Record housing construction in Seattle tanks rent increases.
 

What a shock - areas with massive increases in housing supply see drops in housing costs, and areas where housing supply is not keeping pace with demand see increases in housing costs.

https://www.seattletimes.com/business/re...mpty-apartments-even-some-cheaper-rents/

Support!
History and our own situation has shown that more taxes+rent controls don’t help, they just look good while secretly sabotaging ourselves.

Seattle never built as many condos as Vancouver did, what you’re seeing in their rental market is what you’re about to see in our condo market. An overshoot in building followed by a price collapse.

I also found this interesting: Seattle housing market under pressure as Chinese buying dries up
https://www.google.ca/amp/s/www.cnbc.com...pressure-as-chinese-buying-dries-up.html

The difference is that demand can be met in Seattle because they have lots of neighborhoods in which mom and pop builders can do small scale wood-framed apartment buildings to meet continuing demand for people actually moving into the city to work. In Vancouver, the zero growth policy across most of the city funnels all growth into expensive-to-build arterial corridors and high rise areas.

So, the foreigners who are buying up single family homes and even condos in either city are one thing. But the normal people in Seattle who want to make a life out of college are actually seeing rents come down in that city, whereas the land use/building restrictions in Vancouver continually push the cost of housing up for people entering the market.

Have you travelled the length of Cambie Street lately? Or been out to Norquay? There is no Zero Growth policy. There is a shitload of condo product on the market.

Low rise condos as a result of 10+ years of planning. If you look at major roads such as Granville, oak, knight, kingsway, Broadway, etc there still lacking. While we do have growth it is too slow, Seattle built enough fast enough that it caught up to and exceeded supply needs which is why rent is dropping there. We have a policy of taking years to develop one area then moving on to the next area but we need ambition and speed to solve increasing demand. We’re growing slower than demand which is why supply is restricted leading to increasing prices. Also all these feel good taxes and fees are further constraining supply rather than encouraging it. You’ll notice that there are no stats for how much the empty homes tax, school tax, foreign buyer tax, or rent restrictions have increased supply or lowered prices because honestly they made no significant difference and overall hurt supply. It’s scary when a modern government stops using hard numbers and data to justify its policies.

If you look at Richmond Burnaby or Surrey you’ll notice that Vancouver has fallen behind in construction and development. All the towers are basically being restricted to downtown. Broadway and Cambie should have had 40+ story towers around the station similar to Marpole and Oakridge.

Im hoping in the new Broadway plan they zone for giant towers around skytrain stations and don’t try to be greedy and seek 100% of the uplift instead of 80% (which gives people no incentive to build higher).

American markets also operate at much higher stabilized vacancy rates across all asset classes than is the case in almost all Canadian markets: office, industrial, retail and multi-res. Lack of adequate supply is typically less of a problem in most U.S. markets.

That's malarkey.

There isn't demand for those units now. Virtually every project is completing now with unsold units. It amazes me how clueless some people really are about how far off a cliff Vancouver real estate is set to fall.

The only kernel of truth in this argument is that we do need more rental supply. Unfortunately greedy developers have largely bid up land prices to such a point that building rental becomes tenuous.

Actually I agree with your first point except for the cliff argument. Vancouver prices cannot go down a cliff because demand here is too high, we're a growing city. Unless supply magically increases or something big happens to push people out people will need to live somewhere. Scaring off investment will only drop prices a bit, not a lot. The mortgage crisis in America didn't drop our prices like a cliff, and you'd assume this can reflect what happens when investment dries up as it would have shifted to buying cheap American real estate. What we have now is prices that are still high with buyers waiting to see what happens or unable to afford them and most sellers unwilling to drop prices unless they are desperate.

I totally disagree with the greedy developers argument. Its like people expect businesses to do things that lose them money? Would you work a job you had to pay to do? Why isn't McDonalds, Walmart, Microsoft, etc. being called greedy for trying to make a profit? We all work for money. Why don't you take out a huge mortgage to develop a property and take a loss? Are you greedy too because you don't do this? We can't simultaneously insult developers than expect them to keep doing business here. One business isn't worse or "evil" or greedier than the other. If you want rental developments then make a case so that developers can make money. Rental is extremely difficult to make a case for because payoff isn't for 20+ years. You need 20-40 million minimum to make most rental buildings work which is a big chunk of change to invest long-term. No one's going to invest that in an unstable climate. Long-term no one trusts Vancouver to not put in stronger rent controls so that rent can't increase at all for a few years or even more real estate taxes/laws.

You forget that we have super strong rent controls and tenant protection laws which scares the fuck out of rental investors/developers. Were literally saying why don't you build here, we will increase rental laws so you have a hard time making money from rental, we will increase taxes to make it hard to make money, and we will decrease property values so your investment goes down in value, but your greedy for not accepting getting shafted! Why should they build rental here where they legally get shafted with an uncertain future when they can build rental in Alberta? To attract businesses we need to create an environment they can feel safe in, that they can make a profit in. Instead we're talking about more rent controls, increased corporate taxes, more real estate taxes, illegal money investigations, banning foreign money, etc. We've created an unstable environment for investment and are yelling at investors for being greedy by running away instead of staying and taking a loss. We could have worked with foreign money, developers, investors, etc. Instead we decided to say you are to blame for all our problems, get out. There's a difference between asking that investors lower their profit margins in order to build more housing or rental and telling them to take a loss so that rents are lower. Right now the government is saying they may be changing policies so that 100% (from 70-80%) of the increase in property values from building more housing for rental and strata on Broadway goes to them which leaves developers 0 incentive to build more. In the end our real estate legislation and laws are so unstable that no one trusts BC as a place to invest anymore. If you want people to invest in shit then stop being so damn unstable with legislation.

http://udi.bc.ca/june-20-2018-letter-to-...oncerns-about-broadway-planning-process/

https://business.financialpost.com/opini...fled-canada-since-the-liberals-took-over
https://www.cbc.ca/news/canada/british-columbia/seattle-real-estate-tax-1.4398594

Granville's home to Upper East NIMBYville.
All of Oak's either redeveloped, redeveloping or for sale.
Knight's not very desirable for developers or buyers even with rezoning.
Broadway's waiting on the SkyTrain, for the umpteenth time.
Kingsway... fair point.

You'll be interested to know that we're actually denser than Seattle, despite half the population. It makes perfect sense to curb unnecessary demand at the same time that we're increasing supply.

The FBT and EHT started 1 and 2 years ago; the amount of development keeps shooting up and up. One could easily (if irrationally) argue that more taxes and regs have increased supply... or that developers will continue to build and profit no matter what restrictions they get slapped with.

A) The suburbs have a lower NIMBY count, sub-par planning, and a strong desire to rival downtown. There's OV, Mount Pleasant, Joyce-Collingwood and Hastings (not counting Little Mountain/Jericho/Pearson-Dogwood currently in review); it only looks like the city's falling behind.

B) I'll point out that Marpole is at sea level and blocked from the mountains by a hillside (ditto Oakridge), so of course 40+ makes sense there. Broadway is the hillside - it'll be 30-40 tops. Not everything has to be Marine Gateway.

"Knight's not very desirable for developers or buyers even with rezoning." Although Knight would be a great street to rezone into a rental only multi-residential because its similar to areas like around Rogers Arena with it's near 24 hours operations have amounts of traffic and stores and business. Taking advantage of the provinces new rental only zoning policy in this corridor would be great. There are connectors like at 41st and Broadway to Bline routes and so let's build a ton of mid-rise good quality rental buildings in this corridor.

People who really need a home generally will not sit and wait to see what the market does, they need somewhere to live. However speculators will sit it out and try to time the market, and speculators are what's been keeping the Vancouver market so high along with offshore buyers. Now that Big Daddy Xi has stomped out capital outflow, and OSFI has restricted credit both those sources of buyers are hooped.

There is no more stable market than Vancouver rental, which has been at vacancy rates below 2% for decades. The smart money, like family owned firms, looks at rental as a long term cash generator. The stupid money, as in the Mainland China money train, overbids on lots thinking a housing bubble continues forever and there will always be some fool to pay a higher price for what they build.

If you want to know why Seattle had so much rental construction, look no further than this statement: In Seattle and Bellevue, only about 2,000 condos have opened so far this decade. A pittance compared to Vancouver, here the overbuilding has been taking place in the condo market rather than rental.

PS Please don't quote UDI as an unbiased source for anything. They exist solely to pimp real estate.

Would be nice. Generally speaking though, you don't see much development along commercial-industrial "freeways" (e.g. Lougheed, Boundary, Bridgeport); Granville and Oak are at least mostly residential and therefore attractive to townhomes.

A lot of good points here thanks! I would point out that most legislation is only felt many years later. So developments in progress may not stop but proposals will dry up or grow less ambitious with increased fees, taxes, legislation, etc. You'll note that real estate spending is slipping combined with or causing a which is going to scare away development https://www.richmond-news.com/business/b...lips-for-third-straight-month-1.23454799

whatnext I don't believe your being realistic and I believe your letting anti-foreign feelings cloud your arguments. Developers are businesses and it doesn't matter what their country of origin is, there going to move to where the most+safest profits are made. If a Chinese investor/developer stops being able to make a case for Vancouver a local investor/developer is not going to let local ties push him to make a poor investment. Also foreign purchases are less than 1% now and the foreign buyers tax has not really had much effect so we need to be realistic, most demand is from Canadians. Hell most investors are Canadian. I hate when people say Chinese investors because this is not supported by any research, just racism. You can't blame an entire race for a problem. Asians (Chinese, Indians, Hong Kong, Phillipines, Korean) do make up a large chunk of foreign ownership but so do Americans, Netherlanders, British, and Middle Eastern people. If your looking by acreage more land is owned by people from the Netherlands, British, Americans than any other nationality. Hell downtown is mostly Iranians and British.

https://www.straight.com/files/v3/styles...5/immigrantmap3_150522.jpg?itok=NNZd5-Ks
https://www.straight.com/files/v3/styles...5/immigrantmap2_150522.jpg?itok=52i2OdAb
https://cartocdn-gusc.global.ssl.fastly....742d190a6bc6:1525360899213/1/7/20/43.png

A) Your article attributes the retail spending slowdown to falling car/gas sales and lack of labour; real estate is mentioned a grand total of once:

In other words, the housing market is also doing okay, despite the price drop. Realtors have been compensating for ebbs and flows since the beginning of time, now shouldn't be any different. And again, lower housing prices mean that sectors like film and tech startups - previously mentioned to have been chased away lack of cheap real estate - can now grow too.

B) Depends on what numbers you're looking at - the amount of non-resident condo purchases has risen to 16% on average in recent years. The empty homes map and many of the controversial presale flips line up with PRC-dominant neighbourhoods. I think we can agree that Mainland speculation is, at the very least, part of the problem.

1. I meant that article as an indication that an economic slowdown may be coming.

2. Realtors are not having a good time, imagine your working and 40% of your business dies out. 5-10% was manageable but 40% long-term will force many realtors to find work elsewhere or retire.

3. Lower housing prices? Lol how low have they really gotten on the cheaper end? It’s mostly the luxury market that’s fallen and I don’t think cheaper houses is going to help at all. Condos are still going up last I checked. Has anyone seen condos under 1 million actually become significantly cheaper? All we’ve done is kill a chunk of our economy and create more completion for lower market real estate.

4. This is old news. Sales to foreign buyers is less than 1%. Also the empty home tax resulted in no significant housing increases or tax revenue in Vancouver. However I know a lot of locals were really annoyed because they now have to fill in more paperwork every year. Anyway you must admit saying Chinese instead of foreign constantly is quite racist? Honestly if you look at BC as a whole do Indians or Chinese own more real estate? According to wiki in Surrey which is close to the size of the COV 30+% are South Asian while only 6.1% are chinese. In Delta it’s 14.8% vs 6.1% in Abbotsford it’s 16.5% vs 5%. Just because Indians vote NDP and Chinese vote Liberal doesn’t mean that we should target them.

Also what’s the matter with presale flips? The home still gets built and sales tax+all other taxes are paid. I don’t believe flipping a contract of purchase should have the same taxes as selling a home. I do believe some tax should be paid but not enough to deincentivise it.

Like I've said before you seem awfully concerned about the well being of realtors for someone claiming not to be one.

The argument South Asians vs Mainland Chinese buyers is a canard. Everyone knows the difference between what kind of money is involved in each purchase. Are there wealthy Indians and Iranians buying Metro Vancouver property? Of course but in nowhere near the same numbers.

You must be very young indeed if you believe the 1% figure. And that low figure is only outright declared buyers, not those using local proxies, family members with PR status or "canadian" astronauts sending money.

1) A few bad quarters does not a recession make, nor does a slump in real estate sales (which would be a sign that we're too dependent on that sector anyway).

2) 40% in detached houses, 27% in condos.

Just a now-regulated free market at work, nothing to see here...

3) See above; both SFHs and condos have plateaued and dropped. That takes pressure off other markets like rentals and commercial/industrial space, and allows tech/film/music/etc and their workers (who'd otherwise pass up Vancouver for elsewhere) to move in.

4) Actually, the city projects $30 million projected in the EHT's first year. And foreign ownership is 4-5% overall, and 16% in recent years; perhaps you're confused with country-wide ownership, which is indeed 1%?

4B) That dog will not hunt. I don't see Iranians, Indians or Irish in the process of shadow flipping, so I don't see how "foreigner" applies to the issue, other than to discourage other countries' nationals from trying the same thing. Ignoring whatnext, IMO this has nothing to do with who votes what way or who looks like what and everything to do with one specific country's investor class abusing loopholes (that really shouldn't exist) at Vancouver's expense. I've always tried to phrase it that way.

Insinuating "racism against Chinese" implies that every single individual of Chinese descent lives and thinks and feels the exact same way as the vultures, and is as ignorant as the time Kerry Jang decided to reach out to the "Chinese community" by flying the PRC flag over City Hall. They're not a hive mind, thank you very much - plenty of immigrants, CBCs, even other PRCs feel screwed over by dirty money too. Go to Taiwan or Hong Kong or Singapore, same story. Being of the same race doesn't make them brothers.

4C) Shelter is a basic need, just like food and water. We've got an affordability crisis, eviction crisis, and mass reno/demovictions adding to both. With all that in consideration, buying a home just to sell it again ranks just slightly below Nestle selling our own groundwater back to us mid-drought. There's profiting, and then there's profiteering.

Seattle is said to be seeing record apartment construction - in the US 'apartment' means rental - as opposed to condo. (The first article from the Seattle Times mixes up Metro Seattle and City of Seattle data. On rent increase, it's the City of Seattle, but on construction it's referring to Metro Seattle - which like Metro Vancouver is much bigger than the city).

In 15 years from 2000 to 2015 King County (which includes Seattle) added 315,766 people to reach a population of 2,052,800. That's an average of 21,051 a year, in an area of 2,131 square miles. In 15 years from 2001 to 2016 Greater Vancouver added 476,466 people to reach 2,463,431, an average of 31,764 a year, in an area of 1,113 square miles. So taking into account the different geography and population numbers, Greater Vancouver has been growing quite a bit more than King County, despite a land base 50% smaller than King County.

In terms of renters vs. home owners, there are fewer households renting in Metro Vancouver. King County has 57.3% owners and 42.7% renting households; Metro Vancouver has 63.7% ownership households, and 36.3% renters.

The City of Seattle has 53% renter occupied dwellings, and 47% owners. The City of Vancouver in 2016 had 53% renter occupied dwellings, and 47% owners.

King County saw 18,641 units given a building permit in 2017; Metro Vancouver saw 26,204 housing starts.

On home sales (of existing homes, not new inventory) Vancouver saw a 43% lower number of September 2018 sales than a year earlier, and King County saw a 27% drop. Realtors in both markets will be sleeping badly. Year on year 'average home prices' are up in both places, but between May and September this year the median sale price of single-family homes in King County has fallen 8 per cent. (Most years home prices rise between May and September). Condo prices have also fallen in the past five months. In Vancouver the price of single-family homes fell 3.4 per cent over the last three months and the average price for a condo was 3.1 per cent lower. So markets in both places seem to be following similar paths since the spring.

One reason why Seattle has seen a lot of apartments built recently, but not many condos, is that apartments are viewed as 'safer' investments than condos. "developers and banks that finance construction see condos as the riskiest type of project, both in terms of direct financial payback (during the time when the last decade’s bubble burst, many condos plummeted in value and went unsold or were converted to apartments) and in legal terms.

Washington has an uncommon condo law that allows condo owners to more easily sue builders for construction defects — it allows suits for several years and uses a broad definition of what a “defect” is. That can tie developers up in court and lead to settlement payouts, and at the least, it has caused high insurance costs that can amount to millions of dollars.

And developers say the city of Seattle puts extra restrictions on condo construction, preventing them from converting the units to apartments for at least five years." [quote source]

Regarding 4C how does someone foreign buying real estate as an investment and renting it out bad? Doesn’t this add a unit of housing to the rental market? Why would a local buying to live in it be preferable to a renter living there?
Also rennovictions happen because the only bloody way to raise rents now is to evict and re-rent. Your telling landlords to take a loss or evict and of course there evicting. Shelter like food and water is a basic need but also like food and water it is earned instead of given. Why are we giving people homes as good as or better than the ones we worked for in places we can’t afford to live?

If you mean a landlord overseas renting out legally, that's a highly unconventional setup (are there any examples you know of?) but no problem so long as they're paying taxes. The intended targets are Airbnbs (scams, tax evasion, detriments to Vancouver's hotel industry) and empty units (used as shares or tax exemptions rather than homes).

Rents can be increased by 2% a year - or if the NDP changes it, at the pace of inflation with an option to dispute. Landlords are perfectly capable of increasing rents.

I can sympathize with those who're genuinely struggling to make ends meet at those rates, but what's happening just as often is that tenants are being kicked out for no other reason than greed. Want more for the unit, just turn a simple plumbing job or repainting into an eviction, put it back on the market for another $700-1,000/month. That's not right either.

Your confusing want more with wanting market rates. It’s not like you can jack up a market rental 700-1000 and someone else will come. What happens is you have units where the owner never bothered to raise rent or forgot and suddenly the rent is a lot less than market and the tenant is getting a great deal. How do you raise the rent once this situation happens? Under the old system you could at least raise it slowly but now your forced to rennovict. Right now in vancouver rents are way under what the cost of housing is, you should be getting around 6-7% return because you have to pay maintenance management etc and you need to make as more interest than the bank. Instead people are getting 2-3% which is awful. Owners are already suffering at market rates and were saying this is too high you should take a bigger loss. People forget that owners pay 300-500 towards the strata each month plus rental management plus paying for the damage/screwups of the tenant. It adds up so profit margins are low or non existent. Before people would buy rentals because the housing market goes up to repay it but now the markets going down and rent just doesn’t make sense.

Which is why renting should be left to professional companies and not to some wannabe land baron with a couple crappy condos he's trying to cover the mortgage on. Professionals don't "forget" to raise the rent. Just take a look at the title of this thread, Seattle doesn't have legions of speculators flipping condos who might rent one out if the market is slow.

Rental managers aren't cheap though. And they do make mistakes all the time. Even at their best they hate dealing with shitty/crap tenants and will make mistakes. Even if they do things perfectly the judge/arbitrator/mediator/etc will find fault. Its very very rare that a renter will lose in court.

https://www.recbc.ca/2018/04/linda-louise-gabara-managing-broker-north-cariboo-realty-ltd-quesnel/
https://www.recbc.ca/2017/09/lorraine-susan-fugle/
https://www.recbc.ca/2017/01/kevin-james...gton-remax-management-solutions-kelowna/

And tbh I think everyone is a speculator, almost everyone will sell at the right price. This might be my business degree talking but its just wrong in a capitalist country to label one group as bad for enjoying a profit. Gives me shivers like you just insulted my core beliefs/religion when people say people who buy/sell to make money are bad. We should be encouraging entrepreneurial spirit, the market, the economy, business, investment, etc. not stifling it. I remember when banks, corporations, and lawyers used to be the evil ones.

Why should we bail out landlords who are inattentive in how they operate their business? Can I get bailed out when I don't save enough money and all of a sudden I need a new roof?

This really is a case of too bad so sad.

Yet landlords take their cases to court much more than tenants do (link).

Agreed. I'm really going to need to see some actual examples for misher's "no raises for years" scenario; even the kindest, cheapest owners always raise rents. Again, profiting good, profiteering bad.

AFAIK, it's the same thing as the ex-Shabusen on South Granville - rents went up, the restaurant left, a few months later the place was back on the market at the original price. I'm not seeing anything except a hyperinflated market and 99% occupancy rate allowing less scrupulous landlords to charge whatever they can get away with, knowing that somebody who's been crowded out of the condo market will buy regardless.

Parents were old, sick, etc is common. Your treating landlords like nameless companies when they are people too.

Uhhh and going by your argument should the landlord pay because the tenant can’t pay market rent? I don’t see how the no bailout argument defends renters at all. Rent control is a bailout! In the end owners aren’t charging more than market so profit margins are slim to non existent and yet we’re hounding them for more. The money has to come from somewhere and why should the owner suffer instead of the renter who can just move. If we keep saying it’s owner this owner that then no one will rent anymore. I am very sure with the recent rental restriction that banks are making it much harder to finance rental projects.

Based on? …

Much like the depreciation report requirements we're going to have to see how banks react. The below comes from LandlordBC. I note a ton of forum posters tend to reply saying its a biased source. But please remember that its developers that build and Owners who rent so their opinions are important to increasing housing.

https://www.canadianrealestatemagazine.c...mperilled-12000-rental-units-248935.aspx


Honestly we're seeing that decreasing prices, increasing government taxes/intervention/rules, increased regulation, etc. are causing developers to cancel or leave when combined with the mortgage rules and interest rate increases at a time that we need more housing to be built. Housing starts have dropped across Canada 23%, likely due to mortgage rules. However, BC leads this at 43.3%, likely due to the triple whammy of mortgage rules+taxes+legislation which is insanely bad for our economy and housing supply. We've screwed people [real estate businesses, developers, Owners, etc.] too much and now they've lost trust in BC as a place to do business.
https://www.huffingtonpost.ca/2018/10/09/housing-starts-canada-population-growth_a_23555468/

A 40%+ drop in our biggest industry in sales and development is frightening. We're heading towards a depression while people cheer it on as if a 10% decrease in housing prices will make a difference.

Oh for God's sake, if housing starts have dropped it's because the market is telling builders demand isn't there. Look at the graph in this article to see how months of inventory is swelling. We don't need more supply, if anything is needed it is for sellers to get realistic about the price they can get. You seem to think the prices in the bubble were some sort of "normal" we should be hoping to reinflate.

And you seem to think there’s some large supply of empty homes that will magically become availible if prices drop. If all homes are full how does cheaper prices help any? As for what’s normal I assume Vancouver housing should be worth slightly more than Toronto because our weather is better and going by prices this is exactly what happens. Construction was already barely pacing population growth and if it slows down any we will be facing a crisis that will push prices up more.

Look around and tell me how many more people we can house with less than 1% vacancy if prices go down. How will lower prices help a huge load of people fit into the 1%? Will we shove them in via bulldozer?

Think about it and tell me how lower prices will help get more people into homes that have people in them already. Tell me how lower prices are going to solve our future problems as construction goes down 40% but our population still grows at 0.5% a year. Tell me how lower prices are going to help the massive layoffs in the construction industry. Tell me how lower prices is going to solve the huge hit to the economy and taxes in the budget. Tell me how we’re going to house the labor we desperately need in the less than 1% vacancy that will lower even more as new construction dies, as rental owners+developers+investors run away from a hostile business environment. As demand goes crazy because we didn’t build new housing and chased away everyone that wanted to.





You obviously have thought through everything and have a very smart master plan/strategy for how we will overcome everything. So tell me.

We're not seeing a drop in Housing Starts. There's actually an increase.
As the article you cite notes, there's a huge variation from month to month, and a change from one month to another is pretty much meaningless. The article is also talking about BC data, not Vancouver data.

If you get the latest data from CMHC's 'Housing Now', from September for Vancouver, you'll see that year-to-date (so in 8 months of 2018) there have been 16,813 housing starts in Metro Vancouver, 361 more than the first 8 months of 2017. To put that in context, 2017 saw more housing starts than any of the previous 10 years - and so far this year we're building more than last year.

There were 43,684 units under construction in August, which is 3,510 more than were under construction in August 2017.

And if it's the City of Vancouver, rather than Metro Vancouver that you're concerned about, then it's worth noting that there have been 4,848 starts so far this year, compared to 1,838 in the first 8 months of last year, and more than any other municipality - more than double the starts in Surrey (2,332) and nearly triple the starts in Burnaby (1,754) or Richmond (1,702).

As this thread was initially about rental units, it's worth noting that those are up a lot as well; there have been 4,464 rental units started in Metro Vancouver this year, compared to 2,928 this time last year. Over half those are being built in the City of Vancouver - 2,501 units (compared to 1,210 in the first 8 months of 2017).

So the sky isn't falling (yet), and the new construction hasn't slowed down at all.

Haha honestly I kind of knew that number wasn’t very accurate. But I wanted to see his answer since he seemed to be totally happy with it. And you must admit with rising taxes a real estate slowdown higher mortgage rates increasing laws were not exactly encouraging development and I wouldn’t be surprised if it dropped. I really want to see his answer about how lower prices help when we have less than 1% vacancy.

That is no way to make a valid argument or earn respect from anyone.

So yet another instance where you fling poo against the wall to see if it sticks.:koko:

There’s no supply problem. Did you even look at the graph in the article I linked showing months of condo inventory climbing? Didn’t think so.

You mean with a vacancy rate of less than 1% we don’t have a supply problem? https://www.cbc.ca/news/canada/british-columbia/seattle-struggles-to-fill-vacant-rentals-1.4723908

Lower prices are definitely going to help us house people in non existent housing. Your a genius man.

The vacancy rate of under 1% is in purpose-built rental units. The number under construction is more than for many, many years, and combined with restrictions on Airbnb and taxes designed to discourage people leaving houses or apartments empty, rather than renting them, rental supply should increase. If people continue to arrive in the region, we probably need even more rental housing, but a number of would-be politicians in several municipalities seem to be indicating their intention, if elected, to adopt policies like rental-only zoning, which might help increase supply. There are also candidates suggesting they would allow neighbourhoods to have a greater role deciding what developments can go ahead, and that would probably reduce the potential supply. So the election outcomes across the region will influence how much rental gets built, and where, in the next few years.

In the meantime across the region we are also building a lot of condos, and some townhouses, at close to record levels, even though home prices for existing houses have dropped for the past 3 months. There's no sign yet that falling prices have limited new proposals for development, and new schemes are still being launched and sold in sufficient numbers to allow them to proceed. That may change if interest rates continue to rise, and may cause some projects to be developed over a longer time frame.

The changed ability of potential buyers to raise funds (with the stress test on mortgages, and higher mortgage rates), is the most likely explanation for falling prices. Once prices start falling, potential buyers are less likely to jump into the market, so inventory increases and sale prices tend to fall even more. Eventually that stops, either because interest rates stop going up or enough new buyers come into the market to stabilize prices.

Once prices start falling, there's no way of telling how far they'll fall, or for how long. This could be it - they'll go up again next month, and there will be a little 'blip' on the house price chart. That seems unlikely, as interest rates look likely to be raised at least once more this year, and again next year. What happens to the US economy, and their interest rates will be a significant influence on those future rate decisions, and nobody knows how that scenario will play out.

As a note, take The Goodman Report with a grain of salt. I mean, we're in development in rentals and condos and even I find Goodman to be over exaggerating and too specific in his examples of what is "hot" right now or where things are falling. Goodman doesn't talk highly of rentals for regular people ( households under $80k) and talks a big game about where market rents are right now and gets excited about tearing down rental buildings that are older to build more rental that is slightly taller and charges a much higher rent.

The developers that he cites as "going back to the drawing board" are those that bough expensive land recently, based profits off a %4 rental increase instead of a safe %2 which we do, and are trying to build on a DP not a rezoning, or have poorly chosen land and can't get much of a density lift. Rental is going strong because the demand is there and the programs are there, we just need a few more tools. The MIRHP Program is one of those tools that hopefully is embraced as a firm program under the new government.

There is also a new parking by-law for much of the city Core, and it's to be revised again with the new council to expand to most of the city. Parking minimum changes were a great factor in the rental expansion in Seattle.

Both Changing City and GenWhy? have you given you detailed responses as to the flaws in your argument.

The issue boils down to the fact Vancouver spent far too much time and energy building condos when they should have been building apartments as per Seattle. Rather than appeal to the small time condo landlord/investor, governments should have been encouraging bigger players to develop purpose-built rentals. Given the way you keep flogging this dead horse, there's obviously something colouring your biases you haven't disclosed.

Considering the number of people moving here, Vancouver is definitely not building enough, contrary to what most may want to believe.

If Vancouver is building enough residential units, Surrey, Burnaby, New West, Richmond, Coquitlam and other outlying municipalities will never ever experience the boom they are experiencing right now.

You sure about that?

https://pbs.twimg.com/media/DmEY20IVsAAcqBm.jpg:large

Do you know where one could find the breakdown by sub-region or municipality?

No sorry, but the website/blog might have more detail. I think it comes from REBGV stats in part.

Is it just me or does it look like the amount of housing being constructed hasn’t changed dramatically but the time to complete it has greatly increased?

Something seems wrong with that graph. Housing starts and completions have barely moved but U/C is off the charts. Could be a factor of construction duration, but that's a huge spike for something like that.

Those look like CMHC data. You can see a breakdown of housing starts by municipality from 2007 to 2017 in the table on page 19 of the Metro Vancouver Housing Data Book. You can get completions data from 2008 to 2017 in a table on page 31. The Data Book doesn't have the annual under construction numbers - if you wanted to find those you'd have to download 'Housing Now' from the CMHC website for Greater Vancouver for every year.

That's also CMHC data, and it has shown the number under construction climbing steeply in the past few years. There are a couple of factors that probably explain it. One is that CMHC don't count what happens below ground as construction - it's only when a project meets 'at grade' that it becomes a Housing Start. As we've seen a lot of taller towers under construction, especially in suburban municipalities like Burnaby and Surrey, their construction time seems much longer than when shorter towers were the norm.

And, as we can see by looking at the time projects like Brentwood or Civic Centre have taken to complete, from when they meet grade, those timelines have stretched a lot in recent years as well. Partly that the size of the structures, and partly the difficulties builders have faced in getting finishing trades to move a project to completion. Even lower height projects on places like Richmond are taking longer, in part because they're often larger (more units in total) than projects were a few years ago. Really complex buildings like Vancouver House also take longer. It looks like that building reached grade in summer 2016, and they're not going to complete until next spring, or later, so that's around a 3-year build time.

edit - don't forget too that this includes single family dwellings - I think they represented a greater proportion of what was being built. and were being built more quickly 10 years ago - these days there are more apartment buildings, that take longer.

Another Seattle article:

Amid building boom, 1 in 10 Seattle apartments are empty, and rents are dropping
https://www.seattletimes.com/business/re...tments-are-empty-and-rents-are-dropping/

An almost laboratory study in stark contrasts:


Seattle built 17,450 rental homes in 1 year, while Vancouver only counted 1,364

Jan 10 2020, 2:21 pm


An academic at Simon Fraser University (SFU) is urging officials with the City of Vancouver to pick up the pace in building purpose-built rental homes, and look to the region’s southern neighbours for inspiration.

In a recent blog post on the website of Goodman Commercial, SFU finance professor Andrey Pavlov with the Beedie School of Business compares Seattle and Vancouver’s achievements with building new purpose-built rental housing.

In 2018, there were 17,450 new rental units in Seattle, compared to just 1,364 new rental units by Vancouver over the same year. With the flood in new supply, landlords are now competing fiercely for tenants, with many listings offering up to months of free rent and gift cards of up to $2,000.

While Seattle is larger than Vancouver, it is not 13 times bigger — it comes down to municipal policy.

The City of Seattle has a population of about 745,000 over a land area of 368 sq. km, within a regional population of 3.94 million and a land area of 21,202 sq. km. In contrast, the City of Vancouver has about 650,000 residents on a land area of 115 sq. km, within a regional population of 2.5 million and 2,900 sq. km.

Pavlov describes Seattle’s surge in new rental housing as the “normal and expected free market response to rising demand,” with the city increasingly facing housing pressures from the rapid growth of its tech industry.

“So instead of asking how Seattle has built so much rental housing, the Mayor should be asking what we have done in Vancouver to prevent the same outcome,” he wrote.

“It’s not rocket science. When the demand for apples goes up, normal people plant more trees. It takes a few years, but sooner or later there’s enough apples to meet the higher demand. Perhaps even enough to ship some to China and add capital to the local orchard. But when the demand for housing, especially rental housing, in Vancouver increases, we don’t build more. On the contrary, we do everything we can to sabotage new supply.”

He lists rent control, rental-only zoning used to downzone, and the 12-year-old moratorium on the demolition of rental buildings for the city’s slow growth with building new rentals.

He cited a recent paper in American Economic Review that zeroed in on San Francisco’s housing issues and the impact of rent control: “In the long run, landlords’ substitution toward owner-occupied and newly constructed rental housing not only lowered the supply of rental housing in the city, but also shifted the city’s housing supply toward less affordable types of housing that likely cater to the tastes of higher income individuals… Taking all of these points together, it appears rent control has actually contributed to the gentrification of San Francisco, the exact opposite of the policy’s intended goal.”

When it comes to the provincial government’s introduction of rental-only zoning powers for municipal governments, Pavlov asserts cities like Burnaby and New Westminster have used the new zoning tool for its opposite intended effect. Rental-only zoning was enacted on existing properties without the permission of the owners and without an appropriate density bonus.

“This has exactly the opposite effect of the intended goal — it turns rental housing into a toxic asset. Most investors like to keep their capital away from such assets. The companies which seek them out are called ‘vulture funds.’ As the name suggests, they do not make for good landlords,” he continued.

“Rental-only zoning, even just the possibility of it, not only expropriates from the current owners but also ensures that we will not get a rental building on any property that does not already have one. Why would anyone in their right mind risk such a severe down-zoning of their land?”

The possibility for an increase in rental supply is restricted by the inability to redevelop existing, ageing rental buildings due to a 12-year old moratorium on demolishing rental buildings cover over 95% of Vancouver, he adds.

Pavlov then sums up the resulting situation: “In other words, we can neither add new rental buildings nor redevelop existing ones.”

For acquired sites that are suitable for new market rental housing, applications face a years-long development review process, followed by hostility from some current Vancouver city councillors over the proposals.

“So you wait two, three, or more years for your development application to get reviewed, during which time you’re paying interest on the land purchase, property taxes, and even the so-called School Tax on the entire property. Sooner or later, usually much later, you get to city council for final approval. That’s when you get yet another insult. Your project gets questioned, and possibly denied, because market rents are too high,” he wrote.

“You read that right – we block new rental housing because we don’t have enough rental housing. This doesn’t just defy basic economics; it defies basic common sense.”

Source: https://dailyhive.com/vancouver/seattle-vancouver-rental-housing?auto=true

There are so many errors with that Pavlov piece, and the Daily Hive regurgitation of it that it's hard to know where to start.

The 17,450 rental apartments were completed in 2018 in The Seattle Metro area, not the City of Seattle. It's an area of 15,000 sq. km. with a population of 3.87 million. Metro Vancouver is only 2,882 sq. km. with 2.46 million people. In 2018 very few condos were developed in Seattle Metro.

The number of rentals quoted for Vancouver is for the City, not for Metro. The Metro area saw 6,275 rentals completed, but over 18,000 condos, so there was actually more development activity in Metro Vancouver than in Metro Seattle, even though it's a smaller region with a smaller population.

Maybe the professor of finance needs to take Statistics and Geography 101 before making any more comments.