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Vancouver development industry slows and re-thinks; Fortress evaluated

October 9th, 2008 · 1 Comment

While the focus so far this week has been on Millennium Developments and its current problems with cost overruns and financing, there’s another story in this city about what’s happening with development generally.

As many people told me over the last two days, it’s been disastrous the last few weeks since the financial crisis started. Open houses for pre-sales have seen either sparse attendance with almost no sales or heavy attendance, but with only light sales. One of the few bright spots has been a Polygon project in Delta that sold instantly over the weekend, but, as people pointed out, that was a small project of 24 units that was priced attractively.

No one knows if this is just temporary. Condo marketer Bob Rennie has been saying it’s like trying to figure out what to do in the days after 9/11. “Do you want to get on a plane then? No.” It may be that within a couple of months, there’s a bounce back and buyers and developers will regain some confidence.

But almost everyone agrees that the days of the gold rush are over, when a guy with a few presales and a lender willing to go with that could call himself a developer and put something up. My story here in the Globe and Mail today outlines some of what’s currently going on in Vancouver, though there’s lots more to be written about this.

Along with this, Globe and Mail columnist Gary Mason has taken a look at the Millennium situation again, only focusing this time on the state of the lender, Fortress Credit Corp., and how it’s doing in the current financial climate. You can read that here.

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  • There is a potential positive slant to the down turn in the housing development issue -an ecological advantage. In areas of the Metro Vancouver, such as UBC and the UEL housing development shave been going strong. Housing has been needed and for many faculty and staff the rental and co-development housing that was developed on the former B Lot Parking has been a good thing.

    However, the gold rush mentality of the building boom has resulted in the encroachment on productive second growth woods and is now threatening the existence of the amazing UBC Farm in south campus.

    UBC’s development company, UBC Properties Trust Ltd. (the Ltd is critical to note as this puts the company into the private doamin and away from FOI requests), has a tree replacement policy. That is, for every tree removed they ad one somewhere else on campus.

    Sounds great, but what does it mean? Well, take a 70 foot fir tree in south campus, cut it down and mill or chip it and replant an ornamental shrub beside the Museum of Anthropology. Or, cut down a 50 plus year old pine tree on Thunderbird Blvd and replace it with a ten foot tall hawthorn tree. In the process we are losing significant biomass -perhaps we should replace biomass on a unit to unit basis?

    At the end of the day we need reasonable development practices that do more than look good, they need to be good. This downturn might allow a pause during which we can reevaluate development practices in the UEL and UBC areas and bring them into line with a future oriented ecological perspective rather than a now-oriented business mentality.