Sunday, May 13, 2018

Opinion: 'Missing middle' competition offers residential housing solutions Vancouver Sun May 12, 2018

Haeccity Studio Architecture concept of a gentle densisifcation strata-style apartment block, designed to fit without clashing in area of single-family-house zoning. The building showing includes seven unit, three one-bedroom units of 525 sq. ft. each, three two-bedroom units of 740-to-870 sq. ft and a three-bedroom unit of 1350 sq.ft.. Courtesy: Haeccity Studio Architecture [PNG Merlin Archive] Haeccity Studio Architecture / PNG







     Back-to-backs, brownstones, bungalow courts, clustered housing, plexes, maisonettes, row-houses, stacked towns and six-packs.
     Throughout the world, these low-density multi-housing forms provide affordable homes for millions of households. However, in British Columbia, most of our housing is either single-family homes or apartments.
     As a result, architects and planners are increasingly referring to these other “gentle density” housing solutions as “the missing middle”.
     Given that much of Metro Vancouver is zoned for increasingly unaffordable single-family housing, there is a growing interest among local architects and planners in exploring how these new housing forms might help address housing affordability in our region.
     One key advantage of “missing middle” housing types is that they do not require large lot assemblies. Individual lots or two neighbouring lots can be redeveloped with higher-density ownership or rental homes without significantly changing the character of the neighbourhood.
While the result may not be low-cost housing, three to seven homes are more likely to be affordable than one larger home on the same lot.
     To encourage local architects and planners to further explore the design opportunities for these housing forms, Vancouver’s Urbanarium Society recently held a Missing Middle competition.
For those not familiar with the Urbanarium Society — https://urbanarium.org/ — it is a registered non-profit founded by a group of architects, planners and other Vancouver citizens passionate about city planning.
    Recently, through a series of lectures and sold-out public debates, it has been addressing top-of-mind topics.
     Should we open up all neighbourhoods for densification? Should we legislate housing affordability? Should we build fewer towers? Who should plan our neighbourhoods — residents or professionals?
     The Urbanarium organized the Missing Middle design competition to generate ideas for how to make housing affordable in Greater Vancouver – particularly seeking models for increased density in residential areas where planning officials currently allow only single-family houses to be built on a lot.
     The goal was to generate inspiring possibilities for a single-lot landowner or a pair of neighbours to create affordable, higher-density, low-rise housing options that supported socially healthy housing configurations.
     The competition was co-ordinated by architects Catherine Alkenbrack and Bruce Haden. It was open to a broad range of applicants, from children to accredited professionals, who were invited to propose detailed design options for the redevelopment of one or two lots in one of four Metro single-family neighborhoods: Vancouver, Surrey, Richmond and Port Coquitlam.
     The competition was expected to appeal primarily to local firms; however, it attracted a considerable number of creative submissions from around the world.
     While competitors had to respect existing property lines, they were encouraged to explore innovative ideas.
     Could streets be narrower to provide a front yard for homes built near the front property line? Did every home have to have its own parking space or could parking be centralized?
     While existing single-family densities are in the order of 0.6 FSR (this means the area of a building should not exceed 60 per cent of the site area), and typical apartments are anywhere from 1.2 to three FSR, the density range for the competition was in between.
     Since the submissions were to be judged on their affordability innovation, participants were required to submit detailed financial pro formas and analyses.
Proposals were also judged on social innovation. Did the design help create opportunities to reduce social isolation or offer intergenerational living?
     Design innovation was also judged. While this was not a beauty contest, it was recognized that ultimately good design will contribute to greater community acceptance.
     The jury included technical advisors and senior planning officials from Vancouver, Port Coquitlam and Surrey.
    Thanks to the co-sponsorship of BC Housing, CMHC and Wesgroup’s Peter Wesik, and a variety of other sponsors, cash prizes were awarded to the top entries, as well as an entry selected by local directors of planning.
     The Missing Middle competition received 34 entries and 12 prizes were awarded. While most of the winning submissions came from local teams, there was one winning team from Toronto, Workshop Architecture, and one from Los Angeles, Goodale Architecture Planning, both representing cities also experiencing an affordability crisis.
     In announcing the winners at Surrey city hall in early March, Richard Henriquez, board chair of the Urbanarium and founding principal of Henriquez Partners Architects, noted that Urbanarium ran this competition to have a meaningful discussion on how middle-density inter-generational housing could contribute to affordable housing in the future.
     Haeccity Studio Architecture, a Vancouver-based practice that focuses on medium-scale housing, was awarded both the first prize selected by the jury and a prize selected independently by the senior planners.
    In their submission, the proponents stated that it is no longer viable to rely on density alone to address the current affordability crisis. We need to explore ways to side step the speculation and sudden increases to land cost that come with rezoning.
     Their winning ‘Micro-Op’ concept hinged on zoning relaxations and incentives for resident-driven single-lot developments based on a shared-ownership model. The goal was widespread opportunities for incremental density increases that preserve the character and social composition of existing neighbourhoods.
     Since winning the competition, Haeccity Studio has been spearheading continued discussions among the winning teams in an effort to explore how their innovative plans can be put into action to deliver affordable housing.
   Some of the other ideas put forward during the competition probed the upper-density limits of walk-ups around courtyards; encouraging live-work along walkways; forgoing personal vehicle requirements in favour of a modest shared fleet of co-op cars; and transferring some of the accrued land gains from higher-density development into a neighbourhood park.
     A full list of the winners and their entries can be found at https://urbanarium.org/missing-middle-competition.
     While it is often said that we are running out of land in Vancouver, I believe it is more important to make better use of the land we already have. In future columns, I will explore in more detail other ideas that came forward during the competition and how they might be implemented throughout the region.
Michael Geller is a Vancouver-based architect, planner, developer and educator. He is an adjunct professor at SFU’s Centre for Sustainable Development and can be reached at geller@sfu.ca.

Opinion: School tax is concerning, but speculation tax remains bigger problem Vancouver Courier May 7, 2018

     Last week, an extraordinary amount of attention was given to a protest by West Side residents concerned about the B.C. government’s so-called “school tax.”
     Vancouver millennials were aghast that these people, the majority of whom owned multi-million-dollar homes, would dare to protest a tax that would cost many only a few thousand dollars.
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     However, others, including many who did not own expensive homes, fully understood the protest. After all, in Canada, we have historically used income tax and consumption taxes, such as the GST and provincial sales taxes, to transfer wealth from rich to poor.
     They saw the school tax as an attempt by the NDP government to start taxing wealth.
In a CBC Early Edition debate, former Attorney General Suzanne Anton raised this concern with former NDP cabinet minister Moe Sihota. As expected, Sihota dismissed Anton’s concern out of hand.
     However, she was right to raise this concern. After all, this tax doesn’t apply when someone sells their property. It applies while they own their property.
     Around the world, governments tax assets of the well-to-do to fund programs for those who do not have assets. An example is Switzerland.
     There, a proportional property tax of around 0.3 to 0.5 per cent is levied on the total net worth of individuals. The tax applies to all assets, not just real estate, including investments, shares and savings accounts, less any debts.
     While Finance Minister Carole James has never suggested her government might one day extend the school tax into an even broader wealth tax, many B.C residents fear this could happen. After all, by telling elderly homeowners to defer their taxes, this effectively becomes an inheritance tax.
     While I too have concerns about the school tax, my bigger concern is the so-called “speculation tax.”
     In the budget speech, James said her government is targeting property speculators to help make housing in overheated markets more affordable and available. She went on to say, “With this new tax, we’re targeting speculation in the housing market and freeing up vacant housing to be homes for British Columbians.”
     While this sounds admirable, this is not at all what the tax will do.
     Firstly, while the university academics who first proposed this tax tell me 80 per cent of the $200 million will come from foreign speculators, I see no evidence of this.
Instead, I see this tax impacting a former NDP cabinet minister who lives up north and a B.C. interior mayor, both of whom keep second homes in Vancouver. Neither is a speculator; neither will be freeing up a vacant home.
     Ironically, they will struggle to pay the tax because they are too honest to cleverly avoid it. I cannot say the same for many others.
     This tax will also burden other B.C. residents and out-of-province Canadians owning second homes in B.C.
     This brings me to enforcement. The government’s current proposal is to administer the tax outside of the normal property tax system and property tax cycle.
     The administration cost of Vancouver’s Empty Homes Tax more than doubled from the initial estimate, while the number of empty units converted to occupied homes remains uncertain. How much will it cost the province to set up a separate administration system?
     If, as SFU academic Josh Gordon says, 80 per cent of the so-called speculation tax will be paid by foreign speculators, then the government should exclude all Canadians from having to pay the tax.
Currently properties awaiting development approvals are also subject to the tax. The government should exclude these properties as well. After all, how can the government claim this tax will produce more affordable housing when it adds to the cost of housing?
***
     In 1991, the federal government introduced the GST. At the time I was president of the Urban Development Institute of Canada and warned former Conservative MP Michael Wilson and his officials about unintended negative consequences of the tax.
     On Thursday May 10, at an SFU lecture at Harbour Centre titled “Looking back, Looking forward: Reflections on Housing Metro Vancouver,” I will be discussing how the GST has inadvertently reduced the supply of rental housing across Canada in the subsequent 27 years.
     You can attend by reserving a seat on the SFU Continuing Studies website sfu.ca/continuing-studies/events.
     Since the lecture is free, no tax is applicable.

Friday, April 27, 2018

Another Geller SFU Lecture Looking back, Looking forward: Reflections on Housing Metro Vancouver May 10, 2018

While Metro Vancouver has changed dramatically over the past four decades, many concerns of yesteryear are surprisingly similar to those of today – foreign buyers, rental crisis, dwindling land supply, locals-first policies, and disdain for developers. Using his collection of newspaper clippings, in this presentation Michael Geller will offer a different perspective on Metro Vancouver's housing affordability challenges and some timeless solutions.

Date(s): Thu, May 10, 7-9 p.m. PDT
Event Admission: Free but reservations required. Reserve seats on Eventbrite.

Webcast: Free but reservations required. Register on Eventbrite.
Location: Room 1900, SFU Vancouver (Harbour Centre campus), 515 West Hastings Street, Vancouver

Michael Geller AIBC, FCIP, RPP has had a career as an architect, planner, real estate consultant and property developer in the public, private and institutional sectors. He serves on the Adjunct Faculty of SFU's Centre for Sustainable Development and writes regularly for the Vancouver Courier and Vancouver Sun.

Red tape remains a major culprit in Vancouver’s skyrocketing real estate Vancouver Courier April 26th 2018

As city trumpets reduction of processing times, it proposes increased Community Amenity Contribution rates

Why is housing in Vancouver so expensive? The answer depends who you ask.
While most acknowledge our region has a constricted land supply due to water, mountains and the Agricultural Land Reserve, many believe the fault lies with foreign buyers, especially from China, and the thousands of homes they leave empty.
     Others blame speculators who buy and flip pre-sale condos and properties as if they were playing a game of Monopoly.
     Increasingly we are told there is an imbalance between supply and demand. However, more supply on its own does not appear to be the answer. One only needs to look at the record number of condos under construction without any apparent price reductions.
     My colleagues in the development community believe a major problem has been the complex and time-consuming approval system.
     Last November, an early morning photo appeared on social media. Taken outside Vancouver’s Development and Building department, it revealed a row of architectural drawings and brief cases lying on the pavement.
     The owners were nowhere to be seen. They were off keeping warm somewhere. The plans and cases were place holders, so their owners could hopefully submit permit applications that day.
I thought of this photo last week when I received a Vancouver Communications department press release.
     Headlined “New measures implemented by City Hall within the last year to speed up the delivery of new housing and streamline planning and development processes in Vancouver are showing results,” the release went on to report:
  • A 50 per cent reduction in development permit timelines as part of an affordable housing pilot — with initial approval now under 13 weeks.
  • An 80 per cent reduction in times for landscape reviews for single family homes.
  • A 30 per cent reduction in wait times at the Development and Building Services Centre.
     The release added that more improvements were to come, including policy changes to create greater transparency and simplified regulations.
     While architects, builders and developers have often criticized the city for its unnecessarily complex and lengthy approval process and Vancouver city staff, especially Kaye Krishna, general manager of development, buildings and licensing, deserve recognition for their success in reducing processing times.
     Faster approvals should help reduce the cost of housing, especially if the province’s proposed so-called speculation tax and school tax apply to residential development sites awaiting approvals.
(I can’t help but smile at the irony that by adding costly taxes, the province claims to be improving housing affordability.)
     However, the Lord giveth, and the Lord taketh away.
     Shortly after receiving the city’s press release on reduced processing times, I received a draft council report proposing increased Community Amenity Contribution (CAC) rates.
For those not familiar with the term, CACs are contributions provided by property developers when city council grants development rights through rezoning. CACs fund park space, libraries, childcare facilities, community centres, transportation services and cultural facilities.
      They are in addition to Development Cost Levies (DCLs), which are also paid by property developers, based on square footage, to help fund parks, childcare facilities, social and non-profit housing, and engineering infrastructure.
     For a six-storey building along the Cambie Corridor, the CAC will increase from $68.18 to $115 for each square foot of additional floor space approved by rezoning.
(I tip my hat to the city staffer who determined $68.18 would likely be more palatable for some Cambie Corridor developers than $64.14.)
      I question whether these charges increase the cost of housing. City staff and politicians believe not, since their consultants have told them CACs simply reduce the price developers will pay for land.
      Developers disagree but agree to make these payments as long as their cost can be passed on to future buyers.
     The fact that developers are prepared to pay $11 million for single-family lots along the Cambie Corridor proves to me land prices are not being reduced by CACs.
     Given these land costs, increased CACs, DCLs, and a proposed new Utility DCL to come into effect in September 2018, combined with escalating construction costs, interest rates and “soft costs,” developers are gambling they can find buyers willing to pay at least $1,500 per square foot when they go to market.
     we ask why housing is so expensive in Vancouver.
Twitter

@michaelgeller

Encouraging investment in rental properties key to affordability B.C.’s new taxes miss the mark and could have dire consequences Vancouver Courier April 11

      Over the past two months, there has been growing concern about the negative impacts of the B.C. government’s proposed housing taxes, especially the so-called Speculation Tax.
     While approximately 80 per cent of British Columbians support a tax to curb real estate speculation, myself included, it is becoming increasingly apparent this tax is not going to achieve this.
     Nor was it intended to, according to UBC economist Tom Davidoff, one of the architects of the government’s tax proposalsInstead, he wanted to restructure the Canadian taxation system to collect more money from foreign buyers avoiding Canadian income taxes.
     The provincial government called it a Speculation Tax knowing this would appeal to voters upset by foreign buyers and rising housing prices.
     Davidoff openly admits he was shocked to discover the tax would apply to vacation properties in the Gulf Islands and B.C. interior.
     the government has tweaked the program to exclude some vacation properties and introduced variable tax rates depending on whether you live in Cranbrook, Calgary or Kolkata, few expect this tax to improve overall housing affordability.
     On the contrary, the new provincial taxes, combined with rising interest rates and more stringent mortgage qualification, could have severe impacts.
     Before expressing glee at the possibility of lower housing prices, we should consider what could happen if they drop too much.
     According to some real estate economists, a 35 per cent decline in housing prices, which is not out of the question, could cost the average homeowner $245,000 in equity. Housing starts could fall by half and 54,000 BC jobs could be lost, increasing the unemployment rate to 7.5 per cent.
     While I oppose the so-called Speculation Tax and so-called School Tax, there are tax measures that would create more affordable rental housing.
How do I know? Because they produced most of the affordable rental housing found around Vancouver today.
     Between 1958 and 1973, knowing that new rental housing typically operates at a loss in the initial years, the federal government offered a tax incentive program to encourage investment in purpose-built rental buildings.
     Indeed, as my dear friend the late Morris Wosk once told me, coins from the washing machines and dryers sometimes represented the difference between positive and negative cash flow.
The new program allowed doctors, dentists, lawyers and other professionals to take advantage of Capital Cost Appreciation (CCA) provisions and other tax benefits, and write off rental property losses against other income.
     During this period, 35,000 rental units were built around the city, including most of the low-rise walk-ups found throughout the West End, Kitsilano, Kerrisdale and Marpole. Not only did these tax incentives result in a lot of rental housing, they created significant employment for architects, builders and suppliers to the construction industry.
     When this program came to an end, another followed. Between 1974 and 1981, thousands more rental housing units were created through the Multiple Unit Residential Building program.
Like the earlier program, it too offered tax incentives to investors that could be used to reduce other income. However, unlike the earlier program, MURB units could be strata-titled and had to remain rental only for a prescribed period. Nonetheless, four decades later, many apartments continue as relatively affordable rental housing.
     More recently, at least 45 per cent of Vancouver’s new condominiums units have been purchased by investors. Most will be rented out. The same thing has been happening in Toronto. Once again, investors will lose money in the initial years. However, over time they will earn a profit.
Unfortunately, the recently announced provincial taxes are going to increase the cost of ownership and rental housing due to higher Property Transfer Taxes and additional holding taxes while awaiting approvals.
     Instead, the provincial government should be emulating past federal governments and creating tax programs to encourage investment in rental housing.
***
On May 10, to mark my fourth anniversary as a Courier columnist and 35th year in business, I will be delivering a lecture at SFU Harbour Centre.
Titled “Looking back, Looking forward,” it will examine how today’s housing affordability crisis has developed over the past five decades, illustrated with clippings from the Courier and other newspapers. I will also offer solutions — some old and some new. I hope you can join me.
Details can be found here.

Vancouver needs more housing choices at prices the rest of us can afford Vancouver Courier March 27, 2018

     So where are you going to live next? Hardly a day goes by when I don’t overhear someone being asking this question.
     Sometimes it is a student who’s just been given notice to vacate a basement suite since the house has been sold. Or a long-term renter whose building is being demolished to make way for new condos. Or a young couple about to have their first child.
     Often, it’s an older couple whose house has become too big and expensive to keep, especially now that an additional school tax will significantly increase their property taxes.
     I regularly talk to community groups and organizations about the pros and cons of alternative housing choices for students, millennials, empty-nester couples and seniors.
     Many want to know where to find affordable housing. What should they look out for when buying a new or resale home? Is it better to move into a townhouse or apartment? Is concrete that much better than woodframe? How can you avoid the oftentimes reported pitfalls of condominium living?
     While I need more than 700 words to respond to these questions, here are some things to consider.
In the past, many empty-nesters told me they would move out of their house if only they could find a suitably designed townhouse or apartment in their neighbourhood.
     After all, just because they were getting older was no reason to have to move away from the community in which they had lived most of their lives. Why should they leave the shops they frequented for decades or the church they regularly attended?
     While I still occasionally hear this, I do not hear it as often. That is because many of the favourite neighbourhood shops are shutting down or the church is being redeveloped with condos. The neighbourhood is changing.
     Furthermore, children and grandchildren are now living in Langley, Abbotsford, Squamish or Vancouver Island. Perhaps it’s time to cash out and move closer to them.
     Today’s millennials are facing a different set of problems. Affordability is the critical issue. While most are resigned to never living in a single-family house, just renting or buying a decent apartment in Kitsilano, near Main Street or Commercial Drive is often out of the question.
     Lately we have heard a lot of words and promises from all levels of government about the need to address Vancouver’s housing crisis. However, the reality is that most people I talk with are not going to benefit from government assistance.
     Instead, it will be targeted to people in far greater need: the homeless and those in shelters, low-income senior renters, or poor single-parent led households on B.C. Housing’s waitlist.
What we need are more housing choices at prices the rest of us can afford. However, there are real obstacles to producing this housing.
     Firstly, there’s the high price of land. Given values along the Cambie Corridor and other Vancouver neighbourhoods, the cost of land for a space equal to that occupied by the chair you’re sitting on is $1,900. The land cost for a 600-square-foot one-bedroom apartment is $265,000.
     If that is not bad enough, the city recently announced increased Community Amenity Contribution payments along the Cambie Corridor up to $125 per square foot of building area. This equates to $80,000 or more for a small one-bedroom apartment. This is in addition to other city charges including development levies, permits and engineering fees.
     That’s $375,000 and we haven’t yet paid for any of the consultants, marketing fees, financing and other costs, or construction.
     When this is added in, that new Cambie Corridor one-bedroom apartment will likely cost $720,000 before any developer’s profit.
     So, what are we to do?
     For one thing, everyone concerned about affordable housing should challenge Vancouver’s increasing Community Amenity Contribution charges and other fees since they’re always passed on to future buyers. The developer doesn’t pay.
      Secondly, just as your first car was probably a used car, first-time Vancouver buyers should consider resales rather than a new project.
      And if they own a car, they should sell it and join a car-share program. One just has to compare the cost of operating a car for 10 years with the appreciated value of the same investment in real estate to understand why.
@michaelgeller

Thursday, March 22, 2018

Twas ever thus? Vancouver real estate headlines 30 years ago Vancouver Courier

   In his later years my father was a librarian and prone to cutting out newspaper clippings on topics related to me, and other things which he thought would interest me. I too developed the habit, and since 1981 have kept a scrapbook of newspaper stories with which I was somehow involved.
     I made the mistake of mentioning some of the newspaper headlines at a GVHBA forum a few weeks ago and Joannah Connolly asked if she could see some of the Real Estate Weekly (which she edits) and other newspaper stories. Today she posted the following on-line. Thanks Joannah.
By / Vancouver Courier March 12, 2018 
  It’s easy to think that the problems facing Vancouver’s housing market are relatively new. But if you take a look back at headlines from 20 or 30 years ago, you’ll see a different story.
Thanks to an extensive collection of real estate news clippings from Vancouver Courier columnist and local developer Michael Geller, obtained by the Courier, we can get a glimpse into how people were feeling about the market three decades ago.

Some issues are surprisingly the same as they are today – foreign buyers, rental housing crisis and developers citing lack of supply among them. Others – such as what was considered a “great” interest rate – are eye-openingly different.
Check out our pick of Geller’s cuttings from around 30 years ago.

Same: Affordability crisis
In these May 20, 1988 clippings from the Province, one article quotes Geller warning of an imminent housing affordability crisis spreading west from Toronto, while the other cites Helmut Pastrick, now of Central 1 Credit Union, claiming that such a crisis was not likely. Guess we'll be taking Pastrick's market predictions with a grain of salt from now on.
Same: Overseas buyer threat

In this Financial Post story from March 22, 1989, veteran reporter Frank O'Brien highlights the issue of overseas buyers snapping up Metro Vancouver real estate, along with developers' concerns about what would happen to local development if this were to stop.
Same: Rental housing squeeze

 Just like today, there was a rental housing crisis nearly 30 years ago, according to this Vancouver Sun story from January 1990. It examines the issue of rent control, which had been axed in 1983, and whether it should be reinstated (which it later was).
 Same: Developers cite lack of supply

Same quotes, different millennium... It turns out that not only have people been talking about the affordability crisis for decades, but developers have also been citing the supply/demand equation, and Metro Vancouver's lack of supply, for just as long. The above article is from Toronto Commercial News, February 1990.
Same: Budget offers no quick fix
Did you think that the B.C. Budget tackled housing any better 29 years ago than it did three weeks ago? Apparently not, according to this Province story from March 31, 1989.
 Same: Development a dirty word
Something else that doesn't seem to change is how frequently developers are vilified by the public. This Vancouver Sun story from May 27, 1989 interviews local developers (who are still going strong today) about development being seen as a dirty word.
Same: Populist policies as vote grabs
 Housing policy has always been a way to gain votes, but at least in the old days politicians would admit to it. This Province story from March 8, 1989 reveals how then-B.C. Premier Bill Vander Zalm confessed that his plan to get developers to built more rental housing was a vote-grab, as it was a major issue in his Point Grey riding, in which his seat was coming up for re-election.
 Same: “Locals first” policy

The City of Vancouver's recently announced "locals-first-for-condos" policy may be considered innovative, but a similar initiative was launched in 1989, according to this Sun story from January of that year.
Different: Prime interest rate

Despite all the above, some things are very different than several decades ago. Check out the above Sun clipping from way back in April 1985, the oldest of our headlines. It cites Geller saying that the reduction in the prime rate will be "great" for housing affordability. The rate fell to its lowest level in six years, to 10.75 per cent. Considering that today's rate is 3.45 per cent, that "great" 1985 rate would be considered astronomical for today's mortgage payers.
Different: Condo sales centres
One other thing we discovered has changed radically is how presale condos are sold. In this article from June 1989, the Vancouver Sun reports on the first local developments to be sold out of sales centres using floor plans and renderings. Prior to that, the developer had to complete a show suite for potential buyers to look at. Using a sales centre, show suite costs can be avoided and buyers can get in earlier, explains the article.
Do you remember what the local real estate market was like 20, 30 or more years ago? Tell us in the comments below.