Developers Paint Bleak Picture of Vancouver's Future Under Status Quo

[rofina]

Originally Posted by nds88

I believe everyone should have at least entry level experience working a labour job (washing cars, mowing lawns, digging holes), a desk/white collar job (entering data, administration) and customer service/retail (call centre, working at a clothing store). This helps individuals become more well rounded and understand different perspectives of what other people experience.

Wholeheartedly agree.

Perspective is key in life.

[SpongeG]

Condo crisis? Analyst warns of massive Metro Vancouver presale drop-off

BY SIMON LITTLE AND AARON MCARTHUR GLOBAL NEWS
Posted February 28, 2020


A B.C. real estate market analyst is sounding the alarm about a steep drop-off in condo and townhouse presales.

“We knew there was something going on, but when we saw the final numbers we were pretty shocked,” said Michael Ferreira, managing principal with Urban Analytics.

The company recently crunched regional data for 2019 and found a 60-per cent drop in new condo and townhouse units coming to market.

Looking at highrise construction only, the dip was even steeper: 76 per cent.

While Metro Vancouver appears to be a forest of towers under construction to the eye, Ferreira said the impact of the presale slide is currently hidden.

That’s because presale units usually take about three years to reach completion — meaning a cut in new supply will be felt down the road.

...

https://globalnews.ca/news/6611441/m...os-townhouses/

[misher]

“Developers are cautious before they initiate new units.”

But Casey Edge said there’s more to a drop in starts than a lack of capacity to take on new jobs.

The executive director of the Victoria Residential Builders’ Association said the province and municipal governments have to shoulder some of the blame.

“We are seeing a decline in housing starts despite the fact we have very strong population growth,” he said. “We need to accommodate this with new housing not less housing.”

Edge said the province promised in 2017 it would improve the supply of housing and work on streamlining the approval processes at the municipal level.

“That hasn’t been done,” he said. “[The budget] predicts a 24 per cent decline in housing starts over two years, yet they are also predicting population growth. The demand for market housing is there, but they appear to be doing nothing about improving supply for that growing market demand.”

B.C.’s population is expected to grow by between 57,000 and 60,000 people each of the next four years, while Victoria’s population grows by about 5,000 people per year.

https://biv.com/article/2020/02/hous...ue-demand-cmhc

[rofina]

Originally Posted by misher

https://biv.com/article/2020/02/hous...ue-demand-cmhc

I don't quite understand how delivering 40,000 less units over the next 4 years is going to do anything to ease the housing crunch.
Particularly when we are expecting an additional minimum 200,000 residents in the province over the same time.

1% vacancy or less province wide, an extra 200,000+ people, and only 120,000 units.

[chowhou]

Originally Posted by rofina

I don't quite understand how delivering 40,000 less units over the next 4 years is going to do anything to ease the housing crunch.
Particularly when we are expecting an additional minimum 200,000 residents in the province over the same time.

1% vacancy or less province wide, an extra 200,000+ people, and only 120,000 units.

Bear in mind that the average household size in BC is around 2.8. So you're actually looking at maybe at the worst 100,000+ households in 120,000 units.

[Changing City]

Originally Posted by rofina

I don't quite understand how delivering 40,000 less units over the next 4 years is going to do anything to ease the housing crunch.
Particularly when we are expecting an additional minimum 200,000 residents in the province over the same time.

1% vacancy or less province wide, an extra 200,000+ people, and only 120,000 units.

As noted in other threads where the same budget numbers have been quoted: the BC Budget forecast for housing starts isn't what they necessarily expect to happen, it's what they government are relying on to happen for financial planning purposes. The 2019 budget expected housing starts to fall from 40,000 to 34,000 in 2019. They actually went up to 45,000. This budget anticipates only 35,000 starts in BC in 2020. However, "James said the government’s conservative estimates for housing construction are consistently outperformed by actual results, and she expects that over the next year, both housing starts and sales will climb."

So budget estimates are not predictions, they're conservative expectations of activity.

[rofina]

Originally Posted by Changing City

As noted in other threads where the same budget numbers have been quoted: the BC Budget forecast for housing starts isn't what they necessarily expect to happen, it's what they government are relying on to happen for financial planning purposes. The 2019 budget expected housing starts to fall from 40,000 to 34,000 in 2019. They actually went up to 45,000. This budget anticipates only 35,000 starts in BC in 2020. However, "James said the government’s conservative estimates for housing construction are consistently outperformed by actual results, and she expects that over the next year, both housing starts and sales will climb."

So budget estimates are not predictions, they're conservative expectations of activity.

Thank you for the detailed reply.

Will be interested to see how close they come to reality - it seems that 2020 might surprise to the downside, there has been very few project launches for anything more than a 4 story with 60 units.

If the market continues to recover I can see that changing by 2021, but time will tell.

[Changing City]

Originally Posted by rofina

Thank you for the detailed reply.

Will be interested to see how close they come to reality - it seems that 2020 might surprise to the downside, there has been very few project launches for anything more than a 4 story with 60 units.

If the market continues to recover I can see that changing by 2021, but time will tell.

You're welcome, and I agree that this year they might well be wise to anticipate a lower level of starts, although there are some big projects underway that might keep the numbers up. The level of pre-sales in 2019 in Metro Vancouver was way down though, so unless there are a lot of projects launched and successfully sold over the next few months, I suspect that the 2021 starts are the most likely to take a hit.

[rofina]

Originally Posted by Changing City

You're welcome, and I agree that this year they might well be wise to anticipate a lower level of starts, although there are some big projects underway that might keep the numbers up. The level of pre-sales in 2019 in Metro Vancouver was way down though, so unless there are a lot of projects launched and successfully sold over the next few months, I suspect that the 2021 starts are the most likely to take a hit.

In fairness, I probably didn't think that through, it would be 2021 that still is lower on starts, primarily because I'm not seeing much new product launch so far in 2020.

Obviously its early in the year still, but I'm not sure that developers have the appetite currently to be launching ambitious projects.

[misher]

Originally Posted by rofina

In fairness, I probably didn't think that through, it would be 2021 that still is lower on starts, primarily because I'm not seeing much new product launch so far in 2020.

Obviously its early in the year still, but I'm not sure that developers have the appetite currently to be launching ambitious projects.

And the point should be that government base its policies on its own forecasts and should also maintain a margin fo error. If its forecasting a reduction that does not keep up with population gain then it must institute policies to correct it.

[Migrant_Coconut]

Originally Posted by misher

And the point should be that government base its policies on its own forecasts and should also maintain a margin fo error. If its forecasting a reduction that does not keep up with population gain then it must institute policies to correct it.

For the umpteenth time, the NDP's budget states the minimum required number of builds, and is not a prediction. Kindly cease and desist with the Chicken Little routine.

[misher]

City of Vancouver wants input into cutting red tape in its regulatory procedures
‘Regulation Redesign’ aims to simplify rules for city building

Complaints also relate to confusing or incomprehensible planning or building department requirements, such as the need for an arborist’s report on boulevard trees when the proposal is to build a laneway house at the rear of the property.

An architect once complained that the city was requiring an expensive parking elevator to improve accessibility in a very small stacked-townhouse development, when each home could only be accessed by a flight of stairs.

https://www.vancourier.com/opinion/c...res-1.24093581

[trofirhen]

Whether to post this, and where to post it, I am not sure of.
However, it seemed relevant for many people, especially in hyper-inflated Vancouver. I hope this is a valid thread for it. Thank you.
https://vancouversun.com/news/local-...S_HeadlineNews

[NewfBC]

Originally Posted by trofirhen

Whether to post this, and where to post it, I am not sure of.
However, it seemed relevant for many people, especially in hyper-inflated Vancouver. I hope this is a valid thread for it. Thank you.
https://vancouversun.com/news/local-...S_HeadlineNews

but.. but.. haven't the developers and landlords/investors been screaming that rentals are no longer a good investment because of things like the rent hike limit, etc. etc. etc etc.? Full of sh*t as usual!

Ron.

[Prometheus]

Originally Posted by NewfBC

but.. but.. haven't the developers and landlords/investors been screaming that rentals are no longer a good investment because of things like the rent hike limit, etc. etc. etc etc.? Full of sh*t as usual!

Ron.

I guess you didn’t give the article the proper attention or perhaps are wedded to a particular narrative where acquiring an understanding of the real causes of increasing rents and housing prices is unimportant.

First of all, the investors written about in the article are not looking to invest in the construction of new rental stock, a venture that restrictive government policies make difficult and risky, and which have resulted in an acute scarcity of purpose-built rentals and created an extremely lopsided landlord’s market in which the vacancy rate currently stands at an atrocious 1% or so, leaving little to no choice for renters.

The investors written about in the article, by contrast, are looking to capitalize on this government-created scarcity and purchase the limited supply of rental stock that already exists, not create more of it. Indeed, for these large investors, it is precisely the government-induced scarcity of new rental supply that has made the acquisition of existing rental stock highly attractive, especially since as new, deep-pocketed owners they can renovate and raise rents to levels that reflect the extreme landlord’s market which government policies have brought about.

Until government removes the myriad roadblocks and uncertainties its placed in the way of the efficient and timely construction of an abundant supply of housing, thus permitting the re-establishment of balance in the market between renter and landlord, buyer and seller, then increasing scarcity and rising rents/prices is precisely all we can realistically expect—unless the government chooses not to address its mistakes and the root causes of the problem but rather follow the advice of the so-called advocacy groups and non-profits featured in the story, in which case we can expect an even worse alternative to what is happening now.

[Sheba]

I suppose this is the best place to post this - Developers and trades in Vancouver to be hit with increased fees

On Tuesday, City of Vancouver council will vote on the proposed fee hikes for rezoning applications, general development, building and other related permits — that will average five per cent for a total of 32 per cent in increases since 2017. The changes will apply to around 70 different types of fees.

According to a staff report, increased regulations and “the resulting process and technology challenges” mean that permit turnaround times have been extending during 2021.

The report goes on to state that COVID-related supply chain issues in the construction industry have resulted in project slowdowns during the building inspection phase of permits and this had also made delays worse.

This permit and building inspection backlog has occurred despite efforts since 2017 to reduce wait times. At that time, council approved the hiring of 75 extra staff that came with a nine per cent increase in most fee categories.

In 2018, fees increased on average 12 per cent, then three per cent the following year and three per cent in 2020.

According to the report, without increasing fees, the building permitting program will not generate enough money to cover its costs.

...