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?