If the Chinese Market Isn't Interested-Neither is Westbank
 

This pretty appalling and just h=shows all the smokescreen thrown up by Ian Gillespie for the hypocrisy that it is:

Vancouver developer Westbank is only interested in projects that are wanted in China, the marketing director of the company has admitted.

“It’s a hindrance that I don’t speak Mandarin for example, in sales,” Westbank’s Director of Marketing Michael Braun says on a blog post on the company’s website[1]. “And there is always the fear, what if the China market blows up? But right now I have a rule when we talk about projects if the Chinese market doesn’t want it, I have no interest in it.”

Westbank and its owner Ian Gillespie have come under heavy criticism recently for catering to wealthy foreign buyers at the expense of taxpaying locals — a criticism that Braun has previously denied.

“Our goal with this project is to get people who are committed to the community – versus an investor-style product,” Westbank marketing director Michael Braun told The Globe and The Mail last March[2]....

https://thinkpol.ca/2018/05/02/chinese-market-doesnt-want-no-interest-vancouver-developer/

Translation: If there is no market for high end luxury condos... the we won't build it.

I don't undersand your post. Please clarify.

It's quite easy to understand - the developer is admitting that the only reason they build high end condos is to cater for the Chinese speculator market. A market the industry denies even exists.

Who is denying that no investment money from directly overseas for from overseas investment through Canadian family members are participating in Metro Vancouver real estate? The demand is real, and the system allows it.

the system also allows the jobs created to build the condos and the property tax collected from condos

Except the pace of development is sold to residents as "we need to build this to help affordability". You see people parroting that here all the time. In reality it does no such thing. Look at the 1000 block of Barclay where affordable rental/strata was assembled by Westbank and Bosa in the hopes of building luxe condos, largely for offshore buyers. In that instance they found an even greater fool to pay an outlandish sum for the site, so they didn't even have to build a thing.

While I applaud you for building rentals, as long as the Mainland Chinese buyers is present, what you build will never really be "affordable". The City should be bold and seize the power they are going to be require all developments downtown to be 100% rental. Nothing would deflate land values faster.

What does that do for home ownership? We are working within City programs to produce rental below and at market rate... which is both due to good programs (we get bonus density for reduced rent-cap units) and bad zoning (limited height and density and lots of expensive underground parking in transit areas).

Why should the City regulate an issue that is largely out of their jurisdiction? Why are developers "bad" for playing within the rules of selling and assembling land. If we could build condos, co-ops, and rental in greater density on non-assembled lots in single family neighbourhoods (within City jurisdiction and easily executed) then a fair amount of issues would recede.

If you regulate "rental only", what stops foreign investment from buying large amounts of land, assembling it, and building and running rental buildings. Where does that leave local ownership?

Rental is a better reflection of what local wage earners can pay. We all know offshore money isn't renting. The West End became a diverse neighbourhood of people largely because it was all rental. It allowed workers downtown to live close to work. Now we're dismantling that winning formula to provide investment vehicles for offshore buyers. Surely you acknowledge that every project you build becomes less affordable due to foreign demand for land?

I have no problem with a foreign company building rental buildings, as said above, they can only rent it out for what the local market can afford to pay.

Westbank is "bad for a)their hypocrisy when they trumpeted how they were giving locals first crack at projects and b) somehow managing cute little tricks like intruding into our public realm with that stupid box on the Telus Tower while selling out locals.

How does putting a stop on anything that isn't rental in Metro Vancouver aid in bringing rental rates down, make housing more affordable, bring down land costs, and stop foreign investment and land speculation?

What does an easement on setbacks for Telus Tower have to do with how bad of a perception Westbank is given? I'm just wishing to clarify points eing made is all. I'm presenting my argument in a neutral tone. Writing sometimes doesn't reflect that.

Every project we build becomes more expensive because the City has so many outdated or restrcutive guidelines and regulations that we're forced to build expensive rent-high buildings. Sure land is expensive, but constrcution costs go up 2% or so every month. Condos are not the issue. The issue is zoning, the system that allows speculation to occur when investing from off-shore, and a City process that restrcits more efficeint development of land on almost 60% of the City's lots. Being forced to assemble land is another major issue.

The foreign investment shoe-fits-all argument on housing issues in Metro Vancouver is not appropriate to the many issues the City's (depending on their charter powers from the Province) have power over and needs to deal with.

But you present a dilemma here. Upzoning without investing in dated infrastructure and social programs to deal with the social challenges of densification. You cannot just randomly decide to plow down low density housing without developing a regional livability plan.

Also, we have to begin addressing supply in all major cities. For instance, he Federal government is currently expediting study and work permits for international students as we speak. This alone will have a profound effect in Vancouver over the next decade as we begin to see mass migration from overseas (particularly India).

Come now, surely you agree that a big increase in rental stock will stabilize rents? Supply and demand. The condo bubble, fuelled by foreign speculation, has driven up prices for land, reduced rental stock and driven up construction costs.

That's funny when I discussed that building with a friend who is a developer, the first thing out of his mouth was "How did Westbank get away with that, and how do I get one?!" Gillespie's shrewd use of art and culture in marketing appeals to municipal politicians, especially of Vision's ilk. In truth that box was just a square footage giveaway to Westbank with nothing in return for residents. It's an ugly and dangerous precedent.

To flip your argument, why should people be denied the opportunity to own a SFH in Vancouver merely to satisfy the property lust of foreign buyers? Your solution is just condo-ize everything. I'd like to see a complete block on foreign buyers of residential real estate. If you can't produce a Canadian tax return, you can't buy. Then we can make determinations about how much multi-unit is really needed. Low interest rates have been present in the Western world for a decade now, yet only a handful of cities have seen such a runaway inflation in housing prices as Vancouver, follow the money.

I'm at a bit of a loss to understand why you would defend the rights of Non-Canadians to buy property here?

There are a lot of tools that are available for policymakers other a blanket ban on foreign ownership (which to my mind is a pretty blunt instrument and to use someone else's words, an "ugly and dangerous precedent." Talk about slippery slopes...).

Do what Switzerland does and set aside areas that can only be purchased by residents / citizens. Or institute a public housing policy similar to HDB in Singapore to provide affordable housing purchase opportunities for people who can't afford market housing. It's not impossible. Even Hong Kong with its ridiculous property prices and a government tied to big business has a home ownership scheme offering qualified buyers flats at a 30% discount to market rates.

What areas would those be? As seen below, speculation is everywhere:

...Some of those speculators who flipped multiple units in the six developments are private lenders, which suggests their business has expanded to flipping condos.

One of several is Golden Top Financial Services Inc, whose director is Hua Zhang. His company flipped at least two units in Park Avenue West by Concord in Surrey for a gross profit of $267,300.

Golden Top is “engaged in the business of financial services” in Vancouver and has granted short-term financing at annual interest rates of as much as 48 per cent.

Several investors – local and foreign - appear to be simply buying and selling multiple condos for a living...

https://www.theglobeandmail.com/canada/a...-by-insiders-fuels-hot-vancouver-market/

A blanket ban on foreign buyers does not discriminate against one particular group. It merely states we value homes for working Canadians more than speculative opportunities for offshore buyers.

1) An increase in rental units will lower rents to a degree, due to a more competitive market. Our rental units are at the price they are due to land cost, construction cost, trades, City policy (Rental 100 program). Even if land prices stabilized, hard costs would still be high and the City programs and zoning would still reflect where we can build (mostly along arterials and replacing older C-zoned sites (taking away older small businesses), or replacing older rental buildings that are already zoned for rental.

Constructions costs have been going up between 1-2% a month. Meaning that a 6-storey rental building on a "small lot" that requires lots assembly, to a degree (which is another part of the issue), due to City guidelines/zoning requires construction of a 2-level concrete parkade.

If the many lots on the peninsula in Vancouver were forced to be rental, you could see a decrease in land value in that area, but an escalation in speculation in areas in Burnaby or Surrey. If you determine rental can only be built, you're still limited to the small area of land that economically makes sense for rents you are tying to achieve as "affordable", possibly without a program or policy of some kind to aid in that affordability (not talking about subsidies), and are still restricted to small areas to allow (zoned for) a decent increase in rental units, or units that can be not so expensive.

2) How did Westbank "get away with it"? Like anyone pitching an idea to planners or council. You present, market, sell an idea and concept. If a council or planning staff team decides to reverse the - I believe bylaw - created after that was passed declaring this will never happen again, then that is the way government organizations work. Change, adapt. There is nothing illegal, evil, or nefarious about that decision. We "sell" ideas all the time. You sell it's "worth". Sometimes it works and sometimes it doesn't.

3) It would not be a denial of ownership of single family homes, but an acceptance of changing many of the City's transit heavy corridors and station areas to better reflect land uses for the issues we are facing today. If a piece of land is allowed to be built to something other than a single family home, but is for generations continuously occupied, rebuilt or renovated as a single family homes, then that is a choice of the owners and of the market. We are currently denying single lots of RS and even RT zoned areas, or even the assembly of 2 narrow lots to built modest rental buildings, co-housing, or strata buildings. Think of Heaccity's winning design in the Urbanarium's "Missing Middle" Competition. By allow more flexible zoning and design/occupancy guidelines in RS and RT areas, you can allow more ownership, rental, or co-housing options to more people without massing lot assemblies, expensive construction costs, and without expensive area plans.

An RS zoned lot (1 primary occupant, door facing the street, and 2 secondary suites) has the potential, within a slight increase in density, to become multiple rental units, co-housing, or... yes, strata. Currently, the large RS homes cannot be rental, but if zoning and policy was changed could easily become and accommodate potentially multiple rental units.

I'm not defending non-Canadians to buy property. I'm recognizing we have tools that are being unused while living within the system we have. The City of Vancouver only has so many powers at its disposal. One must differentiate between the powers Vancouver has, and other municipalities (which have much less power), and that of the Province, and the Feds.

And yet it fails to solve the primary issues of speculation, flipping, and the concentration of limited land that can be built at higher densities which, of course, fetch the biggest bang for your buck.

A reminder that there are huge taxes on every real estate sale, especially with the capital gains tax that applies on 50% of the profit. So we may hate people who buy and sell real estate, but they do generate huge taxes. Around a quarter to a third of this profit goes to tax.

CRA is investigate condo flipping in BC in particular, suggesting there has been serious tax evasion.

Capital gains is 50% of marginal rate. Impossible to suggest 25%-33% rate. More like 15%.

Your forgetting the other taxes such as corporate income tax and transfer tax.

Also there’s tax evasion everywhere the current focus is just a PR stunt. Look at all the places that are cash only. Also look at the tips people get. I doubt they pay even half the taxes they should be paying. I doubt the marijuana dispensaries are paying much in tax either.

Wow, you have no idea how taxes work, or what rates apply to different areas. Then you claim people serving cheap food are the problem.

Please bring some facts and rationality to your arguments.

Lol I've taken accounting. I'm just too lazy to break it down and use exact numbers.

And who cares if its cheap or expensive food. Its just the difference between quality or quantity, the tax they pay and income they make should be the same. I'm saying tax evasion is everywhere but we're attacking the real estate industry and casinos because we can say its done by foreigners instead of targets that would be much easier to investigate because many are owned or employed by voters. I'm betting if we investigated every Indian, Middle Eastern, Sushi and Chinese restaurant in Metro Vancouver 80% would be found to not be paying the correct taxes. This would likely rise to 95% if we looked into just the places that are cash only. Add in all the ethnic stores that are cash only for good measure.

Honestly with big real estate transactions tax evasion is very difficult and complicated. Investigations take years and won't find much to justify the investigation. But with restaurants its very simple and easy to investigate. Why are we going after the much smaller and more difficult targets for less gain? Because its better PR and PC.