Vancouver's Housing Supply Myth

[casper]

Originally Posted by logan5

A metro wide land use policy needs to happen in order to curb speculation.

If speculators are capable of driving up land prices, why not start buying in Regina where it's dirt cheap, then watch their small investment grow at an astronomical rate?

The dynamics of Regina, Saskatoon, Calgary, Winnipeg etc is very different. These cities can effectively grow when needed are are held back by purely artificial boundaries. When they run out of space they simply transfer land from the rural municipalities to the city. Draw a few lines on a map and you free up more residential lots. There is no new source of land in metro Vancouver for new residential lots.

[Aroundtheworld]

As this new supply comes online, it will be interesting to see how mortgages compare to rents. If rents level off or go down relative to mortgages, it will show that speculation is propping up the value of bought properties. If they both level off or go down together, then we will know it was more about supply.

[whatnext]

Originally Posted by casper

The dynamics of Regina, Saskatoon, Calgary, Winnipeg etc is very different. These cities can effectively grow when needed are are held back by purely artificial boundaries. When they run out of space they simply transfer land from the rural municipalities to the city. Draw a few lines on a map and you free up more residential lots. There is no new source of land in metro Vancouver for new residential lots.

You could argue that Metro Vancouver is held back by the purely artificial boundaries of the ALR.

[GlassCity]

Originally Posted by whatnext

You could argue that Metro Vancouver is held back by the purely artificial boundaries of the ALR.

Definitely. But even eliminating it and sprawling through all of it wouldn't help affordability at all.

[Pinion]

Originally Posted by Vin

Wow, Vancouver has a really really low population density when compared to other places,

Did you even read what you quoted?

[Vin]

Originally Posted by Pinion

Did you even read what you quoted?

Yes, and my previous statements stand. We should be doubled those numbers we have now!

[Vin]

Originally Posted by whatnext

You could argue that Metro Vancouver is held back by the purely artificial boundaries of the ALR.

We need those ALR boundaries. Otherwise the entire valley all the way to Hope would be filled with urban-sprawl subdivisions, as it would no longer be cost-effective to go tall in our urban centres. Where then can we have land for agriculture, industrial, etc? It's not like we can grow crops on the hill slopes. It also means we need to build more freeways, strip shopping malls, etc.

Despite the ALR, North Shore mountains and US border, we still have really low population densities.

Sooner or later, Richmond, Burnaby, New Westminster, and eventually Coquitlam and Surrey will catch up with Vancouver's population density.

[Migrant_Coconut]

Originally Posted by Pinion

Did you even read what you quoted?

Pinion, please do not feed the troll.

[Vin]

Originally Posted by Migrant_Coconut

Pinion, please do not feed the troll.

The man can speak for himself. He's not a baby.

[Pinion]

Nah he is right, I was feeding the troll. My bad.

[whatnext]

Originally Posted by a very long weekend

The start of a good response. Basically, however dense the city might be compared to Calgary or Milwaukie doesn't matter. Housing markets all have local demand/supply cycles, and in Vancouver introducing taxes to harm demand instead of upzoning the single family home areas that occupy a supermajority of land in the city is just boneheaded. It's not an either/or proposition, obviously, but for some reason, significantly increasing density is off the table. The geography professor's terrible ideas are uncontroversial and held by most of the politicians and planning staff, but they shouldn't be! They should be way out of the mainstream, because upzoning the low rise areas would allow for an enormous increase in building, it would even out land values, allow mom and pop builders back into the business, etc.

Yeah, right. We need more supply so we can feed the condo flippers apparently:

More than a third of all condos currently listed for sale in Vancouver’s Yaletown neighbourhood appear to be attempts at flipping by speculators.

ThinkPol analyzed all 128 of the currently available MLS listings for condominiums in Yaletown and found that 48, or 37%, were bought in the last three years.

These included 22 pre-sale flips, mostly units in Vancouver developer Westbank’s Vancouver House, which the company heavily marketed overseas.

Westbank pre-sold “Architect Series” units of the condo at 1480 Howe Street starting at C$567,000 in 2015 in Hong Kong[1].

Architect Series units are now being flipped for more than C$3 million...
https://thinkpol.ca/2017/11/23/more-...r-to-be-flips/

[a very long weekend]

We have yet to see the details, but this looks like a good start from city planning. I guess you have to go a little at a time:



I like this comment from Gordon Price out of the Vancouver Sun article:

Still, neighbourhood changes on the scale proposed Thursday would have been hard to imagine in the 1980s, 1990s, and early 2000s when Gordon Price was a Vancouver councillor, Price told Postmedia Thursday.

“RS1 was untouchable,” Price said, referring to the classification of zoning for single-family houses. “So this is a big deal.”

But Price believes it has taken the city “way, way too long” for both the densification of single-family neighbourhoods and the release of such a comprehensive housing strategy.

“Maybe there’s going to be some debate and conflict here,” he said. “But you might as well have had it five years ago.”

[240glt]

Vancouver is in a very unique situation right now, as compared to other cities like Edmonton, which is also trying to densify the city. Is it possible to actually drive affordability by adding density, and what is the "tipping point" for number and type of dwelling before it actually starts to become affordable ?

The reason I ask is because here in Edmonton, housing is quite affordable, yet developers are pushing densification as necessary to provide affordable housing. However if you look at the type of densification that's happening (usually replacing one SFH with two or a duplex) it's actually driving up housing prices in certain areas because they're taking perfectly good, but older houses off the market and replacing them with really expensive new houses.

Obviously the differences between Edmonton are night & day, but here in Edmonton the push for densification is largely a cash grab. Is Vancouver actually able to provide affordability by densifying these extremely expensive properties, or are you just making may expensive properties out of one ?

[Aroundtheworld]

Originally Posted by 240glt

Vancouver is in a very unique situation right now, as compared to other cities like Edmonton, which is also trying to densify the city. Is it possible to actually drive affordability by adding density, and what is the "tipping point" for number and type of dwelling before it actually starts to become affordable ?

The reason I ask is because here in Edmonton, housing is quite affordable, yet developers are pushing densification as necessary to provide affordable housing. However if you look at the type of densification that's happening (usually replacing one SFH with two or a duplex) it's actually driving up housing prices in certain areas because they're taking perfectly good, but older houses off the market and replacing them with really expensive new houses.

Obviously the differences between Edmonton are night & day, but here in Edmonton the push for densification is largely a cash grab. Is Vancouver actually able to provide affordability by densifying these extremely expensive properties, or are you just making may expensive properties out of one ?

That's a good question you bring up. The thing is new housing even if it is unaffordable to most will also help make the market more affordable. For example, my brother lives in Manhattan and plenty of new housing is being build, but it is mainly geared to wealthy people. However, rents have gone down and that's because the new places mean that people at the higher end are buying those new places instead of bidding up the price of existing units.

I would say the reason why new housing in Edmonton doesn't seem to be lowering prices is not because new housing is driving up prices, rather there is not enough new housing being built. Consider the situation if no new housing was being built. Likely prices would have increased much more. The problem in Vancouver I think is like Edmonton's, we are building new housing, we just aren't building enough of it.

[GenWhy?]

Originally Posted by 240glt

Vancouver is in a very unique situation right now, as compared to other cities like Edmonton, which is also trying to densify the city. Is it possible to actually drive affordability by adding density, and what is the "tipping point" for number and type of dwelling before it actually starts to become affordable ?

The reason I ask is because here in Edmonton, housing is quite affordable, yet developers are pushing densification as necessary to provide affordable housing. However if you look at the type of densification that's happening (usually replacing one SFH with two or a duplex) it's actually driving up housing prices in certain areas because they're taking perfectly good, but older houses off the market and replacing them with really expensive new houses.

Obviously the differences between Edmonton are night & day, but here in Edmonton the push for densification is largely a cash grab. Is Vancouver actually able to provide affordability by densifying these extremely expensive properties, or are you just making may expensive properties out of one ?

"Lot splitting", in Edmonton, takes older homes in central neighbourhoods that would need some decent TLC and takes usually 1 $330k home and turns it into 2 $600k homes. The issue with that "density" target set out by staff and council over there was a "soft densification" of SF neighbourhoods to keep the homeowners in those areas ok with more density. These lots usually do not have basement suites or laneway units, unlike Vancouver. However if you're lucky to get to be able to build a duplex or tri-plex in an older hood like Queen Alexandra in Edmonton... then the price of those homes become more in line with the price of the original home on that lot, and the added perk is that how you have 3 homes for $300k instead of 1 on the same sized lot.

In Vancouver you can have a SF house that is in pretty rough shape (tear down rather than renovate) selling for $1.2 million. If assembled with 3 or more adjacent lots, the overall site can house many more for less than the original $1.2 million that one of those SF homes cost. Although the City is currently focusing on rentals on arterials and easy density areas... SF zoned areas will need to drastically change in their design to allow affordable ownership.

[Vin]

A bit of good news here:

http://dailyhive.com/vancouver/housi...-proposal-2017

Looks like planners are starting to realize that we can densify further in CoV, and at the same time curb speculations.

Originally Posted by a very long weekend

We have yet to see the details, but this looks like a good start from city planning. I guess you have to go a little at a time:



I like this comment from Gordon Price out of the Vancouver Sun article:

Let's see if we can increase the density of Vancouver by implementing such strategies, would love to see doubling of numbers in skytrain station nodes, and neighbourhood centres such as Commercial/Broadway area, Kerrisdale and Oakridge mall.

Love this from Gordon Price too: But Price believes it has taken the city “way, way too long” for both the densification of single-family neighbourhoods and the release of such a comprehensive housing strategy.

[240glt]

Originally Posted by Aroundtheworld

That's a good question you bring up. The thing is new housing even if it is unaffordable to most will also help make the market more affordable. For example, my brother lives in Manhattan and plenty of new housing is being build, but it is mainly geared to wealthy people. However, rents have gone down and that's because the new places mean that people at the higher end are buying those new places instead of bidding up the price of existing units.

I would say the reason why new housing in Edmonton doesn't seem to be lowering prices is not because new housing is driving up prices, rather there is not enough new housing being built. Consider the situation if no new housing was being built. Likely prices would have increased much more. The problem in Vancouver I think is like Edmonton's, we are building new housing, we just aren't building enough of it.

I'd not disagree with this synopsis with the exception that it may not be that we're not building enough housing, we may not be building enough of the right type of housing

[240glt]

Originally Posted by GenWhy?

"Lot splitting", in Edmonton, takes older homes in central neighbourhoods that would need some decent TLC and takes usually 1 $330k home and turns it into 2 $600k homes. The issue with that "density" target set out by staff and council over there was a "soft densification" of SF neighbourhoods to keep the homeowners in those areas ok with more density. These lots usually do not have basement suites or laneway units, unlike Vancouver. However if you're lucky to get to be able to build a duplex or tri-plex in an older hood like Queen Alexandra in Edmonton... then the price of those homes become more in line with the price of the original home on that lot, and the added perk is that how you have 3 homes for $300k instead of 1 on the same sized lot.

There is no such thing as "soft densification" at least as far as any sort of city policy goes. And contrary to what you said, a growing number of those older homes are not run down, they are perfectly liveable homes. Just down the street from us, a developer bought a quite nice older house that had been upgraded and was in completely viable condition, knocked it down and they are now building two $650k homes. I don't really have a problem with that except that the lie that the city and the local developers told to be able to change the rules to allow this was that it was to increase affordability. That is not the case. And Edmonton does not have an affordability problem... you can still buy a decent SFH for under $250k in a number of areas.

The Queen Alexandra example doesn't hold water because an old SFH there starts at $500k, and infill goes up from there. So no you're not really getting any affordability from infilling those old lots either

In Vancouver you can have a SF house that is in pretty rough shape (tear down rather than renovate) selling for $1.2 million. If assembled with 3 or more adjacent lots, the overall site can house many more for less than the original $1.2 million that one of those SF homes cost. Although the City is currently focusing on rentals on arterials and easy density areas... SF zoned areas will need to drastically change in their design to allow affordable ownership.

On the Vancouver MLS, such developments exist now, and the asking prices are still exorbitant. So again I ask, is this really solving the affordability problem, or is it just creating more expensive homes ?

[GenWhy?]

Originally Posted by 240glt

There is no such thing as "soft densification" at least as far as any sort of city policy goes. And contrary to what you said, a growing number of those older homes are not run down, they are perfectly liveable homes. Just down the street from us, a developer bought a quite nice older house that had been upgraded and was in completely viable condition, knocked it down and they are now building two $650k homes. I don't really have a problem with that except that the lie that the city and the local developers told to be able to change the rules to allow this was that it was to increase affordability. That is not the case. And Edmonton does not have an affordability problem... you can still buy a decent SFH for under $250k in a number of areas.

The Queen Alexandra example doesn't hold water because an old SFH there starts at $500k, and infill goes up from there. So no you're not really getting any affordability from infilling those old lots either



On the Vancouver MLS, such developments exist now, and the asking prices are still exorbitant. So again I ask, is this really solving the affordability problem, or is it just creating more expensive homes ?

My round-a-bout answer of saying a massive rezoning change and charge in Edmonton for suburban development has to happen so mature neighbourhoods are not wealthy enclaves. Lot splitting was a dumb move to appease SF home residents in older neighbourhoods. The issue in Vancouver is most of the city and its surrounding communities are zoned for SF homes. Changes are 10 years too late as of this recent housing strategy announcement.

[GlassCity]

Originally Posted by 240glt

Vancouver is in a very unique situation right now, as compared to other cities like Edmonton, which is also trying to densify the city. Is it possible to actually drive affordability by adding density, and what is the "tipping point" for number and type of dwelling before it actually starts to become affordable ?

The reason I ask is because here in Edmonton, housing is quite affordable, yet developers are pushing densification as necessary to provide affordable housing. However if you look at the type of densification that's happening (usually replacing one SFH with two or a duplex) it's actually driving up housing prices in certain areas because they're taking perfectly good, but older houses off the market and replacing them with really expensive new houses.

Obviously the differences between Edmonton are night & day, but here in Edmonton the push for densification is largely a cash grab. Is Vancouver actually able to provide affordability by densifying these extremely expensive properties, or are you just making may expensive properties out of one ?

I saw this firsthand growing up in Richmond while SFH lots were subdivided into two SFH lots all throughout the city's arterials. We called them the "Williams Special" for the road this was most readily noticeable (especially between Garden City and 5 Road).

One big $500,000 split up into two smaller $700,000 houses. Of course those prices are no longer accurate.