Sun

VANCOUVER SUN FILES The seawall along False Creek is just one of the attractions drawing people to choose a downtown lifestyle.

Eric Carlson

Trevor Boddy raises some fine issues. Unfortunately, he misses the main reason there have been few offices added to the downtown core over the last five years: Taxes!
   Commercial taxes imposed by the City of Vancouver are astronomically high, and seriously skew location decisions for businesses. My own office occupies 2,000 square metres of space on Homer Street, for 60 employees. Our annual municipal taxes have risen Peter Busby threefold over the last four years, to $108,000 a year. Imagine the outcry if residential taxes had tripled in the same period.
   We are growing, and need to move, so we are seriously considering a non-urban location. But wait: Most of our employees live downtown in condos, walk and bike to work. A number rent from condo owners who are investors, and have created a large, reasonably affordable rental housing pool. They love downtown, and don’t want to live anywhere else.
   It seems the condo boom that Boddy laments is part of a bigger picture of a vibrant urban core with housing, jobs, recreation and entertainment in a great balance. The condo boom over the last 10 years can be seen as a historic correction, people returning to live near their places of work, much as they were in Vancouver until the Second World War. Politicians and planners at City Hall have been a large part of this phenomenal success story.
   Everyone has benefited from the reduced traffic congestion, better amenities, recreation and schools.
   Now what about commercial growth — and where should it be? The downtown area is largely built out. To keep the current vibrant growth and economic wave intact, we should actively be planning a new downtown core now, in the False Creek Flats. That’s the largely empty area of land east of the Science Centre bisected by Terminal Avenue and the ugly buildings that line it.
   Boddy should address his energies, not at what has changed, but instead to spur a sweeping new vision for this area, as a high-density futuristic core for the next 100 years of Vancouver’s growth.
   Perhaps he can lobby for lower commercial taxes at the same time.
   We will soon have a new director of planning. The last ones have given us a fabulous city that captures the urban spirit of the present. Let’s hope the new director(s), have a vision.
   PETER BUSBY
   Architect
   Vancouver
   One of the most important events in our city this year will be the appointment of new chief planners to take the place of Larry Beasley and Ann McAfee who have announced their retirements. New and vigorous redirection needs to be taken, and Trevor Boddy has hit the mark.
   Beasley and McAfee have been endlessly praised in the media and by the corporate elite for their “vision.” The result of their tenure has been an array of disconcertingly similar condo towers and townhouses, which will be cursed in the future for being boring and repetitive. They’re set in the midst of our city, which seems to have forgotten that a strong economic centre of commerce and industry is vital to its welfare.
   I suspect the ardour with which this “vision” has been embraced has, in large part, rested on the irrationally exuberant increase in property/condo values instead of any thoughtful analysis of what makes cities flourish as dynamic centres of diverse activity.
   My concern is that the appointment of new chief planners will not receive the scrutiny it demands. If the appointments are made through the usual channels at city hall, few of us will know anything about it until they’re done.
   Can we rely on Mayor Sam Sullivan and Councillors Suzanne Anton, Peter Ladner et al. to grasp this incredible opportunity and find new planning leaders who will have the depth, knowledge and plain guts to set us in a new and revitalized direction? I hope so.
   But I’m very concerned that they won’t because they show little sign of either reflection or innovation — they seem stuck in the rut of convention where the rules of the past, rather than the realities of the future, apply. Witness, for example, their cavalierly spiteful direction on the Southeast False Creek lands.
   A special process for these appointments should be established and it should be open to public scrutiny and debate. As the selection is made, let’s recognize that the 2010 Olympics are not an end-goal, but rather a stepping-off opportunity. Take a look at Barcelona.
   In the 1970s, Vancouver turned its back on a Los Angeles-like maelstrom of traffic and smog, and embraced livability. We stand now on the brink of a similar moment where the beauty and setting with which we are endowed, and the livability that we have created can be carried much much further. But that will only happen if we heed the message of Boddy and others like him. I challenge Sullivan and his colleagues to let us do that.
   GEORGE STEPHENSON
   Vancouver
   For the second time in six months, I have read Trevor Boddy lambasting the residential development in downtown Vancouver over the last half decade or so.
   True, Boddy successfully demonstrates that much of the construction has been residential. Yet he erroneously asserts that the relatively low level of office development is killing downtown’s vitality.
   I have been working in downtown Vancouver since 1982. Lots of people worked downtown then. More people work downtown now.
   In 1982, downtown was dead after 6 p.m. and on Sundays. The best restaurant was the William Tell. The hip restaurant was Hy’s. The best night life was in a cinderblock discothèque called Misty’s. Robson Street was a Strauss, Coal Harbour was a rotting shipyard and the north shore of False Creek and Yaletown were rat-infested warehouse districts sitting on polluted land. And so on.
   Today the city buzzes all day, all week. It vibrates with lots of people, many who work downtown and many who live downtown. Any one of 20 restaurants could be claimed as the city’s best and there are dozens and dozens of eclectic diverse hip ones, too. There is night life everywhere, some cool, some rough — something for everyone.
   Robson Street has more buzz than 20 years ago, as does the reemerging Granville corridor. The north shore of False Creek and Yaletown are among the most vibrant downtown neighborhoods in the world, let alone North America. Coal Harbour is green, modern (not post-modern), and well-used. Just go running on the extended seawall on any lunch hour. Great city, Vancouver.
   The old world model of people living in suburbs and commuting downtown is environmentally unsustainable, inefficient and inhuman. Downtown Vancouver has never been more cosmopolitan or more vital. It is an international success story. Its planning policies are now being copied and implemented in many large North American cities including Seattle, Los Angeles, San Diego, Dallas and Phoenix.
   Residential housing construction is booming downtown because people want to live there. Office buildings aren’t booming because large corporations don’t want to be there.
   And that has little to do with zoning or planners. Rather, it’s because of commercial property taxes that are five times higher for office than for residential space, the shrinking of the average work unit afforded by the microchip, corporate consolidation that has seen Telus, Finning, West Coast Energy and MacMillan Bloedell absorbed into other companies with head offices in more business-friendly cultures and cities, and so on.
   This is all okay because city planners, thankfully, had the foresight to see that if Vancouver wasn’t going to be a world corporate headquarters city, it was at least a beautiful city with a diverse population that could be very cosmopolitan. They facilitated that by allowing residential uses on poorly utilized, transitioning downtown sites.
   As long as people want to keep moving downtown, developers will be happy to keep providing them with urban homes. As soon as businesses want to come to downtown and pay the rent to justify new construction, developers will be happy to build them an office. There will be plenty of sites in and around downtown when and if that time comes.
   I just don’t get Boddy’s assertion that reverting to the old model will somehow make Vancouver a better, more vital city. I think he is wrong. I hope city councillors and planners put his column where it belongs — the recycling bin.
   ERIC CARLSON
   President
   Anthem Properties Group
   Vancouver

Noelle Knox
USA Today

WASHINGTON — Sales of existing homes fell for the fifth month in a row in January, and consumer confidence slid to a three-month low as Americans worried about job prospects and their income potential.

Existing home sales dipped 2.8% last month to a seasonally adjusted pace of 6.56 million, down 5.2% from January last year. The news followed a government report Monday that said new-home sales dropped 5% last month to the lowest level in a year.

“The primary factor driving down the market were condos and co-ops, which fell 10.6%,” said Phillip Neuhart, an economic analyst at Wachovia. “That’s the real story here, the condo market, at least in January, was quite slow and has been trending downward since summer.”

Single-family home sales, by contrast, were off just 1.5%.

Regionally, home sales suffered most in the Northeast, falling 10%, followed by a 7.7% drop in the Midwest, and a 3.5% dip in the West. The only strong market was in the South, where sales rose 2.6%, according to the National Association of Realtors, which released the data Tuesday.

The rising number of home shoppers who aren’t buying may be in part because fewer people can afford the median-priced home. That price — half cost more, half less — was unchanged last month at $211,000, 11.6% higher than in January last year.

The inventory of homes for sale rose slightly and now stands at a 5.3-month supply.

Home shoppers’ reluctance also may be because of concerns about financial security. The Consumer Confidence Index fell in January to 101.7 from 106.8, the Conference Board said Tuesday.

The drop in home sales came despite record warm weather and cash and give-away incentives from builders. “Imagine if the weather had been terrible,” Neuhart said.

Sales of both existing and new homes set records for a fifth year in 2005, but analysts believe sales of existing homes will fall about 5% this year as rising interest rates cut into demand.

The five consecutive declines in existing home sales represented the longest stretch of weakness since a stretch of six monthly declines from July through December of 1999.

Analysts say the rising supply of unsold homes will likely slow the rapid increase in home prices of recent years. Instead of double-digit gains, Lawrence Yun, senior economist at the Realtors, said he was looking for a more moderate rise of 5% in prices this year.

The big concern has been whether the slowdown in sales would cause home prices to come crashing back to earth. But most analysts believe the housing market is headed for a slowdown but not a crash.

USA Today

WASHINGTON (AP) — Sales of new homes fell for the second time in three months in January, providing further evidence that the nation’s five-year housing boom is slowing.

The Commerce Department reported Monday that sales of new single-family homes dropped 5% to a seasonally adjusted annual rate of 1.233 million units last month.

That was a bigger drop than analysts had expected and provided support to the view that the housing market, after setting sales records for five straight years, is slowing as mortgage rates rise.

The 5% January drop in sales followed a revised 3.8% increase in December. Sales fell 7% in November.

The number of new homes available for sale at the end of January rose to a record 528,000. At the current sales pace, that represented 5.2 months’ supply — the largest inventory since November 1996.

Despite the fall in sales, the median price of a new home was up in January to $238,100, compared with $229,000 in December. The median is the point where half the homes sold for more and half for less. The January figure was the highest since an all-time high of $243,900 set in October.

Economists had expected sales to be supported last month by the warmest January in more than 100 years of record-keeping. Unusually mild weather pushed up construction of new homes and apartments 14.5% last month, the biggest increase in more than three decades.

However, the milder weather did not have the same positive effect on sales which fell in all regions of the country except the West.

The biggest decline was a 14.9% decrease in sales in the Northeast, which followed an even bigger 23% plunge in sales in December. Sales in the Midwest were down 10.8% after having risen by 21.2% in December.

Sales fell 10.3% in the South in January following a 1.2% gain in December.

Bucking the national trend, sales in the West posted an 11.3% increase in January after a 6.3% gain in December.

Statistics Canada predicts a fourth straight year of significant increases

Derrick Penner
Sun

British Columbians will spend $34 billion on new buildings, businesses and public works in 2006, according to Statistics Canada, which will make this year the fourth straight year of significant increases in investment in the economy.

The forecast is in Statistics Canada’s latest survey of public and private investment intentions, and represents a 6.5 per cent increase in investment spending from 2005.

Helmut Pastrick, chief economist for Credit Union Central B.C., believes Statistics Canada’s 2006 forecast, which he referred to in Credit Union Central’s latest Weekly Economic Briefing, could even be a bit low.

Statistics Canada forecasts that investment in building new homes will account for $11.2 billion of 2006’s overall investment intentions, an increase of five per cent from 2005.

Capital spending however, which includes non-residential construction and business purchases of machinery and equipment, are forecast to hit $22.5 billion in 2006, a 7.2-per-cent rise.

“One thing I was encouraged by is that the construction industry itself had expected to show a pretty solid gain [amounting to] a 29-per-cent increase over 2005,” Pastrick said.

“That’s the construction industry itself investing so it can increase output.”

Pastrick added that if that comes to pass, overall investment spending for 2006 could surpass the $34 billion figure when Statistics Canada makes its final report in early 2007.

Inflation, however, will factor into the overall investment numbers as labour shortages help push up construction costs. Pastrick noted that construction inflation during 2005 was in the range of six to seven per cent.

However, Keith Sashaw, president of the Vancouver Regional Construction Association, said the rising forecast for investment spending is not just the result of inflation.

“I think the survey would indicate an increasing expectation of more capital projects being undertaken,” he said.

Sashaw noted that the latest edition of the provincial government’s Major Projects Inventory counted some $83 billion in major capital projects being planned between now and about 2011. He added that some $34 billion of those are listed as being currently under construction.

“Certainly [Statistics Canada’s forecast] seems to be consistent with everything we’re hearing,” Sashaw said. “It is a robust time in the economy for B.C.”

In his weekly briefing, Pastrick noted that some of the expectations for rising investment spending are driven by public-sector initiatives, such as the provincial government’s own capital spending plan.

Pastrick added that construction of commercial and industrial buildings is expected to increase, and some of the investment spending will be made to advance “engineering projects,” such as the Canada Line and provincial highways.

However, Pastrick noted that a couple of industries that have been hot lately are expected to see surprising declines.

Statistics Canada projects that B.C.’s hot mining and oil and gas extraction sectors will see a 13 per cent drop in investment spending in 2006, and manufacturing will see a seven per cent decline.

© The Vancouver Sun 2006

RENO: This rickety rooming house is fabulous again

Jeani Read
Province

Curved window in the living room is the ideal spot for a mini music area. Photograph by : Wayne Leidenfrost, The Province

Fireplace after the reno above and before below. Photograph by : Wayne Leidenfrost, The Province

Fireplace after the reno above and before below. Photograph by : Wayne Leidenfrost, The Province

The dining room (below) was far from the red-and-gold inviting space it is now (right). Photograph by : Wayne Leidenfrost, The Province

The dining room (below) was far from the red-and-gold inviting space it is now (right). Photograph by : Wayne Leidenfrost, The Province

Below right newly created built-in shelving is identical to the original. Photograph by : Wayne Leidenfrost, The Province

Buying an older home and renovating is one option people take to attempt to avoid the skyrocketing costs of new housing.

Of course, not everyone can buy a Shaughnessy mansion, but this great reno couldn’t help but catch our eye.

The beautiful home, which turns 90 this year, was more of a wreck than the owners imagined when they called Ralph Belisle of TQ Construction to do the work. “I sometimes wondered why (it) was still standing,” he says.

Constant renos over the years had compromised structure and finishings. By the 1990s it was a rickety rooming house. The original huge structural beams in the roof had rotted, been replaced inadequately and rotted once more; the bedroom level was full of unnecessary rooming-house bathrooms; and the main floor was not even a shadow of its former grandeur. Within 18 months, however, it was a beautifully restored gem.

“The owners were very careful and conscientious,” says Belisle. “Their first priority was to the structure, which may not sound very glamorous. But if your work is dictated by the structure, the decor will follow. If you just go for a ‘beautiful’ home without adherence to the basics, it doesn’t always work out the way you hoped.”

Some of the work Belisle and architect Jonathan Ehling did is shown here.

LIVING ROOM

– The living room had been broken up into two smaller rooms. When a two-piece powder room was added near the entrance in the 1980s, it interrupted the crown and baseboard moulding, plumbing, electrical and duct work. Belisle’s crew moved the powder room to a more central location, and re-located fancy double-pocket doors for a grand entry. They removed walls to restore the living room to its original size, and re-created the crown and base moulding.

– The flooring was all different, at different levels. The hardwood now is oak with a honey finish; the entry marble.

– Gas fireplaces that had been installed were removed and original wood-burning fireplaces replaced with gas. The original mantle design was re-created in natural wood with contemporary lighter stain and slate treatment.

DINING ROOM

– Badly maintained wood floor was repaired and refinished.

– Mouldings were re-built. Newly created built-in shelving is identical to the original.

– Some windows throughout the house had been replaced. They were in bad shape but the originals were in good condition. The replacement windows were replaced and the originals kept.

© The Vancouver Province 2006

Long look needed at short-term solution

Wendy McLellan
Province

Together with his wife, Patricia, former retirement planner Konni Bernaschek is a member of the Canadian Association for the Fifty Plus. Photograph by : Nick Procaylo, The Province

The ads are seductive: Unlock the equity in your home. Access tax-free cash to supplement your income. Stay in your own home and don’t make payments until you move.

Reverse mortgages offer everything the TV ads promise, but advocates and financial planners worry seniors don’t have enough information about what they’re getting into when they sign the loan papers.

In Canada, reverse mortgages have been available to seniors for 20 years and the business is growing as steadily as the aging population and property values.

A reverse mortgage advances up to 40 per cent of a home’s value and requires no monthly payments. The interest, which is calculated semi-annually, is added to the mortgage balance every year.

Instead of paying down the mortgage, homeowners can allow the balance to increase every year as the interest compounds. The mortgage continues to grow until the homeowner, or the estate, sells the property, at which time the loan is paid off.

In Canada, only one national company, Canadian Home Income Plan, or CHIP, sells reverse mortgages. CHIP, a wholly owned subsidiary of the publicly traded Home Equity Income Trust, sells the loans directly as well as through mortgage brokers and by referral from financial institutions. The current interest rate for a three-year term is 8.6 per cent.

According to CHIP’s financial statements, the reverse-mortgage business is growing by about 10 per cent a year in Canada. At the end of 2004, the company reported $472.3 million in outstanding mortgages, an increase of almost $37 million from the beginning of the year.

At the end of September last year, the company said it held $520 million in mortgages, about 25 per cent registered against B.C. homes. The company advances 250 to 300 mortgages a year in B.C.

It’s the compounding interest on reverse loans that worries advocates and financial planners.

“Reverse mortgages are just a short-term solution and I’ve yet to see one that made sense,” said Scott Hannah, executive director of the non-profit Credit Counselling Society.

“The interest keeps compounding, and if you live 20 more years, you get to stay in your house, but you can’t leave because you could be walking away with nothing.”

He said seniors who are accumulating debt might see reverse mortgages as the perfect solution but, before signing up for a loan, they should get a firm grip on expenses and discuss their options with family and a financial advisor.

“People don’t look at all the implications, and they don’t think long-term.”

Cathie Hurlburt, a registered financial planner with the Vancouver-based Integrated Planning Group, said some of her clients signed up for a reverse mortgage because they wanted to stay in the family home but couldn’t afford the upkeep on their income.

But, after five years of watching the mortgage increase, the couple asked Hurlburt for help.

“The mortgage allowed them to stay in the house, but in the end, he was 80 years old and so distraught about how much he owed it was driving him out of his mind,” she said.

“And they were still spending a lot of money on the house. They didn’t understand that having no debt payment wouldn’t solve the problem — they were living a fantasy.”

Hurlburt advised them to sell the home, downsize their living arrangements and put their remaining home equity into investments.

With a little more financial planning, she said, the couple is far happier, even though they had to move.

Konni Bernaschek, a local member of the Canadian Association for the Fifty Plus (CARP) and a former retirement planning counsellor, said reverse mortgages are useful for a select few.

“I believe reverse mortgages are a form of assistance that is a last resort for someone who has no other financial means and wants to stay in their home until the very end,” said the Coquitlam resident. “In this regard, they are useful. But people need total, full disclosure to know what they are getting into.

“With our aging population, there will be a much larger group on fixed incomes, and reverse mortgages could experience exponential growth. We need to be sure the product is well evaluated and regulated.”

A report released this month by the Vancouver-based Canadian Centre for Elder Law Studies recommends the province develop regulations specifically for reverse mortgages, with improved disclosure statements and a 10-day cooling-off period so people have more time to consider their decision.

“We have a number of concerns,” said Kevin Zakreski, a staff lawyer for the law studies centre. “This is not a type of loan people are familiar with — it’s not like a traditional mortgage, it’s a rising-debt loan.”

The centre suggests B.C. follow Manitoba’s lead and develop specific legislation for reverse mortgages.

But CHIP president and CEO Steven Ranson said borrowers receive disclosure statements and the company requires everyone to get independent legal advice before the money is advanced.

CHIP is regulated under B.C.’s Mortgage Brokers Act, which includes a 48-hour cooling-off period for borrowers. The legislation also requires a disclosure statement, but advocates say the document is geared to traditional mortgages and doesn’t clearly explain the rising debt aspect of reverse mortgages.

Ranson said setting up a reverse mortgage takes an average of 30 days, so a longer cooling-off period is not needed.

“We are completely in favour of disclosure and more disclosure, but we don’t see the need for more legislation,” Ranson said. “This is really unnecessary.

“To us, there is already regulation of reverse mortgages in B.C.”

© The Vancouver Province 2006