Summary of housing policy actions
2023 has been a momentous year in housing policy at the provincial level. More has changed this year on the housing front than did in the past 40, and it’s getting quite confusing to keep all the different reforms straight. Given that the premier recently mentioned that he’s “nowhere near satisfied” on housing, it’s likely also not the end to housing reforms for a while. To that end I thought it was worth putting together a quick overview of all the changes that the province has made this year. I’ll keep this updated as we get more information in the coming year, as there remain many unanswered questions about what these changes will look like when they are implemented by municipalities.
In addition most of these are reforms that primarily have medium and long term impacts. Given that there is a provincial election next year with housing one of the primary issues, it remains to be seen whether these reforms will take hold or be reversed by the next government.
Note this summary is assembled from available information on a best effort basis. Please verify the information in the associated acts and regulations.
Building code reforms
This is not a land use reform per se, but nevertheless highly impactful for housing. In the short term the code has multiple updates, with a focus on higher seismic and accessibility standards. Those raise the standards for new builds in those areas, but will also lead to substantial cost increases for new construction. On the other hand, the province promised to study legalization of single stair buildings above the current limit of 2 floors. If you’re not familiar with the importance of these type of buildings, I would recommend watching this video which gives a good overview. There is also a proposal to raise the height for mass timber buildings, but neither has a fixed timeline or guarantee of approval.
When will it take effect?
The new building code takes effect March 8th, 2024, but the major seismic and accessibility standards are delayed until March 10, 2025 to give the industry time to adjust.
Discussions on allowing single stair will happen in course of the next year, and the proposal for taller mass timber has no timeline or assurance it will be approved.
More information
Building code update and single stair discussion: https://news.gov.bc.ca/releases/2023HOUS0167-001923
Mass timber changes: https://news.gov.bc.ca/releases/2023HOUS0173-001959
Change in Development Fees
As the province pre-empts municipalities on some land use decisions, a key concern raised by municipalities is being able to fund amenities that will be required to support new growth. While most direct infrastructure costs are paid via Development Cost Charges (DCCs) that are collected at building permit time from all construction, some municipalities were also using Community Amenity Contributions (CACs) at the time of rezoning to collect money that could be used for a broad range of other expenses. While CACs had various downsides, the province moving away from spot rezoning also meant that CACs could no longer be collected for a lot of new housing. To replace CACs, the province introduced a new Amenity Cost Charge (ACC) fee that will allow municipalities to collect the incremental cost of amenities that aren’t covered by DCCs, such as fire, police, library, transportation, and waste treatment facilities needed for new residents. The new ACCs are not discretionary and have various restrictions that prevent municipalities setting them higher than justified by anticipated costs and the split between existing and new residents.
When does it take effect?
Changes take effect when local governments pass bylaws implementing ACCs in their community.
More information
Press release: https://news.gov.bc.ca/releases/2023HOUS0063-001737
Short term rental restrictions
The province brought in several new regulations relating to short term rentals, restricting them to a primary residence or suite in most areas of the province, increasing fines, and bringing in new enforcement tools for municipalities. That would have been a minor change bringing some units back into the long term market over time, but they also ended grandfathering that allowed short term rentals to operate legally in the City of Victoria in a number of buildings. That had a more immediate impact on the market with the short term rental premium likely evaporating overnight, and dozens of units being listed either for sale or for rent.
One issue that remains unclear is whether rentals over 30 days will still be allowed. Though the province defined short term rentals as 90 days or less, some cities defined them as 30 days or less. The recent release of regulations included a policy guide which states that cities can define short term rentals as a period longer or shorter than 90 days. That may mean that 30+ day rentals could continue to be allowed in some cities that use that definition (the City of Victoria comes to mind), however this remains to be confirmed.
When does it take effect?
Grandfathering for short term rentals is phased out as of May 1, 2024. The new enforcement tools are coming in late 2024 or 2025.
More information
The technical briefing is a concise summary: https://news.gov.bc.ca/files/ShortTermRental_Technical_Briefing.pdf
No more public hearings for projects compliant with the Official Community Plans
Municipalities have always been able to opt out of public hearings for OCP compliant projects, but this was rarely done in practice. In 2021 the province made a subtle change that switched the default for municipalities to not hold a public hearing for OCP compliant projects, and council must vote to hold the public hearing. This changed little, with most municipalities still opting to hold public hearings regardless. Part of bill 44 took this a step further and mandated that councils must not hold public hearings for projects that are compliant with the OCP.
While this sounds like a major change, in reality it will likely have only minor impact. There are many opportunities for a municipality to kill an OCP-compliant project before public hearing and those are still allowed. In some municipalities where the housing would have been approved anyway, it will save a few months between third reading and public hearing.
When does this take effect?
This requirement came into effect on royal assent of Bill 44.
More information
See the press release for Bill 44 (bottom) or the regulations: https://news.gov.bc.ca/releases/2023PREM0062-001706
Transit Oriented Development (TOD)
The province is mandating that municipalities cannot restrict density less than the prescribed minimums near what they consider to be frequent transit stations. We mostly don’t know what those are yet, and beyond Uptown and the Legislature exchange, the province has not designated any in Greater Victoria. While the list of bus exchanges as designated by BC Transit seems like a logical set of locations for this type of upzoning, we don’t yet know which locations will be included, as they must be designated by either the province or a municipality. In Victoria that means municipalities are not allowed to restrict buildings to less than 10 stories within 200m of the exchange and 6 stories within 400m. They also cannot impose parking minimums except for reasons of accessibility. If a lot is partially within the region it is considered to be inside the TOD area.
Saanich for example is proposing to designate the Royal Oak Exchange, Tillicum-Burnside Exchange, and the McKenzie-Shelbourne Exchange as TOD zones as part of their OCP update. I haven’t heard from the other municipalities about what areas may be included.
Note that the province is not mandating that cities match zoning to the allowed uses in these TODs, but cities also cannot reject applications that meet the height and FSR requirements there. The reason for that is to allow cities that have certain policies that apply on rezoning the ability to apply those policies (such as tenant assistance policies) in the short term. Note that in the long term zoning will likely be matched to include these TOD zones as part of the reforms to match zoning to OCPs by the end of 2025 (see below). Unclear is how strict the province will be on mandating approvals, and whether there will be an appeal body for developers to approach if they feel an application in a TOD zone has been rejected improperly (similar to what Ontario has).
When will it take effect?
The requirement for municipalities to not reject developments that meet the guidelines is in effect now, however most transit exchanges in Greater Victoria have not been identified. Municipalities must identify them by June 30, 2024 and adjust bylaws to remove parking requirements in those areas.
More information
The TOD policy manual includes detailed guidance on how these should be implemented by municipalities https://news.gov.bc.ca/files/TOAProvincialPolicyManual.pdf
Small Scale Multi-Unit (Missing Middle)
The province is ending single family zoning in much of the province by requiring municipalities to do a number of things to legalize low-rise infill housing including:
- Allowing secondary suites within homes or ADUs (garden suites). Local governments will be able to decide whether to allow suites, ADUs, or both.
- Allowing a minimum of 3 units on lots up to 280sqm (3014 sqft)
- Allowing a minimum of 4 units on lots over 280sqm
- Allowing a minimum of 6 units on lots within 400m of frequent transit. Municipalities cannot impose parking minimums in those areas. Frequent transit is defined in the regulations as a bus stop that has at least one route with an average of 15 minute service from Monday to Friday 7AM-7PM and 10AM-6PM on weekends.
These standards for suites apply everywhere, while the requirements for 3-6 units apply in any municipality over 5000 people, and on lots that are within the urban containment boundary, are on municipal sewer (not septic), and are not heritage protected.
In the modelling report on potential impacts of the reforms, there is a map that shows a broad list of transit stops showing frequent service bus routes and are thus potential areas to allow six-plexes. However this map is not accurate in terms of the regulatory requirements because most of the bus routes that BC transit considers frequent service do not meet the provincial regulations because they either:
- Don’t meet weekend requirements for service (They come at 16-20 minute intervals, not 15)
- Are split routes (for example the 27/28 combined meets the 15 minute requirement, but each individual one doesn’t).
Thus unless the regulations are changed, or they are interpreted more loosely by municipalities (discussion of this is underway), as of now only the 95 and 6 bus qualify as frequent service for the purpose of six-plexes.
Note that the province has released a lot of information for municipalities including a policy manual with suggested setbacks, parking requirements, and FSR limits for implementing the bill into their zoning codes. There are even suggested multiplex designs coming that could be pre-approved. However it’s important to remember that none of these are mandates, and are merely intended as best practice. Municipalities are free to create their own zoning amendments, which also means the viability of these infill housing forms remain up in the air. Through various additional requirements, municipalities could legalize these forms only on paper without making them practically buildable (as we saw in the first implementation of Victoria’s missing middle policy).
When will it take effect?
Municipalities are required to update their zoning by June 30, 2024 to allow SSMU housing.
Extensions are possible, with the one that cities are most likely to take advantage of being an extension in order to upgrade infrastructure to an area that otherwise couldn’t support SSMU housing. It remains to be seen how strict the province will be with those extensions.
More information
Press release: https://news.gov.bc.ca/releases/2023PREM0062-001706
Regulations: https://news.gov.bc.ca/releases/2023HOUS0171-001945
Reducing Spot Rezoning
What is it?
Bundled in to the SSMU reforms was a substantial change in how municipalities will plan for housing in the future. Currently municipalities create Official Community Plans on irregular schedules, where they outline many aspects of community priorities, including where housing density should be placed, and some guidelines on what heights and forms are supportable. However what is actually allowed is set by zoning, and developers that want to build housing that matches the OCP still need to request a rezoning which usually comes with long timelines and uncertain approvals.
Under the new process, municipalities will need to update their housing needs reports based on standard methodologies set by the province (guidance coming Feb 2024). They will then need to update their OCPs to accommodate at least 20 years of projected growth, and then update zoning to match the OCP. That would mean projects compliant with the official community plan (as captured in zoning) would proceed much more quickly without a discretionary rezoning process, while projects that aren’t OCP compliant would continue to require a rezoning. OCPs must be updated every 5 years.
This change received far less attention than the more controversial missing middle reforms, but it likely has the potential to create a lot more housing. While the province expected 130,000 new missing middle type homes in the next 10 years, the bulk of housing production will likely come from higher density apartments which will become substantially streamlined if OCPs must be operationalized in zoning.
When will it take effect?
Municipalities must complete their updated housing needs reports by Dec 31, 2024, and must have updated their OCPs and zoning to match by Dec 31, 2025.
More information
The technical briefing provides a good overview of the new planning process, starting on page 12: https://news.gov.bc.ca/files/Housing_Tech_Brief_Nov_01_2023.pdf
Municipal Housing Targets
What is it?
This was one of the first reforms announced, but it is fundamentally an accountability measure for the above housing reforms. While there are many ways for municipalities to comply with the land use reforms on paper while not actually increasing the new housing being built, there is no way to get around a requirement to hit a specific amount of new housing. In September the province selected 10 municipalities and gave them targets for housing that they must hit over the next 5 years. Locally the municipalities affected are Saanich, Victoria, and Oak Bay. Though the list has been dubbed the “naughty list” in the media, in reality it’s actually a mix of municipalities that have been doing reasonably well on housing like Victoria and those that have been underperforming (Saanich) or actively hostile to housing (Oak Bay).
The targets are in terms of net new homes, which means that gross completions as measured by CMHC will need to be higher than targets to account for demolitions (for which we have limited data).
The province has promised that this list will be expanded, and I’ve heard the next 10 could come as soon as this year, though that now seems unlikely. Look for a lot more cities to be added to this list in 2024, and likely eventually to capture most local municipalities.
When will it take effect?
The clock for the municipalities started ticking on October 1st, 2023, which means the first 6 month check-in will be April 1st, 2024 and the first year will end on September 30, 2024. The province has promised a series of escalating interventions ending with zoning overrides if municipalities do not hit their targets, however if there is a drastic economic downturn that tanks housing construction that may have to be adjusted.
More information
Press release: https://news.gov.bc.ca/releases/2023HOUS0123-001505
Detailed housing unit targets by municipality: https://news.gov.bc.ca/files/HousingTargetGuidlines.pdf
This isn’t the full list of reforms there are also things to do with expanding non-market housing like the $500M apartment buying fund but I don’t expect them to affect the market side substantially until the long term.
Also the weekly numbers
| December 2023 |
Dec
2022
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 39 | 128 | 320 | ||
| New Listings | 39 | 183 | 361 | ||
| Active Listings | 2517 | 2453 | 1688 | ||
| Sales to New Listings | 100% | 70% | 89% | ||
| Sales YoY Change | — | +2% | -72% | ||
| New Lists YoY Change | — | -1% | -10% | ||
| Inventory YoY Change | +24% | +24% | +159% | ||
| Months of Inventory | 5.3 | ||||
December is as usual dead quiet in the market, and so far we are tracking about the same as last year on sales and new listings, with about a quarter more properties on the market. There was a bit of an increase in resale activity in the core in the first week, but total reported sales are still very much in line with a year ago.
The small sales recovery and petering out of the new listings bump has put the sales to new list ratio back in line with a year ago. This is a time of year when new listings drop off a cliff, so don’t expect much new to hit the market until the first week of January.
I’ve talked about the potential impact on land values from all the provincial reforms, and the modelling report likewise predicted that while the price of multifamily housing is expected to be driven downward by the new supply, the price of land could rise. There’s anecdotal reports of some Vancouver-based developers buying a few lots in Victoria, but I don’t have a number for how many there might be yet. So far the median house is still going for 6% below current assessed value (similar to November) but once we get some more sales I’ll take a look to see if there’s evidence for some uptick in activity for lots that are mostly land value and might be suitable for redevelopment.
The modelling report – like most economic forecasts for a policy changes – makes predictions about value impacts relative to the counterfactual (business as usual scenario). In this case they predict a 6-12% decrease in multifamily prices in 5 years as well as a decrease in rents compared to what they would have been without policy intervention. While common for economic modelling, that’s not how most people think when assessing the impact of policies. If prices are up in 5 years, the government could argue that they would have been up even more without policy intervention, but this isn’t likely to convince most people. In this case with poor affordability pointing to an extended period of price stagnation or declines, the province may have gotten lucky on timing. If the modelling holds up (as usual, economic modelling is educated guessing at best), it may actually bring multifamily prices down on an absolute basis. However as I’ve mentioned before, 5 years in the future is likely outside the buying window of most people reading this sentence right now.
New post: https://househuntvictoria.ca/2023/12/18/how-are-things-holding-up/
LeoS: Thank you for providing the chart projecting deaths and projections indicate a substantial increase.
You are right that the millianials are in prime buying years but their purchasing power is more salary based and less large capital fund from selling a house in Toronto or Vancouver. Strangely, or perhaps not, I think it will have a much greater negative effect on condos than SFH. Naturally there are a lot of moving parts.
Their 90+ day delinquency for their mortgage portfolio increased 78% on a year over year basis. I suspect most people are hanging on for now and if conditions continue or deteriorate then lots of people will get hit at once in a short span.
The fact they don’t seem to have had a spike in defaults makes me think people are figuring out how to handle the high rates. The 2024/2025 renewal pain may not lead to as many arrears as people expect.
The reason BNS (and National Bank) has high a higher provision for credit losses is that they don’t have the luxury of kicking the can down the road since their variable rates adjust immediately following BoC moves. This maintains the mortgage term with positive amortization as per the original contract terms. RBC is somewhat similar in that they don’t allow negative amortization.
All other banks will see the credit loss provisions go up substantially with renewals, may not renew risky mortgages, and/or charge a higher rate to recoup the credit losses.
No. Banks aren’t stupid, a lot of the loans are EUR or USD so not negative real rates. Some of the other “mortgages” are Islamic Mortgages where interest is not allowed so the principal is inflated and what appears to be interest is fees. .A Lot of purchases are big down payments or foreign all cash.
The main point is that the huge price rises are because It’s a housing craze in Turkey . Rent prices rose a staggering 157% last year,, and that’s not related to negative rates. Istanbul prices rose 480% in the last two years.
https://www.benoitproperties.com/news/turkey-house-prices-rose-51-last-year-after-adjusting-for-inflation/
Yes of course, that’s a very common reason that house prices rise during inflation – as a tax-free safe haven. Not just in Turkey but in Canada, USA and elsewhere. Canada house prices tripled during the inflation of the 1970s and doubled again in the 1980s.
Yet there are people here on HHV that think that higher rates and inflation will crush prices. Not me.
It stays until you mouseover the comment, then it’s gone. Not quite sure why it does that, default behaviour of the comment plugin, but it should not disappear on its own
Dang, missed that goodie!
Big banks hunkering down.
The negative real interest rate (-20%) is exactly the reason why house prices have gone up so much in nominal terms. Housing is seen as a safe haven in the face of hyperinflation.
LMAO another horrible take, but not surprising given all your content is from the internet with zero real world experience.
Do you have any idea how much money she made during her stint in the US with the jobs she had? Do you have any idea what RE prices are in Istanbul or Manhattan? You should know how to google those, now go ask yourself if what she is saying makes sense or is she saying some B.S. to fit the narrative.
Not to minimize the refugee problem, but the Inflation in Turkey is mainly due to political interference in the central bank (e.g. 2021:)
https://www.aljazeera.com/economy/2021/10/14/turkey-erdogan-central-bank-firing-clears-way-for-more-rate-cuts
Really? I thought it was Trudeau in the basement of Rideau Cottage sitting behind a Gestetner printing bank notes.
Just take a look at all the people flooding into Turkey from neighbouring war torn countries. That’s what causes house inflation, and inflation in general.
Most of those millennials are going to need that transfer of wealth to pay down their jumbo mortgages.
As bad as our housing market is, it looks like Turkey’s is worse! Their central bank chief had to move in with her parents because housing costs are too high in Istanbul!
Turkey has Inflation 60%, interest rates 40%, and yet house prices went up 100% YOY!
This is all contrary to the common HHV’er idea that inflation and high rates will lower nominal house prices. As I’ve said many times on HHV, history in Canada and elsewhere tells us that nominal house prices rise during rising rates/ inflation, and fall when rates are falling! Now noone is saying Canada is like Turkey, but there are plenty of examples in Canada/USA where inflation+rising rates have led to higher nominal house prices, and falling rates have seen falling nominal house prices.
Why?…Because the economy drives house prices more than interest rates.
https://www.barrons.com/news/inflation-forces-turkey-s-central-bank-chief-to-move-in-with-parents-c806d3ba
“Inflation Forces Turkey’s Central Bank Chief To Move In With Parents
The new head of Turkey’s central bank said she has been priced out of Istanbul’s property market by rampant inflation, leaving no choice for the former finance executive but to move back in with her parents.
“We haven’t found a home in Istanbul. It’s terribly expensive. We’ve moved in with my parents,” 44-year-old Hafize Gaye Erkan, who took up her post in June after two decades in the United States, told the Hurriyet newspaper.
Erkan previously worked at firms including Goldman Sachs and First Republic Bank — and is now getting a crash course in the soaring prices that have seen many young people struggling to find lodgings.
“Is it possible that Istanbul has gotten more expensive than Manhattan?” she said.“
The Gordon Head box is an efficient floor plan layout that maximizes space while reducing cost. The only more efficient design to maximize space and reduce construction costs would be a cube. But I have never heard the design called “character” as most lack ornamentation. They are functional and economical which characterized most of the 1970’s and 1980’s.
The homes built today are more lavish with copious amounts spent on kitchens and bathrooms. Who really needs a pot filler faucet in a kitchen? I saw a property last month with gold plated faucets. Houses today have become a statement of one’s personal wealth.
I wonder if the future of housing may revert back to austerity.
This is exactly happening in south Oak Bay right now on small lot, especially south of McNeil Ave, but almost all 1970s+ Gordon Head boxes still being flipped instead of tear down. If this tend continues for another 20 years, eventually south Oak Bay will look like Royal Bay today and Gordon Head will look like south Oak Bay today, where most of these 70s homes will be called “character homes”.
Forgive me, but when I see that graph, I see a ton of boomer-owners splitting $1-2M estates between their (average of two?) Gen X/millennial children. Huge wealth transfer.
I’m using Chrome and I do see the new/unread comments highlighted in blue, but it’s only blue for a few short seconds. Maybe if it stayed blue a little longer you’d notice it. IMO, it would be helpful if the blue didn’t disappear so fast — not sure how everyone else feels about it.
https://househuntvictoria.ca/2023/12/11/summary-of-housing-policy-actions/#comment-109219
That’s a wild gap in a short time. 1559 Ash (8,700 ft lot) @ around $160/ft versus 1554 right across the street (11,000 ft lot) at $77/ft, or less than half the price. If you can stomach the interest rates, or have lot-to-no borrowing, it’s a nice time for developers to stock up a bit. . . .
Barrister, I’m already seeing the effects on housing when it comes to the baby boomers that are now into their late 70’s. The Rockland neighborhood that you live in does not represent most of the market as the houses in your area tend to be architectural designed large homes that are worth preserving. The rest of Victoria is mostly small pre 1960’s houses that were built for retirees and that’s why they only have two-bedrooms on the main floor. These homes are an inefficient use of land. The homes built a decade later in the 1970’s were built to maximize space for growing families at the lowest cost per square foot. The Gordon Head box is an example which was built with an unfinished basement that the owner could develop later to meet the needs of an expanding family. The middle income family on a budget home.
The estates that have lately come to the market are pre 1975 houses that have had little updating or remodeling and like their owners are showing their age. The original owners were frugal and only made repairs as necessary. These were the properties that escaped the gentrification that was occurring a decade ago when every guy and his dog was remodeling and flipping old homes. The problem with financing these older homes is that most of property’s value is in the land component. So at times it is a challenge to meet the requirements to amortize the mortgage over their remaining economic life. The challenge stemming from a nostalgic desire for these old homes still exists with some buyers pouring bags of money into them when what they should be doing is demolishing them. I expect that to fade away as the cost to renovate at times is equivalent to the cost to build new. One can spend $300,000 to $400,000 to renovate a old home but a significant portion of those costs are not recoverable in the marketplace.
A lot of homes in the core districts are mostly comprised of land value. The baby boomers have owned these homes for 40 plus years. When these baby boomer home’s are sold they will most likely be demolished. My expectation is that the pace of demolishing these older homes will accelerate over the next couple of decades. In another decade or so, the character of these neighborhoods will change and Victoria will look more like Royal Bay is today. The neighborhoods will still be peppered with some character well preserved properties but there will be a lot fewer of them. Economics will trump nostalgia and we will see more homogenous housing built such as what happened in Vancouver with the “Vancouver Special” Entire city blocks of near identical homes built to maximize finished floor area.
-or not.
Month to date numbers:
Sales: 212 (up 1% over same time last year)
New lists: 292 (up 6%)
Inventory: 2333 (up 25%)
I did some modelling on the death rate in Victoria which should slowly increase over the coming decades. https://househuntvictoria.ca/2020/03/09/modelling-the-morbid/
But we have to remember that the boomers are going to be less relevant as millenials are in prime buying years, and gen-z are entering household formation years.
I’m using Chrome and that doesn’t work for me. Maybe I’ll have to try Edge or something… however as I was looking for dark mode (I already have it for my OS system and for the browser) I tried closing and reopening this page and the font is darker! Thanks Leo! Hopefully this isn’t too disturbing for the other readers.
I don’t think darkening the font is a bad idea overall. The main article text is already black, so doesn’t make sense to have the comment text so much lighter. Let’s be honest HHV isn’t winning any design awards.
Maybe we could have suggested that CuriousCat familiarize him/herself with Dark Mode and Page Zoom (browser settings) before we changed the way the website looks for everyone?
Arbutus, I suspect that a reasonable portion of the wealth transfer will be leaving the city since the kids more often than not do not live in Victoria. Historically, wealth transfer has mostly been squandered by the third generation.
Frank, neither of us is expecting to be here in Victoria for too much longer. Typically, in most cases the surviving spouse often downsizes or in a few years ends up in a nursing home. I suspect that the massive growth of government jobs will counterbalance the decrease of retirees although home purchase power might change.
“..anyone know what’s up with RateSpy? Used to be my go-to site for an overview of mortgage rates. They seem to have gone belly-up, or at least are no longer advertising available rates anymore.”
Rates.ca bought it and no longer seems to update it much, if at all.
Thanks CuriousCat. I darkened the font and will look into the numbering system. For now the unread comments are highlighted in blue, does that not work for you? It’s device specific though so if you are on different devices each one will show different blue highlights depending on the last time it was on that page.
Barrister, my theory:
With or without high immigration, more wealth to the haves (their offspring) continued demand in the form of home or second home (eg cottage, recreation, out of country) purchases, wider gap between haves and have nots. I hope I’m wrong.
“Inner-city infill sites, on the other hand, are all unique, and cannot be retrofitted with prototypical buildings.”
This isn’t really true. The 80/20 rule applies here, with a dozen typical sizes duplicated many times.
Interestingly enough, Kelowna had pre-approved designs for their RU-7 upzoning in 2017. It worked, but it got some backlash eventually because too many of the same designs were being built over and over. Now they are thinking of going a different way, keeping a binder of previously approved designs and allowing builders to pick those to get somewhat accelerated review, but not publishing a list of designs that is static. Seems like a better system, IMO.
Barrister- Why not simply ask your wife what she plans to do?
Physics has Laws for sure, but that doesn’t stop many arguments …
Like they say… you can’t count the number of irrational arguments on physics forums 🙂
The revival of pattern home designs will do little to solve the housing crisis
https://www.theglobeandmail.com/opinion/article-the-revival-of-pattern-home-designs-will-do-little-to-solve-the/
I looked a bit more into the baby boomers dying faster than retiring numbers and while the numbers are not clear to me, it does look like we will reach the tipping point in the next two years at the latest. Obviously by 2031, all of the baby boom will have reached retirement age.
My question is what happens to the housing market when here when this steady stream of old people with suitcases of money starts to slow down while at the same time houses start to empty out as they drop dead, downsize by the surviving spouse or enter nursing homes? I know that there is a complicated set of factors here but overall it seems to indicate a real change for the local housing market. Has anyone seen any modeling on this?
I don’t drink coke, even if it’s free.
[tips hat]
Patrick, all I have heard is gossip.
Back in the 80’s it was the speculators that ended up eating crow. I was a kid, there were signs on houses everywhere offering free Intelivision gaming consoles and free vcr’s with the sale of the house. Even with the moon shot interest rates the majority of the mortgage holders made it through. I remember a lot of belt tightening back then…kinda like what I’m seeing right now.
With that said, this cycle doesn’t scare me at all, just another bump in the road, buckle up enjoy the ride…we’ll see you on the other side.
Even if a house falls into foreclosure, as is where is, sight unseen…you’ll still end up paying fair market value.
Max and Frank seem like they could be siblings given their posts?
Others on HHV have been telling us about Vancouver buyers snapping up core Victoria lots for multiplexes. Do you see any sign of that, in view of these falling lot prices you’ve mentioned?
I’m still not buying your story, there are bumps in the road.
The key is hold…Even with the vacant land tax.
If you own a lot clear title and approach the bank for the build to construct a house they will approve the build mortgage no problem…why would they do that? Because the land is a tangible asset.
They don’t even care how much money you have in the bank, they want something tangible they can take back in the case of default. For the guy’s out there trying to sell in a down market…sucks to be them.
Land values have been already.
A lot sold at the peak at 1559 Ash Road for $1,425,000 . Which was way too much in my opinion. The property across the street at 1554 Ash just sold for $850,000.
A lot in the Marigold area of Saanich that sold near the peak at $800,000. Asking price for a vacant lot in the Marigold area is now $699,500.
Land values aren’t budging…ever.
Even if I owned a vacant lot I would still hold, Its tangible money in the bank that will just keep getting bigger and bigger and bigger.
I was around in the 70’s-80’s and land owners made bank…look at Eddy Ing the guy that sold out to west hills… He is just fragment among the many, many others who nailed it with land back in the day.
I would rather hold land than cash, stocks, bonds, or whatever….Land is solid, Its tangible.
We are about to revisit the zoning for the Songees Roundhouse lands over in Vic West. In stead of messing with endless arguments give the developers three or four extra towers, making it a total of about eight to ten towers, and make them up to four-five (45) floors each. In exchange for all the density have them build one tower of 15 floors for supportive housing. Half should be rental and half condos. Make it a condition that they have to complete them in under ten years.
Land values are not carved in stone. They can fall dramatically. And if we go into a recession – they will.
Unlike a house, that you can rent, there is a small to zero market to rent vacant land. The rental on a home sets a price floor. If home prices fall too low, then investors jump in to buy the cash flow that the property generates. There is no cash flow and no price floor for land. Its value is governed by market sentiment.
If one wants to develop missing middle homes then it has to come from the bottom up. And the better way to do so is to have those owners of properties that have improvements of nominal value to put their properties on the market. Thereby increasing the supply of developable land and lowering land prices.
The Victoria core has a lot of these properties with small pre 1960’s houses. They are just not being listed for sale in the numbers necessary to dramatically lower land values.
Remember gentrification? That sparked a lot of people to buy these old war shacks, update them and then flip them. That’s coming back to bite us on the arse.
.
I don’t think rental availability is the issue, I just don’t think people can afford these prices…and If they can they would just as soon buy. Not to mention you need a very solid resume to even qualify for the application process…pay stubs, credit score, In person interviews, references, iris scan, etc.
The developers need to come up with some kind of rent to own thing. Making the banks redundant altogether. Or the developer could take second position on the asset in the form of a second mortgage topping up what the banks won’t release.
Kinda like selling the asset, then being a landlord for the balance. The developers could probably bundle all these second mortgages up and sell them in the form of reits on the open market.
At the end of the day, construction costs are construction costs, land values are land values, and that is never going to change. Affordability needs to come from the top because the bottom just simply can’t afford it.
So how’s the rental market doing in December?
There are about 535 rental listings on Craigslist within a five mile radius of the downtown core. Which is a lot for December. The impact of the proposed changes to vacation rentals seems to be having an effect.
The lowest priced one-bedroom in a purpose built apartment in the city is $1,500 a month at 1022 Pandora which has been up for lease for the past 20 days. That’s about $3.00 per square foot for a suite that is comfortably within shopping, walking and biking to the downtown. But if you absolutely have to live downtown then the lowest rental starts at $1,850 per month for a condominium or about $3.60 a square foot not including parking at 1029 View Street.
The average rent for a one-bedroom downtown condo is about $2,150 per month but there are still condos half way through the month available for less. Enough space for someone and their snuggle bunny to live in.
Downtown two-bedrooms are more expensive but you can split the cost with a room mate. They are averaging about 40 percent more at around $2,950 a month. The lowest priced two-bedroom at 845 View Street being $2,295 per month or about $2.85 per square foot plus parking. No smoking but a cat would be allowed if it was only smoldering. It has been up for lease for about a month now.
In summary, the downtown rental market seems to be weakening since the announcement on vacation rentals. There seems to be a lot more supply of rentals and they are taking longer to lease up. That leads me to believe that the vacancy rate for downtown condos is slightly higher than the surrounding neighborhoods. That’s not good news for investors.
PS In this blog’s favorite complex – The Janion. A studio has been up for lease for about a month at $1,695 or $4.70 per square foot. Asking rent for a studio at the Hudson is $1,450 or $3.00 a square.
Do any of you think the Janion may be a bit high of an asking rent?
How are sales going so far this month? The next two weeks should be very quiet.
Didn’t realize many ground floor condos have grass on the patios. Big patios (100sqt+) on condos have always commanded a premium though as there just aren’t many of those around especially on newer buildings.
Barrister, when it comes to the Victoria Core condominium market, some 62 percent of the sales lay between $400,000 to $700,000. 80 percent are between $300,000 to $800,000.
If you want to build missing middle stratas in the $900,000 to $1,250,000 range that’s just 8 percent of the market. It works out to an averaged absorption rate of 10 freehold strata units per month over the course of a year.
It’s essential for the success of the missing middle to bring these prices down substantially to appeal to a greater proportion of prospective purchasers. My opinion is that we can’t just do this solely by reducing the soft costs related to pre-construction before a spade is put in the ground. It’s necessary to attack the root of the problem which is the cost of single family homes improved with old homes where the improvements exhibit a low contributory value to the property. As it is now, the land value of single family home is too high relative to land for redevelopment into a houseplex.
Early adopters of the missing middle should have some success, but as more developers enter into the market, the market may become saturated with unsold and unfinished projects. The common wisdom is that more supply will lower prices but it will come at the cost of developments that are completed or nearing completion that have sunk costs.
My opinion, is the best way to lower costs and not to compete with freehold condominium developers is through PPPs or private public partnerships to provide a different product from what is currently being offered in the marketplace. Hence my thoughts are leaning towards long term leasehold condominiums rather than freehold or pre-paid leasehold condominiums. As an example the False Creek development done by Vancouver. Perhaps including an initial ground lease at a low or zero rate for the first five or ten years of home occupied ownership. There are several ways this can be structured to a developer to reduce their land costs and/or provide a substantial injection of capital to be applied against their construction costs.
And it’s the reverse sentiment here.
Most insolvencies are credit card debt. Multiple cards when one is maxed out, too many Skip the dishes orders, Amazon and online shopping, internet gambling, on and on. Some people are living the dream, until they wake up to reality.
$275K in fines for real estate agents who allowed fraudsters to sell B.C. home that wasn’t theirs
https://bc.ctvnews.ca/275k-in-fines-for-real-estate-agents-who-allowed-fraudsters-to-sell-b-c-home-that-wasn-t-theirs-1.6688179
I think what the problem is here, we are in a huge debt bubble. Credit cards, car loans, student loans, cell phone bills, Disney channel, Netflix, financed a couch at the Brick, on and on…these things all add up at the end of the month.
I think people aren’t really over leveraged on mortgage obligations, rather they are over leveraged on personal debt.
I find it hard to have sympathy for these people. People know when they are f#cking up…Its a built in intuition, yet they still crossed that line. Every other ad on the Q FM is an insolvency ad…why?
The sentiment is pretty interesting. When condos are the same price as they were 15 years ago it’s smashed all expectations of profit out of people.
I think the people renting are those not able to get the mortgage approvals and those that aren’t planning to stay for 5+ years, but I’m surprised they’re still able to build new condos even at those prices. They don’t build as much as Calgary but they do still do it
I am curious, how is the condo market doing these days? What is selling?
Alberta is a meh market , I did a project there and wouldn’t do another one .
Pretty difficult to find a patch of grass with the none ground floor ones.
Probably because they can’t find affordable housing in the area because of STRs.
Aren’t there big patios for none ground floor condos? Like the Hudson for example
I hope that coke had some rye in it for $4.50.
As a kid I would work on construction sites as a labourer for $3 per hour (min wage at the time) slaving 8 hours per day for $24…Its all relative.
When I was a kid a can of coca cola was .45 cents now its $4.50 cents.
Housing has always been expensive. Renting has been a thing ever since I’ve been on this rock. Think View street towers, Blanchard courts, co-op housing, social housing, on and on.
Houses have never been cheap, rent has never been cheap.
Also, one more tidbit, starting to see more and more demand for ground floor condos with small fenced patios re dogs. I’ve just had a transaction go unconditional on a ground floor unit with fenced yard yesterday, an accepted offer on a similar unit ground floor unit today with a different dog owner buyer, and an email today from a new different buyer looking for such as well.
I think this is possibly a function of a lot of dog owners being priced out SFHs and townhomes.
I am actually thinking about buying a pre-sale ground floor unit in Croatia as the North American trend of pet ownership is blowing up in Croatia and when developer’s sell pre-sales in Croatia they charge 75% of the finished per square foot price for covered balconies, 50% for patios, and only 10% for ground floor condos with fenced grass yards so it’s great bang for buck buying a condo with a yard for the time being.
I wonder how these condo towers will fare in a big earthquake.
Edmonton is just a headscratcher. I saw a studio in a remediated condo building the other day for $50k. Why would anyone even rent? Are people there just because the have to be and hoping to flee to Toronto or Vancouver as soon as they can economically?
I watched a podcast a few months with two agents (one from Calgary and one from Toronto) where the Calgary agent was giving the Toronto agent some numbers like investors buying 225k units and renting them for $1,750 and the Toronto agent was like that makes zero sense. Calgary agent explained it as a lot of people have been burned in Calgary real estate the last 20 years on downturns so there is much more appetite to rent versus buy (and potentially lose money on the purchase). I thought it was kind of interest.
Totally agree. I am seeing compression in the condo market on the basis of affordability rather than value. What I mean by compression is I feel there are just complete crap units in problematic buildings in poor locations that are holding in there at >$400kish. I think the demand is huge from government/military/uvic/etc., employees and I don’t think that is going anywhere even in a recession in Victoria. The alternative of renting isn’t that appealing as rents are very high.
On the higher-end seeing some solid value, but a lot of buyers simple can’t qualify. For example, this is one of many condos I see really good value in at the moment -> https://www.realtor.ca/real-estate/26359088/1803-848-yates-st-victoria-downtown
What I am trying to convey is I think the bloated public sectors in Victoria will set a huge demand floor for any type of housing, including condos, going forward.
Been through Virginia , beautiful part of the U.S
Bobby K, good to know, although the post is telling about your character.
Virginia really varies, the coal mining western part of the state is economically depressed while the eastern part is extremely prosperous. Looking forward to seeing how things shake out after Christmas.
Physics is the law, everything else is a recommendation
LMAO
Barrister, I remenber seeing this survey last year and remembered it when I saw your post. It says Virgina is the grossest state in America.
https://www.zippia.com/advice/the-grossest-states/
Meanwhile in the real world people are desperate = huge demand for any type of housing.
Yes. And you’ve correctly included the necessary condition to cite the “law of supply and demand” which is “for a given type of housing”. So if we increase supply of “home type X” the law of supply and demand tells us the price of “home type X” goes down. And the “law of supply and demand” doesn’t tell us that the price of a different type of housing (“home type Y”) will also go down.
For a real world example, If we have more supply of “hotdogs” the law of supply of demand doesn’t tell us the price of “steak” will fall. For housing this means that the “law of supply and demand” doesn’t tell us that increasing micro-units supply will lower price of SFH.
There can be other theories of economics such as “substitutions” that would try to explain any effects of “increased hotdog supply” on the price of “steaks”, but “substitutions” isn’t the “law of supply and demand”. And substitution theory is complicated, and based on how similar the buyers consider the form & function of the different products to be.
Canadian doctors are head hunted constantly by the U.S. clinics and hospitals. Nothing weird about that. Plus real estate is cheaper and the U.S. dollar has a lot more buying power. It’s a no brainer.
I don’t live in Vancouver so I don’t know but their ERs are open is my understanding. In Osoyoos/Oliver the ER is regularly closed down due to lack of doctors. The nearest open ER is an hour away – long time to wait if you are having a heart attack.
Totoro, what is the hospital situation in Vancouver these days?
Just got off the phone with the munchkin who moved to Virginia. It took her a day to get a GP and two days before getting an appointment with him. The weird thing it is a doctor that is from Barrie, Ontario who graduated from UofT. She says he spent almost half an hour with her going over just about everything include diet and exercise. Doing an extensive panel of blood and spit tests as well a couple of things I dont understand. But, it sounded very comprehensive.
She seems thrilled with the new house and everything else. Apparently the search for a puppy is about to start this weekend. It is just nice to know that they are doing well.
I am concerned about the unintended consequences of the STR changes on some of our tourist areas. I suspect it will be catastrophic for many local businesses and workers and for municipal and provincial revenues.
A lot of the homes built in ex. Osoyoos would not be there but for the summer tourist market and are way more expensive than a local worker can afford. The lack of reliable hospital services makes it very unlikely that loads of Vancouver retirees will step in as full-time residents.
https://www.castanet.net/news/Oliver-Osoyoos/461695/Understaffing-continues-to-cause-closures-at-the-South-Okanagan-General-Hospital-ER
Spoke to a number of insider contacts at various businesses and sectors last week. Confirmed that the labour market and discretionary spending has dramatically turned in the last 6 month and likely recession incoming shortly. Might not show up in the stats yet, good luck to all!
Something is in demand if someone is willing to pay for it. There is demand for all types of housing. Increase supply for a given type of housing and its price will go down, for a given level of demand. And that’s the law of supply and demand in a nutshell.
From $2500 plus a week in the summer to $2200 a month long term. These units are worth more than a million so that is really low ROI.
Okanagan rentals and real estate sales have had way bigger drops than Victoria from the STR changes as they are dependent on summer tourism – not much going on Oct-May in the smaller towns.
Will be huge knock off effects to the local economy – more than the forest fires – but long term rentals sure are easier to find now.
LMAO
If suggestions are being taken on website design, I’ll agree with Max here. I only check this website once a day usually, while I have my morning coffee and I’m also spending quite a bit of time trying to figure out what the newest unread comment is. There can be 100+ new comments a day! A numbering system would be welcomed. Another teeeeny tiny suggestion… I wish the font for the comments was a lot darker on the white background. I’m finding this one difficult to read. Unless there is a dark mode that I haven’t seen? I find myself actually selecting the comment I’m about to read with my mouse to highlight it. I find the post itself very legible, it’s just the comments that are too light. (The dates and time are almost invisible to my poor eyes.)
I’m not complaining or anything, I just find newest like reading a book backwards.
I understand that. Is there a way in the settings to default to oldest? In settings is there a way to have the posts numbered linear?
The dropdown menu on the opposite side of the comment count that allows you to select oldest or newest……
From: https://financialpost.com/news/live-news-top-business-stories-december-15-2023
I imagine the same numbers will be reflected in Canada soon. Hopefully, it ends foolish mandates and subsidies. Especially mandates requiring charging infrastructure be included in new homes. Guess what, if it is a feature the builder thinks they can sell (or the customer is demanding), they will include it anyway.
Is there a way to default to oldest rather than newest? I find newest very non linear.
In a very, very kind way…this is just a suggestion for Leo S, could you number the posts.
Its easier to just scroll down to the last post number I have read.
Again, this is just a kind suggestion.
@ Whateveriwanttocallmyself.
The interest rates aren’t even that high, Its not like its double digit Armageddon. These are normalized interest rates. I thought that was what the stress test was for.
Not sure why you’d assume that isn’t already the case. Thanks for the advice, but I’ve got that covered.
Ok sure. Just like all the other things that “applied to housing” that HHV told us about – the money laundering hearings, beneficial registry, foreign buyers, satellite families, unexplained wealth, number companies and spec tax were big deals being dealt with by the NDP that would help housing. So now it’s the “Auckland upzoning experiment , with a made-in-BC bonus idea of reduced parking requirements ”, to be transplanted to Victoria . Of course you and Totoro may be 100% right and this is just-what-we-need, but forgive me if I’m skeptical.
For the record, you can ask any economist, the “law of supply and demand” that you cite frequently, only applies when the supplied product is the same as the one in demand . In the case of Victoria housing this isn’t at all the case, as the product in demand (SFH) isn’t the product being supplied (multi-units, where you are tearing down the SFH in demand ). So, as far as economics is concerned. the law of supply and demand doesn’t apply to our Victoria multi-units plans, and there are much more complex relationships between substitutions etc. which is a different area of economics than the law of supply and demand. Multi-units are the perfect product for the 5,000 or so that move to Victoria per year, and the extra availability will likely increase that number moving here. Likely higher numbers of well-heeled retiring boomers from Toronto and Alberta will be happy to buy in Victoria to take the supply of those expensive multi-units in the core near a golf course or marina.
But ask any Victoria HHVer looking for a SFH if they’re excited about the new supply of multi-units……. [silence]
Anyway, thanks for the comment , and good luck with the new project!
Busy working on a new project this week, so haven’t been keeping up with the comments.
As for the impact in Auckland, forgive me if I’m not super interested in debating whether supply and demand applies to housing or not. It does.
The reforms worked to produce a lot more housing in Auckland, and the people actually studying those markets have concluded it also improved affordability and rent growth. No doubt it will be interesting to monitor the data going forward to see the full spectrum of impacts but it’s not like this is some novel case where we are looking to learn about how more housing affects prices. Tons of examples from other cities that those with better supply elasticity have lower prices.
Why is Edmonton so cheap despite growing faster than Victoria? Because they have a lot of housing. It’s as simple as that.
Obviously what works in Edmonton (lots of sprawl) doesn’t work here, but that doesn’t change the factors at work.
I would take this with a grain of salt, but the Fed also started gently walking back the “higher for longer” rhetoric this week, and now anticipates 3 rate cuts in 2024.
Your article referenced on Auckland;s rents is out-of-date, ends early 2022. Doesn’t include the recent year YOY to Oct 2023 which data I posted,, with large Auckland rent increases of 11%. Which “laid a big egg” on the story of Auckland’s lowered rents. If you can find something current, that can explain that big rent increase away, I’ll be happy to continue the discussion.
As an aside, on the homeownership side, Auckland laid another housing “egg” with deteriorating affordability (price:income) as the 88th worst affordable city to buy housing out of 94 English speaking cities. Another reason we shouldn’t mimic their housing policies. But that’s a discussion for another day!
Next msg
The 5 year bond yield has free-fallen 117 basis points in 2 1/2 months. From 4.42% oct 3 to 3.25 today. If that sticks, that means the 5 year mortgage renewals should be 3.25 + 1.5 = 4.75 . All depends on the economy, if is OK then it’s clear sailing for the housing market in the spring.
The article you quote does not address the impact on rent. In fact, the author states he has not read that paper yet.
The article deals with whether upzoning creates more units that would have been created by a immigration and a boom cycle. I think there was some effect of low interest rates that may work against us here. Other authors have since weighed in including:
https://www.sciencedirect.com/science/article/abs/pii/S0094119023000244?via%3Dihub
I believe that Leo can point you to the data to support why building more new houses reduces housing costs overall. I am not an expert in this field of analysis.
I think we won’t see the effect of the higher interest rates until next Spring when the market was very busy during the spring of 3 and 5 years ago. A larger number of homeowners would be refinancing then.
I suspect we might not see rate cuts anytime soon unless there is serious restraint on government spending.
The changes to vacation rentals have had two effects on the market that I wasn’t expecting. There has been a significant increase in the number of furnished houses for rent and the number of Estate Sales.
The articles you posted have been “rejected as flawed and contradicted by the data “ by some experts in the field.
These articles you posted are both from the same author, and even they don’t say it’s anything more than an “argument” in favour of their position. You ignore than it’s merely a “argument” and state it as facts. ‘Here’s the intro to one of their articles.
“ Using a quasi-experimental framework, Greenaway-McGrevy and Phillips (2023) argue that the zoning reform generated a significant increase in residential housing permits over the five years subsequent to the policy change.
The conclusions in the specific articles have been “rejected as flawed and contradicted by the data “ in great detail, by articles like this:
“ The Auckland myth: There is no evidence that upzoning increased housing construction.The one study showing it did is methodologically flawed and contradicted by the data” https://www.fresheconomicthinking.com/p/the-auckland-myth-there-is-no-evidence
And they are talking about the two exact articles you posted. And they proceed to tear their apart in great detail, with PhD level charts only an economist would understand.
The authors are Dr. Cameron Murray and Dr. Tim Helm, both PhD , and employed and well published and specializing in housing and real estate matters in New Zealand and Australia.
If you are truly “excited” by this kind of article, you may enjoy their thorough rebuttal of the articles you posted. Good luck, this isn’t for the faint of heart!
Anyway, the point of this is : experts continue to disagree on the success or failure of the Auckland experiment. What we do have objectively is the rent data that I posted, showing continual rent increases and a 11% rent increase in the last year alone. Compared this year to Wellington (and New Zealand overall) , which wasn’t upzoned like this, and whose rents rose 5% YOY. (as I posted)
—===
Here’s a simple test for you to convince yourself if you’re right about your theories of Auckland’s housing success. . Please provide an answer, as if you have any confidence in what you’re saying about Auckland is correct, this should be an easy one. There are two cities, Auckland and Wellington, and we are measuring housing starts (consents) in each one (indexed as described in the article). Now one is Auckland that upzoned, and one is Wellington, that didn’t and is described as having a “racket to stop housing being built”.
So your easy job is to tell me which city is Auckland and which is Wellington?
The answer is here, but don’t peek! https://www.fresheconomicthinking.com/p/the-auckland-myth-there-is-no-evidence
Perhaps we should use Detroit as our model instead of Auckland.
/s
Annual pace of housing starts in Canada down 22% in November, says CMHC
https://www.cbc.ca/news/business/annual-pace-of-housing-starts-down-in-canada-1.7060588
Yes.
Far better than the pace of appreciation and increasing hardship for renters and first time buyers without these changes. And it is not just forward modelling from the province but also the analysis done on the past seven years in Auckland:
https://cdn.auckland.ac.nz/assets/business/about/our-research/research-institutes-and-centres/Economic-Policy-Centre–EPC-/WP015.pdf#:~:text=In%202016%2C%20Auckland%20upzoned%20approximately%20three-quarters%20of%20its,five%20years%20subse-%20quent%20to%20the%20policy%20change
and
https://cdn.auckland.ac.nz/assets/business/about/our-research/research-institutes-and-centres/Economic-Policy-Centre–EPC-/WP016.pdf
Can’t keep up, so much back and forth.
https://www.bnnbloomberg.ca/bank-of-canada-s-macklem-says-too-early-to-consider-rate-cuts-1.2012235?
Sorry, but saying “the data shows” and then your go to “data” is not data, but “modelling” from consultants hired by the government with an obvious goal in mind. Hardly data. Do you honestly think there was any chance of the models paid for by the government to come out with a conclusion that the government’s plans wouldn’t work? The shocker is that the models didn’t come out and say that prices would be lower, instead rents will keep rising, just by a “feeble” 6-12% less than they would. Is anyone really excited by that?
Anyway, I don’t want argue about it. If government “modelling” that rents will rise, but 6-12 % less than otherwise is good enough for you, to get rid of SFH zoning, which has been an important factor producing as many SFH as we have now, well OK you must be happy. I think that shortage of SFH is the main “crisis” in the “housing crisis”, and we will only worsen it. So we differ on this. Time will tell.
I guess more supply , with cheap rates and fast profits creates more demand . Hey it’s the Canadian economy lol
If densification produced more affordable housing, Vancouver would have some of the least expensive housing in North America.
“Vancouver has the highest population density in Canada, with more than 5,700 people per square kilometre, according to Statistics Canada figures. It also has the fourth-highest population density in North America after New York City, San Francisco, and Mexico City.
“The elimination of single-family zoning is the most recent fashion statement, but I think (the policy) makes a lot of mistakes,” said Schultz, a former director of planning in New York state.
https://vancouversun.com/business/real-estate/the-promise-and-pitfalls-of-upzoning-and-missing-middle-housing-policies
“Developers are going to produce the type of housing that gives them the greatest profit. So just because you remove regulations, it doesn’t mean it’s going to produce more affordable housing. What it’s going to do is encourage developers to buy undervalued property that used to be single-family zoned and then flip it into high-end more-expensive housing.”
Never been the story. The data shows that increased housing slows the pace of rent increases and prices – not lower them from what they are today or tomorrow. Increases will happen, just more slowly based on the modelling. Here is what the province actually said:
What this means is that there should be an improvement in affordability vs. what it would have been and this is what the data in Auckland shows has happened:
https://www.abc.net.au/news/2023-09-25/nz-auckland-house-supply-experiment-results-in-dramatic-change/102846126
As an aside, I think rents are down 5-10% since the reforms were announced and all the STRs came onto market.
https://househuntvictoria.ca/2023/12/11/summary-of-housing-policy-actions/#comment-109137
That is quite curious, that house prices and rents haven’t sagged much. Seattle too – has allowed multiplexing on SFH lots for many many years. It’s a slow transformation for sure, and won’t have an overnight impact (if at all).
Uh oh !…….Bad housing news from Auckland New Zealand. Rents have surged up 10.7% YOY to October 2023. This is 6 years after Auckland up zoned the whole place, and became the poster child city for BC politicians to spin the tale that increased density will improve affordability and LOWER rents.
One look at the Auckland rental chart from 2016-2022 (statsista.com) followed by the huge 10.7% rise in Auckland rents YOY to October 2023 (news hub.co.nz) paints a very different picture. Rising rents!
So let’s recap… even density advocates are predicting that Victoria SFH prices will rise from increased density (SFH scarcity). And as we can see, Auckland rents have risen consistently since 2016. And in the last year, Auckland rents have increased 10.7% almost double the average in the rest of New Zealand.
So after 7 years of this Victoria (BC) upzoning maybe Victoria can be a “success story” like Auckland, where our rents too have kept rising consistently since upzoning and then surge 11% in year 7. Won’t that be exciting and worth the wait! But is it worth tearing down SFH (making them more scarce), not requiring parking and giving a tax-free upzoning land lift to SFH owners? I don’t think so!
https://www.newshub.co.nz/home/money/2023/11/rental-price-index-auckland-weekly-rent-reaches-all-time-high-despite-national-median-stabilising.html
https://www.statista.com/statistics/1080383/new-zealand-mean-weekly-housing-rent-in-auckland/
We could have an early spring market , best to get a head start over everybody else
Peter sounds good but my understanding is that u can only build 4 units in oak bay . So you would more than likely build 2 level townhouses . I’m not sure but after 13000 u can build 6 units , either way they are going to big and they will be well north of 2 mil .
I am a bit surprised by the number of open houses the week before Christmas.
That’s actually why I was wondering before whether a developer could make money going a different route by buying one of those really large lots say in Rockland, even Uplands, maybe parts of Oak Bay, and building luxury concrete & steel condos. I don’t know enough about this, but say 2.5 million for a large lot with a tear-down, build say a 4-story nicely terraced concrete & steel luxury condo project (4 units one floor each, say 2000 square feet each) – is it reasonable to think dvpt. costs on something like that might be say 600/sq. ft including soft costs = about 4.8 million, total cost for project say 7.3-7.5 million, maybe as a really unique product these might sell for like $2.3 million a piece, $9.2 million total.
Are these figures nuts, or is that feasible? If so, you’d think a Jawl or someone like that would think about it. They’ve built some nice 2,000 sq. ft. condos like on the golf course.
It’s true that not many people would pay $2.3 million for a condo, but this would be a pretty unique project and you only need to sell 4 of them. I think there’s more and more wealth in Victoria, and this would have a market.
Doesn’t do much for missing middle!
Anyone have a price on recent sale of 4091 Beam Crescent?
The problem in some of the higher end neighborhoods of Oak Bay and Victoria is determining what is or is not a missing middle lot. Developers may be interested in finding an older home in need of updating that they may demolish, but there is still demand by home owners to find the same property and renovate the existing home to modern standards.
One can point to a property say in South Oak Bay that is improved with a small home and exclaim that’s a missing middle property! And yet a missing middle house plex won’t be built on that lot. Instead a prospective purchaser will just renovate the existing house.
I suspect that’s because prospective purchasers still desire these older homes as they want the nostalgia of old Oak Bay. As more new homes are constructed, I think that nostalgia will be lost in the future as the neighborhood transitions from old homes to modern houses.
Cambo I don’t think we will see any meaningful interest rate cuts unless we are in a recession having said that we really at historically normal interest rates today , and the economy can’t stick it
I’m curious how the convergence of all of these new rules, mixed with the most recent forecast by TD (example) of a 150 bps drop next year and a further 125 bps in 2025, will see a return to a more active market, both for buyers and developers (I’m neither – but do have a few rentals). https://economics.td.com/ca-mortgage-tides-canada-households
https://www.reddit.com/r/PersonalFinanceCanada/comments/18isirn/td_economics_expects_150_bps_next_year_and_a/
Patriotz, I am not familiar enough with Texas to even begin to guess. I do wonder about the wisdom of real estate investment that are completely dependent upon capital appreciation to show a real return. The capital appreciation, in turn, seems to be very dependent upon extremely high immigration numbers. At the same time, the real per capita worth of Canadians has been on a slow and steady decline. Before someone points out how much money people have made in Canadian real estate, I will completely agree that many a fortune has been made.
Somebody posted a chart on here showing that in spite of having a much lower income than Americans Canadians were happier. For some reason the much lower income worried them a lot less than perhaps it should.
Well RE in BC is far more expensive than in Texas, so clearly somebody thinks it’s a better place to invest for some reason. But I’m not claiming that metrics like rental yield are better in BC.
Texas is a very solid place to invest with a very growing dynamic business community. Not sure if I would say the same of BC
For the people saying that the market for long term furnished rentals is small.
I have had 4 of my units set up as long term furnished rentals for the last 2+ years with a 0% vacancy rate and have never advertised on Airbnb.
That being said, we just had our first month vacancy as the market is flooded over the airbnb change and December/January is the worst time to rent. this will eventually change when people decide to sell or rent long term
Our rates are 2850/month up to 5000k month for 1 bed 1 bath or 3 bed 1 bath units.
We started with one and I was very sceptical about doing it at first, but it’s been amazing this far and gives us some diversification.
An acquaintance of mine now has 300 long term furnished units between B.C/Alberta/Ontario all strata condos/townhouses. he stoped investing in Canada about a year ago and is now buying in Texas, he as well has never listed on any airbnb platform.
The problem with most peoples opinions is they have never actually done it themselves, do you how glad I am that I never listened to all those people telling me not to buy a rental property and I was going to be getting clogged toilet calls at all hours of the night haha, Yet to get one.
Just like the 24 plus months I’m into the dvp permit/B.P permit to legalize two rental units in an existing building that met all the zoning requirements and only needed a couple variances.
Do not hold your breath on all the fluff that Ravi is spewing, you will only know what I’m actually talking about, if you’ve actually gone through the permitting/dvp process in Victoria or sannich.
It’s ok though, sannich’s website says only 3 months turn around.
Barrister- I wouldn’t lose any sleep over when boomers are going to be extinct. For every one that dies, there are 5 more that can be imported to replace them.
Patrick, I wonder when the curve of retirements and deaths is supposed to cross. I am sure someone has figured that out. I suspect that the gross number reaching 65 drops pretty dramatically in the last few years judging by one boomer curve I saw and the death rate totals start to really pick up, judging by the American numbers you posted about 27% of all boomers are already dead. Most of my generation is already either gone or staring out a window into the dark.
On a different point on the airbnbs. It’s obvious that you love to use them when traveling. No need to apologize there, I love them too, and so do many if not most people. Would you like to see all these cities you stay in also ban airbnbs, so you are back to using hotels? I think there’s a basic principal that if Canadians are expecting other countries to have airbnb, Canada should reciprocate by allowing them too.
Canada can’t make repeated claims to be special, by banning foreign ownership, punitively taxing foreign second homes and now banning many airbnbs, without being willing to accept that foreigners might respond in kind by banning Canadians (snowbirds) from doing the same in their country – namely banning Canadians from owning homes, second homes or staying at airbnbs in their country. So far the Americans have been “nice” to us, but I wouldn’t expect that too much longer, given the spirit of their original “rattlesnake” flag is alive and well… with the message “don’t tread on me”
Anyway, I’ll bow out at this stage. Thanks for the discussion.
I don’t think it does. Your analysis pointed to the closing of STRs as “making the housing crisis” worse and this is objectively false.
For starters, people like Marko who only list their primary residence when they go away can still list on Airbnb so these will be available. Second, occupancy rates on Airbnb for active listings (which are not all listed year-round) are at about 55%. So for 30-day plus rentals this covers 1-5 bookings a year, not all of which will convert to long-term rentals for a variety of practical and economic reasons.
For example, sometimes when we vacation in winter we book 30 day plus furnished rentals, but we would never stay 90 days or want to do move-in move-out RTB style rentals that require us to both apply and set up utilities from a distance. Super impractical. We’d just choose a state/province/country that permitted a shorter time, or stay at home.
While the loss of the 30plus day bookings on Airbnb/VRBO may result in a small increase in demand for longer term executive rentals of 90 days or more, there is an absolute glut of furnished rentals on the market and more being added each day from the change in STR rules. The executive rental market has way more product than demand and the market will normalize around this demand while still returning the vast majority of STRs to the regular long-term rental market.
They aren’t. Your figure says it is for listings not number of stays. So 24% of the listings have a minimum stay of 30+ days. This makes sense. Victoria has a bylaw banning most STR with 30 days as threshold. Folks trying to comply with bylaw would advertise 30 day minimum.
looks like the remaining probate sale beside sarita wont go below $1mil.
The well moneyed boomers retired at 55. The one’s retiring now are the one’s that had to keep working to 65 to get a pension.
Yes US numbers. With the numbers as definitive as shown, I doubt that Canada is materially different on the point in question.
One article said that during the whole decade of the 2020s, five million Canadians will turn 65. That is like about half a million a year. I am finding the numbers confusing and all over the place.
I don’t know….better deals in the COV and the MM is much further along than the provincial push in terms of actually getting something built in the next five years….also can’t see a developer wanting to deal with the tree bylaw on Sarita. My best guess would be renovation.
I did not feel like they were dying that fast but I have no idea.
Patrick, where are you getting the numbers from. I read the article but that seems to be the US. Are you extrapolating from the US numbers?
If we use age 65 as retirement age, the University chap is wrong.
—— 3.5 million boomers reach retirement age (65) in 2023. https://www.j2t-recruiting.com/post/the-impact-of-baby-boomers-retiring
—— 2.2 million expected to die in 2023 https://incendar.com/baby_boomer_deathclock.php
Also, peak number of boomers births is 1961 (now age 62). That makes peak age for the age 65 retirement still to come. Of course retirement at age 65 is just a yardstick and there are all kinds of variations.
James, any idea if the boomers are checking out faster than retiring?
From cencus.gc.ca site it says that the baby boomers were born between 1946-65, so they’re between 77 and 58. So I could see many boomers as having already retired.
AirDNA reports that 24% of Victoria Airbnb rentals are for 30 days or more. That strongly supports my analysis, because these 30+ day rental people are now looking for another solution to their 30+ day rental needs. Some will just rent a place full time instead of the efficient type of rentals where an Airbnb rental could host different people with 30+ day rentals.
Here’s the breakdown from airDNA.
You need to understand what this data means if 24% of rentals are 30 days and the other 76% average 5 days (as you describe) then that means the most common renter to be in an Airbnb at any given time is a 30+ day renter.
Simple math. If you have 100 renters and 24 of them are 30 day renters that’s 24×30=720 rental days for them. And the other 76% at 5 day rentals will be 5×76= 380 days. So the most common renter on a given day in an Airbnb in Victoria is a 30+ day renter.
Of course the airdna is far from perfect and refers to minimum length of stays. But if 24% of stays are 30+ days, the numbers above apply.
How about Sahtlam Seeker?
It’s actually bad news for economy, employment, incomes, rents, and the real estate market.
1.15 on .25 acres.
We have all noted the impact of the baby boom retiring in Victoria. I was talking to a chap from the University
who was saying that we have reached the tipping point where the number of baby boomers retiring is less than the total number dying. I have no idea if it true and I actually tried googling but that tipping point is not one I could find. Did note the the baby boom in Canada came a couple of years later than the US and lasted a couple of years longer. Also noted that the first half was larger than the second half so not a uniform curve.
Has anyone actually seen any good stats as what impact dying baby boomers are likely to have on house prices. I dont expect all of Oak Bay to drop dead tomorrow but a lot of the boomers will be dead by 2030. I know that one can play around with a lot of stats but I recall someone pointing out that retirees have an outsized impact since it is new money coming into the market. Are the inheritences going to stay on the island or are the kids in Toronto or Calgary.
You’re not the only serial killer on this blog.
Barrister, I’ve never strangled anyone to date. I’m just a long time lurker/fan of this forum, I live in Sahtlam and really like alliteration. I couldn’t come up with a better name.
Silly analysis and conclusion.
There are about 28,000 active short term rentals each day in BC. Of these, about 17,000 are units removed from the long term rental market (McGill report).
What we see already is a whole bunch of these units already being listed for sale or long term rental. My best guess is that about 80% will be rented long term as most people who can will choose to wait for a better time to sell will wait.
The market for long-term furnished rentals is a very small minority of the total rental market – most people want to have their own stuff and don’t want to pay a premium for “executive rentals” – they want market rates for unfurnished long-term. The vast majority of STR demand comes from short stays of a week or less (Airdna) and these customers will never rent a place for the mandatory 3-month minimum instead.
This means that the film industry, travel nurses, snowbirds, home renovators, insurance claimants, or the shared custody out of town parent who used to rent a STR and who now switch to long-term furnished will have a lot to choose with all the former STR units. However, imo, there will still more than 10,000 units brought back to the long term rental or owned residence market.
My concern is not that somehow this will worsen the housing crisis, but what impact this will have on our tourism and general economy.
I will not be travelling in BC as much because of this change. In addition, people trying to book are already finding that there is hotel surge pricing from increased demand. I expect that far fewer people will be vacationing in BC and choose a staycation or alternate destination instead. The knock off effects on the economy from shutting down STRs and almost the entire vacation home ownership market are going to be quite significant for individuals, communities and for tax revenues.
What did it sell for?
Or maybe 5 families could divvy up the house. 1800 square feet each. Missing middle come to uplands
We can start at the start – “Dynomite, elegant, special”. I don’t even think you could “dynomite” this 1958 stucco build because of all the elegant asbestos.
“The extra-large bonus room ( or 4th bedroom ) over the garage has all kindsa potential?” – newspapers charge per letter, so I’m doing you a service here! I just saved a space and an additional letter with “kindsa”. Question marks cost more, but it doesn’t make any sense otherwise.
“Age and lot size taken from BC Assessment, purchaser to verify if important.” – You know, getting the actual age and lot size sounds like a lot of work.
“Peace Quiet and Tranquility… ” – shows front yard of house right off Feltham, on a street that people often cut through at high speed because they’re in a hurry.
“Home when evening shadows fall and trees whisper day is ending, my thoughts are ever wending home. ” – don’t worry, I paid Paul McCartney to use this.
“Orange ya glad ya bought sunscreen ” – I paid $20k to sell my house and all I got was this knock knock joke.
“All the mod cons what” – the best thing about having David Keen as a realtor is that he also speaks Millennial, he can sell to all the generations!
As expected, pos houses in gordon head with bigger lots like 1671 sarita are being scooped up for multiplex builds.
Sahtlam – its listed as off market as of Dec 8
Are you actually a strangler moving to Duncan and should people be concerned?
Split that into 5 sections, each one over 5000sq ft. You could put 20 townhomes on that right? Sell each for a $1 million. #profit
We are listing our house in the new year (up island, hence the username) as we need a bit of time to make some repairs and get it market ready. A house we had our eye on (5288 Cormorant Place, Duncan) for months has since disappeared. Is there any way to tell if it sold vs. if it was just taken off the market? Apologies, we are pretty new to this.
I love it too, for entertainment.
Introvert: (Rob Shaw: Nearly half of homebuyers hit by BC NDP’s speculation tax are British Columbians).
Note the government and this article talks about the “number of people” paying spec tax, not the REVENUE raised. Because the revenue raised from foreigners still is much higher than from BCers. Why? Two reasons, foreigners pay 4X the rate of BCers. And BCers get a $2,000 deduction (as a tax credit on their income tax return). So BCers pay net nothung in the first 400k of their spec tax value. Overall this means foreigners pay 8X as much spec tax per dwelling (for the same value dwelling).
The overall effect is that foreigners pay 4X as much spec tax despite their falling numbers. And it remains an embarrassment that the BC spec tax is mainly paid by a tiny targeted group of foreigners.
Killing short term rentals may worsen the supply of rental housing. Why?
An example, say that 100 homes were used to rent as air-bnb to 2,000 different people over the year. The hope is that all 2,000 of these people will now stay at hotels.
But life gets complicated and it doesn’t work like that. Lots of people used airbnb as a “temporary second home “, and a hotel-as-substitute doesn’t work for them. So out of the 2,000 maybe 150 say, I guess I’ll rent” and so rent a second home full time instead.
For example, one might be a divorced dad who has partial custody in another city so needs to rent something that works like a second home to host his kids for custody visits. Who used air-bnb for that because he could rent the same furnished house when he had custody of his kids. And no, he doesn’t want to replace this with custody hosting his kids in a series of Holiday Inn hotel rooms. So he rents out a cheap studio unit and we’ve lost a full time unit of the rental pool.
Nobody knows what the numbers are, but there are no restrictions or spec taxes on “renting a second home” and lots of people do it. And likely more people now that airbnb rentals has been reduced. It may turn out that air-bnb was a very efficient alternative to people renting a second home full time, and they may now be forced to do that, worsening the housing crisis.
I do love finding weird property descriptions and random awkward pictures. Bring it on eccentric realtors!
There are some good lawyers on the island who should give a balanced set of opinions on how to deal with the estate. Marko is right that some professionals gave bad advice whether lawyers, doctors or real estate agents. Perhaps after thirty years of matrimonial cases I have seen too many sad situations develop as soon as there is some cash in the kitty.
Yeah but do cornball descriptions trying to dress up what is an unremarkable property on a unremarkable street inspire confidence? The other extreme is just as laughable. And there have been plenty of them. Nobody is saying ‘holy shit’ ridiculing the realtor.
I agree, description does not change outcome. One day when I am selling one of my own properties I am going to write a real talk description. My unit at the 834 would be a good one….”not very spacious, bedroom doesn’t have a window so perfect for shift workers, other than the yelling on the street from the homeless shelter next door will constantly wake you up. No parking. Roof top no one ever uses because it is too windy up there. Appliances are stainless not to be confused with stainless steel.”
I guess the problem is it doesn’t look professional even if it doesn’t change the outcome of the sale. It’s like a pilot showing up late and poorly put together with stains on his or her clothing. Might not change the outcome of the flight but just doesn’t inspire confidence.
If the expectation of increasing value results in FOMO and dreams of real estate wealth, what is the result of anticipation of future lower values? can this be the pin that pops the hot air bag that is straining under our delusion that RE only goes up?
stories in USA of best cities with $250k housing.
Cost of housing comparing USA / Canada tracked closely for decades until now we diverge dangerously .
Will the USA costs rise to meet ours or will we fall to meet theirs?
On the realtor write up critique, what is the problem? I mean really? Who cares. It’s a property for sale. That’s all it is.
Does anyone buy a house based on a description.
Irrelevant from my POV.
Bet the realtor.ca traffic is going to be a lot better than other listings in the area with a perfectly written description just based on HHV exposure 🙂
Re: 4080 Longview
Did someone hack the realtor account?!
“Lotsa counter space” is a personal favourite
+1, I’ve seen a lot of really bad advice given to my clients by lawyers and accountants over the years. Where do I start, just in the last few years a bunch of scenarios come to mind.
i. Client bought a condo for his elderly monther to live in and a professional (lawyer) suggested he register a $1 lease on title (I forget the reason, maybe property tax home owner grant?). Mother passes away and client phones me up to sell and I ask has he cleared probate…..he says “no need to clear probate, I am on the only on title, it is my condo.” I suggest he call BC Land Title before we put it on MLS to ask regarding discharging the lease and guess what BC Land Title says….the $1 lease is to the benefit of your mother’s estate so we need probate to discharge the lease…..probate took 10 months while condo sat vacant (strata fees, insurance, lost opportunity costs of investing the $).
ii. Just last year a health care professional was given the advice that she should set up a trust by accountant/lawyer for her mom’s property. Follows instructions, but for whatever reason the mother remained on title. Mother passes away (accountant and lawyer both AWARE mother has passed away and home needs to be sold). My client gets all her personal stuff in order approximately 10 months after mother passes away and is ready to list the home and phones me. I pull the title and I am like hey I don’t think I can list without probate granted even thought she is convinced lawyer and accountant said no problem….and sure enough it has to go to probate which has complications and takes an entire year while the home sits vacant. Both the accountant and lawyer who helped her set up the trust failed to advise her to start probate once her mother passed away.
Many other s***shows over my career.
Buyers market with no buyers , Benjamin Tal
Not Cool – Introvert
Holy shit.
Photo caption for master bedroom: This is where you “”woke”” up
???
If anyone is looking for a weirdo unprofessional realtor, give David Keen a call.
I’m 50, the sands of time for me are running low. I don’t want them having to go through years of probate. My Wife and I are both healthy, It has just become something that I want to deal with.
Passing is a thing, we are all gonna die. We just want to pass this house on to our kids without the government getting a dime, that’s all I was trying to say. Even if we have to give it to them before we die.
I said I was sorry.
Posting this just for you introvert. Best? house description eva!
Have you considered teaching economics?
sorry, I read that wrong…my apologies.
.
patriotz, With the cost of construction how does affordability even work.
Demand side subsidies simply result in higher prices. Improving affordability requires increased supply.
With Dockside Green the developer now has competition with pre-construction owners that are now selling their units. The developer no longer has complete control over the sales in the complex. It’s the same with the Pearl.
It doesn’t seem that the pre-construction owners are selling at a loss, but some are close. It’s not the money maker that the pre-construction buyers thought. From what I’ve seen most of the pre-construction buyers that are selling are from Vancouver and the Fraser Valley. Maybe they were betting on renting them as vacation rentals. Now that they are long term leases, the achievable rents could be putting them into the red.
The rent multiplier is now about 18.5 for the down town core. For a one-bedroom of say 600 square feet listed at $650,000, they would have to get a monthly rent of $2,927 per month. That’s really tough to get right now as the average rent for a one-bedroom in the downtown area is $3.50 to $3.75 a square foot for a one-bedroom or about $2,200 per month. A bit more if the suite has a view.
Almost as hard to sell as luxury homes which are just taking a beating. 9,000 sq.ft. newer build on a 27,400 sq.ft. lot just sold in Uplands for $4.1 million after starting at $6.9 million asking price.
I don’t know about a trust. They last 21 years and are a pain in the butt to administer sometimes. You can’t control everything and one home between three families is not high enough value to justify the complexity, expense, and maintenance imo.
Holding the house in your name until you pass may be enough creditor protection. You can’t control everything and divorce post your demise is probably better managed with a prenup.
Thanks Barrister, I’ll have my Wife look into that.
https://www.bchousing.org/housinghub/programs-and-eligibility
This has been around for a while. Targets incomes as follows: Combine gross household income of all individuals on title must not exceed the applicable Middle-Income Limit, defined as follows:
Units with less than two bedrooms: Middle-income households are those whose gross household income does not exceed the 75th income percentile for families without children, as determined by BC Housing (currently $126,050)
Units with two or more bedrooms: middle-income households are those whose gross household income does not exceed the 75th income percentile for families with children, as determined by BC Housing (currently $182,870)
Great point. Thanks Barrister.
Max, perhaps get a quick consult with an estate lawyer to ensure things move smoothly, especially if there is a divorce after you are gone. A properly constructed trust is often to your children’s advantage.
I plan on doing this under a different light. I built a 18′ x 24′ accessory building with a 12/12 para chord truss system on 8′ walls in my backyard 10 years ago with permits but not as a dwelling, rather as a woodworking shop since that is my hobby.
Since its a 12/12 para chord roof. the ceilings are very high (17′) off the slab. It could very easily have a loft. I set the grade of the slab to tie into my existing 4″ pvc house sewer, Its has its own panel, and water to the building.
My surrounding neighbours have adjusted to me being in there all the time and working for the past 10 years. Over the coarse of the next 10 years, I plan on slowly turning this space into a bitching unit for the wife and I to retire in. We love the area and never want to move…you can walk to anything you need.
Our main house out front is 2600 sq/ft, It has the main level up with 3 beds, 2 baths. And an in-law suite down, Full kitchen, 1 bath, 2 beds, 2 bay garage. I want to gift this main house to my 2 kids, but at the same time keeping it in house…They get it in the end anyway.
This will be an in house family arrangement. Everyone gets their own space, the boys can raise a family, There by turning a 10,000 sq/ft SFH into a 3 family SFH which is kinda what were going for. All I would ask is the 2 of them pay the property tax, water, hydro, internet for the entire property…No mortgage. Maybe come and see Mom in the back yard once and while.
I don’t think I would have any issues with CRA, since they are my direct family and they aren’t paying rent. Like I said, They get it in the end anyway. our name will be on the title until the Wife and I pass. I think its a win.
Marko, why is dockside not selling well, I thought it was a really good development in a good location? In terms of condos, and i stand to be corrected, I thought Vic West was a really prime location.
Caveat: The housing Minister Statement as ” In a perfect world was in a earlier speech, a few days back announcing the missing middle. It was posted here on VV.
I would for it but I am rather tired from the treatments. If recollection serves me right it was right at the beginning of his missing middle. On the other hand, produces the quote would simply lead to Marko saying that him saying it is not relevant.
Totoro, you like the numbers. So if the government plans to build a lot of housing for the poor and also build a lot of subsidized housing for working people making 80k to 170k, exactly what percentage of Victoria population does this represent.? Who is left paying market rates under that formula? Frankly, I would be very supportive of the government coming up with a way to help people buy a property in that income range, provide long term low rate stabile mortgages while dropping things like land transfer to a reasonable fee like 200. Strangely I have every confidence that Marko can produce a high quality housing product at a fraction of the cost that the government will end up paying for rental buildings.
They seemed to stop updating rates back in July, no idea really why. Wowa and nerd wallet post rates that seem more up to date, but really don’t seem to get discount rates as close as ratespy did.
News flash! Nobody cares if you (pretend to) mute people.
Stick to housing!
Well the minister says 20-30% below market. Following means testing to $80k-$170k income.
That’s a BIG subsidy in my book.
A propos of nothing – anyone know what’s up with RateSpy? Used to be my go-to site for an overview of mortgage rates. They seem to have gone belly-up, or at least are no longer advertising available rates anymore.
Starting to see cancellations rolling in for the new builds sellers can’t offload. Three cancellations at Dockside I’ve cross-referenced with ads for the same unit up for rent with two already rented. A number of the active ones also have ads up for rent. Things sticky on the way down.
Misinformation was posted on HHV, shocking 🙂 While Leo has upped his game over the years the comments section has deteriorated so much that without the mute button I wouldn’t bother doing my daily read. So much better 10 years ago.
Here is a crazy idea….how about decrease insane levels of bureaucracy in development/construction, open the flood gates to immigrant skilled construction workers and let builders/developers flood the market with inventory? and with the funds the government saves by reducing bureaucracy they can use to buy housing.
Yes the 4/6 unit dev. would have to sell at premium maybe just as well build a sfh for the effort probably a wash
At that income level rent will essentially be market and will subsidize the other members of the complex who have lower income and pay only ex. 2400 for the same unit. And it is just a hypothetical as market for a 3-bed townhouse may well be 4000 not 5000 but you won’t be able to get above market so that will be the top end no matter what.
There is no subsidy; however, just my guess, some people may choose these units over market as they are stable and you can’t get kicked out, will be well located, they will be new and attract young families with working incomes.
Hundred percent agree. Our incomes vs. land prices and construction costs are a big mismatch. Only with government land and construction financing do these numbers work for more than half our population and then only to create secure rentals – which is okay.
The missing middle removes some upward pressure on prices and rents but will never create affordable housing and that is logical because the private market is never going to be able to do this and stopping the compounding increases is really really important.
As always, it comes down to math. I would like to see the land bank formula vs. rents – maybe with essentially free land and low cost government financing the rents create a sustainable project. I wonder where all the government lands are for this in Victoria that are not already designated as parks?
I would never have focused so much on housing had we not had four children and would not do so had I foreseen viable alternatives. We’ll see if things change given how widespread the problems are.
Here’s the link to the video interview with the BC Housing minister two days ago (Dec 11) when he talks about the workforce housing.
https://www.youtube.com/watch?v=xLV6FRH5zPQ&t=837s
He said that back in September when he said they would use land bank to build affordable housing. Things have apparently changed judging from his more recent statements . Listen to the much more recent video, from December 12,2023 starting at 13:45 and you’ll hear him talking about the land bank (and the government financing and tools) specifically targeting the “workforce housing” $80-$170k crowd. And he specifically says they are still interested in the affordable housing low income crowd but said they would use a “different approach” for them.
Here’s what our housing minister actually said:
“The only way to truly build affordable housing that people can actually afford is going to be through government land, using government financing and using government tools to enable housing to be built faster,” said Kahlon.
Quite a far cry from:
“in a perfect world all housing would be owned by the government.”
Jibber-jabber as totoro already stated
Surrey builders are licking their chops in the mean time.
Spoke with two condominium developers this morning. Neither are interested in house plexes as there is no profit to be made.
This may just be mom and pop builds. Ideally if they own the current property, without a mortgage, they might be able to make it work. If they can find a contractor. Cost plus jobs.
Government providing 25% rent subsidies to someone with 165k income renting a $5,000 unit is absurd.
Governments, especially the NDP, were elected to take care of the poor and less fortunate in society. Those groups are having a worse housing crisis than someone at the $5,000 rent level.
In coops you own shares in the project and need to contribute time to running the coop. Rents are set by unit type based on expenses and there is a minimum and maximum income to apply. Rents are often lower than 30% of income for some residents and you generally don’t have to move out once you get in.
Not sure how workforce housing will roll out but might just be rental housing owned and managed by a non-profit and nonmarket rent is mostly set at 30% of income with a minimum and maximum income range. In this case of 80-170k ranges rents would be 2400-5100 a month if I understand things correctly. So most attractive to those at the 80k range. This type of housing can included lower income subsidized units and full market rentals.
What is this workforce housing? Why not just build more coops. Isn’t that what coops are (since you have to prove minimum salary plus have a certain amount of cash on hand). I will admit that although I like what the government is doing with housing so far I’m weary of government becoming too large. Still I don’t understand why we wouldn’t just build more coops.
Huge drop on the 5 year bond yield today.
I look at the math of home ownership and agree with public investment in workforce housing depending on the business case. Many middle income families objectively cannot buy a townhouse here even if there were more of them.
If we have public lands to put into this and can pay for construction and maintenance with the higher than traditionally subsidized rental fees over time, then seems solid. My worry would be budgeting for long term capital repairs and maintenance so there would need to be rules about this like there are for condos.
I myself wish that home ownership was not the only reasonable and stable way to house yourself. Rental housing should be so precarious and difficult for middle and lower income people. Stable non-profit and coop housing is a good way to decommodify housing and create security imo. Nothing to do with some hyperbolic “government wants to own all the housing” jibber jabber. Just addressing the economic reality on a math basis knowing that housing is a primary need.
What do you mean? The recommended criteria have been published. For a lot up to four units (most) lot coverage 50%, no minimum parking, 3 stories and setbacks reduced to quite minimal. Google the provincial policy manual and site standards.
Something that seems to be missing from all of the zoning reform is lot coverage % and square footage area ratio. It doesn’t matter if you’re allowed to build 3 units on a 3000 sq ft lot when the building footprint is capped at 900 square feet (with a maximum of 1050 sq feet finished on all levels).
This was the fundamental problem with ADUs in Esquimalt: they finally allowed them, but hard-capped them at the accessory building size, banned basements and second floors, and required them to be accessable by a second driveway. Shockingly, not a lot of people were interested in dropping half a million dollars to create a 500 sq foot microappartment.
Housing Hell, by Pierre Poilievre: A “common sense solution” or a 15 minute litany of logical fallacies?
https://www.youtube.com/watch?v=RxKI9zKhDNE
It seems a bit of a stretch to blame all our housing problems on one man and his reign that began in 2015. PP claims that he wants to get rid of “The Gate Keepers” and hopefully he won’t emulate Javier Milei (who upon election cut the number of government ministries from 18 to 9).
Hey Patrick:
What you were summarizing is an improved version of the model we saw in the Bay Area. When we moved there in 2016, Palo Alto made the news (https://www.cbsnews.com/sanfrancisco/news/250k-per-year-salary-could-qualify-for-subsidized-housing-under-new-palo-alto-plan/) because they set in motion a plan for subsidized housing for city workers which had an income floor (to make sure you could pay for it if you got in) and a ceiling (to make sure it didn’t subsidize wealthy people).
The floor was 150k/year US and the ceiling was 250k/year.
Presumably the floor in what you summarize is there for the same reason — to make sure you can pay for the housing with < 40% or some similar percentage of gross income. But the optics are truly awful.
Good news today is that todays market is only the second most unaffordable and barely eclipses the early 90s . So I guess things aren’t as bad as some people make them out to be
Barrister, I’m having trouble finding where the housing minister clearly stated that in a perfect world all housing would be owned by the government, or where he/they said it was the direction they were headed. Did I miss this? As mentioned, I’m still not sure about this proposoed workforce targetting, but most of what I’ve heard so far seems to be focused on bringing back some balance to the housing mix (not a primarily gov’t owned focus) similar to the 70’s, perhaps, when gov’t had helped build purpose-built rentals, co-ops, etc. Maybe the result won’t mean an absence or lessened amount of private ownership. Perhaps, conversely, it will give more people a chance to own. More rentals = healthier vacancy rates = healthier percentage of income dedicated to rent = more savings. Or, if that ship has sailed and ownership remains too high forever for those without family wealth, we get an affordable place for the middleclass to put down roots in secured housing. I get worried when there’s too much gov’t intervention, too, and I am not in favour of everything coming down the pipe, but I give them credit for efforts to try to deal with what is truly a crisis.
China has their Social Credit Score, and countries like ours, based on the “Free Market” Capitalist system, have Credit Scores.
They measure different attributes, but for the same purpose.
The article mentions AirBnB but fails to connect the dots – how many of those “empty” properties owned by locals are actually short term rentals?
cc: Patrick
https://www.theorca.ca/commentary/rob-shaw-changing-times-shift-focus-of-speculation-tax-from-foreigners-to-fellow-british-columbians-7975912
The economic ‘miracle’ taking shape as the scourge of inflation vanishes
PDF: https://docdro.id/6jAyxcT
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-the-forces-that-make-a-soft-landing-possible-in-unprecedented-economic/?rel=premium
I can’t quite tell if the SSMU ordinance on 4 and 6 units would require zoning that allows this number of units as part of a single multiplex building, or if these units could be added separately to an existing building.
For example, rather than knocking down a SFH to build a 4 plex, would this zoning requirement enable the SFH to be maintained and then a triplex added to the property as a separate structure with rental units.
The latter would enable more flexibility and reduce build costs.
The government owns and controls the land on the First Nations reserves and their housing is a complete disaster, just like everything else they touch.
I think the real issue is whether most housing should be owned or controled by the government or should we continue to try to have most people own their own houses.
The housing minister, and this government, has clearly stated that in a perfect world all housing would be owned by the government. It is also the direction that they are wanting to move in.
Gee you missed the joke.
Patriotz, the problem with the mute button is that it is easy to end up being in an echo chambers. You might not like his sentiment of a social credit score but one has to wonder about this plan to “house” middle class workers because it sounds a lot more like East Germany or Tito’s Yugoslavia than Louis XV.
Someone on here wrote that providing subsidized housing for a large part of the middle class workforce is bat shit crazy but if you asked me or many people ten years ago whether every SFH lot would be rezoned for six and twelveplex apartments most people would have said that it was bat shit crazy and would never happen. Yet those ideas were out there ten years ago. It was basically a vision of a more collective hive. So listening to the whole range of ideas on here has some value. If for no other reason than stupid people get to vote.
Guess what the minister’s younger brother is!?!
Would that be nostalgia for BC in the days of the Bennetts, or France in the days of Louis XIV?
Anyway time to mute this one I think.
Vancouver council just approved a 7.5 property increase.
Guess devil is in the details. But, ya, I do wonder about the Workforce Housing policy and if it would be a good use of public dollars, given all the other demands.
If your social credit score is within our targeted range…you can live in our 15 minuet cities.
I expect that they will start with the popular sectors like health care workers, fire and ambulance and police, then move on to teachers and all other government workers along with charity workers. Frankly, I think this will be extremely popular because people love getting free stuff. This is shrewd politics and lots of people on HHV have expressed a strong desire for more public housing. This will definitely boost their vote in the next election.
I am looking forward to seeing how this develops. On the other hand my family and I will not be paying for it so it is easy to just be interested.
His statement is not nonsense, and he has been clear in the past that housing should be increasing owned and controlled by the government. If you are a developer friendly to the government you should be looking at making a fortune.
Frank. Virginia.
There are probably 500,000+ households in BC that qualify for the”workforce housing” income range quoted by the BC housing minister of $80,000- $170,000.
If the minister was serious about the government building homes and offering to them to this “workforce”, without specific targets in mind, this would just be nutty. If they build 5,000 units, they could offer them them to 1 out of 100, and those lottery winners would get subsidized rent by 20-30%.
If the government wants to do something along these lines, let BC Health own the houses, and it can offer subsidized housing to some of its nurses, as a taxable employee benefit. But the minister was quite clear in the interviews saying that he didn’t care what jobs they had, that this “workforce housing” was going to be there for struggling above-average income BCers.
Just complete nonsense as he presented it, and I hope he was just having a bad day, and didn’t describe what they are actually planning. but this”workforce housing” project is real, and he did mention specifically that they are starting on this workforce housing idea in the new year.
If the government is planning some kind of “workforce housing” subsidy, they would need to offer it to everyone, not just lottery winners. Maybe they offer a tax credit of $1,000 per year for renters or something. Personally, I wish they wouldn’t do any of these hare-brained schemes that spend money on housing. Because if you spend more money on housing, and more housing doesn’t get built, all you have done is created inflation, with more money chasing the same number of houses. And that’s not me saying that, BOC Tiff Macklem says the same thing, and says what the governments are doing to stimulate housing is worsening INFLATION, and he wishes they would STOP. As do I.
Our provincial government needs to get back to basics, and work on health care, homelessness, addiction and poverty. With a $6 billion deficit forecast, once they consider spending significant amounts of money to help the “workforce” (middle class ) to buy or rent housing, they’ve crossed the line into CrazyTown.
Where is Alexandria? Russia?
Arbutus, you dont need a car, you should be using the bus or a bike. If you rent a small place you really dont need much stuff. People should not be buying houses or even condos. Rent a small place and if absolutely necessary a small two bedroom if you absolutely have to have kids. That is the new vision of how your life should be. That is what people have voted for and I am confident that the NDP will have a majority in the next election at which point this should really gather steam. It will be interesting to watch.
On the good news front, daughter just bought a really nice house in Alexandria, I am really happy for her.
I believe that Ravi was vary clear when he said that in a perfect world all housing will be owned by the government. Social housing is going to be a really big budget item. I doubt if luxury condos are exactly the game plan here.
p.s. not just hard to save for a home, but to save for anything, if student loans, car purchases, etc.
Regarding the Workforce Housing: I’m still mulling over the interview, but I interpreted this to be one angle of many to address the housing needs of a healthy community. i.e. one that has enough people from various professions to serve the needs of everyone, from all walks of life. For example, nurses, firefighters, trades people – as a single person, they may make $80,000, as a double income/kids, they may make $170,000 (I don’t think it is meant to subsidize a single person making this higher wage.) While this sounds like a lot, without any help from parents, many people at these gross income brackets pay too much rent to ever be able to save for a home. Or, if they can, it’s slow going…so they move, or they don’t come at all. I’m still pondering what I think of it, but that was my interpretation of the rationale.
Most exciting time to be a town planner in a generation
This land bank better not be our SFH’s.
At any rate they sure seem hell bent on making it happen.
I think that’s exactly what they are saying, Missing middle co-op, social housing.
I’m curious of this land bank.
Sold couple of days ago for 950k. Lot is like 4500 sqft so not bad actually. The price is similar to townhouses but you get a newer house in a newer neighborhood in the core.
I picked a hell of a time to become a councillor.
Here’s a novel idea – if the aim is to increase the stock of viable housing why don’t we take measures to make downtown liveable? There appears to be some hope – it seems that even the most dim-witted, virture-signaling pollyanna CAN spot an abscess when they see one.
https://www.thetimes.co.uk/article/oregons-decriminalisation-dream-hits-reality-of-drugs-and-death-jdmmv6mxr
Let’s all hope that perspicacity migrates northwards.
Thanks for this. It’s an excellent resource to point to when people get all doomer about housing. We finally have some substantial action at the provincial level and most of it is good long term policy to increase supply rather than scapegoat taxes that avoid the real issues in the housing market.
Good to see Sean Fraser is talking about immigration changes time to put the brakes on . Would help to take the steam out of housing market as anything helps
That’s a great interview with BC housing minister Ravi. He’s very personable and intelligent guy , and may find himself as BC Premier some day.
But what’s this “workforce housing” initiative he’s talking about to help above average income people get below market housing?
Here’s the video interview,
https://www.youtube.com/watch?v=xLV6FRH5zPQ&t=837s
starting at 13:45 when he talks about “workforce housing”, to subsidize the $80-$170k household income “workforce housing” crowd to get 20-30% lower housing. What???? Why are we subsidizing these above average income people?
Ravi, 15:00 of video : “We’re [government] going to move into that’”workforce housing as well”
Anyway, the big takeaway from the Ravi interview is that he introduces (for me) this term “workforce housing”, which is alarming for me as the project he describes at 13:45 of the video seems to subsidize above average income people in the range 80k-170k per household, which I am opposed to!
He explains that these “workforce housing initiatives” don’t replace the “deeply affordable housing” that they’re still committed to (except he didn’t mention any new initiatives for the low income folks) , but it was remarkable to hear what he’s talking about with “workforce housing”.
Have a watch of the video… He describes it starting at 13:45 of the video, as working households with income 80,000 to 170,000. And then he describes the subsidies that are coming their way!
if this is true, it is unbelievable to me, to see a NDP government subsidizing people in this group earning 80,000 to 170,000! What on earth is someone earning 70,000 supposed to think of their taxes going to help someone in that range?
Anyway, here’s the subsidies that the “workforce housing” means tested crowd will be getting,
——government land (from a “land bank”) gets donated into the government owned project
——Private builders (who are wary of building for themselves) will be sought out to build housing, paid for by the government.
——When completed, the housing hands it over to a non-profit. The non-profit then rents ( he wasn’t clear, but I assume its “rents and not “sells”) the units to means-tested “workforce housing”, meaning people with income in the range 80,000 to 170,000. He mentioned 20% -30% below market as the target (rents I assume), which identifies the amount of subsidy. Presumably the government gets paid back by the “profits” of the non-profit, but there isn’t an expectation for the government to make a profit on it.
—— And so the “workforce housing crowd gets rent for 20%- 30% below market.
When he describes this for “workforce housing” in the range 80,000 – $170,000, why am I shocked? Aside from giving those people any subsidy to begin with…. Maybe he misspoke, but why would you have a minimum income threshold ($80,000) on a “means test”. Are we saying “Sorry, you’re too poor, this “workforce housing” is for wealthier people?” If so, why didn’t he say “incomes below $170,000 instead or providing the range?
Good news out of OFSI today, they are maintaining the stress test requirement for uninsured mortgages. At least they are demonstating some sanity.
VicRE, isn’t that what is also known as a house? What’s the townhouse alternative bit? It’s a house on a small lot for still quite a fair bit of money? I don’t see it for sale, but it was assessed at almost $1,050,000.
Great article Leo. I’ve “googled” lots of articles on these BC housing changes, and this is the best by far!
Timeline seems fine but I just don’t know who is going to rush to develop that many homes in Oak Bay. Council is going to have to approach the United Church instead of the other way round plus work with UVic maybe on the Cedar Hill dog park site. The amount of land available to develop is minimal so it will have to be willing party which is very slow.
Timeline overview from Oak Bay staff.
4029 blackberry lane $950k. Looks like a good alternative to townhouses.
Thanks Leo. I’m interested to see how the transit network will be implemented in Victoria as it appears that a six-plex might make economic sense in more places than a four-plex does and what happens next is all about economic viability. Also interested to see how/if Oak Bay gets to 664 new homes in the next five years…
Thanks for putting this all in one place Leo. My brain was spinning the last few months trying to make sense of it all. Getting excited for 2023 predictions review and 2024’s wild guesses!
On another note – Bloomberg tells me we are going back to post-war spec houses: https://www.bnnbloomberg.ca/ottawa-to-launch-pre-approved-home-design-catalogue-bring-back-post-war-effort-1.2010636. Could this move the needle? I don’t see why every OCP doesn’t have a set of pre-approved plans for different sized houses so that permits could be rapid-issued.
Good video overview of some of the changes from the housing minister https://m.youtube.com/watch?time_continue=792&v=xLV6FRH5zPQ&embeds_referring_euri=https%3A%2F%2Ftwitter.com%2F&source_ve_path=MzY4NDIsMjM4NTE&feature=emb_title