If Vancouver residents really want the province to start making changes to try to moderate the officially out-of-control (parts, anyway) real-estate market in Vancouver, just holding demonstrations and/or waiting for newsrooms to provide coverage is not going to do it.
My experience of politicians — okay, not all, some do things strictly out of principle — is that they wait to see how much public uproar there is. If it seems like it will die off in a few weeks, they’ll just sit out the dust storm. If it seems like it’s building up to serious levels, they’ll start to move.
One thing that would have an impact is if homeowners, those people with their money sunk into the market and whom the premier seems to be so afraid will be upset if she does anything, should start a petition saying they do not need the excessive profits that the last couple of years have been providing and that they’d rather see the market moderated.
Many people I know, myself included, take no pleasure in seeing the big jump in alleged value of our homes the last couple of years.
They’re not planning to cash out and take their millions to Hedley or Charlottetown. They are committed Vancouverites (and, by this, I don’t mean just the city but the region) who want to stay and would like to see other committed Vancouverites be given a chance to put down roots here.
Go ahead: Let the premier and her party know, in your thousands, that you don’t need that extra $500,000 or $1 million or $2 million on top of the 300 per cent or so increase in value you’ve already seen on your property since you bought.
One note: Even though I’m encouraging this, I do it with the warning that I don’t think any of the measures so far proposed are going to do what some people want, which is to return Vancouver real-estate values to the level of Saskatoon or even Victoria. That’s not going to happen. It wasn’t even happening in the ’70s and ’80s.
Vancouver is one of the many cities around the world that have become go-to places and where real-estate values have risen because the number of all people wanting to buy here is exceeding the supply.
But one of my blog commenters said, “I’d just be happy to see it go back to 2005.”
What needs to be taken out of the Vancouver equation is the layer on top of the general jump in property prices that exceeds wage increases that’s happening everywhere. That layer is the extras — the speculation, the use of houses to park investment cash while leaving them empty, and so on. We don’t know how much of that there really is. Maybe only a few hundred properties in this region of 2-million-plus.
But at least sanding off the crazy peaks at the top would prevent even more speculation and loophole diving.
Then Vancouverites who really want to do more will have to look at much bigger measures.
For those who believe it’s the demand that’s the problem, pressure to limit immigration and, perhaps, limit the number of wealthy people who can immigrate. (I know that sounds wacky, but, really, when you listen to some conversations out there, that’s what some groups really want. They dress it up by saying they don’t want people with illegal money or who are leaving families here while working abroad or whatever. But, truly, what they don’t want is wealthy people competing with locals for housing.)
For those who believe it’s supply that’s the problem, there should be pressure to convert more areas to housing that uses less land but is still ground-oriented, as the planners call it — places where you can walk out the front door and not have to use an elevator to get outside.
22 responses so far ↓
1 Mac Hartfiel // Feb 10, 2016 at 9:16 am
There should be much more pressure at the city level. The core of the problem is there isn’t any options for middle-class people to purchase a home in Vancouver. We have outdated zoning policies that have been the same since the 70’s or longer. Which leaves us with limited number of titles on very expensive single family parcels (which still dominate our land mass). Addition of 1 legal basement suite and 1 laneway house only adds to the total cost of that single title. The 2 things that need to happen is for the city to begin to up zone areas so close to major transit routes. For example, East or west 1 block off cambie st (a bus and skytrain route) the zoning is back to single family with homes averaging 3million+$. This doesn’t make logical sense. Allowing development of “the missing middle” between towers and single family homes is severely lacking in Vancouver. The planning and building department has done such a good job of preserving our city like the “good old days” it is now suffocating the supply needed for huge population growth. Allowing basement suites and laneways in certain areas to be titled and sold would also help people looking to buy. Of course the city is terrified to even slow this majestic rise in house prices but at the very least they could encourage/mandate some developments focused towards families and people who don’t need marble backsplashes and Miele appliances. But mayor Gregor and Mr Geoff Meggs need to stop insulting the citizens and say this is completely out of their hands. I think the public pressure is certainly present, just not sure it’s going to the right places.
2 boohoo // Feb 10, 2016 at 1:34 pm
East or west several blocks of Cambie is designated (will be) for rowhouse/townhouse that ‘missing middle’ as part of phase 3 of the Cambie Corridor Plan. So, they are doing that.
I think they should do more of that and chill out on the densifying of arterials only, but at least it’s something.
3 Mac Hartfiel // Feb 10, 2016 at 2:53 pm
Yes, I totally agree that density should be tapered up towards arterials, not a night and day contrast 1 parcel off. It seems that considering the context and price accelerations in the last few years that these studies, input and ultimate change in zonings could be hurried a bit. The Cambie corridor plan did come about in 2009? As the city drags its feet, young families are either being crushed under financial strain or just packing up and leaving.
4 IanS // Feb 11, 2016 at 1:51 pm
Hmmm… my place hasn’t gone up 300% and I don’t expect to receive a bump of several hundred thousand when I sell. I wonder if there’s any way I could agitate in favour of policies which will give me that benefit?
5 Jack // Feb 11, 2016 at 3:19 pm
There a few parcels of land in Vancouver which won’t skyrocket in terms of residential prices and that’s the shady industrial area’s where there are a few blocks of houses scattered throughout in those big grey buildings with no stores and walkability areas, where your neighbour is a windowless brick wall with parking lots and rusty fences.
Houses close to DTES towards the train tracks, small sections below hastings/west of nanaimo.
Granted the city just rezoned the clark street area/east hastings so now there finally will be some good creative construction for mixed use buildings.
6 IanS // Feb 11, 2016 at 3:33 pm
Well, I have a condo downtown that’s done OK, but nothing like the crazy prices I read about. I would love to see the price of the place skyrocket before I sell and would be more than happy to sign a petition or whatever to have steps taken to lower prices afterward.
7 Jack // Feb 11, 2016 at 3:39 pm
Oh a condo, yeah those generally don’t get much in increased values, unless it has good square footage, of course a view & location helps wonders.
The real money is in detached houses, the unicorn of Vancouver.
What is happening now is duplexes & triplexes are being built in their place across Metro Vancouver.
Apartments for rent/social housing/condos above stores mixed use buildings will be increasing now.
8 Lysenko's Nemesis // Feb 11, 2016 at 5:54 pm
“For those who believe it’s the demand that’s the problem, pressure to limit immigration and, perhaps, limit the number of wealthy people who can immigrate.”
Yes Frances, that does sound wacky. Anyone that wants that is going to have to speak to Justin. Provincial politicians have no say in immigration numbers.
9 IanS // Feb 12, 2016 at 1:16 pm
This is a bit of thread drift, but I’ll use the mention of “loopholes” in Ms. Bula’s original post as the jumping off point.
What’s the fuss over this so called “shadow flipping” that’s been all over news lately?
Absent a clause saying otherwise, contracts may be assigned. That’s nothing new.
If seller’s agents are involved in the practice, that would be a pretty clear breach of contract and breach of fiduciary duty on their part, giving rise to a cause of action in favour of the seller. IMO, that’s pretty clear and nothing new.
However, if the buyer or buyer’s agents are engaged in the practice, I’m not sure I see the harm. Yes, the actual purchase price paid by the ultimate assignee should be used to calculate the tax, but, if the tax is properly paid, what’s the problem?
10 rowbat // Feb 12, 2016 at 2:21 pm
It does seem rational to consider the rezoning of at least one block on each side of all bus routes in the single family areas of Vancouver for low-rise apartment and rowhouse development.
To triple or quadruple the dwelling unit density along existing RS-zoned arterials served by transit seems like a relatively ‘low-hanging fruit’ density option, and may be politically easier in many (some?) cases than trying to rezone larger blocks of land in specific neighbourhoods for even higher densities.
Having the single-family sections of transit streets like Main, Fraser, King Edward, 16th/33rd, 41st (!), etc. lined with 3 to 4 storey condominiums or row houses seems to make a lot of sense, and would encourage more services to locate in the existing commercial hubs along those streets. With well thought out setbacks it could also create a better quality of housing than the 3 storeys of residential currently being built right on the front property line in typical C-2 development in the commercial areas of those streets.
11 Mac Hartfiel // Feb 12, 2016 at 3:36 pm
Yes! I totally agree, but how on earth could such logic be brought to the attention of the Mayor, Council and planning department? haha….oh they know this? well, darn.
12 spartikus // Feb 12, 2016 at 4:52 pm
However, if the buyer or buyer’s agents are engaged in the practice
If you were a buyer and you discovered your agent had been colluding with other agents to jack the price of a property that you could have hypothetically gotten for a lower price, wouldn’t you be mad?
As a seller, perhaps it is ultimately your responsibility to follow up on your former property, but how many do or would know how to? And would you bother with the hassle of suing?
I don’t know how much this practice is responsible for rising prices but I think it’s fair to say it’s playing a part and that tightening the rules and increasing scrutiny would do little harm other than to the shadow flippers.
13 Chris Keam // Feb 12, 2016 at 7:51 pm
I wonder if we wouldn’t be a better society if naked self-interest wasn’t clothed in the merest g-string of ‘how do my actions impact my community?’
14 rowbat // Feb 12, 2016 at 9:23 pm
I think they all know the challenges with respect to housing costs and density, but to be fair any political party (or Director of Planning) who decided to simply pursue the up-zoning of a swath of the city against the sentiments of the voters wouldn’t be in office long enough to see the first development built. I was simply wondering aloud whether the rezoning of land along residential arterials might be more politically saleable than some other approaches.
15 IanS // Feb 12, 2016 at 10:27 pm
Not sure why a buyer would have an issue. They would see the original agreement, as they would be taking an assignment. No issue there.
As I said, the seller would have a good cause of action against his or her agent. I would hope such an agent would also lose their licence.
I doubt the practice is raise g prices at all. At most, it’s a symptom of an overheated market.
16 Mac Hartfiel // Feb 13, 2016 at 9:04 am
Well nobody’s talking about a swath of the city, but just maybe a start, 1%, just something to start a transition? Also, is it really against city sentiments anymore? Many property owners realize the crises, realize many neighborhoods, especially near transit lines really should have slightly higher density. I believe the time has come where pushing density in moderate amounts transitioning from heavy density arterials to single family hoods is actually good politics and good logic, especially if we want to further invest in transit. I think zoning is the core of the whole problem, but the city and its citizens will just keep blaming foreign buyers and Christy Clarke.
17 Lysenko's Nemesis // Feb 13, 2016 at 4:38 pm
Frank O’Brien has been writing and publishing on real estate in BC for ages. He properly points out …:
http://www.vancourier.com/news/confidentiality-may-trump-disclosure-in-housing-flips-1.2170062
18 spartikus // Feb 13, 2016 at 5:51 pm
It depends on who the buyer is, I suppose. If it’s someone from [Country X] trying to park their money in a safe harbour, probably not. If you’re a local family, probably yes. It’s also is a matter of whether the realtors who are shadow-flipping are being completely open and, you know, filing all the forms they’re supposed too.
I doubt the practice is raise prices at all. At most, it’s a symptom of an overheated market.
You may be right, but given the dearth of data collection we don’t know enough to judge.
Personally I think the affordability crisis is a scenario of death by a thousand paper cuts of which shadow-flipping is but one. There isn’t a satisfying monocausal explanation and there isn’t a satisfying monocausal solution, but a thousand ones. Which, in Canada’s situation, would require multiple levels of government to act with common purpose.
Let’s just say I’m not hopeful.
19 IanS // Feb 14, 2016 at 6:07 am
Seems like a good article, properly pointing out the distinction between the seller’s agent and the buyer’s agent, as well as circumstances where an agent becomes involved as a principal. Well worth a read.
20 IanS // Feb 14, 2016 at 6:15 am
The article linked by LN, below, is worth a read. It talks about the difference between a seller’s agent and a buyer’s agent, among other things.
If we proceed on the presumption that this is a problem pushing prices upward, it would be easy to solve. Just stick a “no assignment” c!a use in the standard contract.. I don’t think it’s necessary, but it would make the so called “shadow flipping” much more difficult.
21 penguinstorm // Feb 15, 2016 at 11:03 pm
“What needs to be taken out of the Vancouver equation is the layer on top of the general jump in property prices that exceeds wage increases that’s happening everywhere.”
Why does no one ever say the salaries need to rise? It’s always “control the cost of housing” never “stop paying people less than you would in Toronto.”
You move to San Francisco for a job it doesn’t matter WHAT the job is–your salary is higher than it is in Wichita. In Vancouver, you move and it drops. It’s not sensible.
22 penguinstorm // Feb 15, 2016 at 11:05 pm
All the outrage of contract assignment without any reference to the number of properties this is happening with. So Vancouver.
While it may suck for the individual sellers to lose out on money, without numbers there’s nothing to suggest this is having a noticeable effect on overall market pricing.