Developer Ian Gillespie is much in the news these days. He launched his Gesamtkunstwerk exhibit a week ago as part of the build-up to Vancouver House, the Bjarke Ingels-designed tower that will be blooming flower-like (thin stalk, showy bee-attracting thing on top) next to the Granville Bridge.
Here’s a recent feature I did on him in Vancouver magazine. In advance of your comments, I notice Gillespie seems to draw a lot more negative comments than any other developer I write about. I’ve done profiles of Peter Wall and the Malek brothers at Millennium, mentioned people like Terry Hui at Concord and Andrew Grant at PCI and Michael Audain at Polygon in stories any number of times, and never seen as much vitriol directed at them as at Gillespie. (Interestingly, others in the development community seem to be at least as annoyed by him as many resident groups.)
I’m guessing it’s because he tends to wade in to contentious parts of town, attracting more attention. (Some development companies I report on simply never ask for rezonings — they just don’t want to deal with the hassle. They stick strictly to land that’s already zoned for what they want to build.) And because he makes claims about the worthwhile social mission he wants to carry out in some of them — Woodward’s, 60 West Cordova, 1401 Comox — again unlike other developers who simply build their buildings and move along. And he antagonizes developers by saying some of the things he does in my feature.
(And, on the social mission front, I worked with UBC journalism student Ian Holliday recently, who produced this story on 60 West Cordova.)
I think some of you commenters may say it’s because he appears to be so favoured by Vision, because he gives money to them. For my story, I went back and looked at the record. And strangely, Gillespie gives very little — about $12,000, which is probably less than his Christmas-light bill. Unless I’m missing a numbered company somewhere, these are the general totals: Walls gave 110,000 through various companies; Reliance gave 26,000, Bastion gave 21,000, Concord gave 36,250, Westbank gave 11,700.
Anyway, I’m sure you all won’t hold back in your assessments of his impact on the city.
93 responses so far ↓
1 Jay // Apr 3, 2014 at 7:17 pm
@48 – “Townhouse economics: As I said, the current going price per buildable square foot in Vancouver is widely seen to be about $142. This is an average. Townhouses in Vancouver sell for under $300 psf. The spread is your building cost, soft costs, and profit margin. That is simply not enough. Building anything in Vancouver for under $140psf is very tough. The economics just say no to townhouses right now. Prices of land will have to drop significantly to make it possible for anyone even looking to break even.’
Wouldn’t the zoning designation determine the value of a piece of property? For example, houses zoned for townhouse/rowhouse as part of the new Norquay plan, go for around $900 000. Houses in the higher density apartment transition zone are selling for $1.5 million. There shouldn’t be much speculation going on in Norquay or G/W because there is a firm plan in place and everybody is aware of what type of housing is expected.
2 Factchecker // Apr 3, 2014 at 7:56 pm
@48 – I’m not sure where you’re getting the idea that Vancouver townhouses sell for $300 psf. The examples I can find online are over $500 for a new eastside example $789,000 for a 1,445 sq. ft. 3-bed townhouse on E16th. They’re more expensive on the westside, at least $600 psf – $699,000 for a 30 year old 2-bed 1,167 sq. ft. townhouse in Fairview was the cheapest example I could find. And Jay is probably correct – the land alone to build new townhouses would cost $900,000 a lot, so even if you could somehow squeeze 3 townhouses onto each they’d cost at least $442,000 each to build (not counting soft costs, profits etc.) for a 1,000 sq. ft example taking your construction cost to be correct.
Your comparison of townhouses with False Creek North density is very misleading. The figure of 50 units per acre is a gross land area figure – that’s 50 units per acre and BC Place Stadium, Rogers Arena, an office building, a future casino and two hotels, a community centre, retail including a supermarket, roads and four parks (one still to be developed). You can’t really compare that with townhouses in the east at 47 to the acre.
You also probably shouldn’t use a 10 year old document with a foreword signed by Larry Beasley as Planning Director for numbers either. The 7,800 dwellings in that publication is more like 10,000 today, and there’s still undeveloped land for about 5,000 more to come.
In Vancouver townhouse projects like those you find on Oak Street are around 35 units per acre (on the land parcels they are built on). There are examples that have smaller units, so your 47 per acre seems perfectly achievable. False Creek North is currently over 200 units per acre if you just count the land area the residential buildings occupy.
3 jenables // Apr 3, 2014 at 10:27 pm
Bablu, I did read the articles, every one of them. I also read the comments. Sorry to appear contentious but I actually do disagree about the volume of people coming into the city of Vancouver. Metro, sure, but the city of Vancouver? I’m not buying it. But please do answer my question as to why someone would want to buy a condo with the belief it will depreciate significantly. I really need to know!
4 spartikus // Apr 3, 2014 at 11:13 pm
but I actually do disagree about the volume of people coming into the city of Vancouver.
Based on…???
Here’s the thing. These discussions are quite often divorced from the wider world. The latest IPCC report paints a pretty grim picture of famine. I’m convinced large populations are going to migrate north in the next century. They’re probably not going to care if places like Vancouver are expensive or not, they’ll just build shantytowns as generations before have.
This is the sort of stuff we have to think about.
5 Lewis N. Villegas // Apr 3, 2014 at 11:22 pm
Townhouses vs Condos — reality check
The land economics, we all agree, will remain a slippery slope until imbalances in the system and the irrational exuberance correct.
Economics notwithstanding, there are other values to consider. Chief among these is the key consideration that the (fee-simple) row house will be seen as a different productby the market place than the SFH (single house) and the condo (tower, slab or walk-up).
That ‘fee-simple’ part is important. The fee-simple takes out the “hidden tax” of the condo and makes the row house competitive with the condo on that all important “monthly payment”. The condo’s property management fee pays principle and interest in the fee-simple row house.
Also important is realizing that row houses can be zoned and built on a lot-by-lot basis. Much of what inflated the cost of the condos going up on Cambie opposite QE Park was the food fest that ensued over profit taking during land assembly.
Take out the party, lower the costs.
I say row house and not ‘townhouse’ because the latter tend to be strata title not fee-simple, and built over a shared underground parking. Suspended concrete slabs are prohibitively expensive compared to wood frame floors. Furthermore, fee simple row house are ‘self-parking’. They park two cars off the lane and one car on the street in front of the house.
On a lot-by-lot basis, a 25-foot lot yields two 12.5-wide foot rows; a 33-foot lot two 16.5-foot rows; and a 66-foot lot five 12.5 foot wide rows. Now we can get to density…
The 16.5-foot row x 60-feet deep yields 1,000 s.f. per floor and 4,000 s.f. over 3.5 stories (bottom storey is half-sunk on the street but at-grade with the back yard on sloping lots). The lot is 122.5 feet deep x 16.5 feet wide or 2021.25. Say 2000 s.f.
That row house has an FSR of 2.0 (4000/2000) which is impressive.
At 800-s.f. per unit, the row is the equivalent of 5 units, and you can get 21.55 of these lots per acre, or 107 units per acre. Now, this is a net density figure that does not account for the share of road, lane and flanking street used to service the lot. So, it is a bit artificial. In Vancouver platting, the gross up factor is typically 33%.
Thus, the gross density of the 4000-s.f. row house @ 3.5 storeys high is 107 x 0.67 = 71.69. Let’s cheat (most developers do) and call it…
72 units per gross acre.
That is the fee simple row house‘s comparative advantage in a nut shell.
It will yield 15% more habitable space than a walk-up apartment the same size since all the circulation and exiting is contained in the individual units. There is no common area and no Strata Fee. If you want to paint the front door RED go right ahead. No strata council is there to tell you how to live. The home owners do their own upkeep and gardening and take their savings to the bank.
I agree with Rand that the row house is a far superior model from the point of view of neighbourhood and community building, social functioning, and private investment. Top and bottom floors can be rented out as ‘mortgage helpers’. It is also a brawnier economic model supporting many small projects and a diversified market place hosted by numerous of small builders vs. the condo towers that privilege a select and small number of super-rich and super-sized players.
Whether we compare them to walk-up apartments or condo towers and slabs, the fee-simple row house has the human scale that the others lack. That will not only reap rewards in social functioning, but it will protect the one asset that makes this city unlike any other in the world—the view of the mountains. If the entire neighbourhood builds out with social scale—without giving up on the possibility of adding robust density—then the rooftops will follow the natural contour of the land and all lots will preserve one and the same number and quality of views, lunar and solar exposure.
Slice it any way you want, the condo is not king.
6 Lewis N. Villegas // Apr 3, 2014 at 11:50 pm
A survey of venerable row house neighbourhoods in Canada here:
http://wp.me/p1yj4U-bW
7 jenables // Apr 4, 2014 at 1:44 am
Spartikus, based on actual population statistics, based on Vancouver’s economy, based on cost of living, based on school enrolment, based on what I see (which is people moving to the suburbs and commuting in, causing the highway to need widening and the b line/skytrain packed – outside of rush hour I don’t really see a change at all in terms of cars, other than areas that have had capacity reduced, or people on the street, unscientific I know but it should be clear that what anyone sees will always be anecdotal) and lastly spartikus, because these projections justify projects that make very powerful people even wealthier. Where is the evidence we are being flooded with people? Note I do not consider demand for investment properties as legitimate evidence of a ballooning population.
8 jenables // Apr 4, 2014 at 1:45 am
Also spartikus I had no idea how to interpret the rest of what you said regarding famine and shanty towns.
9 spartikus // Apr 4, 2014 at 8:03 am
based on actual population statistics
Well I’d be curious as to where these population statistics come from. Metro Vancouver, supported by Stats Can, is expecting 1.2 million new residents by 2041. 137k projected for CoV.
I had no idea how to interpret the rest of what you said regarding famine and shanty towns.
Yes, I know. It’s crazy to think that Vancouver might not exist within a bubble and that outside events might capsize the neatly ordered plans and dreams of hobbyist urbanists.
10 Roger Kemble // Apr 4, 2014 at 8:59 am
http://en.wikipedia.org/wiki/Demographics_of_Vancouver#Population_growth
“Well I’d be curious as to where these population statistics come from. Metro Vancouver, supported by Stats Can, is expecting 1.2 million new residents by 2041. 137k projected for CoV.” spartikus @ #39
“1.2 million new residents by 2041” Phew bonanza!
Fortunately I saw the housing bubble coming and deposited what little money I have in a GIC and silver bullion rather than real estate. So I am able to step back from this repetitive, and pointless discussion, over the future of house prices.
As of the last census the city has grown @ . . .
2006
578,041 +5.9%
2011
603,502 +4.4%
And Metro @
2006
2,116,581 +6.5%
2011
2,313,328 +9.3%
Don’t take my word for it. I have posted the appropriate StatsCan link (Frances allows only one link) on my name above. Check it out!
For the general Canadian pop trend see . . .
http://www.statcan.gc.ca/pub/91-003-x/2007001/figures/4129879-eng.htm
. . . essentially we are looking at stagnation unless we can find an alternative to someone else’s coal dust and hopefully not arouse the sleeping giant ring of fire when we gear up the fracking!
I have posted this stuff numerous times but I have to conclude we have others out to control the agenda especially local municipalities. The trend according to StatsCan is down . . .
To wit: “Well I’d be curious as to where these population statistics come from. Metro Vancouver, supported by Stats Can, is expecting 1.2 million new residents by 2041. 137k projected for CoV.”
I can understand the anxiety when you read this after clearing out the basement to find the money to put a roof over your head. But those days are gone and don’t blame the population stats for that. Blame the banksters . . .
Please enlighten me. I know of nowhere were StatsCan supports municipal stuff!
11 Roger Kemble // Apr 4, 2014 at 9:35 am
“Well I’d be curious as to where these population statistics come from. Metro Vancouver, supported by Stats Can, is expecting 1.2 million new residents by 2041. 137k projected for CoV.” spartikus @ #39
“1.2 million new residents by 2041” Phew bonanza!
Fortunately I saw the housing bubble coming and deposited what little money I have in a GIC and silver bullion rather than real estate. So I am able to step back from this repetitive, and pointless discussion, over the future of house prices.
As of the last census the city has grown @ . . .
2006 578,041 +5.9%
2011 603,502 +4.4%
And Metro @
2006 2,116,581 +6.5%
2011 2,313,328 +9.3%
Don’t take my word for it. I have posted the appropriate StatsCan link (Frances allows only one link) on my name above. Check it out!
For the general Canadian pop trend see . . .
http://www.statcan.gc.ca/pub/91-003-x/2007001/figures/4129879-eng.htm
. . . essentially we are looking at stagnation unless we can find an alternative to someone else’s coal dust and hopefully not arouse the sleeping giant ring of fire when we gear up the fracking!
I have posted this stuff numerous times but I have to conclude we have others out to control the agenda especially local municipalities. The trend according to StatsCan is down . . .
To wit: “Well I’d be curious as to where these population statistics come from. Metro Vancouver, supported by Stats Can, is expecting 1.2 million new residents by 2041. 137k projected for CoV.”
I can understand the anxiety when you read this after clearing out the basement to find the money to put a roof over your head. But those days are gone and don’t blame the population stats for that. Blame the banksters . . .
Please enlighten me. I know of nowhere were StatsCan supports municipal stuff!
12 Chris Keam // Apr 4, 2014 at 11:38 am
“famine and shanty towns.”
If .01 percent of Bangladesh’s population (177,000,000) make it alive across the Pacific and on to BC shores once their country is swallowed by the ocean, we will have to find homes for nearly 20,000 people in the province, until they disperse to other locales. That’s a tiny fraction of one country almost certain to be impacted. Start to extrapolate how this all plays out and it’s obvious northern and high altitude countries are going to have to make room for new settlers.
The enormity of the probable future we face makes a mockery of middle class folk whinging that their TV and car don’t get their own room and they have to share a wall with a neighbour.
13 Richard // Apr 4, 2014 at 12:05 pm
Really Roger?
Do the math on the numbers you posted. By 2041, based on those percentage numbers we will be more or less at the numbers used in the local and regional plans.
Of course, if we don’t build enough homes, those numbers will be lower but homes will even be more expensive.
14 Dr. Frankentower // Apr 4, 2014 at 1:46 pm
But Richard, you (and Metro) don’t appear to have factored in the Bangledeshi. Clearly, we must build many, many more condo towers. I wonder, though, would it be better to build them in Delta, Richmond, or Gastown?
15 spartikus // Apr 4, 2014 at 2:02 pm
Clearly, we must build many, many more condo towers.
Who said anything about towers?
But better to pretend the world outside our privileged kingdom doesn’t exist.
Contingency planning is for losers.
16 Chris Keam // Apr 4, 2014 at 2:31 pm
@Frankentower
‘Mount’ Pleasant. ‘Hillcrest’. Champlain ‘Heights’. Capitol ‘Hill’. Oak-‘ridge’. One might reasonably surmise that a region with mountains to look at may have some high ground available.
17 F.H.Leghorn // Apr 4, 2014 at 3:08 pm
The Cassandra syndrome strikes again. CK, with his fantasy of Bangladeshis swamping our little corner of paradise, is sounding a lot like Dr. David “The Sky is Falling” Suzuki.
Is the argument that the normally unpredictable future is filled with disasters on a global scale unless we stop driving, burning and consuming, is that argument going to convince anyone that drastic measures are required now? Would you give up your car because Suzuki is worried about sea levels?
One might as well plan and behave based on advice from palmists or astrologers. But Science is different, the alarmists will say. It actually can predict the future. For example?
Surely the risk of conventional (or nuclear) warfare is more real and immediate than the apocalyptic scenario evisioned by the Climate Police. Or the threat posed by collision with asteroids, or any of the other foul-ups which characterize our bungling species.
18 John Geddes // Apr 4, 2014 at 3:35 pm
@55 Lewis
Thank you for the thoughtful analysis. I find it very interesting as I tend to agree that a housing alternative that is efficient and “strata free” would be a good addition to our urban planning.
19 IanS // Apr 4, 2014 at 4:02 pm
@Lewis #55:
While I don’t dislike the idea of fee simple row houses, I’m not convinced that the “fee simple” model is necessarily an advantage over a strata title. They are different animals, to be sure, but the strata approach is not inherently inferior. It’s just different.
I assume the “hidden tax” to which you make reference is the monthly maintenance fee? If so, I am doubtful that it would cover principle and interest on any realistic mortgage. Moreover, it goes to maintenance of the property. Even owners of fee simple row houses will have to maintain their properties.
Finally, wouldn’t owners of such row houses share common walls? Wouldn’t there be some need to provide for a mechanism for cooperation and/or resolution of disputes?
To be clear, I’m not saying that there’s anything wrong with the idea of row houses. However, I do think that you are overstating some of the benefits.
20 Frank Ducote // Apr 4, 2014 at 4:38 pm
Back on topic – if you haven’t visited Gillespie and Westbank’s Gesamtkunstwerk exhibit at Beach & Howe Streets, you are missing a simply stunning demonstration of how a truly amazing and visionary project – Vancouver House – is coming into being.
Kudos to them and curator Trevor Boddy for putting this installation together. Once you see it you may be more willing to agree with Mr. Gillespie’s statement. Nobody else IS doing what he dares to do.
This exhibit is yet another reminder that Vancouver needs an Urbanarium to show, discuss and debate planning and development ideas more than ever.
Hopefully that long held dream of people like Ray Spaxman and Richard Henriquez can get a kick start with this as a stellar precedent.
21 Roger Kemble // Apr 4, 2014 at 5:16 pm
“Do the math on the numbers you posted. By 2041, based on those percentage numbers we will be more or less at the numbers used in the local and regional plans.”
Let’s get a bit of common sense into this conversation, Richard @ # 62 please!
So I have done the math and the outcome is that Vancouver is relying on in-out pop numbers with more off-shore investors doin’ the empty suites thingie than ever.
Vancouver pop is sliding lineally, status-quo-ing not growing.
When BC attracts wealth creating new industries that support a growing and prosperous population then you can start crowing about doing the math!
Check out . . .
http://www.statcan.gc.ca/pub/91-003-x/2007001/figures/4129879-eng.htm
. . . really Richard what do you thinq it is telling you.
22 Randy Chatterjee // Apr 4, 2014 at 5:21 pm
Ian S (68) – Condo aka Strata fees range from $0.75 to as much as $2.50 psfpm in Vancouver and thus significantly above the interest payments on the debt for the median dwelling unit.
So, the real financial cost of holding strata property is indeed roughly double that of a fee-simple unit. Remember, a strata unit owner still has to fix everything inside his or her unit. The strata fee does not cover that. The row house owner indeed has building envelope responsibility, but a new roof every twenty years, gutter cleaning, new exterior paint, and maybe new window trim (on two sides only), averages well under $100 per month. (The party walls are usually 4-6″ of solid, mostly unexposed concrete, with absolutely no wear.) There are rarely expensive lawn care contracts to manage, and what else, shovelling the sidewalk three days a year?
Every person I know complains about uncontrollable and escalating strata fees, and it is punishing to those on a fixed income. There is no choice but to pay, and the province just passed rules to force greater withholding and additional reserves for future structural and envelope liabilities.
Fee simple ownership avoids huge moral hazard and frictional costs, and since stratas are often taller concrete buildings, most maintenance costs are significantly higher to start.
23 Chris Keam // Apr 4, 2014 at 5:33 pm
“But Science is different, the alarmists will say. It actually can predict the future. For example?”
Hmm, well the history of ‘Science’ is largely one of theories put forth and later validated through experimentation and/or real world observation, so there’s that. But feel free to stake out a position in opposition to that. I sense you’ll have plenty of room and little company while you are there.
24 Randy Chatterjee // Apr 4, 2014 at 6:00 pm
Science cannot ever begin to predict the future, outside of maybe some gross generalizations that are rarely specific enough to be immediately actionable. The notable exception may well be climate change, and even there, it is anyone’s guess–outside of those living at or below sea level–as to who will suffer the most.
Also, about science, the vast majority of scientific hypotheses are debunked. (Theories are not “put forth and later validated” but born out of tested and re-tested hypotheses.) Only a few theories–which in time become generally accepted “facts”–survive at least for some amount of time.
F.H.Leghorn (66) is correct in that we must plan for all hazards, not just one, such as this massive influx of people. (Why Bangladeshis, by the way? Why not Pacific Islanders?) The Lower Mainland already has an historically high influx of immigrants, and we are certainly failing miserably if we look at the horrendous homeless counts and dire housing unaffordability. So, do we keep doing the same things we have been doing for twenty years since this recent migratory spurt began? Is Gillespie not continuing down a decades-long blind alley?
It is time we considered building resilient and inclusive communities in structures that can survive and remain livable without energy of any kind or maybe even pressurized water. Earthquake resistance might also be valuable, as well as easily repairable wood frame construction. Being adjacent to (but not on top of) farmland may also be a critical siting decision.
It is time to look to the principles of permaculture to design our communities, not Victorian era engineering that preached the defiance of gravity and all limits to growth.
25 Bill Lee // Apr 4, 2014 at 6:53 pm
@Frank Ducote // Apr 4, 2014 at 4:38 pm #69
“Urbanarium”?
Be more like Sydney Living Museums which cares for a group of 12 of the most important historic houses, gardens and museums in NSW on behalf of the people of NSW.
Would you include apartment towers in that?
MoS is much better than the VAG.
http://sydneylivingmuseums.com.au/exhibitions/iconic-australian-houses
Next week, “Iconic Australian Houses”, curated by Karen McCartney is a behind-the-scenes exploration of 30 of the most important Australian homes of the past 60 years.
The exhibition explores the design and building of these houses, as well as the experiences of those who live in them, and illustrates the emergence of a distinctively Australian approach to home design. Vivid photography, rich illustrations, 3D models and filmed interviews look beyond the physical structures to tell the story of how good design can enrich lifestyle.
The exhibition includes a sneak peek at one of the award-winning Australian houses featured in Karen McCartney’s forthcoming book, Superhouse: architecture & interiors beyond the everyday, which looks at stand-out contemporary architecture from across the world.
26 jenables // Apr 4, 2014 at 7:26 pm
Wow, spartikus. You don’t need to be so snarky – you asked what I based my statement on, I told you. It’s perfectly fine if you don’t believe the system manipulates information for the benefit of a few. Imo, that is what perpetuates it, but I can only explain my point of view. Somehow I don’t see Bangladeshi being housed in new towers in Vancouver, but it’s not because I believe they don’t deserve to be housed.
27 Chris Keam // Apr 4, 2014 at 8:29 pm
“Somehow I don’t see Bangladeshi being housed in new towers in Vancouver”
Those new towers will be 40-50 years old in even the most extreme projections. Perfect for housing a mass migration of people. Y’all need to take a longer, more pessimistic view of the future and everything falls into place. 🙂
“Why Bangladeshis, by the way? Why not Pacific Islanders?”
Because I was choosing one ‘example’ of a large population that will be impacted, where even a small subset of the population arriving here would put pressure on housing. Feel free to substitute the people of the Maldives, or any low-lying equatorial country. They’ll all be looking for new digs if the ‘Science’ proves even remotely accurate.
‘Science cannot ever begin to predict the future’
A car is travelling at 60 kmh. Barring obstruction, breakdown, or accident, how far will it be from its current position in one minute? Science! The Future! A Prediction! 🙂
28 F.H.Leghorn // Apr 4, 2014 at 9:13 pm
The scientifically correct answer is: That depends.
The result is implicit in the starting conditions. That’s not prediction, its tautology.
29 Chris Keam // Apr 4, 2014 at 9:36 pm
It’s physics, which at the level of a speeding car, is pretty consistent with its laws, so an example can be given of a prediction that will likely be accurate. Tautology is an expression for logicians and philosophers.
30 Frank Ducote // Apr 4, 2014 at 10:00 pm
Bill Lee @74 – sounds interesting and could be a related idea. Beijing’s Urbanarium is a closer model to what is being considered here, I believe.
31 IanS // Apr 5, 2014 at 12:11 am
@Randy #71:
Thank you for the numbers, which, if accurate, make a pretty good case.
My own experience as a condo owner for almost 20 years is that the strata fees are not that bad, at least in the context of what I know my parents spend on their single family house. (Although it’s not a maintenance issue, I also know my utility bills are a fraction of theirs.) I don’t have any experience with respect to costs of a fee simple row house, so it may be much less.
Personally, I also like the convenience of not having to deal with maintenance issues, but that’s just me. 🙂
32 Lewis N. Villegas // Apr 5, 2014 at 8:47 am
@ IanS
I’ve owned a condo since 1988 in Vancouver. It has been OK. And it was the right first step on the home ownership ladder for me, likely yourself, and many, many more.
The issue is about having another option between a stars unit or condo and a house, which even if the markets here were ‘normalized’ (whatever that means) it is a bit of a reach for many folks and families. To your points:
I assume the “hidden tax” to which you make reference is the monthly maintenance fee? If so, I am doubtful that it would cover principle and interest on any realistic mortgage. Moreover, it goes to maintenance of the property. Even owners of fee simple row houses will have to maintain their properties.
(1) I am suggesting that the strata fee goes towards lowering the mortgage cost. Among the ‘new’ costs for fee simple owners would be property tax. Some of the other fees like water, garbage collections, etc., may be higher for the fee-simple property than for one condo’s share in a strata of say 50 units.
However, the management fee and most of the upkeep can be done by the home owner and represent a savings that can be passed on to the mortgage payment.
The second comparative advantage is being able to buy say a four-level unit and rent the top and bottom as mortgage helpers. At $1 per square foot, that could represent $2,000 per month for the top and bottom combined, and that might be something like 50% of the mortgage payment.
[W]ouldn’t owners of such row houses share common walls? Wouldn’t there be some need to provide for a mechanism for cooperation and/or resolution of disputes?
As Rand says, the common wall is typically ‘buried’ in the rows, so they only need repairs in extraordinary circumstances. One of the hold-ups for having row houses in B.C. was precisely the ability of putting the same ‘common wall’ on the deed of each of the two properties that share it. So, the mechanism exists.
I’d add another 25 years onto the life of the roof @Rand 73, and point out that it will be a lot more economical to repair a ‘small’ roof on a row house than to tackle the entire roofing surface of a 3-storey walk-up (soon to become 4, 5 and 6 storey wood frame).
In todays market standing seam metal roofs seem to be the best option for small houses. This can be done as a weekend project. While the flat roofs of the condo buildings are typically tar and gravel, or some rubberized membrane that just doesn’t seem to stand well to the weather.
Taking a page from British History, the row house might also be looked at as a better product to build on 99-year lease, city-owned land. I have often thought that this option can be used to solve our social housing shortages while banking the land for 100 years. At the point where the 99-year lease retires, the land and buildings revert back to the city. One would expect that 100 years on that parcel will have increased greatly in value if only due to the old saw of “location, location, location”. What is a peripheral site today might become a centrally located asset after 100 years of city development.
33 Frank Ducote // Apr 5, 2014 at 12:25 pm
Randy@71 – my condo fees aren’t anyway close to $0.75 psf. Also, like IanS, my hydro fees are very low, less than $30/month even with the recent rate hikes.
There are many advantages as well as some disadvantages, actually rather minor overall, that makes an apartment work very well for me and many others in this world.
34 Mary // Apr 5, 2014 at 3:53 pm
Frances, honest to gawd, did you really drink the Kool Aid? the reason developers AND communities hate Gillespie is that he gets special treatment. He gets expedited process and he gets favourable Community Amenity Contributions negotiated on his projects compared to similar scaled developments. I wish we had an investigative reporter with an interest in and understanding of urban land economics in this town.
35 IanS // Apr 5, 2014 at 4:31 pm
@Lewis #81
“The issue is about having another option between a stars unit or condo and a house….”
I don’t disagree with that. As I said, I have no difficulty with row houses. I think they make sense and I can’t think of any reason not to provide for that option. I just thought you were overstating the drawbacks of strata title a bit.
36 Lewis N. Villegas // Apr 5, 2014 at 9:43 pm
Another option between “a strata unit or condo and a house…” [typo alert there!]
That’s right. I agree there is a role for strata. I see it as the entry level on the property ladder, and for some, the preferred option to size down later in life.
It just shouldn’t be the ONLY option, as it has been around here for too long (unless you want a duplex).
And, it should be made with human-scale to support social functioning. My 40-year-old walk-up fails that test miserably for no good reason at all.
So, the first problem in our region and in our markets is that it has been duplex or strata or no other choice for moving up from a condo. That’s bad.
The second problem in our region and in our markets is that the tower, slab or walk up apartments are the only options that are considered for adding density. So, family neighbourhoods must be single family houses (theoretically) and dense neighbourhood (urban places) must be all condo, singles and empty nesters (also theoretically—in practice the mix happens, but unplanned and in less than ideal circumstances).
Here, the discussion does get pointed. Because, as I see it, the towers, slabs and walk-ups don’t contribute to social functioning at the scale of the neighbourhood. The ground-oriented housing does that in spades. Row houses are much better for family life than condos.
Of course, we should revisit another twist, that the row house can be split up into strata units and function as strata property. Just one option is the ‘stacked town’—two, two-storey units, stacked one over the other, each with a door on the street. I would still expect that the residents would be taking out the trash and meeting their neighbours while sweeping the sidewalk, caring for the garden, working on a project in the garage, putting out pots of daffodils and tulips in spring, or bending over their threshold to pick up a copy of the local rag.
What I’m after is a way to add density to the neighbourhood that keeps the rumour mill strong (read about how it happens in Cabbagetown in the link provided @ 56).
Towers don’t do that. Cabbagetown is human-scale, old, high-density, and teeming with social mixing. So are all these places in Canada and elsewhere that take care to shape density to support social functioning rather than make alienation in the street the default option.
It’s either ‘streets for people’, or ‘streets for cars’. There really is very little room to sit on the fence on this one. The products that turn a back on the street fail to contribute to the making of community.
That may be OK in the CBD (central business district). But, it is not OK in Arbutus Ridge, Mole Hill, Mount Pleasant, Oakridge, Hill Crest, Champlain Heights, Capitol Hill, or any other neighbourhood outside the [Dr. Franken]tower zone.
37 IanS // Apr 7, 2014 at 8:34 am
@Lewis #85:
“I agree there is a role for strata. I see it as the entry level on the property ladder, and for some, the preferred option to size down later in life.”
I guess this is where we part ways. IMO, strata properties are good for the middle part too, not just the beginning and the end.
38 Frank Ducote // Apr 7, 2014 at 11:54 am
IanS@86 – evidence in Vancouver certainly agrees with your point.
If we quit referring to apartments as “strata” or “condo” we might gain a better appreciation of just how common and indeed popular this form of living is, worldwide. Those terms are not descriptive of anything other than a form of tenure.
39 Frank Ducote // Apr 7, 2014 at 1:20 pm
Another term is “flat, ” pretty common in larger and older cities like NYC and SF.
40 IanS // Apr 7, 2014 at 2:05 pm
@Frank Ducote #87-88:
Good point.
It’s worth recalling that a “strata” or “condo” is a type of ownership or tenure, created by statute, not a type of building or structure.
From a physical perspective, there’s no difference between living in an “apartment” or a “flat” or a “condo” or whatever. Similarly, the physical experience of living in a row house, as opposed to a stratified townhouse is, I would think, pretty similar.
While Lewis and Randy make reference above to various potential financial benefits / drawbacks of strata ownership, I think the real issue, from the perspective of urbanism and city planning, is the nature and effect of the structure, now the nature of the ownership.
(To be clear, I am using “urbanism” as I perceive it being used by other, more knowledgeable, posters here. I don’t purport to be knowledgeable on that subject.)
41 Randy Chatterjee // Apr 9, 2014 at 12:02 pm
IMHO, the core comparison issues between fee-simple ownership and strata and between rowhouse and various forms of strata from townhouses to apartments (often now in the same strata together) are as follows:
1) Frictional Costs and Moral Hazard: Fee simple ownership avoids the moral hazards of a third party management contract to steward the building under the often inchoate and potentially misaligned direction of the Strata Board, i.e. investor or retiree owners may be less committed to capital improvements such as efficiency upgrades. The costs and lost value here are significant. Ham-fisted government regulations are also likely to cause problems with stratas. Finally, a fee-simple rowhouse can easily accommodate multiple rentable units as mortgage helpers, a very different economic relationship with fewer externalities than a rented condo unit.
Stata of course is potentially more hands-off and demanding less time from the owner, if he or she is willing to cede management control to others. So we are talking in part about how much a resident’s time is worth, whether one has any, and what one’s skills are. Age and family circumstance does play a significant part in this, although there are no clear rules. All ages and all family sizes inhabit all forms of housing.
It is very worth noting from a local economic development and equity standpoint that ground-oriented housing is not nearly as popular among international investors. Row and townhouses are far less likely to be left vacant than mid- or high-rise suites. Whether strata or not, having a door on the street likely means someone will answer a knock on it.
2) Risk-Reward: While any development can be owned in fee simple, financing larger buildings is less risky and capital intensive if stratified, aka sold off in pieces under strata title. One advantage of row house development is that one property can be converted to one or more row houses, each contributing significantly more neighbourhood density than a SF house and each potentially under separate ownership. The financial risk and cost of financing is far lower, there is little need for large lot assembly, low-rise construction is far cheaper, all parking is handled at the surface around the lot, city infrastructure remains unchanged, and the entire project can be completed faster.
3) Density: Row house net neighbourhood densities range from 35 to 75 people or 20-35 dwelling units per acre (see link below). This is for comparison in the range of Vancouver’s current gross density, taking into account the presence of both SF and high-rise areas, commercial, parks, and public infrastructure.
Mid-rise or high-rise stacked flats can more than double this net density number, but at significantly higher construction and city infrastructure costs. Also, the greater need for additional nearby park space, schools, and other public amenities is a penalty and such high net density areas cannot be analyzed on their own. The Concord Lands of Yaletown is just 50 BU/acre. There is also a question whether such high densities can be accommodated at all if adjacent park space, large bodies of water to provide sun and air flow, and cultural amenities (like Vancouver’s West End has) are economically or physically impossible to provide.
As said by so many, the important urban policy point is to ensure that no housing type is ignored or ruled out, that people have choices of housing style and tenure, and that all forms–and their developers–compete on a level playing field in areas zoned according to what amenities are in or surround the area.
http://places.designobserver.com/media/pdf/Explaining_Res_803.pdf
42 Bill Lee // May 9, 2014 at 7:02 pm
Cheap Condo Experiment Fails to Live up to Hype
Planner finds result of Vancouver project ’embarrassing’ as buyers flip for profits.
By Ian Holliday, 08 May 2014, TheTyee.ca
http://thetyee.ca/News/2014/05/08/60-West-Cordova-Condo-Experiment/
[ PHOTO Even to residents who’ve stayed at 60 West Cordova since it opened in 2012, the building now seems like little more than another condo project in a gentrifying area.]
When one of Vancouver’s most prolific developers proposed 60 West Cordova on the edge of the Downtown Eastside in 2010, he promised it would be a bold new experiment in housing affordability.
The units would be priced as low as possible and sold only to those who lived, worked, or volunteered in the neighbourhood. Buyers would have to agree to live in their units and promise not to sell for at least a year — a strategy meant to discourage investors.
But some of the early buyers who got a great deal cashed out shortly after the one-year limit, turning profits as high as $74,000 on their “affordable” units. Others have begun renting out their units. According to data gathered at the BC Assessment office in March, 16 per cent of the condos in the building are no longer owner-occupied.
Even to those who stayed, 60 West Cordova now seems like little more than another condo project in a gentrifying area.
“If I were to come in now and buy the apartment that I’m in now from somebody else, I wouldn’t find it that affordable,” said Sylvia Lim, a resident who bought her unit when the building opened in 2012. “I would sort of see it as being on the average price range for most one-bedroom condos in the area.”
Nathan Edelson, a former planner for the Downtown Eastside, said he admires the experimental nature of 60 West Cordova, but sees the end result as “embarrassing” because the developer failed to plan for the second generation of buyers in the building.
“They were trying something,” Edelson said. “To try to bring [costs] down toward $250,000, that’s a pretty big achievement in itself. How to keep them down was the critical issue, and they didn’t quite get there. But the next one, I suspect, will. It’ll have to.”
Assessed values climb
When developer Ian Gillespie’s firm Westbank proposed the project, it took a number of measures to ensure that it would be able to sell the units at rates affordable to people making less than $40,000 per year. Measures included lobbying the city to reduce its parking requirement to only 19 spaces for the 108-unit building, spending minimally on marketing, furnishing units with lower-cost fixtures, and partnering with Vancity credit union to offer flexible financing for buyers.
There are 12 non-market units in the building — four managed by Habitat for Humanity and eight by PHS Community Services. Prices for the 96 market-rate units started at $219,900, and nearly three-quarters of the units were originally sold for less than $300,000.
Lim said she chose to buy at 60 West Cordova because it was affordable. It would have cost her the same amount to rent in the area as she ended up paying for her mortgage, she said.
“I think it made sense,” Lim said. “The price range for this building was quite reasonable.”
In 2013, five of the building’s market-rate units were resold for prices ranging from $306,000 to $330,000, netting an average profit of almost $56,000 for those sellers.
“Two or three sales of that sort would really make a difference on the affordability [of a building],” Edelson said.
Indeed, these sales have triggered a shift in assessed values at 60 West Cordova. For 2014, nearly-three quarters of the units are valued at more than $300,000.
+————
[ INFOGRAPHIC BAR Graph Prices at 60 West Cordova
“Rapid Rise in prices at 60 West Cordova”
Blue = sold units in the Woodwards building
Red = sold units at 60 West Cordova
Purple = units at 60 West Cordova if sold at their current list prices
Y-axis Percent increase between purchas and sale
X-axis Property location [ colors of bar greaphs, footer note of which floor }
Graph by Ian Holliday. Sources include BC Assessment data on recent sales, local MLS listings, and Brian Higgins of Prompton Real Estate Services, Inc. ]
+————
In an email, Westbank spokeswoman Jill Killeen said this shift was predictable. The developer’s goal for the market-rate condos was to attract first-time home buyers and keep out “flippers” and investors, she said.
“It should be expected that assessed values are higher than the original purchase price because the homes were purposely sold for less than market value as that was the goal of the project,” she said.
Because of this potential for rapid increases in values, Edelson said he would prefer not to see the city invest in affordable homeownership — as it did by reducing its parking requirement for the 60 West Cordova project — unless there’s a mechanism to keep prices down. Such a model is in place for the building’s non-market units.
First-time buyers priced out
Though prices for the market units at 60 West Cordova have increased, real estate agent Brian Higgins remains a fan of the project. He said he sees a sense of community among residents that gives the building “a unique feel” compared to other condo projects in the area.
Higgins sold a seventh-floor condo in the building earlier this year for $320,000, an increase of more than $88,000 over the unit’s original sale price.
The project has been a good opportunity for first-time buyers, he said, noting there are other new buildings in the area where units are selling in the $200,000-range, providing similar opportunities to those found at 60 West Cordova in 2012.
While the building remains on the low end of the Vancouver condo market, some of those first-time buyers it was originally constructed for have already been priced out. A pair of units currently on the market for $310,000 and $339,500 originally sold for $221,000 and $250,000, respectively.
A third unit, originally sold for $281,000, is currently listed for $369,900. If sold for their asking prices, those units would only be affordable — defined as costing 30 percent or less of a person’s total income — to people making $60,000 or more per year.
The market-rate condos at 60 West Cordova are still mostly cheaper than their counterparts in the nearby Woodwards building — also a Westbank project — but their values have been rising more quickly.
A sampling of six Woodwards condos that sold in 2013 for prices in the $350,000 range showed sellers making profits comparable to those found in the 60 West Cordova sales. The difference is that Woodwards units have been appreciating for four years now, compared to two for 60 West Cordova.
As the city plans to add more than 8,000 “affordable homeownership” units over the course of the recently approved Downtown Eastside local area plan, it will need to look at ways to prevent the price spikes seen at 60 West Cordova, Edelson said.
Affordable homeownership is a model that only works if there are restrictions in place to keep prices low for future generations of buyers, he said.
“The real thing is, when you sell the unit, what are you selling it for?” Edelson said. “It’s good that you have to wait at least a year, but beyond that, what is [the price]?… The mechanism around resale is the critical one.”
—
Ian Holliday is completing a practicum at The Tyee. A version of this story was first published on The Thunderbird.
43 Ravening // Jul 15, 2014 at 12:05 am
Ian has always been a big dreamer intent on getting as rich as possible since his UBC days. What is intriguing is that he himself would not put his own family into permanent condo living. No, he lives in splendid waterfront abode of luxury. (Hint: It is NOT a cond0.) What is good for the goose (his customers) is not good for the gander (himself). To me that speaks volumes. The little people in the little boxes in the pretty towers he builds are only there to fund his lifestyle and past a point Ian does not care.