoffs out there and you can also show it off to your friends! You connect the dots and can understand why there might be some cognitive dissonance.

    My last point is totally anecdotal. I work in a field where I have a fair bit of access to data and I am occasionally asked to write press releases. I know contacts I could partner with to write stories on the real estate market to promote both our companies. While I don’t have a stake in the market’s direction, these contacts have told me they are unwilling to add their data and participate in a story if it might lead to conclusions that would upset their clients.

    I can go on, but you add it all together and it can start to feel like the military-industrial-congress complex.

  • not running for mayor

    There is starting to be a large backlash against Craigslist. I beleive it started in New York with tickets, people would flood the listings with cheap tickets for sale for sold out events when they didn’t really have any. Real sellers would see the ads and lower their price respectively to compete. The fake posters would then purchase the tickets at prices below the true market would bare so they could attend the event. This apparently spread heavily once word got out, real estate was targeted but with less success but the rental market apparently was hit hard too. That’s the biggest problem with free ads is anyone can post anything and tamper with the market. If you had to pay a minimal fee that issue would dissappear.
    I look at those Vancouver Craiglist rental ads out of curiosity every once in a while and wonder how much if any of them are fakes.
    Perhaps a new study for Andrew.

  • fbula

    Hmm, well, I still don’t get how writing a story about research into the empty-condo hypothesis is aiding and abetting the real-estate industry and big-bucks advertisers. How does that help them and in what way is that being “spun” to benefit them?

    As for newspapers and what they’ll do — yes, surprise, surprise, among the hundreds of newspapers and reporters out there in the land, yes, some of them do sometimes bend to advertiser pressure or get too cozy. Does that mean every last publication does that? No, and it would help promote good journalism if all the media critics out there would learn to distinguish between good and bad. I only started writing for the Globe last year, but one thing I’ve been really impressed by is their enthusiasm for going after news, even if those stories don’t particularly make advertisers happy.

  • JG

    That’s an interesting idea, but I can see why it wouldn’t work. Most people still list with agents who have actual data on what prices the market will bear. The guy speculating on front row britney spears tickets does not have the same luxury.

    Also, I believe new york is one of the few markets where craigslist charges for listings, although that might just be for jobs.

    Regarding condo rentals, I see more of the opposite thing happening. Unaware owners often ask rents that are much more in line with their mortgage payments than what comparable condos are renting for.

  • Thank you, Rand Chatterjee…I stand corrected…Editing got a little overzealous and it is KWh/month after reviewing my notes from BCH. This is the benefit of crowdsourcing and constructive criticism.

    I do however take exception to the suggestion of “spin” in this story. Frances has been very diligent in presenting this story and has NOT in anyway manipulated any of our findings.

    It was a bit of a surprise for me at the lack of empty condos based upon these criteria as much as anyone else. However, I stand by the results of this study and how Frances has presented the story as we use one possible measure of quantifying empty condos.

    In the face of limited research resources, our indicative stratified sampling technique was to focus on high density towers in Downtown Vancouver (excluding the West End). Any extrapolation on the overall city or even the entire downtown peninsula is NOT what this study examined. Indeed, the interest as articulated in this board and others reflect the need for a much more comprehensive study of the subject on a citywide level muchless a regional wide level to get a complete understand of the housing ecology in the region. Anyone out there up for this?

    At the beginning of the project, we explored a number of possible metrics such as water use, garbage weight, photographic analysis, but they were systematically ruled out for practicality as well as responses from folks like Metro Van. Hydro usage emerged as the most feasible metric. This type of research and insight is built on a constructive and collaborative dialogue between researchers and those interested in the area. We just wanted to start this conversation with one attempt to look at empty condos and ownership patterns in Downtown Vancouver condos. I should however caution that the plural of anecdote is not data.

    After completing this study, I have concluded that going after “empty condos” may not necessarily solve our ongoing affordable housing problems. Indeed, more towers, if developed and sold like the ones in Downtown Vancouver over the last 20 years with the dominance of one bedroom, non-owner occupied units, might not be sufficient to allow families with children at any income to stay in the city. So given all that is said about Vancouver, the big questions for me are still “what kind of city do we really want to be?”, “how do we get there?”, and “what are we willing to do?”

  • Very interesting…now if we could only get Tsur Sommerville of UBC to review all of this, and provide a response, we would be well served. He gave a paper at the BC Land Summit on many of the topics discussed in this blog, as well as whether there would be a benefit in having prohibitions on strata councils that don’t allow rentals.

    His conclusion. It’s not necessary. He also has some very good statistical information on the percentage of condominiums owned by investors, by location and building size and age…It’s worth checking out, if you are interested.

  • foo

    Andrew, I agree the best thing to come out of your study is support for the notion that Vancouver is NOT a family-friendly city.

    Many people have been complaining for years that the policies of the city planning dept are leading to the very opposite of the sustainable, diverse city that they claim to want. Maybe studies like this will actually make them take notice.

  • Rand Chatterjee

    A Broad Thank You and a Word on Spin

    A considerable number of posts here, Francis! Clearly you’ve chosen to follow a popular, and highly important, story. Thank you for your interest on this from the very start.

    Thank you also to Andrew for obtaining important data openly, which we could not do in our research on a similar topic over two years ago, and before this real estate bubble began to burst. Thank you also, in the most respectful of academic traditions, for acknowledging corrections where appropriate.

    Andrew, your conclusions relating to the cost, suitability, and flexibility of what we have built, and the consequent effects on social diversity, are invaluable contributions to our understanding of Vancouver’s most critical social planning crisis: housing affordability. I also noted with interest the reverse ownership skew you found, where downtown towers are majority non-owner occupied, in stark contrast to Vancouver- and Canada-wide real estate owner occupancy rates of 60-75%.

    Now turning to the question of journalistic spin.

    Andrew’s project title is “Ownership, Occupancy, and Rentals: An Indicative Sample Study of Condominiums in Downtown Vancouver.”

    The Globe article title on this same study, and with no other data introduced, was “Empty condo myths untrue, research shows.”

    For those who chose to read the article itself, this message is reinforced unequivocally. “Neither of those beliefs is true” is the lead hook of the Globe article, rebutting a suggested myth that a high percentage of downtown condos are empty and heavily foreign-owned.

    The article furthermore describes the BTAworks survey as “a representative sample,” when in fact this statistical terminology is never used in the study at all. “Indicative” is not the same as “representative.”

    Let us address the question of foreign ownership first. The BTAworks study had no access to data on the citizenship of condo owners, and in fact provided a clear caveat and reasoning for why its “methodology is not necessarily a final measure of foreign ownership.” All that was reported was that 87% of tax assessment bills were posted to Canadian addresses. What is more, the study’s conclusion does not even mention the question of foreign ownership.

    The Globe article states “Eight-seven per cent of the units were owned by investors from Canada.” The implication in context is clearly that these investors are Canadians. The study made no such representation at all.

    Spin? You decide.

    Turning to the question of Vancouver’s empty condos, what are the facts and what was reported?

    Let us assume that this survey of just under 2,400 units, clustered in only 13 buildings in an area reportedly containing 27,000 condos, were “representative” as errantly claimed in the Globe article. An ‘unoccupancy rate’ of 5.5-8.5% would be a startling 1,500-2300 empty units just in the downtown core, and by accident in exactly the range of the number of homeless people in our city.

    Now, given that the vast majority of recent condo developments have in fact been not downtown but throughout the East Side of Vancouver, could one extrapolate this finding to more of the city’s 285,000 total dwelling units? The statistically honest answer is no.

    But if you did, you would find that the “urban myth” of 18,000 empty dwelling units city-wide that Francis Bula and others have cautiously reported since February 2008 is in the lower middle of this study’s distribution, at just 6.3% of the total.

    My reservations about BCHydro’s suggested low energy usage trigger still stand, especially given their own PowerSmart apartment profile data. However, I tip my hat to ‘not running for mayor’ for his apparent energy frugality, and wonder if his situation, with no unit Hydro bill for heat, hot water, or cooking (gas), is common in downtown towers.

    “Condo Myths Untrue.” You decide if this title is indeed spin, given the facts as presented in this groundbreaking research by Andrew Yan.

    Now how about reporting on how Vancouver can recover from building so much “housing product” of a monolithic typology that starves the urban core of its affordability, creative diversity, and perhaps even its celebrated “density”?

    That would be reporting worth reading!

  • fbula

    Rand,

    I am at a loss as to why you would think that I would have any interest in “spinning” this. It’s a shame when legitimate public debates are sidetracked by attempts to prove a conspiracy thesis about the evil corporate media or whatever is going on here. Why are you trying to prove that I somehow distorted what Andrew and his study had to say.

    As you know, I’ve been interested in these issues for a long time. Andrew told me he had a study going. I read the study, talked to him and Michael and wrote my story. I have no interest in “spinning” things — if Andrew had said that, in fact, Vancouver’s downtown condos are three-quarters empty and all owned by Russian gangsters, I would have been thrilled to report that.

    Once again, can I remind you that, after I wrote the story, I looked at Andrew’s press release and was amused to discover that I had hit on the same points he had.

    Here is the news release BTAworks prepared:

    For Release
    May 25, 2009
    Downtown ‘Empty Condo’ phenomenon largely a myth, study finds
    Majority of condos, non-owner occupied, but rented.
    Vancouver, British Columbia – The popular belief that there are large numbers of
    empty downtown condos with offshore owners is largely disproved by a new study
    released by BTAworks. The study, undertaken to examine condo ownership in
    Downtown Vancouver also confirmed that the majority of the area’s condos are not-
    owner occupied.
    BTAworks, a new research and development consulting division of Bing Thom
    Architects, examined data from the City of Vancouver, BC Assessment, BC Hydro, and
    the Canadian Mortgage and Housing Corporation for 2,400 condos in Downtown
    Vancouver – almost 10 percent of all the condos in the area.
    “Working with BC Hydro data, we were able to determine that only 5.5 to 8 percent of
    study condos were unoccupied.” states Andrew Yan, a BTAworks researcher and
    Urban Planner who led the study. “While the number of empty condos in Downtown
    Vancouver is low, condos in our study were typically non-owner occupied, but rented
    out by their owners”.
    In addition to an estimate on empty condos, the study found that:

    Condo ownership is a relatively new form of housing for Vancouver. Over 88
    percent of condo units in Downtown Vancouver have been built since 1990.

    Less than 40 percent of downtown condos have more than one bedroom.

    The majority of condos are not occupied by the property owner.

    The majority of non-owner occupied condos are owned by BC residents, with a
    scattering of foreign owners, predominately from the western US states such
    as California, Washington, and Arizona.

    Owner-occupied units are typically worth $30,000 to $40,000 more than non-
    owner occupied units, and the more bedrooms the unit has, the more likely it is
    to be owner occupied.

    A family with one child in the City of Vancouver earning the median income of
    $75,000 a year would have great difficulty in finding and paying for a condo
    bigger than one bedroom, even if condo prices were to fall 25 percent below
    2008 assessment levels.
    The study findings outline some of the elements behind Downtown Vancouver’s
    remarkable housing boom and suggests that the majority of growth in Downtown
    condos has been dominated by investors and those looking for a second home, rather
    than homeowners. These trends signal emerging housing and planning challenges in
    providing suitable and affordable housing for working and middle-income households,
    especially those with children.
    “If Vancouverism 1.0 is embodied by tall skinny towers and one bedroom, investor-
    driven condominium projects for Downtown Vancouver, then Vancouverism 2.0 needs
    to redress this imbalance by providing more affordable family-oriented housing units
    with great supporting amenities,” concludes Yan. “Without this, the sustainable
    communities with opportunities to live, work and prosper that the City aspires to are
    likely unachievable.”
    “We’re proud to fund this study and inform the ongoing and important housing and
    planning dialogues occurring in the City” said Bing Thom, principal of Bing Thom
    Architects. “Vancouver is often viewed as a global example of downtown residential
    development and we must work to ensure that what we are modeling for the world has
    substance with a commitment to affordable and suitable urban housing for families
    with children to stay and grow with our city.”

  • LP

    Can I just state that it is not likely that editors influence stories positively or negatively for those that spend money advertising in the media.

    What is more likely to happen, and does happen is that someone like Frances does a story, the editor approves said story, and it gets published.

    During the process of publishing, the sales department reviews the content of the publication or media and subsequently bitches and whines to the editors that the story hurts their business.

    Depending on the size of the advertiser and how much money they spend, the sales dept then scrambles to kiss enough ass to rectify the hurt feelings and maintain their business despite the whatever was said in the story.

    For those folks who are not major advertisers or have never been in the business, please seek out some help for your conspiracy theories on advertising influencing the media, especially when it’s someone with the reputation of Frances Bula.

  • Rand Chatterjee

    Journalism is about analysing and reporting facts.

    The simple fact is that Andrew Yan’s study found a 5.5-8.5% vacancy rate in the Yaletown/West End condo supply, using very low thresholds on hydro use of 2.5 or 3.4 kWh per day.

    This usage, below which an apartment is considered likely empty, compares with BCHydro PowerSmart’s own published average power use profile for 500-999 square foot apartments of 5.0 to 6.8 kWh per day, depending on its use of electric heat and/or hot water, or neither.

    But even if we accept this 5.5-8.5% rate of vacancy as the true number, look at the real estate crisis down in America’s worst-hit cities, and you will find these home vacancy rates for the 1st quarter of 2009:
    Los Vegas – 4.8%
    Phoenix – 2.6%
    Orlando – 5.2%
    Miami – 5.6%
    Atlanta – 4.4%
    Source: http://www.census.gov/hhes/www/housing/hvs/rates/index.html

    Now, what about this Bing Thom study would make ANYONE write “Empty Condo Myths Untrue,” and dismiss this impending crisis while Vancouver Council debates incentives to encourage the construction of even more new residential units.

    Blind overbuilding and overcapacity has plunged the US economy into the worst recession and banking crisis in 70 years. Why are we continuing to stoke the very same fire here, when it is already out of control?

    To be sure, Bing Thom’s press release title, did state “‘Empty condo’ phenomenon largely a myth,” but the study itself came to no such conclusion, if anyone–including anyone in the media–actually read it, let alone thought for just a second what this meant.

    “Rip and read” is not a form of journalism, but a violation at the very core of journalistic ethics, one all too common in Vancouver, and one that will cost the public dearly.

  • fbula

    Rand,

    You seem pretty determined to make the case that anyone who doesn’t agree with you is a “bad journalist.” There’s not much I can do about that.

    I will just keep pointing out the obvious facts — an 8 per cent vacancy rate, even if it’s higher than other cities, is nothing like the 25-50 per cent rate that has been the assumption of urban myths about Vancouver condo towers.

    Andrew’s figures indicated that 87 per cent of the investors were from Canada, with half of those Canadian investors being from the Lower Mainland.

    Once again, I am mystified as to why you think there’s some deep hidden agenda to anyone who doesn’t agree with you. As I’ve said before, if Andrew had found out that, indeed, half the condos were empty and that most of them were owned by a mix of Russian and Middle Eastern investors, that would have been a fabulous story — one I would have got better play for. (It’s never a big news seller to bust a myth.)

    In spite of all this, I admire your efforts to fight for a better Vancouver. Just don’t know why you have to attack people who don’t agree with you on every point.