Condofication of Metro Vancouver

[jlousa]

Came across the following image over at www.Vancouvermarket.ca. Nothing we didn't already now but it certainly is eye opening seeing all of them laid out together like that. They certainly aren't all the projects either just some of the largest ones. Thought a little free for all on densification would be interesting. What do people think, are we on the verge of a glut of condos by overbuilding? Are we going to see SFHs rise up in price within the inner city as supply begins to reduce? Should cities be imposing higher percentages of family friendly condos outside the core? Are there some of these projects that are mistakes in the making?
It seems obvious to me that eco-density's concept isn't limited to Vancouver's city limits and is being embraced by it's neighbours.

[whatnext]

I drove by the Bluetree Living site on Main & 25th where they were loudly proclaiming "25% Sold" over their hole in the ground! Really, that's all? After months of marketing? Another project at Main & 31st still flogging units after being occupied for months. Signs like that of overbuilding everywhere, I'd say.

However, I'd pick Richmond as headed for the biggest fall.

[logan5]

Originally Posted by whatnext

I drove by the Bluetree Living site on Main & 25th where they were loudly proclaiming "25% Sold" over their hole in the ground! Really, that's all? After months of marketing? Another project at Main & 31st still flogging units after being occupied for months. Signs like that of overbuilding everywhere, I'd say.

However, I'd pick Richmond as headed for the biggest fall.

Only $550 per sq. foot for a small 1 bd. unit. I wonder what the price would be without this real estate apocalypse that we are experiencing.

[Pinion]

A lot of us are priced out of not only Vancouver but also neighbouring suburbs. I chose an old condo over one out in the valley, but in hindsight I kinda wish I bought new in New West or Coquitlam Centre (Looking at an $11,000 bill for pipe replacement this year).

[BIMBAM]

Originally Posted by whatnext

I drove by the Bluetree Living site on Main & 25th where they were loudly proclaiming "25% Sold" over their hole in the ground! Really, that's all? After months of marketing? Another project at Main & 31st still flogging units after being occupied for months. Signs like that of overbuilding everywhere, I'd say.

However, I'd pick Richmond as headed for the biggest fall.

Overbuild away! It's the only way Vancouver will return to sane real estate prices. I mean, wasn't that the whole point of opening up to development, to increase supply to the point where prices will have to become more reasonable to attract demand and thus ameliorate this toxic affordability crisis?

[CBeats]

Originally Posted by BIMBAM

Overbuild away! It's the only way Vancouver will return to sane real estate prices. I mean, wasn't that the whole point of opening up to development, to increase supply to the point where prices will have to become more reasonable to attract demand and thus ameliorate this toxic affordability crisis?

I really hope this is the case. According to first year economics it is...

[Jebby]

I'm all for densification and developers building as much as they can sell, but it is very sad to see virtually ever unit being a 1 bed, especially within Vancouver and the major town centers. I don't think that developers should be forced by government to build 3 and 4 bedroom units, but they should be given tax incentives to do so.

[WarrenC12]

Originally Posted by Jebby

I'm all for densification and developers building as much as they can sell, but it is very sad to see virtually ever unit being a 1 bed, especially within Vancouver and the major town centers. I don't think that developers should be forced by government to build 3 and 4 bedroom units, but they should be given tax incentives to do so.

I thought you were all about free enterprise? Supply and demand should sort that problem out. There's a reason west side SFH's are (or were) going for $2M+

[whatnext]

Originally Posted by BIMBAM

Overbuild away! It's the only way Vancouver will return to sane real estate prices. I mean, wasn't that the whole point of opening up to development, to increase supply to the point where prices will have to become more reasonable to attract demand and thus ameliorate this toxic affordability crisis?

Cuz that theory has worked out so well over the last 10 years....

[jlousa]

Economics doesn't teaches us that increased supply reduces prices, it teaches us that when supply over exceeds demand that prices reduce. As long as demand remains higher then the increase in supplies we shouldn't see prices drop. It can happen that the developers oversupply the market with enough condos to lower price but at that point developers will stop building until demand picks up again. Densifying NY, HK, etc with condos did little to stop prices from shooting up over time, the demand was there to absorb those units. I used to beleive that we could build our way to lower prices but have since realized that the demand side is main factor.

[leftside]

That's very few new downtown condos. Everyone I know wouldn't dream of living outside downtown - and to the detriment of quite a few of them. They refuse to move out of downtown and buy a place they can afford, and continue to rent whilst they wait for the "inevitable crash".

I agree with tax incentives for larger more family orientated living spaces.

[jlousa]

I'm not sure tax incentives are needed, it could be done with regulation. DT buildings already dictate that at least 25% of units need to be family friendly (2bds or more). If city councils were to impose that outside the core that at least 50% need to be family friendly, with perhaps 25% of those unit's being 3bd+. It would greatly reshape the city we are currently building. Most developers (there are some exceptions) aren't going to build larger units then mandated as they can squeeze more profit out of the same sqftage with the smaller units. As much as I don't like overegulation there are times it can and should be used to shape things in the way we want and that the market itseld won't.
Imagine if the orginal bedroom communities along the interurban were developed with hundreds of family friendly units instead of mostly 1bd and studio apts, it would be a vastly different vibe, as people invest into community as they remain in place for longer periods of time instead of uprooting when kids come along.

[whatnext]

Originally Posted by Pinion

A lot of us are priced out of not only Vancouver but also neighbouring suburbs. I chose an old condo over one out in the valley, but in hindsight I kinda wish I bought new in New West or Coquitlam Centre (Looking at an $11,000 bill for pipe replacement this year).

Ouch, sorry to hear that, it sucks. I gotta say about 90% of my friends who have bought condos that ranged from 40-0 years old at purchase have had to shell out more on stuff like this then I've had to shell out on my prewar house (and that's with re-roofing, sewer pipe replacement).

[quobobo]

Originally Posted by jlousa

Economics doesn't teaches us that increased supply reduces prices, it teaches us that when supply over exceeds demand that prices reduce.

jlousa, I really respect your opinions and contributions to the board but that's not accurate. Supply and demand are curves, not quantities such that one can be larger than another.

My understanding is that in the short run (and with normally-sloped supply/demand curves), a rightward shift in the supply curve (like you would see if it suddenly became easier to develop and sell new condos) pushes the equilibrium price of housing down.

Complicating matters, additional housing units may influence demand so in the long run a supply shift can result in a demand shift leaving the overall effect on prices ambiguous.

This is possible because housing is a weird market with huge externalities - new housing units can significantly affect the desirability of those around them. Think of Yaletown - would anyone want to live there if it was still an industrial wasteland?

Densifying NY, HK, etc with condos did little to stop prices from shooting up over time, the demand was there to absorb those units.

There are extensive limits on housing supply in New York and the price of new housing is significantly higher than the marginal cost of building it. Seems like fairly strong evidence that New York has not allowed enough housing to be built.

[jlousa]

Quobobo, as you probably know though the supply and demand curves aren't fixed and are constantly adjusted based on outside factors. So while it's true if everything remained constant and supply were to increase we would see prices decrease. Reality though tells us supply and demand on real estate are affected by multiple outside factors that cause the curves to be constantly shifted left and right, and up and down. Even developers get it wrong all the time due to the long amount of lead time needed to bring units to market, some mistime the market and don't have enough units on the market when the demand is there only to have units come onto the market by the time the market has shifted.
I truly believe that opening the zoning flood gates wouldn't decrease prices nearly as much as people believe. Supply would still only increase to meet demand. Developers wouldn't begin razing sfhs to build towers everywhere if they were able to, they would continue building at whatever rate the market would bear. They might be able to pick up land at a cheaper price per buildable sqft, (the city would take most of that in CACs) but the price they sell the units at would still be at the highest price the market will pay for them.
Just so we're clear I'm for the densification of Metro Vancouver but because I believe it'll improve livability, support transit and a bunch of other positive improvements, but I'm no longer convinced it will decrease
prices in any meaningful way. I don't have a solution to lowering prices drastically, if someone can figure out how to lower demand that is the ultimate solution.

[someone123]

Originally Posted by jlousa

It can happen that the developers oversupply the market with enough condos to lower price but at that point developers will stop building until demand picks up again.

If this is true it's a sign that the market isn't very competitive.

A big part of the issue in Vancouver is that most of the city is zoned for single family.

[Track]

At the very least, I can't see an increase in condos being built causing an increase in prices, so I'm all for it. Densification is a good thing provided that it's concentrated in the right areas, and creating new city centres is good for providing urban options outside of Vancouver's downtown.

[logan5]

The Norquay Village Neighbourhood Centre Plan, approved by Council in November 2010, was developed with input from Norquay Village residents and property and business owners to help guide growth and development throughout the neighbourhood in the coming years.

Staff are now working on the implementation of the plan which includes areas such as: improvements to Kingsway, new residential zones, a public benefits strategy and a public realm plan.

Here's a plan to densify a SFH neighborhood with row houses and town houses. The CoV site says the plan was approved in 2010, then goes on to say "staff are now working on implementation of the plan."

What more needs to be done if the plan has been approved? Doesn't approving the plan mean the same thing as implementing the plan?

I realize there are some projects happening on Kingsway, but I was more looking forward to seeing densification of the SDH areas, which seems like it will never happen.

[jlousa]

It's going to council in early apr. The plan was approved in general a couple of years ago, what still needed to be done is to determine how that plan would be implemented. Saying we are going to allow townhouses isn't how things work, guidelines needed to be drawn up to determine min lot sizes, max heights, allowable fsr, design criteria, etc. Things aren't as straight-foward and easy to implement as we'd like them to be. To build a liveable city takes so much legwork to ensure things get done right the first time as getting them wrong makes long term mistakes. I spent 3+yrs on the Norquay committee to get to the stage where the plan was approved and there was not much consensus among the group.

That said since Norquay was brought up, the CT site is going up for rezoning in early Apr and it appears as some Nimbies are rallying to try and stop the proposal even though it meets the adopted plan. Would be great if some of the members could write in to council, and even better attend the meeting and speak in support. I'd be willing to buy everyone from here that attends something off the Wendy's value menu.

[logan5]

There are guidelines for height, density, lot sizes, etc., in the documents section. Or are these guidelines not explicit enough?

https://vancouver.ca/home-property-d...ntre-plan.aspx

https://vancouver.ca/files/cov/norqu...house-zone.pdf