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With nearly two dozen municipalities and districts, the Lower Mainland is run by a hodgepodge of governing bodies. Could they do better by banding together?

Don Cayo
Sun

The cost of civic government in the two North Vans — the city and the district — appears, according to a study released last week, to be way out of line.

The study, commissioned by the North Shore Industrial Waterfront Association, compared the North Shore‘s per capita cost of municipal government with Delta and Coquitlam, which are roughly the size of the two North Vans combined. The difference was substantial — as much as 28 per cent.

That led the authors of the report to ask the obvious question — a good one any time, but never better than when a civic election campaign is underway. How much could be saved if some North Van services were merged and delivered jointly for greater efficiency?

A variation of that question could be — and I think should be — asked by voters in every municipality in the Lower Mainland, a region with nearly two dozen cities, districts and villages crowded cheek by jowl.

The problem is that no one has stepped up to the plate like the North Shore Industrial Waterfront Association to sift and compile the information that’s needed to jump-start an informed discussion of the question.

The North Shore study, wisely I think, is not married to the idea that the two municipalities in question should or should not amalgamate — although the data would help inform an intelligent discussion of that possibility. Nor should amalgamation per se be at the heart of a broader study.

Even though I froth at the unaccountability of regional bodies like the GVRD and TransLink, and I like even less the idea of formalizing a fourth level of government, a proposal to amalgamate the whole of the Lower Mainland would be a tough sell with me. I believe our communities are simply too different and the priorities of the suburbs and the urban core would be too much at odds for a single municipal government to effectively represent all interests.

But the idea broached by the study of adjacent municipalities offering joint services when it makes financial sense to do so? That’s a whole other story.

So, for that matter, is the possibility of selective amalgamations of like-minded communities — two or three that might find it mutually beneficial to meld together on the North Shore, or south of the Fraser, or in between. Whether or not these make sense, and what the new boundaries should be, is hard to say without much more information — without, for one thing, the kind of basic spending data that’s in the North Shore report.

Yet even a cursory analysis of civic expenditures and populations shows there’s often a big difference in the per capita cost of municipal government as soon as you step across a municipal boundary.

Our library staff did some simple math for me — dividing population numbers from census data into spending totals that were obtained from the provincial Ministry of Community Services. The per capita costs for the two North Vans turned out to be a little lower by our calculation than in the sophisticated analysis of the study, which arrived at its conclusions by analyzing and combining three dozen different spending categories. I don’t dispute their figures, but I’m using our simpler ones for the sake of consistency because we calculated figures for the other municipalities in exactly the same way.

The upshot is that our figures show the cost of government in the North Vans to be $1,088 per resident in the city and $996 in the district. That compares to a regional average of $984.

But that average is arrived at by adding up numbers that range from just $577 in Pitt Meadows to a whopping $1,550 in West Vancouver. That’s a huge difference.

Of course, it’s not fair to treat those simple numbers as absolutes and conclude that Pitt Meadows is roughly three times more efficiently run than West Van. There are a lot of variables that have to be considered.

The North Van study breaks it down into not only per capita expenditure, but also the cost per adult resident and the cost per household. That’s because the proportion of adults to population and the number of people per household can vary widely between family-friendly suburbs and the more dense urban areas that are more attractive to singles and childless couples.

Valid questions also stem from geography. Is a place hard to service, like steep, rocky West Van, or easy, like flat Delta? Are most homes tightly packed together or spaced widely?

And what about service levels? How good is maintenance? How richly endowed is the community with public amenities such as street lights, parks, playgrounds and community centres?

All of these things are the stuff of conversations that voters ought to be having with the people who are running for municipal office. Do we think that we, compared with our neighbours in the cities next door, get enough value for the money our council spends on our behalf? And do we, as individual voters, think that our council is spending our money on the right things?

It’s unfortunate that North Van city Mayor Barbara Sharp didn’t seem to see it that way when the study was released last week.

She responded with a highly selective and not very relevant defence of the city’s property tax rate. Or, at least, of its residential property tax rate, which she described as the second-lowest in the region. But she very noticeably did not address the city’s sky-high rates for businesses and industries, which are four to 11 times higher than what homeowners pay.

Since only residents vote, not businesses, Sharp’s response might be politically smart. But it’s not good policy to let business tax rates reach the point where they start to chase expansions and start-ups — in other words, new jobs — into some more moderately priced municipality.

The North Vans are at that point. They’re now in the same undesirable ballpark as Vancouver, Coquitlam and Burnaby, all of which have steadily worsening business tax rates that are four to six times higher than their residential rates, and industrial rates that are much higher still.

Michael Sasges
Sun

CREDIT: Peter Battistoni, Vancouver Sun Palatial homes (above, and below) in Burnaby off Government Street, across from Charles Rummel Park, are the products of one man’s determination.

CREDIT: Peter Battistoni, Vancouver Sun Palatial homes (above, and below) in Burnaby off Government Street, across from Charles Rummel Park, are the products of one man’s determination.

CREDIT: Peter Battistoni, Vancouver Sun Ensuite bathroom of palatial home in Burnaby shows great attention to detail.

Yes, the Winsford Court homes are big and expensive, absolutely and relatively. But what makes these seven news and not the 30 or so other manorial Burnaby homes on MLS listed for between $1 million and $2 million?

Their possible/probable singularity is one answer. Their expression of one man’s determination over 10 years is another.

In his 20 years in the real estate business, agent Preston Fisk reports, Winsford Court is “the first large lot . . . cul-de-sac I have seen off Government Street.”

”Most lots are infill in established areas, which is to say, if you build in these areas, whether in Burnaby or Vancouver, you may have an older or dated home beside you. These lots have a building scheme attached, which ensures consistency in the homes.”

Fisk started pursuing what would become Winsford Court 10 years ago. ”I first became involved with the property in 1995, when I brought an offer from another buyer for the three lots, in order to put together a subdivision.”

That assembly went nowhere because one of the owners did not want her two properties divided and sold them to another buyer. That buyer wanted to build a ”a large estate home,” but never did.

His next attempts at creating the subdivision occurred in ’97, ’98 and ’99, but went nowhere mostly because of price disagreements.

”In 2003 the planets aligned, and I brought an offer from Noort Homes for the three lots, which were all finally accepted in multiple offers.

”I have always thought of this area as the ‘sweet spot’ of Government Road and always believed, as did Noort Homes, in the subdivision potential.”

The developer, Noort Homes, has been developing and building residential and commercial properties for more than 40 years in the Lower Mainland and Vancouver Island.

Its Winsford Court homes are two-storey residences with full basement, four bedrooms up. Inclusion of ”miles of granite,” a commercial range, two pantries, a kitchen, a nook and a dining room in the one home currently listed on MLS suggests these homes might appeal to a big family with big appetites.

”Over the years I have met many people who have purchased a townhome or a single-family-detached home from Noort Homes, and when they are in the position to upgrade, they seek out Noort to build them a new home or to purchase a completed property, as they were so happy with their first homes,” Fisk reports.

Outside the homes, he says, educational and recreational, including shopping, opportunities abound.

”My favourite thing about the neighbourhood is that you can run an unbroken 11 kilometres around Burnaby Lake,” Fisk says.

”This trail is great for bird watching or just enjoying a gorgeous wilderness setting. You are minutes away from the Burnaby Lake Equestrian Centre which I have ridden at for years. . . . SFU is no more than 10 minutes away. Skytrain is within walking distance.”

About homes that start at 5,200 square feet of living space, Fisk comments:

”Homes on 33 [foot] by 120 [foot] lots can only be 2,400 square feet. Most of the lots on Vancouver‘s eastside, and many on the city’s westside, are this size.

”Homes on 50 by 120 lots can only be 3,600 square feet. Most new single-family-detached homes are built on lots in this range. Homes on 60 by 120 lots can only be around 4,300 square feet to a maximum of 4,700 square feet. So homes in the 5,000-plus-square-foot range on a cul-de-sac that have beautiful homes surrounding them are unique.”

© The Vancouver Sun 2005

CONSTRUCTION I Technology exhibited with other B.C. innovations at international conference

Gillian Shaw
Sun

How green is their condo? Source: EcoSmart Foundation Some of the green features incorporated into the sustainable condo (shown above and below), designed by Busby + Associates Architects and built by Ledcor, include: Textiles: All natural, organic cotton, hemp, and wool materials help to create a warm, comfortable living space that contributes to the overall health and well-being of occupants. Wood: Furniture and building materials in the condo use wood that is certified by the Forest Stewardship Council to be from forests that are sustainably managed. Mechanical systems: In-floor radiant heating and cooling integrated with building structure uses energy storage capacity (thermal mass) of concrete structural system. Lighting: Indoor lighting fixtures are compatible with compact fluorescent light (CFLs) bulbs. CFLs use approximately 75-per-cent less energy than standard bulbs to produce the same amount of light, and last up to eight times longer. Condo also displays LED lighting. Energy-efficient appliances: The Equator washer/dryer consumes 135 kWh of energy per year and 34 litres of water per load. That’s 85 per cent less energy and 77 per cent less water than a conventional washer/dryer.

Borrowing a sales concept from rock bands, British Columbia‘s first sustainable condo is heading out on tour, this one aimed not at selling music but at selling the world on the wisdom of building green.

It’s now on the road to Atlanta, Ga., where the sustainable condo will strut its stuff at the U.S. Green Building Council Greenbuild 2005 international conference and expo, where more than 10,000 delegates could view it.

B.C. participants will be among hundreds of exhibitors at the conference, the world’s largest green building technology event. The condo is a rallying point to show off a growing cluster of B.C. companies dedicated to creating environmentally responsible and healthy work and living spaces.

“We are way ahead of other areas of Canada,” said Michel de Spot, president and chief executive officer of EcoSmart Foundation. “Both nationally and internationally, firms and people from B.C. are considered to be at the leading edge of green building.”

Politicians are adding their voices to the cheerleaders of the province’s green building industry, with B.C.’s Environment Minister Barry Penner and Richard Neufeld, minister of energy, mines and petroleum resources, lauding B.C.’s showing in a recent international study released by the Royal Institution of Chartered Surveyors Canada.

The study, Green Value, looked at buildings in the United Kingdom and North America, including several in B.C., and demonstrated a link between a building’s environmental friendliness and its market value.

The EcoSmart Foundation, a non-profit organization that focuses on new technologies to reduce greenhouse gas emissions, has received $298,000 from Western Economic Diversification Canada to help develop B.C.’s sustainable building cluster. Part of that is helping to put the sustainable condo on its road show.

Like other clusters, the sustainable building cluster is gradually building momentum. Technology and biotechnology are perhaps the most high-profile clusters here that grew from one or two anchor companies along with some academic research to thriving sectors, eventually spinning off their own start-ups. De Spot is aiming for the same to happen with green building technology.

He is working on the development of a fully fledged sustainable building cluster that is recognized worldwide, drawing in companies and institutions from a variety of areas, all sharing in common the link to green technology. It’s a bit of a branding exercise, pulling together existing companies and players as well as new participants and selling them internationally under the green building banner.

The category brings together firms that otherwise might not be linked. Companies like Ballard Power, searching for a viable commercial alternative to the fossil-fuelled engine, would fall in that broad category, along with B.C. LED lighting leader Carmanah Technologies Corp. Add to that work being done at academic institutions, by engineers and builders, and it’s a broadly based group that de Spot wants to identify under the brand.

© The Vancouver Sun 2005

Bob Ransford
Sun

A signal moment last summer in the transformation of Squamish in the popular (Lower Mainland) imagination was the gathering of windsurfers for a world-championship qualifying competition. A change in image is one of three prerequisites critical to Squamish’s accession to a community that could support both ‘a very high quality of life’ and ‘a smalltown atmosphere,’ columnist Ransford argues.

It wasn’t that long ago that Squamish didn’t even appear on the radar screen for Lower Mainland home buyers. Today the Squamish real estate market is booming as the one-time forestry town on the road to Whistler is heralded as a revitalized “people-friendly family-community” within commuting distance of Vancouver.

Just last week headlines in this newspaper talked of the launch of a 10-hectare, $100-million development in Squamish’s downtown. The private development, on a once almost worthless site owned by the district of Squamish, will bring a number of new housing types, including row townhouses, and real density to the small town’s core.

Not only will this latest development help to create a more vibrant downtown, it is one of a number of planned developments that will breathe new life into Squamish’s downtown and ensure that it survives, despite the competing commercial development that for too long has been allowed to sprawl along the Sea to Sky Highway on the outskirts of town.

Squamish is poised to become more than an alternative suburb to the sprawling Fraser Valley and more than a highway stop on the way to a four-season resort beyond. It has the potential to sustain a very high quality of life without sacrificing its small-town atmosphere.

The key to achieving this is a change in attitude, a change in image and a change in planning.

Squamish had to believe that it could see as much success as its world-class cousin Whistler. Attitudes were quick to change with the promise of the tourism boom that will come with the 2010 Winter Olympics.

Squamish had to shed its image as a one-industry town. Changes in the forest industry forced a re-positioning. While the community celebrates a still important and once vital forest industry heritage, it has found other assets to promote as well, including a new private university that will help transform the town.

But the most important element of change in Squamish has been the adoption of a long-range plan for smart growth.

Last week, Squamish district council formally approved a plan that includes a 30-year-plus vision for transforming Squamish’s downtown and waterfront .

Fourteen months of grassroots community work that went into crafting that plan and the process that facilitated that kind of community collaboration is rather unique in community planning in these parts.

It was carried out under the Smart Growth on the Ground initiative — a partnership between the Design Centre for Sustainability at the University of B.C., the Real Estate Institute of B.C. and Smart Growth B.C.

This unique partnership is assisting three B.C. communities — Maple Ridge, Squamish and Oliver — with the preparation and implementation of neighbourhood plans that are smarter and more sustainable.

The Squamish plan demonstrates how leading research can have practical ”real world” impacts with multiple community benefits. Highlights of the plan include:

– More opportunities for living, working, learning and playing in downtown Squamish, through a range of new housing types and densities and a civic-culture-education precinct.

– Encouragement of eco-industrial networking, to ensure a diverse and vibrant economy in Squamish.

– Transportation improvements, including a trail network to provide mobility options.

– A limit on building height along historic Cleveland Avenue, to maintain the historic aesthetic and to keep land prices within reach of small businesses.

This new vision of Squamish reinforces the role of the traditional downtown as the heart of activity for the community, while increasing sustainability in the entire community.

With a new, vibrant and healthy downtown, Squamish will have a new heart and a new identity.

The Smart Growth on the Ground initiative begins work with its third partner community, Oliver in the South Okanagan, with its first community meeting scheduled for Nov. 2.

Bob Ransford is a public affairs consultant with COUNTERPOINT Communications Inc. He is a former real estate developer and a director of the Urban Development Institute, Pacific region. E-mail: [email protected].

© The Vancouver Sun 2005

Ashley Ford
Province

There will simply be no stopping B.C.’s vibrant residential real-estate market in the foreseeable future, Credit Union Central BC said yesterday in its latest provincial housing forecast.

The institution’s housing reports are closely watched by all sectors of the industry and its bullish outlook may surprise some.

Central’s head economist Helmut Pastrick says the market will reach new highs over the next two years.

“Economic conditions remain positive for a further expansion in housing activity,” he said. “The main constraint on demand is higher prices, which will reduce affordability for first-time buyers.”

Despite this, Pastrick forecasts that average home prices throughout the province will rise nine per cent next year and another seven in 2007.

He sees sales rising three per cent to 109,300 units next year and another seven per cent to 117,200 in 2007. Sales are expected to be come in around 106,500 this year.

The growth will be widespread across the province, especially in resource-based towns.

And in-migration numbers will grow as well with net migration climbing 50,000 this year and increasing to 65,000 in 2007.

Patrick says there is little chance of a “bubble” market developing.

Despite rising prices, he says, homes are remain generally affordable with low interest rates. “Another consideration is that speculation is not rampant, which would result in even higher prices if it were.

“The speculation indicator is well-behaved at this time,” he adds.

Peter Simpson, chief executive officer of the Greater Vancouver Home Builders’ Association, backs the forecast. “He [Pastrick] is very seldom wrong and is highly respected,” he said yesterday.

Just back from meeting with economists in Ottawa, Simpson says there is general agreement that western Canada, and B.C. in particular, will have strong housing sectors over the next two years.

The two areas of concern relate to getting enough skilled labour and the impact future interest-rate increases might have, he says.

While there is no doubt interest rates are heading up, the increases will be gradual and are not expected to have any major impact on the Lower Mainland housing market, he added.

Of course, he said, there is always some dampening effect from higher rates but “we don’t see it as being widespread.”

Simpson says the booming renovation business is putting further pressure on labour availability forcing contractors to be very careful in planning and scheduling projects.

Both Pastrick and Simpson say the renovation sector will quicken its pace again next year. Simpson estimates renovation spending will surpass $6 billion while Pastrick is more conservative, saying it will reach $4.6 billion.

Upward swing to go through 2006 and 2007, B.C. economist predicts

Derrick Penner
Sun

CREDIT: Photo illustration Vancouver Sun, Background photo Ian Lindsay, Vancouver Sun Despite predictions of interest rate hikes, B.C.’s housing market is expect to remain robust over the next two years, according to an economist at Credit Union Central B.C.

The torrid upward swing in British Columbia‘s real estate market cycle will continue through 2006 and 2007 to become the longest rise on record, predicts Helmut Pastrick, chief economist for Credit Union Central B.C.

Defying warnings that the Bank of Canada will continue to raise interest rates in order to fight inflation, Pastrick points to a certain inexorability of demand — high migration, increasing incomes, and strong economic growth — that he predicts will outweigh the effects of higher borrowing costs.

Also, Pastrick doesn’t believe record-breaking sales and near-record new housing construction has eased B.C.’s pent-up demand for new housing, so he predicts prices will continue to rise.

In an update of his B.C. housing market forecast released Thursday, Pastrick projected total housing sales for 2006 of 109,300 units, which is yet another increase over the record the province is expected to set by the end of this year.

If that comes to pass, Pastrick noted, the upswing will surpass the boom market between 1985 and 1989.

And he has forecast total sales dramatically higher again in 2007, reaching 117,200 units.

Pastrick is also forecasting that housing starts will continue to rise, hitting 35,700 in 2006 and 38,200 in 2007, compared with his projection of 33,600 by the end of 2005.

“There’s considerable momentum already in the B.C. economy,” Pastrick said in an interview. “The domestic side of the economy, in my view, will hold up and grow, [which] also means some of the other sectors will contribute more, [such as] government spending, and we’ll see some business investment activity.”

It has been a sellers market through 2005, Pastrick said in his forecast, driven by near-record low mortgage rates, and he is forecasting that will continue into 2006 because the housing inventory — through new listings from owners willing to sell, and new construction — will remain low compared with demand.

“For brief periods, market conditions will ebb and flow around the cycle uptrend, due to short-term sales swings,” Pastrick said in his forecast.

“Overall, the market needs more supply, and the weaker the supply response, the higher the rate of housing price appreciation.”

Price increases will also be driven by rising construction costs, which Pastrick is estimating at about 10 per cent per year.

Demand, he added, will come from net population migration into B.C., which he expects will hit 50,000 by the end of the year, and climb to almost 65,000 per year by 2007.

Pastrick is predicting that growth of B.C.’s total economic output will hit 3.9 per cent by the end of this year, and rise to 4.2 per cent through 2006 and 2007, which will translate into rising employment numbers and income growth.

But interest rates are on the rise. Pastrick concurs with other economists who believe the Bank of Canada will raise its key overnight lending rate by a quarter-point to 3.25 per cent in December, and again to 3.5 per cent in January.

He added that the rise will help to squeeze some first-time buyers out of the market, but move-up buyers and investors will remain active.

“Conditions will continue to worsen [for first-time buyers] . . . partly due to higher interest, but more so due to price increases,” he added.

And Pastrick believes the Bank of Canada is due for a rest to allow the economy to adjust to a higher Canadian dollar and uncertainty over world economic growth before considering further increases.

Pastrick does not believe there is a bubble in real estate prices for markets such as the Lower Mainland and Victoria.

He said simple comparisons of house prices to rental income fail to account for the fact that the cost of home ownership is different from price.

Pastrick added that a formula that factors in expected rate of capital gain, depreciation, property taxes and risk premium as well as current prices and rent show Vancouver prices are lower than might be expected in the market.

He said there are risks to his forecast, such as the possibility of more rapidly rising interest rates. If rates go up by 1.5 percentage points, he added that he would revise his numbers downward.

Also, if global events put a dent in world economic growth, that would also affect B.C.’s economy, and therefore housing demand.

However, “prospects for the global economy are good.”

Tsur Somerville, director of the centre of urban economics at the Sauder School of Business at the University of B.C., said Pastrick’s forecast appears a bit optimistic by assuming interest rates will stay low, and that investment interest will continue to fuel the market.

For instance, Somerville has heard anecdotal reports that activity in the downtown Vancouver condominium market is starting to slow down.

He added that generally, conditions appear solid. Any economic model that could be devised would paint a rosy picture of B.C.’s housing market, with the projections of four-per-cent growth in economic output, and interest rates that, in the most pessimistic projection, will rise 1.5 percentage points over the next year.

At the same time, Somerville believes it is a lot to ask for sales in an already hot market to continue rising.

“My view of this is that things come to an end, and they come to an end for unexpected reasons, which makes forecasting a problem.”

[email protected]

GOING UP:

Sure, bank interest rates will rise in 2006, but Credit Union Central B.C. chief economist Helmut Pastrick is predicting that high population migration to B.C. and strong economic growth will be enough to outweigh any dampening of real estate sales, leading to the lreal estate market cycle’s longest upward swing.

2005 2006 2007

Residential MLS sales 106,500 109,300 117,200

Average price $329,000 $360,000 $387,000

Housing starts: total 33,600 35,700 38,200

– Single-family 13,200 12,800 12,500

– Multi-family 20,400 22,900 25,700

Rental vacancy 2.8% 2.6% 2.2%

Renovation spending $4.1 billion $4.6 billion $5.3 billion

Source: Credit Union Central B.C.

© The Vancouver Sun 2005