Rental market remains extremely tight
A brief update as we wait for January to close out tomorrow.
Unlike the wealth of data we have about the real estate market, rental data is extremely limited in Canada. The only reliable source is CMHC, and they publish just once a year (used to be twice) and only release some summary statistics instead of the full dataset of rental data they collect. For the longest time they also only released the average rent paid by tenants which is often quite a bit less (due to rent control) than the going rate for empty units. This confused everyone including city planners, who regularly used CMHC statistics as measures of “market rent” when in fact the actual market rent was substantially higher. In recent years they have finally started releasing average rents of vacant advertised units, and this year’s update for Victoria is shown below.
Note regional variations such as higher rents in the westshore, which reflects a much newer stock of rental apartments mostly built within the last 5 years, while the rest of the region has substantial older (and therefore cheaper) inventory.
With a vacancy rate of 1.5%, Victoria’s rental market is in somewhat better shape than last year’s 1.0%, but still half of what is generally considered a healthy rate where rents are expected to stabilize. If we compare markets across the country, it’s clear how low vacancy rates push up rents. Victoria has the worst chronic vacancy rate in the country, followed by Vancouver and Kelowna.
And while the rental shortage is a chronic problem here, markets across Canada that have traditionally had healthy or arguably even too-high rental vacancy rates have suddenly faced a rental crunch. Nowhere is that more obvious than in New Brunswick where rental vacancy has fallen precipitously in recent years to Victoria levels. Thunder Bay, Hamilton, and London, Ontario also came in vacancy rates in the mid 1% range, well below their long term average of over 3%.
Though interest rates are shelving a lot of rental projects, the pipeline still looks strong in Victoria, with an all time record 4,169 rental units under construction as of December 2022 while large projects like Harris Green (1500 units), various university heights builds (600+ units), as well as various affordable housing projects should keep production up in the coming years. I expect that some combination of the new supply hitting the market and some slowing of population growth due to high rents will improve our vacancy rate in the coming years.
Stay tuned for the month’s resale market review in a few days.
New post: https://househuntvictoria.ca/2023/02/01/january-anecdotes-and-data-tell-different-stories/
What I did say is that middle income houses are around $1,175,000 plus or minus 20 percent in the Victoria Core. What I didn’t say is that middle income homes are north of 1.3 million.
If you are willing to move further out from the city core then a middle income home will be less. A middle income house in Gordon Head is about 1,175,000. Some are more and some are less.
As I try to get back to the point of the original post. If you are fortunate to have $800,000 as a down payment. You will still need to take out a mortgage to buy a middle income home. I don’t think many first time home owners that sell their home are going to have $800,000 available as a down payment on the next property. They may have half that amount available so they are looking at a substantial mortgage to buy a middle income home. If they only have $200,000 for a down payment then most are stuck where they are and can’t move up the property ladder.
Strange to think that you can have $400,000 as a down payment but can’t afford the house you were raised in.
I’ve experienced this endearing combination of off station and max volume.
Umm..thanks for adding some humour to what started out as inconsequential jurisdictional bickering.
Step out the front door of your house and enjoy the majestic view of the cinder block back wall of the Save-on-foods while the sound of the industrial HVAC is mildly drowned out by local Hobo’s mobile shopping cart stereo as he works his way between the liquor store and Redfern park.
Sounds like you could make some money writing RE listings.
From: https://vancouverisland.ctvnews.ca/january-home-sales-slowest-we-ve-seen-on-record-in-victoria-vreb-1.6256197
The numbers got the press coverage fast enough…..
This part of the article is a pretty big assumption, one that interest rates have settled and or that buyer’s have adjusted to the higher rates.
Clearly the market didn’t agree with you in that transaction.
Neighborhood plays a part of it too. People start out in Oaklands, but to go from Oaklands to Jubilee that is 2 kilometers away isn’t a big step up. Starter homes in Oaklands and Jubilee are about the same. Maybe a 5 to 10% difference in the land values between Oaklands and the wannabee Oak Bay area.
There is a wide spread between starter homes and middle income homes. Most people are going to need a bigger and more costly mortgage than they had when they originally bought their starter home. The bank of mom and dad is closed to them now.
Whatever, Amphion Street runs parallel to Foul Bay either side of Oak Bay Avenue, I’d call that Oak Bay.
No it is a combination of both the neighborhood and the quality of the home. 6698 Scottswood sold for less than ask which was $1.2M and is in both a nicer neighborhood and is a nicer house. So coming to the conclusion that one step up from an $800k oaklands home will run north of $1.3M is just plain false.
https://www.platinumkey.properties/homes-for-sale/BC/saanich/v8y_2y1/4698_scottswood_pl/bid-399-920323
That’s the problem you’re having VicREanalyst you look only at price and not the physical aspects of the property. Moving up the property ladder is moving up in the quality of the home. Amphion is in the Jubilee area behind Save On not Oak Bay.
(Sarcasm removed).
Ok so going to a house that costs >50% more is one step up? Also, since when did Oaklands and Oak Bay become the same neighborhood?
Price whys it’s two steps up. But going from a 1200 square foot rancher to a middle income 2200 square foot basement entry home in the same neighborhood would be just one step IMO
The median price for a home in Victoria’s core for the last three months is $1,125,000. This most likely represents the typical middle income household. Give this range a 20 percent variation to encompass most middle income households or say $900,000 to $1,350,000. A starter home is around $815,000 and an upper income home is around $1,750,000
There are 13 homes listed under $900,000. The months of inventory for starter homes is 1.9 in January
84 homes are listed in the middle income range have an MOI of 3.3 in January
And 50 listed in the upper income with an MOI of 7.9
Our single family market in the Victoria Core does seem to be top heavy. The upper income market should be a buyer’s market with lots of choices available for those of you looking to spend over 2.1 million.
That is two steps up, not one.
Sales: 278 (down 41%)
New lists: 805 (up 16%)
Inventory: 1739 (up 133%)
How many realtors are there in Victoria now compared to say June 2022?
Frank and should get better as the fed said they’re not finished with interest rates So Canada either keeps up or our dollar will suffer which would be inflationary
Final January numbers:
Sales: 278 (down 41%)
New lists: 805 (up 16%)
Inventory: 1739 (up 133%)
Canadian real estate is deeply discounted for foreigners/immigrants who have USDs or Euros in their pocket. The Euro is over 40%, USD over 30% our pathetic Canadian currency. What better place to park your money?
The impediments for fist time buyers are saving for a down payment and their income. The high rents in Victoria make it more difficult to save for that down payment when a high percentage of their net income goes to the landlord and utilities.
Houses prices were not that large of a concern before as the purchase could be leveraged at low rates. Rents however can’t be leveraged. There is a price ceiling for rents. At this time renters are caught between a rock and a hard place. The low vacancy rate means they have no place to go that wouldn’t take more of their net income. They can’t buy and they can’t rent in the city.
Those economic pressures puts strains on families. Money problems are a cause of partners separating. But they can’t afford to separate. An equal division of assets puts both parties back to either being renters or a substantial down grade in their lifestyles. That’s If they can afford to rent in Victoria.
As a friend said to me, the couples are now having hallway sex. When they walk by each other in the hallway they say “F U” to each other.
A starter home in Oaklands just sold for around $800,000 while a home that I would consider the next step up the property ladder just sold on Amphion at $1,335,000. That’s a huge gap to leap.
I can understand why those with starter homes in Victoria are not listing their properties. First Time Owners (FTOs) are priced out of the market.
$3,200 plus $25 a month for utilities does seem at the high end. The average two-bedroom on craigslist is asking $2,434 per month. Depending on age, condition and size two-bedrooms, excluding outliers, range between $2,000 to a high of $2,880. A new garden suite would be at the high end at say $4.00 per square foot of rentable area. The asking rent is close to that but I think you could get a better bang for your rental buck in a different neighborhood.
The reason why leasehold condominiums are less expensive than strata condominiums is that at the end of the lease there is no reversionary value.
With a strata, when the building has deteriorated to the point of being condemned the owners of the complex still have a reversionary value in the land less the cost to demolish the building.
It is the same with a garden suite. The principle house and lot include a reversionary value. The garden suite does not have a reversionary value as that reversionary value has already been accounted for in the principle dwelling and lot.
This makes a difference if you are tasked to determine the contributory value of a garden suite. A legal and conforming triplex may sell at 20 times its potential gross income. That factor includes an allowance for the reversionary value of the land. While a garden suite would have a lower factor of say around 10 because there is no reversionary value. Those factors are derived from the current marketplace.
So what would be the contributory value of your garden suite be then? It’s contributory value would be the annual gross income at current market rent multiplied by about 10 for illustration purposes.
If you are receiving an economic rent as single tenancy on a month to month basis for the garden suite of say $2,500 per month. Then the contributory value of the garden suite to your property would be about $300,000. These rates/factors are always changing with the market place and have to be re-calculated each time. As the garden suite ages its potential income will also decrease relative to a new suite. That diminishing utility is depreciation.
This gives you another way of determining if it is economically viable to build a garden suite by comparing the cost to build versus its contributory value to the value of the entire property
For this example, a 600 square foot garden suite that would receive a rent when completed at $2,500 per month. If it costs $300,000 to build and the contributory value is also $300,000 then it’s a coin toss. If the potential rent is less at $2,200 per month then the costs are greater than its contributory value. The home owner’s entire property’s value upon completion would then be less. If the achievable rent was $3,000 then the home owner would benefit in building the suite as their entire property value would increase in excess of the added cost to build a garden suite.
Of course there are other personal reasons besides economics to build a garden suite.
Fedex laying off 10% of management employees now.
Fed raised the expected .25%.
Lots of situations where that isn’t true. If you can’t think of any, let me know.
If the tenant can’t afford to buy the property, the landlord is running a loss on the rental.
Then they can afford to buy.
That is a pretty good return if they can get this rent. Cost to build is likely sub $300k if the backyard was suitable.
Supply is represented by the number of listings. Demand is represented by the number of potential qualified bidders. If FTB is shut down, the demand goes down. If mortgage qualification is hard, demand goes down. If the banks scrutinize the mortgage applications and CMHC changes the rules, demand goes down, etc.
If someone is renting a property that they can’t afford to buy, that means the landlord is running a loss.
Well in that case they can afford to buy themselves.
Crazy! I thought the last Garden Suite that came up in my area was bad, $2,600 for a similar size essentially right on Interurban Road, but this is worse! I’m sure being detached is a draw but the rent is crazy for that size.
https://www.usedvictoria.com/house-rentals/39922933
You’d also need investors to be shut out. Because, if a FTB is shut out, he needs to rent. So an investor buyer buys the property and total demand is the same.
In the broad sense, 67% of homes are owner occupied in Canada, leaving 33% of renters currently “shut out”. If someone moves to Victoria, but is shut out of buying, they need to rent instead. So thats marginal demand for a rental property, which may result in a home sold to an investor instead of a owner occupier.
If renters are willing to pay rents that support landlord ownership, I’d expect these investors to fill in if FTB demand falls off.
Total demand is the same either way.
I get the concept, but maybe upgrade a bit to a decent strata property for 350-400k and get a better long-term investment. Plus I have it in the back of my mind that the leasehold ones in James Bay for 250k are in that building that’s had ongoing issues (lawsuit between ‘tenant owners’ and RE owner about who is responsible for what)?
FTB’s have been shut out for sometime.
What may be different this time is that First time Owners are more likely now to be shut out from moving up the property ladder. The spread between a first time home such as in Oaklands and a middle income house in Gordon Head has widened. I suspect the number of applications and 80 percent or greater loan to value ratios mortgages has dropped substantially more than the number of sales over the past several months.
My opinion is that current market prices are being mostly stabilized from out of town purchasers who need small or no mortgages.
It is now been a year since the ultra low interest rates in the first quarter of 2022. Those that opted for a one year mortgage will be renewing at significantly higher interest rates or be forced to sell. The Spring market could be a disaster. Or not.
Intel pay cut details:
Quarterly pay bonuses are gone, annual bonuses are being paused, 401k match is halved from 5% to 2.5%, merit-based raises are suspended, and there is a pay cut to all employees’ base salary based on grade.
All employees below Principal Engineer, grades 7 to 11, will get a 5% cut, 10% cuts will be instituted for VPs, and the executive leadership team will take a 15% cut, with Pat Gelsinger taking a 25% cut.
Looks like close to 15% cut to total compensation for the mid tier employee with no raises.
Nothing to do with structure type, they apply to all stratas.
You don’t even need that. You just need first time buyers to be shut out.
Most of the councilors , and many of their voters already own their 2,300+ sq. foot home. So they’re free to support the NIMBY agenda without it hurting them.
Hard to put any weight on a one month GDP number, especially when they have adjusted it for some (imprecise) measure of inflation, and seasonal adjustment as well.
Let me know if you can find out the nominal GDP, in CAD.( not seasonally adjusted, and not in USD) That CAD nominal gdp is what they use to start out the calculation. But they seem to have some aversion to publishing that, at least I find it almost impossible to find.
I think nominal gdp is something near +10% for 2022, which is 3.8% real + 6% inflation. When they say there’s 0.1% growth for a month, they could then say “we got that by seeing 0.5% nominal growth and subtracting 0.4% inflation”… but they don’t. And of course the inflation number they use is very relevant, because if they uses 0.6% for the month, the real GDP would be 0.5% – 0.6= -0.1% growth which would be headline and market moving news of a recession coming. Or maybe they use 0.1% for inflation, who knows?
Nominal GDP is relevant to lots of things, but for some reason they bury it somewhere.
House prices in Nanaimo have been coming down too from their high of $980,000 in January 2022 to the median last month at $753.000 or 23%. Greater Victoria’s prices declined from their peak in March from $1,351,000 to last month at $1,079,500 or 20%. Statically no real difference between the two.
Peak sales in Victoria were 353 in April 2022 and last month were 112. A drop of 69%. Nanaimo peak sales were in March at 168 and last month were 66. A drop of 61%
-source VREB
Average one-bedroom rental rate in Nanaimo is $1,791 and in Victoria it’s $1,826
-source craigslist
Would it be more fair to compare Victoria to Nanaimo than to a European City?
-probably but not as much fun.
If people want 2,300 sq/ft homes that is fine, but then why did a new council just get elected in Langford and their first order of business was to introduce a tree bylaw. Everyone is pissed off by all the clear cutting in Langford, but how exactly are we going to build 2,300 sq/ft homes without clear cutting for both the homes and the roads to get to these homes?
People don’t want 800 sq.ft. homes and they don’t want clearcutting to accomodate SFHs. Doesn’t add up.
Well it looks like the economy barely eked out some growth in November getting a feeling we might be in recession already imo
Not saying we should or shouldn’t. I meant only what I said and no more, that I find the complaining about densification to be overwrought. That’s all..
Marko this is a town house but described as adult and with an age restriction of 19 with no rentals. Do the recent changes to age and rental restrictions not apply to townhouses?
I sold this unit 10 years ago. It was nicely and at the time recently renovated as I remember.
It’s unfinished and under pending litigation too. Sign of things to come?
Someone ran out of money https://www.realtor.ca/real-estate/25233084/2-3968-cedar-hill-rd-saanich-mt-doug
Another day another tech layoff.
https://www.bloomberg.com/news/articles/2023-01-31/paypal-to-cut-2-000-staffers-in-weeks-amid-economic-slowdown
I’ve spoken to many Europeans who have moved to Canada from places like France, Germany, Portugal, etc… They all move here for the space and lack of density. No one wants to live in a can of sardines.
Just because the city has one of the lowest loan to equity ratio won’t save the city from a decline. Prices are set at the margin. All you need is enough over extended home owners to sell under duress. 98 percent of the homes in Victoria are not for sale. That 2 percent is what determines market value. If one percent or one out every 100 homes were suddenly listed for sell that would be another 1,500 to 2,000 listings. There are only about 1,300 listings currently. That would crash the market. This is highly unlikely to happen but it illustrates how prices can change dramatically when active listings are low. Even half of one percent or one out every 200 home owners have to problems like divorce, loss of income, illness, etc. to change the market when listings are this low.
Low listings makes the market less stable.
I wonder if many HHVers agree with you. I think they’re house hunting closer to Houston home size (2,300 sq ft) than Amsterdam (800 sq ft).
I wouldn’t build a garden/laneway/carriage/granny/guest cottage. Too expensive and too long to get approvals and too long to build. Rather buy a leasehold condominium in James Bay for $250,000. Same rate of return as a small garden suite but without the loss of privacy or future capital gains problems.
Vancouver and Toronto homeowners have the lowest loan-to-equity ratios in Canada. A rosy report from RE/Max declaring them primed to withstand the “coming storm” https://www.timescolonist.com/real-estate/metro-vancouver-homeowners-primed-to-withstand-coming-storm-remax-6461494
European density will never happen here but I think it would be better if we trend towards the density/lifestyle Amsterdam has to offer versus Houston, for example.
Why should we match the density of European cities? Europe is 10X Canada’s population with the same land mass.
Vive la différence !
Garden suites were a topic recently. I happened to be on the Saanich website actually looking at the townhouse development under discussion because I was curious, and man there is a boatload of Garden Suite applications in the pipe! I was actually shocked. I didn’t open them up but did note a lot said “large lot,” and I can see that that is where the guidelines would work best for Saanich in terms of what you’re allowed to build. Having a “small lot” myself, just under 6,000 square feet, I would only qualify to build a 500 square-foot garden suite which to my mind isn’t a livable or realistic size for the outlay of building one, and pretty nonsensical since my home is small and as such there is a lot of space on my lot for a building other than my home. Just an FYI for people not prone to look at the development tracker pages which are fairly recent in their current form.
Just wait until climate change impacts start to snowball. Many parts of Canada are going to become more desirable. Maybe in my lifetime even, but I hope not.
Waay off topic. German made, Polish operated, NATO tanks; be careful what you wish for.
On a different note, I never thought that I would be pleased to see German tanks approaching Kyiv.
Not just the ramifications but people for some reason completely ignore the upside. Every day I drive past developments and I see positive improvements.
Classic example -> https://goo.gl/maps/EELckY3AYLLRNwWm9
In exchange for density Saanich forced the developer to pull the sidewalk way off Mckenzie. You can’t tell me that walking past falling apart houses basically right on Mckenzie is more pleasant than a 20′ boulevard walking past brand-new townhomes.
+1 (along with many other things you’ve said today).
This is one of the things I find absolutely bizarre when listening to the kvetching about “densification” in Greater Victoria. Especially when well-traveled people complain. You could be almost infinitely more aggressive than MM and outside of downtown replace every third SFD with a four-plex, increasing the density by a factor of two (not a small amount!) and you’re still not that dense, compared with say major cities in continental Europe which apparently we’re supposed to compare with Victoria when it comes to cost of living economic mobility &c.
Good news on the immigration front for Canada.
—-Gallup worldwide surveys show a big surge (2.5X) in the number of people worldwide that want to emigrate to Canada. From 42 million in 2011 to 101 million in 2021.
—-And Canada is now the # 2 desired country people to move to in 2021. With 8%, way up from 5% in 2011. Canada (8%) is 2X higher preferred destination that Australia (4%)or UK (4%).
—- Of course this is just a survey and estimates “want to live” which isn’t “applying to emigrate”.
—- But the numbers are up 2.5X which should translate to about 2.5x the number of applicants now as we had in 2011.
======== details ===
—- 16% of all adults in the world want to live in another country. That’s up from 12% in 2011.
—-And Canada is the # 2 desired destination country (after the USA). 8% of all who want to emigrate want to go to Canada . 18% want to go to the USA. As you can see, the number that want to go to Canada has risen more than any other country (2021 vs 2011)
—-In 2011, 5% of the 12% worldwide that wanted to emigrate wanted to go to Canada. That’s 0.6% of the world x 7.054 billion (pop in 2011) = 42 million that want to emigrate to Canada in 2011
—-In 2021 8% of the 16% worldwide that wanted to emigrate wanted to go to Canada. That’s 1.28% of the world, or 1.28% x 7.888 billion (pop in 2021)= 101 million people that want to emigrate to Canada in 2021
https://news.gallup.com/poll/468218/nearly-900-million-worldwide-wanted-migrate-2021.aspx
For the most part people looking at density as evil and undesirable. I quite like it personally. We don’t have any dense (like actually dense) neighbourhoods in Victoria but my condo in Croatia is in a very dense neighbourhood and I love it. Gym, doctor, dentist, physio/massage, barber, two grocery stores, 5 bakeries, medical lab, two excellent resturants, etc., all 30 seconds to 8 minute walk from the front door of my condo building. Even thought I have a car there I’ve gone 10+ days without using it as I simply don’t need it. I kind of find it relaxing going to get a massage and walking four minutes there/back not having to worry about traffic and being early or late/finding parking/etc.
While everyone in my building here in Victoria freaks out about the roundhouse development I can’t wait until it actually gets developed. I’ll have a bunch more amenities a 1 to 2 minute walk away and the Songhees waterfront walkway will still be barely used. Everyone freaked out about Boom and Batten/Marina and now everyone goes there.
Big picture (global) this is a complicated matter. Small picture (Canada) this is extremely simple. Don’t want endless growth? Cut off immigration and the growth is pretty much done. Then hope the budget balances itself.
No pet restrictions in my building (I prefer to keep my re-sale as high as possible). My balcony looks onto the dog park….never had an issue. I have nothing against dogs, I just believe pets to be a luxury item.
Core SFH freehold under $1 million down to 22 active listings. Lowest I’ve seen it since I started paying attention to this search criteria last summer. The highest I saw was 56 I think at some point in the fall. Several of the 22 actives have “unconditional offers,” waiting three business days for rescission period to report the sales.
What a tough market to read. Sales low but many market segments non-existent inventory.
Weird isn’t it. More immigrants yet house prices declined and the vacancy rate increased marginally.
If you look at Chart 5 you see that NPR/PR arrivals in 2022, are essentially unchanged from 2019. That’s just bringing us back to the pre-Covid status quo, and the population was not growing by anywhere near a million a year back then. Explanation? The chart does not account for NPR departures. NPR either leaves eventually or becomes a permanent resident.
I seem to remember predicting 1,000,000 new residents coming to Canada this year. Guess I was out by a year. I’ll have to up my estimate for 2023, let’s say up to 1.5 million. This isn’t going to end well.
CIBC report estimates nearly “one million newcomers” arrived last year. Housing affordability advocates may want to switch focus to the demand side from population growth.
https://cibccm.com/en/insights/articles/in-focus-housing-demand-from-newcomers-even-stronger-than-perceived/
There is so much nuance that is not captured in debates around density. It impacts our entire way of life, yet it’s reduced to a single dimension in its most literal definition: people per square kilometre. People talk past each other when everyone considers different aspects that get summarized into a simple “more dense” or “less dense” stance.
I have lived in different places along the density axis, from both extremes and in between. I rented in James Bay and it was great. I’ve also lived in different types of sprawl, older residential neighbourhoods, downtowns, and rural. I’ve come to the conclusion the reality of increasing density does not live up to the ideal. The elephant in the room is infinite growth. There is no end game; the answer is always more growth.
Higher density is sold as the solution to affordability. For what used to get you a house, you now mortgage a depreciating asset with increasing maintenance fees instead of an appreciating plot of land. That leads to fewer options and precarity later in life as the wealth divide grows.
You get a fourth level of government – the strata – that micromanages your life. Not to trigger Marko, but pet restrictions like size of dog are a deal-breaker for me. (I get it, most dog owners are bad, but there will always be responsible ones that pay the price.) Non-strata forms of density like row houses are simply not built.
Growth leads to further degradation of the environment. Maybe people aren’t driving as much, but sprawl in the sky enables more people to exist, all consuming more resources, flying for vacation, etc. Efficiency has yet to reduce consumption, it just frees up budget for more consumption.
All of these lead to a lower quality of life. As a remote tech worker, I could afford a mediocre SFH in the core, but I’d be working more years to live in a city that is losing its charm. I’ve been up island for a few years now and have no desire to move back.
I’m glad that you have come to the realization that economic growth comes with population, urban sprawl, and more developed inner city. Protection of trees and destruction of roadways for bicycle lanes among may others poorly thought out pet projects and regulations doesn’t increase living space or standard of living.
There are always two sides to everything, and something have to give for our living standard and population growth.
There is also an option to raise some of the small condominium complexes by one floor and a steel and concrete main level constructed.
Stick frame single family homes are raised and they most often require a new foundation. I don’t know if there is a company in Victoria that has the expertise to raise a four storey complex with a 4,000 square foot foot print. That’s a lot of weight and a lot of hydraulic jacks. Some of these buildings are on crawl spaces and others are on poured slab. If its a poured slab then the slab would also have to be raised. So it would be on a building by building basis. But that’s what you pay engineers for.
I believe the building code was changed in 1984 to 2 x 6 construction. So there are some buildings that may be able to take an additional load. Of course, each building would require an engineering study. The exteriors of these buildings and the roof will have to be upgraded as well as the mechanics so additional load carrying supports could be integrated into the new attractive exterior walls and roof. As I said, it will be expensive and the cost of each additional rental unit added would have to be weighed against the cost of building new.
It isn’t necessary to add another floor. The province could still purchase these buildings and upgrade them and turn them into apartment buildings. But that is going to drain the 500 million dollar fund quickly.
Say a 16 unit condominium complex could be bought up for 8 million plus another 1.75 million in repairs. That’s say 10 million for 16 rental units. That’s $625,000 per rental unit. NO ONE would pay that per door for an apartment building. Maybe 6 million on a sale. MAYBE. That leaves a four million dollar loss. But the province has just provided 16 rental units at a cost of $250,000 per unit for suites that are on average 1,000 square feet. Try to get a price per unit that low when compared to building new.
I have no expectations whatsoever that this will be revenue neutral. But it seems to accomplish the vision the province has for housing while upgrading the older multi-family housing.
You can sweeten the pot for an investor wanting to buy the apartment building units if the province buys down the mortgage interest rate for ten years with a guaranteed rate of return if the investor places a cap on the rents. A guaranteed income stream for the first ten years would likely increase the number of potential investors, including non profit, as well as the value of the apartment units. The province is removing most of the risk for a potential buyer. That would provide more cash back to the province that could be used for other projects.
The apartment units could be marketed in blocks of four, five, six or 20 units. For all those people looking for a four-plex to purchase, this would be a good investment opportunity. A structurally updated building with a solid income stream and a guaranteed rate of return for ten years.
And I would be in favor of demolishing some of these older condominium complexes and building a new six story or more condominium complexes. These buildings are nearing the end of their use. They are inefficient, unattractive, and do not utilize the highest and best use of the land. In a perfect world with unlimited funds I would demolish an entire city block of these older buildings in Fairfield or James Bay and build a project like Dockside Green. But it’s unlikely that you will get all of the owners to agree to do that because they are not motivated to do so. Unless they are facing an expensive special assessment as this provides an option for those living in older complexes who don’t have the means to pay a large special assessment.
Perhaps the upper structural may be able to take the additional weight, but it is likely that the foundation aren’t.
IMO, it makes sense to repair if the cost is reasonable, otherwise tear it down to build a taller one in place. However, it is unlikely that many buildings will be replaced, because the city has made it practically impossible to tear anything down with over burden regulations such deconstruction and salvage.
wood framing Code prior to mass timber framing is up to 4 storey max Thats why they are all 4 storeys or 4 storeys of wood frame over a concrete first floor.. Nothing built in that method would be able to take another two stories without ridiculous engineering solutions/costs such as exoskeleton metal frame. Then insulation and step code requirements. Just tear it down and do it right.
Dear Wahteveriwant,
In the short time I’ve been frequenting this place, you do seem to have good ideas. Do you know Lisa Helps, because this latest idea of yours deserves to be shared with those that could maybe fine tune it and put it into play.
The alternative isn’t just that we build more new housing. A more viable solution is took take a look at the older stock of four storey multi-family housing condominiums that are in need of substantial repairs and upgrades and re-vamp that multi-family housing by upgrading the exteriors and building mechanics.
The owners of these older strata condominiums are facing repair bills of $100,000 and more. The province should make an effort to buy these condominiums and then re-zone them to a split zoning to allow rental apartments and individual stratas.
Some of these buildings will be structurally sound to allow for another floor or two to be added. In that way the building would have one or two more floors of new strata units that could be sold off individually while retaining the older suites as a single strata apartment of say 15 units that could be sold as an apartment complex to investors. Changing a four-storey pre 1984 complex in need of substantial repairs to a 5 or 6 storey complex.
Your are not displacing a significant number of tenants as these are mostly owner occupied suites. The current owners don’t have to come up with a $100,000 or more repair bill and are free to purchase another property or lease back their current suite or buy one of the new ones. In the end you increase the number of rentals in the city and increase the number of new condominiums. The rental apartment units in these complexes are larger than most new condos averaging around 1,000 square feet and would be more suitable for families if the floor plan is reconfigured as a three-bedroom or two-bedroom with den apartment. The interiors of these apartments will have some updating but would still be dated in appearance, so the economic rent will be lower than a new suite.
This provides a long term solution for rentals while providing new condominiums at the same time. This is solving multiple problems such as owners facing substantial repairs, more family suitable rentals, new strata homes in established neighborhoods, all at the same time. No doubt it will cost money to the province but most of that cost will be re-captured in the sales of the new condominiums and apartment complex. But I do think that this will provide more housing, more quickly, as well as provide rental accommodation at a far less cost per unit than to build an entirely new complex.
And in my opinion, a building that has designated apartments along with a mix of individual owners provides a positive mix of different income groups rather than being all one income. It will also rejuvenate the neighborhoods with more attractive exteriors.
And yup there are going to be logistical and engineering problems that are building and site specific and the province is most likely going to take a loss. But then some creative financing by the province on the apartment units might lower those upfront losses too.
Where there is a will – there is a way.
Japan has a problem with depopulation of outlying areas. It’s not really about overcrowding in Tokyo. In fact its population is now also declining, although not nearly as badly.
https://www.macrotrends.net/cities/21671/tokyo/population
The problem comes when we severely restrict both sprawl and infill housing, call it smart growth, and pat ourselves on the back for it.
While it’s blindingly obvious that allowing people to live in less space is the way to protect sensitive ecosystems that would otherwise be cleared by sprawl, I also don’t blame anyone mourning the loss of an urban tree. This is Singer’s shallow pond. The tree you see is more salient than the 10 that would be flattened far away.
But density and greenery is not incompatible. We just need to prioritize it.
https://twitter.com/StockholmCyclo/status/1616854902889762817?s=20
+1
So true.
That’s honestly the only place in the whole city where they’ve done bike lanes properly. It’s a joy to ride on for all of 3 minutes.
I drive 35,000 – 40,000 km within Greater Victoria each year due to the nature of my job. 80% of those km are within the core and 20% on the Westshore. Traffic out to the Westshore and Sidney has defintively become worse in the 13 years I’ve been in business.
Other than that I don’t see any crowding and I live in Vic West which is likely one of the most dense areas of Victoria. I went for a run along the Songhees waterfront walkway this morning and passed like two people. Even on a beautiful summer day it isn’t busy. I grab groceries at the SafeOnFoods in Vic West and it isn’t crazy busy whatsoever.
Personally I feel like Victoria can handle a ton more density especially walk-able developments. If you live in Vic West and work downtown, for example, you have everyone accessible on foot. Add a Modo membership and your a good to go.
The alterantive is we build more SFHs in Sooke?
This is how real life actually works. Own of my tenants paying $1,700/month gave me notice two weeks ago. Townline (an evil greedy developer from Vancouver only looking out for their own interests) also obtained occupancy on their new 200+ unit rental tower at the Hudson. They also posted all the floorplans/prices online. When setting the price for my unit I took this into consideration. They had a few advantages over me such as they allow pets, etc. Therefore, I decided to undercut their offering and I listed my unit for $2,000 instead of $2,200 (where Townline is approximately for similar size unit with parking). If Bosa’s rental tower (another greedy developer from Vancouver) in Vic West was also complete I would have probably had to list at $1,800 or similar with 350+ units hitting the market for rent. Thankfully, Bosa’s rental tower won’t be finished until the fall.
Developers go out of business, less supply, I set my prices higher due to less competition.
I’ll aslo add that contributing members of society rent and live in this apartments/condos. Right now I have 2x navy, 1x healthcare worker, 1x construction. It isn’t like a tower goes up, developer runs off with a briefcase of cash and there is no benefit to society.
So people are telling me they prefer Saanich to remain looking like this
https://goo.gl/maps/mbsWqjKSAkSB4YXy9 (2014)
vs https://goo.gl/maps/8BSge2FpuYSLugje8 (2023)
Sure? Developers would absolutely LOVE not to have to do any civil improvements in front of their developments. Civil improvements associated with a 1,600 sq/ft in the Oaklands area set me back over $70,000 last year.
Personally, as a resident I’ll take new sidewalks, boulevards, safe crosswalks, defined parking areas, etc. Each to his own.
Great article Leo. And nice to see Harris Green lives on. Still not approved, but back from the dead. It had been rejected by previous council based on NIMBY concerns that it might block some of their “sunlight’. Next step is a zoom community information meeting, on Feb.2 https://www.harrisgreen.com/ and then a public hearing (“where sparks will fly“)
why so many penthouses for sale at dockside green all of a sudden?
Isn’t that exactly what Eby intends to do, override city councils that drag their feet too much?
True. I remember a movie where a real down-and-out character in horrible shape living on the street says to a rich well dressed guy… “I may not be much to you, but I’m all I think about”.
Seems like a recipe for disaster to me. Like how we got to the point where climate change threatens the future of our species. Self-interest needs to be tempered by the interests of the greater good and this needs to actively monitored, communicated, and enforced. Society does better with clear rules and guidelines that reflect the larger picture needs, especially long-term needs.
The most honest thing I’ve seen in this forum. Bravo!
You could just let the free market forces play out, although it will take many years but eventually it will be back brought back to equilibrium.
I heard the news too. But it is for family with children, older people don’t qualify. But in here we need young people in CoV and CRD.
“Starting in April, families in the Tokyo metropolitan area, including those headed by single parents, will be eligible to receive 1 million yen (US$7,700) per child if they move to less-populated areas across the country, according to a spokesperson from the central government.”
Everyone is self-centered. You are self-centered in your views of not wanting more development in your neighborhood. It is how humans are.
Being self-centered is only a negative quality if allowed to run unchecked without enough attention to the needs of others. Otherwise it is pretty efficient and allows people to meet their needs and society to make progress.
NIMBYism and developer profit motives are some of the reasons why urban planning is required at a higher level, along with rules that are enforced.
Unfortunately, the system we have for urban development is not functioning well imo given the greater needs, and it is really hard to make changes to at the municipal level because the self-interest of constituent owners has way too much sway, and the bureaucracy is slow.
I’d really like to see the province step in and provide binding rules/guidelines in communities with low vacancy rates based on best practices that have already been tested in places like Portland or other cities with effective housing solutions in place.
I believe that Tokyo is paying people & families to move away.
You must be joking? The land of Victoria doesn’t grow with the population. So if you don’t increase density, where do you put young people in, even if they can afford it? By paying everyone who is over age 80 or 85 to move out, freeing the space for young people?
BTW, we all need to eat and more so when we have more people, so farmland is not a valid option for building houses.
Precious ecosystems, my ass. The three rural areas that I’ve lived in all suffered from people who moved to their shangri-la, and then attempted to pull up the draw-bridge to stop others moving there too.
That attitude would be easier to accept if they would be honest about their reasons, but those reasons are so full of self serving hypocrisy that they find a moral stance such as precious ecosystems, our children’s safety, the salmon.
That attitude results in an exodus of the upcoming generation because there is no place for them to move into. I seems the same goes for urban areas.
People should park in their driveway.
Perfect lighting is no lighting for the majority of streets. Arbutus rd is the bee’s knees as far as lighting goes in my estimation. They just need a sidewalk on both sides of the road there.
I don’t really blame anyone for opposing projects in their neighbourhood. I think resistance to change is human nature. However what should change is for communities to respect the democratic official community plan process where there is a real attempt to gather representative feedback from the residents. And everyone comes up with a plan on where growth should go and what it should look like.
The problem is we make official community plans and then don’t actually make it any easier to build within that plan than it is to build outside of it. I certainly see the point from many people that developers are constantly proposing things that go beyond the OCP. The reason is there is zero advantage to sticking to the OCP, since they will face all the same opposition and get less profit. The solution is to match zoning to the OCP so that anyone building what the community agrees we want has a much easier direct path, and anyone proposing to build something outside the OCP has to take their chances with the public hearing process.
There goes Marko again being anything but real in order to make an argument.
You can have perfectly good lighting without sidewalks but Marko tosses that in to paint his horror picture. Parking is a matter of having a curb and again has nothing to do with sidewalks.
Marko knows this since he is a clever guy but he is rather clever at painting his arguments. But it is also why I cannot take him very seriously since a lot of what he argues is disingenuous and seems to just be driven by self interest. The point is not sidewalks (which are often good things) the point is that some developers simply will say anything to further their self interest and need to be viewed with a rather large grain of salt.
Putting aside the issue that the labour market doesn’t base salaries on housing affordability, putting more money in people’s pockets in the face of restricted supply just makes housing more expensive.
Anonymous. Actually, there is a third opinion of we simply dont need more density in Victoria not in my neighborhood or anyone else’s neighborhood. As far as young people go, the solution is simply pay them more so they can afford to live here. The real question is what is the optimum size for a city that provides quaity of life.
Developers of coarse will always argue for endless growth since that is how they make their money.
I mean, isn’t this the struggle? We’re stuck in fisticuffs? Victoria/Saanich and surrounding municipalities are great because traditionally we haven’t been overcrowded. I myself prefer a less crowded Victoria. Our government’s don’t seem to be great at infrastructure planning, so the more people that live here the more problems we seem to have. It’s not stopping people from trying to move here, and it’s causing prices for both ownership and renting to get out of the reach of young people.
I feel like it’s a no win scenario. If everyone attitudes are, we need density, but not in my neighborhood, then nothing is ever going to get done. The problem will exponentially get worse, and there won’t be any young people left here to work jobs. On the flip side the faster we densify, the more crowded and overloaded everything gets, which also isn’t great (as our different levels of government don’t seem to plan infrastructure to adjust to the rising population). Both things seem to not be great. You either don’t build and crowd all the younger working age people out of the city, or you do build and make the CRD lose part of what makes it amazing.
As a good friend of mine says, you can’t stop progress (good or bad) 🙁
Two options
i. You can walk down a poorly lite road at night walking around cars half parked on gravel/grass and half on the road dodging distracted drivers texting.
ii. Or you can walk down a brand new sidewalk with 6 to 8′ of boulevard grass (perfect spot for your dog to urinate) followed by a curb and cut out designated parking places.
You are going to opt for i.?
That portion of Cook Street starting @ Cloverdale/Quadra where Saanich put in sidewalks/bike lanes/etc. is a complete disaster compared to what was there before……common let’s be real.
Actually, I lived on a street in Toronto that had no sidewalks and every few years the city tried to put them in. Every few years virtually everybody on the street got organized and opposed sidewalks.
My point is that Marko sees everything through the eyes of a developer since he is a small developer. Actually, I suspect that some people would be thrilled if the small developers all went out of business. Surprisingly not everybody wants to have their neighbourhood converted into your vision of higher density so that it becomes your money machine. What amazes me is how self centered and self interested a lot of developers actually have become.
I know NIMBYs have zero common sense but this one really takes the cake. You get new sidewalks on Seven Oaks where they currently don’t exist. New crosswalk. Proper street parking. Abstract builds a solid product meaning these will be expensive townhomes; therefore, a positive for the market value of SFHs in the area.
Significant infrastructure upgrades (sewer/storm/etc.) are required….wouldn’t I want this as an owner in the neighbourhood? and it won’t cost me anything.
On the flip side the development is right off Mckenzie which means most owners of the townhomes will just turn on to Mckenzie when leaving (minimal traffic impact in the neighbourhood).
The way the development is positioned in terms of orientation it won’t be casting any shadows on anyones yard. Maybe a tiny bit for the one house that is right on Mckenzie and development bait anyway.
Like what’s the problem? Park is right across from the development which is awesome for families buying these.
I would be shocked if it wasn’t approved but I don’t get why the neighborhood is complaining..
..like what is the angle? I would be all over support of this if I lived here! Bring on the sidewalks please.
On a side note we will soon be left with only huge builders/developers. Abstract owns 20 to 30 development properties they can afford to spend years rezoning as with such a huge number of properties they always have something on the go construction wise. Smaller builder/developer can’t survive this process.
So middle class puts in barriers which help large companies/corporations then complains about divide between rich and poor. Middle class doing it all it can to kill of small business.
We have a family friend who owns a single family home in Colwood. He and his wife bought it maybe 5 years ago from a wealthy friend who gave them a $200,000 discount and co-signed on their loan so they could afford to get into the market. Then a developer bought an old property at the head of their street and they were emailing friends who aren’t even in their neighborhood asking them to sign a petition against the project. We live in esquimalt and were asked to sign the petition because the proposed project would “change the fabric of the neighbourhood”. They are super nice people, so I was surprised how intensely opposed they were. They are a young couple like us with 3 children in the baby-toddler phase. When I refused to sign, I explained that this is the reason their children will grow up and be unable to afford living in the same city as their parents. He seemed really surprised like it hadn’t occurred to him – even though he himself needed to get help affording housing here. I wonder how many people out there don’t realize the ramifications of opposing densification in their areas.
Classic NIMBY obstruction.
The proposed three-storey, 25-unit townhome which aims to provide the district with its own missing-middle housing options – has sparked controversy among the area’s residents…“Based on our latest conversations, we understand the residents would like to see 50 per cent fewer homes, which would render the project unviable.”
https://www.vicnews.com/news/unviable-saanich-developer-wont-slash-projects-density-in-half-like-residents-want/