Bob Ransford
Sun

Are buyers willing to pay a premium for a new home if they know that they can live an eco-friendly lifestyle in a home that is energy-efficient and incorporates up-to-the-minute design thinking on sustainable development?

It seems strange to even suggest that someone would pay a premium price for a new home in a market that is setting records for housing prices.

But there is a growing awareness in the western world about the causes and consequences of rapid climate change. Recent fossil fuel price increases are also awakening those who hadn’t previously thought about energy consumption.

I know the one-dollar-per-litre threshold in the price of gas, combined with another increase in my monthly rental rate for a downtown parking spot was my breaking point, turning me into a part-time transit commuter.

SFU’s UniverCity development head Michael Geller jokingly reminded me recently how our attitudes have changed over the years.

He was explaining to me the details of their VanCity Community Transit Pass that allows Burnaby Mountain’s UniverCity residents to purchase an annual transit pass at a substantial discount, as part of UniverCity’s sustainability efforts. Geller, a long-time housing developer, recalled that not many years ago he rode a transit bus only when his car was in the repair shop.

On that odd occasion he would raise his voice when he boarded the bus to ask the driver the price of the fare just so that commuters in earshot wouldn’t mistake him for a regular transit user. Now we swap stories about our experiences riding the bus.

In a community where a home near good schools is more important than being ecologically responsible, home buyers were willing to pay a slight premium to live in a development that went about as far as you can go in incorporating green building technology. That is according to architect and project manager Clair Bennie, who was in town from England last week to present an honest overview of the BedZED project – Beddington Zero Energy Development–in the London suburb of Sutton.

BedZED can legitimately call itself unique.

While there are a number of one-off multi-family residential projects based on sound environmental principles in various corners of the world, BedZED is probably the first housing development of its scale to try to incorporate so many green building and sustainable development principles into its design. That design also deliberately influenced the way BedZED’s owners and rental tenants live in the 100-unit development to this day.

Bennie, speaking at a conference on innovative housing hosted by Smart Growth BC, explained that BedZED incorporates everything from green roofs to a co-op network of electric cars charged with the power from photovoltaic cells installed atop the apartment units. Homes are heated with a common boiler fueled by wood waste and brown water and roof runoff was supposed to be recycled for use as toilet flushing water and for site irrigation.

Many of the green features worked and others were a disaster both financially and the way they operated or failed to operate, according to Bennie. For example, the brown water recycling system failed when the quality of the water was declared unacceptable after it as realized the roof runoff filtered through chicken manure in the green roof’s substrate.

However green sells, according to Bennie. She estimates that BedZED homeowners paid a 2 percent premium for their homes and the popular “green” dwellings sold quickly, faster than normal new homes sell.

But Bennie also deflated the dreams of some of those who look at green living as though it were some philosophically based utopia when she confirmed that the green measures added between 15 and 17 per cent to the cost of building the BedZED homes.

That gap between the cost of building in a smarter and more ecologically responsible way and the premium home buyers are willing to pay is therefore around 13 to 15 per cent–one that may seem huge in absolute dollars but one that is also miniscule compared to the price increases we have seen in overall housing costs over the last decade.

This gap can also be closed by heeding Bennie’s advice which basically boiled down to avoiding the urge to incorporate every single green building and sustainable development principle into every development. She advised on taking incremental steps in designing buildings and communities more responsibly.

If we can move the ball part way down the field and at the same time close the gap between what people will pay to live more responsibly in their homes and what it costs to build more innovative and smarter housing then we will achieve something.

Bob Ransford is a public affairs consultant with COUNTERPOINT Communications Inc. He is a former real estate developer who specializes in urban land use issues. Email: [email protected]

© The Vancouver Sun 2006

New reality means people moving here are likely to buy apartments

Derrick Penner
Sun

VANCOUVER SUN FILES With prices of houses out of reach for most people, a fast-increasing number are now looking for condos, figures suggest.

Call it home hunting, not house hunting. Potential buyers in Greater Vancouver’s real estate markets are increasingly giving up on dreams of a white picket fence and settling for townhouses or condominiums.

Builders in the region already build townhome and condominium units at a rate of almost three to each single-family home. And multi-family projects dominate overall real estate sales.

Re/Max, in its first-quarter 2006 condominium market report, found that more and more buyers are gravitating toward apartments and townhouses, citing sticker shock as the key reason.

Re/Max tracked 4,274 condominium sales in Greater Vancouver during the first three months of the year, a total that is up three per cent from sales for the same period of 2005.

Burnaby realtor Roland Tecson, with Sutton Group Priority Realty, has seen buyers go through that sticker shock. He is currently working with a family from Ontario who have had to shift their sights away from the house they gave up in their move.

“They’re coming from a nice three- or four-bedroom home in a nice suburb, and they’re coming here to find they’re looking at townhouses, at best, in [the same] price range,” Tecson said.

Tecson added that while incomes in Greater Vancouver have not gone up that much, housing prices have doubled within the past five years.

“People cannot get into the house they dream of,” Tecson said.

Vancouver realtor Raymond Leung, with Amex Fraseridge Realty, said that almost every other day he gets a call from someone who asks about housing prices, “and when they find out . . . they hang up.”

He added that the market has never been hotter, but buyers have become accustomed to the fact that only apartments are affordable now.

Ahmet Kadioglu, a realtor with Royal Pacific Realty in Vancouver, said he has had similar experiences with clients who have sold homes in Windsor or London, Ont., only to move into apartments here.

However, he added that he deals with a lot of international clients, “and for them, Canada is still a bargain, though it isn’t for us.”

Peter Simpson, CEO of the Greater Vancouver Home Builder’s Association, said new buyers are acclimatized to the new reality. He noted that at the association’s annual seminars to educate first-time buyers, the majority of attendees surveyed say they expect to buy a townhouse or apartment.

That is a sea change from when the association first started and the majority said they were looking for a house.

Simpson said prices for Greater Vancouver’s limited land base are rising, and construction costs are going up, leaving builders no option but to “carve up that land into smaller pieces” to deliver affordable housing.

However, the trend toward condominiums is no longer unique to Vancouver. Elton Ash, Re/Max’s executive vice-president for western Canada, said markets such as Victoria and Kelowna are also seeing more condo sales.

And in Edmonton and Calgary, the number of buyers snapping up multi-family units skyrocketed in the first quarter of 2006 about 40 per cent over the same period of 2005.

Ash said Re/Max realtors are seeing larger numbers of lifestyle buyers, such as baby-boomers and retirees, looking for low-maintenance property.

First-time buyers, however, are having to stretch budgets, despite low interest rates and long amortizations, and are discovering that condominiums are “the easy answer.”

“Affordability is one of the key issues we’re seeing, and that’s what’s driving a large part of the condominium market,” Ash said.

© The Vancouver Sun 2006

Michael Harris
Other

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New home construction likely to peak this year, the federal agency says

Derrick Penner
Sun

Lower Mainland real estate markets should hit new record levels for sales this year before waning slightly in 2007 due to declining affordability factors, Canada Mortgage and Housing Corp. said Wednesday.

CMHC analyst Cameron Muir also expects Lower Mainland new home construction to hit the peak of it’s cycle in 2006, though he believes a decline in housing starts in 2007 will be mainly because builders once again will have trouble keeping up

However, Muir’s forecast doesn’t see the inventories of both new-home and resale housing rising enough to give home buyers any relief from rising prices.

“We’re in the midst of a strong economic-growth cycle,” Muir said. “So job growth, wage increases and migration are pretty solid underpinnings to the housing market.

“The only fundamental that is not in place, or eroding, is affordability.”

Muir expects the average single-family-home price to rise 12 per cent this year to $685,000, and another seven per cent in 2007 to hit $730,000. Condominiums are forecast to rise 10 per cent to $360,000 this year, and another 10 per cent to $400,000 next.

Muir said those prices, combined with moderately rising interest rates will keep more buyers away from the market starting next year.

CMHC, on Wednesday, released revised forecasts for new housing construction for all markets nationwide. CMHC predicts that all of British Columbia will counter the trend of its national forecast, which calls for a tapering off to 222,000, compared with 225,481 in 2005.

Muir’s forecast for Lower Mainland is for real estate resales to hit 60,700 in 2006, 2.6 per cent higher than the region’s 2005 high. In 2007, however, he expects to see a three-per-cent decline in sales to 59,000 units.

He has forecast that housing starts this year will ramp up by eight per cent over 2005 to a peak of 20,500, the third highest number on record.

Muir said builders have managed to overcome bottlenecks in production that held them up last year: labour shortages, a lack of building lots and slow municipal approvals for development.

In 2007, however, Muir believes contractors will hit another choke point in production.

CMHC regional economist Carol Frketich is also predicting a peak for all new-home construction in B.C. this year at 37,000 units. In 2007, she expects starts to drop to 34,900 units and decline again to 33,200 in 2008.

“A combination of rising prices and rising interest rates is going to slow things down,” Frketich said, though not as much as declines experienced in previous market cycles.

Other analysts, however, are more skeptical about B.C.’s ability to keep generating high increases in housing and real estate sales.

“Residential construction will remain at very strong levels, there’s no doubt about that,” Sebastien Lavoie, economist with TD Bank Financial, said. “But we won’t see the growth we’ve seen in the past few years.”

Lavoie said B.C. is “bucking the trend of what we see in Atlantic and central Canada.” However, he believes the combination of the province’s skyrocketing prices and higher interest rates will lead to “an ease on demand” that could take hold later in the year.

He added that Vancouver is still one of the markets TD Bank believes is in most danger of a major correction because price increases are outpacing wage raises and the potential income from property.

© The Vancouver Sun 2006

Wendy McLellan
Province

Warranty experts James Christensen (left) and Greg Stolz have put it all the answers together in a custom-made binder. JON MURRAY — THE PROVINCE

When you buy a new vehicle, you know where to find the warranty and the maintenance manual. If something goes wrong in a year or two, it’s easy to figure out who to call.

New homes are a little more tricky. There are dozens of components and stacks of different warranties and maintenance requirements that new-home buyers most likely find in a kitchen drawer or stuffed in a brown envelope.

A couple of local entrepreneurs saw an opportunity in the kitchen-drawer system and developed a program so builders can provide new-home buyers with the same service they would get if they were buying a new car.

“When you buy a new home, there are so many components and products and they all have different warranties and maintenance requirements,” said Greg Stolz, president of Vancouver-based CONASYS Inc.

“Builders give homeowners information about their new house, but there is no standardized way to do it. It doesn’t even occur to homeowners that every product in their home has a warranty.”

Stolz came up with the idea to develop a system, called Warranty Resource homeowner packages, to organize new-home information for builders and help homeowners at the same time.

Stolz and his business partner, James Christensen, have developed a database to collect warranty information on every product used in a new home, then build a custom-made binder that builders can give their customers.

The binders provide maintenance, installation and operating instructions for everything, including the kitchen sink. Each product and its warranty information is listed, along with the manufacturer, supplier, installer and even colour and style details so homeowners can track down replacements years later.

Later this year, the company plans to offer the same information online as well as a “maintenance alert” system to help homeowners keep up with warranty requirements. The service costs builders a minimum $450 per home.

“It’s something we should do ourselves, but we’re too busy,” said Victoria homebuilder Chris Ricketts, who signed up for the service last fall.

“They have the time to do the research, and it gives people information about every system in the house. It makes it easy for homeowners.”

© The Vancouver Province 2006

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Buying boom means a ‘problem’ property can easily be fixed and resold

William Boei
Sun

PETER BATTISTONI/VANCOUVER SUN Leaky condos, such as the one (left centre) visible under green and white tarps downtown, are not necessarily money-losers for owners who have the necessary repairs made before putting the unit up for sale, but researcher Nancy Bain says there can be abuses in which leak problems are not fixed and an owner fails to disclose a property’s troubled past to an unwary buyer.

Source: Homeowner Protection Office VANCOUVER SUN

If B.C.’s leaky condo disaster has a silver lining, it’s the province’s hot housing market.

Prices are rising so fast that once a leaky condo is properly repaired, its market value can easily increase by the cost of repairs and more within a few years.

Owners who buy leakers, see them through the repairs and then sell may well come out with a profit.

In fact, says researcher Nancy Bain, that has been suggested as a viable investment strategy: Buy leaky condos cheap in buildings whose strata councils are willing to come to grips with the problem, get the repairs done and sell into a rising market.

The fast-moving housing market is also a reason for cautious shopping: Some leaky condo owners, especially in buildings whose strata corporations can’t agree on a repair strategy, are putting up for-sale signs and bailing out, sometimes without disclosing the problems.

Buyers are often caught by surprise, says Bain, who wrote a research paper on disclosure for Canada Mortgage and Housing. She interviewed 40 condo owners who had unknowingly bought leakers and found that all too often the previous owners knew there were problems but failed to disclose them.

“There are numerous cases where the buyer was not aware of material facts prior to the purchase,” her research paper said.

Bain found property disclosure statements that are supposed to reveal such problems sometimes said there had been no water damage when there had. Strata council minutes were sometimes drafted so as to “not reveal the true condition of the building.” Even home inspectors’ reports were sometimes “couched in soft language” that might raise red flags for knowledgeable people but would not necessarily be noticed by typical homebuyers.

Bain said in an interview she is certain leaky condos are still being sold without disclosure. James Balderson of the Coalition of Leaky Condo Owners agreed.

“Yes, he said, “minutes are sanitized, pages are missing.”

The condo crisis generally occurred for buildings built between the early 1980s to the late ’90s. Since then, condo design and construction has improved dramatically.

Buildings that continue to have issues with leaking have, for the most part, either taken time to show problems or have strata councils that have not taken appropriate action.

Some strata councils make cosmetic repairs and then claim the problem has been fixed, even though engineering studies call for major work. Some buyers have been told a building has been retrofitted with rainscreen technology when no such work has been done, Balderson said.

But it’s a forgiving market, for now.

“As long as the market is hot and fast, when people make ‘a buying error’ they will just resell it,” Bain said. “It will be when the market stops that it all comes to light.”

There doesn’t appear to be any agency keeping track of failure to disclose.

The Better Business Bureau says it refers complaint calls to the provincial government’s Homeowner Protection Office. HPO chief executive Ken Cameron says he doesn’t recall seeing any such complaints. The Real Estate Council of B.C.’s records show only one case in recent years of a real estate agent disciplined for failing to disclose the state of a leaky building.

Bain advises homebuyers to do their homework — ask for all the relevant documents such as strata meeting minutes and engineering reports, study them carefully, ask a lot of questions and do not commit to a purchase until they are answered.

She concedes that research takes time and that in this market, by the time you’ve got your answers the place may well have been sold to someone else. “So you have to weigh off the risk-reward thing.”

One strategy is to do exhaustive research on a building where a condo is for sale and not worry about whether anyone else gets there first. If you find the building has no problems or that it had problems that have been properly dealt with, wait for the next listing in the building. You’ll be able to move fast and safely.

Be very wary of buying in a building where the owners are arguing with each other about how serious the leaks are and what level of repair is needed.

In almost every leaky building, there are owners who refuse to believe the problem is serious enough to warrant spending big money on studies and repairs. When the skeptics are in the majority or when the strata corporation is deadlocked, no repairs are done and the rot only gets worse.

What must be the worst-case scenario is being played out in a building in Vancouver’s West End, where an investor who was renting his unit out found it was leaking and asked the strata council to fix the leak.

That was in 1997. Nine years later, his suite remains uninhabitable and the building envelope has not been repaired, although a number of suites have had individual repairs and some have been sold.

Owners have been suing and counter-suing each other and the strata council, some claiming the council authorizes cosmetic repairs for its friends’ condos and refuses them for dissenters.

Balderson said dissident condo owners in the building are just now getting close to obtaining a court order to force the strata council to undertake building envelope repairs.

The West End building “isn’t an isolated example,” said Bain, a former member of the Real Estate Council of B.C. “So much money goes into acrimony. The community that people have is ruined, and the repair still doesn’t get done.”

The HPO stresses that it’s caveat emptor — buyer beware.

“It is ultimately the consumers’ responsibility to make sure they’re protected, that they take advantage of the protection that’s available to them,” Cameron said.

“No system is perfect, but the system that we have, combined with a diligent consumer who knows their rights, catches as far as we can see most of the problems.”

There is also an element of “seller beware,” said Pierre Gallant, an architect with the Vancouver office of building engineers Morrison Hershfield.

“Many have been successfully sued for misrepresentation,” said Gallant, who has been an expert witness in a number of suits where sellers got caught failing to disclose.

There is some good news: The newer the building, the better the chances are that it has been competently designed and built, and the lower the risk that it will rot.

Cameron says much has been done since the 1990s to improve condo construction.

A robust warranty program backed by major insurance companies has replaced a wobbly building-industry-run warranty scheme that collapsed in the 1990s under the weight of leaky-condo claims.

Home builders and remediators have to be licensed now, as do strata management companies. The provincial government is expected to approve more demanding education requirements soon for residential builders.

Architects, engineers and others have been working since the early 1990s to develop better “building science,” and have produced best-practices guides which, if followed, should prevent most of the problems that led to the leaky condo disaster.

“The housing industry has gone from a crisis to an economic powerhouse,” Cameron said. “Consumer confidence has rebounded, and 135,000 homes have been built with the new home warranty insurance system by licensed residential builders.”

Peter Simpson, chief executive officer of the Greater Vancouver Home Builders’ Association, says the number of new warrantied homes is up to 143,000 now.

The HPO operates a no-interest loan program that has so far doled out nearly $550 million to cover repairs on more than 14,000 leaky condo and co-op units. The province has also forgiven provincial sales taxes of more than $16 million on leaky condo repairs.

Cameron said: “I think it’s quite remarkable how much of a corner we’ve turned in helping those who were stuck with a problem not of their own making, but also the preventative measures of a licensing system and warranty insurance for new construction.”

Most of the new warranties cover labour and materials for two years, the building envelope for five years and major structural defects for 10 years.

There is an option to cover the building envelope for 10 years, but few insurance companies offer it. That worries consumer advocates who point out that in the 1980s and ’90s, leak and rot problems often didn’t surface in the first five years, especially on highrises.

Tom Reeves, a former HPO official who is now director of home warranty operations for Lombard General Insurance Co. of Canada, responds that leaky buildings may not experience “major failure” within five years, but any leaks should be apparent within that time, as long as strata councils and their management companies do proper maintenance and inspections.

Reeves said Lombard, which is new in the home warranty business in B.C., “obviously feels that construction quality in British Columbia is excellent, or we wouldn’t be writing this product.”

His company takes painstaking steps to make sure projects it insures are well-built, he added.

“On a larger project, we’ll review the team, anything from the building envelope consultant to mechanical systems to the architect and the engineers, all those things.”

The technical skills on the project are scrutinized, including the qualifications of the construction trades. “We’ll review plans, details and materials, We’ll review the business plan. All of that occurs at the beginning of the project. During construction, it includes inspections and reviews of inspection reports.”

Asked if consumers can be confident in new B.C. homes, Reeves said they now come with “the strongest defect warranty in Canada for new homes.”

Simpson said HPO surveys show 91 per cent of new home buyers now are satisfied with the quality of what they’re buying.

In Greater Vancouver, where single family homes are rapidly becoming unaffordable for many buyers, more than three-quarters of new homes are in multi-unit developments. Simpson said consumers are not hesitating to buy into them.

“They’re selling out well before they’re even built,” he said. “They’re getting built as they should be built, and they’re being designed more with our West Coast climate in mind.”

Gallant adds: “We build buildings differently than we used to in the ’80s. We have building envelope specialists, we now typically use rain screen, we go beyond the minimum standards of the code in most applications, save the exception of family homes.”

The HPO is trying to get a grip on the single-family-home-building business, which includes many small operators who escape regulation by claiming to be builder-owners, but actually sell everything they build.

“There’s better checks and balances throughout the industry to avoid the mishap of the ’80s,” Gallant said.

“We still see it with some of our projects, immense pressure to hurry and cut corners. That’s human nature; that’s not going to change,” he said, adding that even though the rush to get product to market was a hallmark of the earlier building boom, he does not expect the same problems to occur.

“It’s not built the same, it’s not designed the same and it’s reviewed more often by more people during construction.”

Nevertheless, there will be individual failures and the industry can’t let its guard down, Gallant said.

“In a boom economy is when building failure rates increase, so we must be vigilant.”

Home-buyer advocate Carmen Maretic remains skeptical, saying the building industry is known to have skills shortages and “if you build it wrong, it will fail.”

She is also concerned that when a home warranty provider declines a claim, home owners have no recourse short of hiring a lawyer and starting a legal battle with an organization whose resources are far greater than theirs.

An independent adjudication system like that used by the Insurance Corp. of B.C. might plug that gap, Maretic said.

Louise Murray, who runs the bccondos.ca advocacy website, said the provincial government should be much more active in policing the Strata Property Act.

“Given the spectacular and ongoing failure of multi-unit housing here, how can this province even consider the rampant condo development now everywhere you look, without providing any recourse for conflicted owners?” she asked.

She said a condo equivalent of the province’s Residential Tenancy Office, which provides landlords and tenants with information and offers dispute resolution services, is urgently needed.

Balderson agreed the home-building industry’s performance has improved, but said that happened in large part because so many building professionals, developers and contractors were sued by thousands of unhappy condo owners.

“All that litigation served as a spur to improving the industry,” he said.

© The Vancouver Sun 2006

Hundreds of thousands of British Columbia homeowners have been affected over the years

William Boei
Sun

PETER BATTISTONI/VANCOUVER SUN Tens of thousands of condo units built during the B.C. building boom of the mid-1980s to the late 1990s suffered water damage as wind-driven rain entered the walls of buildings.

Source: Homeowner Protection Office VANCOUVER SUN Leaky condo loans

B.C.’s leaky condo disaster is entering its third decade. The worst of it is behind us but it is far from over and we are not nearly finished paying for it, or arguing about who is to blame.

The human cost of the disaster is not measurable. Hundreds of thousands of British Columbians have been touched by it.

For some, it was no more than a financial inconvenience. Their homes leaked, and they paid to repair to them.

Others, especially in the 1990s, lost their homes, their savings and their health.

Tens of thousands of condo units built during the B.C. building boom of the mid-1980s to the late 1990s suffered water damage as wind-driven rain entered the walls of badly designed, badly built buildings.

The home building industry’s warranty program collapsed under the weight of the claims, and many homeowners got little or nothing back. They included older couples who intended to spend their golden years in a low-maintenance condo and young families buying their first homes.

In the worst cases, the walls leaked so badly homes were all but flooded. Wet carpets sprouted mushrooms. Moulds, some of them toxic, stained the walls, making some people sick. And the walls rotted.

Some condo owners walked away from their mortgages and their homes. Some slipped into bankruptcy. Some developed respiratory and stress-related illnesses.

There was no government help until the end of the 1990s following two public inquiries, when the province set up its Homeowner Protection Office and offered condo owners interest-free repair loans.

The financial cost of leaky condos is measurable, but only parts of it are being measured.

We do know that the average cost of repairing water-damaged condos has nearly doubled since the Homeowner Protection Office was created. Some figures indicate it has more than tripled.

Government and industry sources agree the cost is going up because:

 More and more concrete highrise condo owners are discovering leaks, and they’re more expensive to fix than low-rises;

 Low-rise buildings whose owners have put off repairs — sometimes for years — or tried to cover up the problem with cosmetic fixes are coming up for repairs with more advanced rot than buildings that were dealt with early;

 Construction costs are rising fast as B.C. rides another major building boom.

One indicator of per-unit repair costs is the interest-free repair loans provided by the HPO.

“The average value of the loans has been going up quite significantly,” said HPO chief executive Ken Cameron, “so it’s now in the $60,000-to-$75,000 per unit range, whereas it used to be in the $35,000-to-$40,000 range.”

The number of low-rise buildings turning up with building envelope problems is past its peak, but a second wave of leaky condos — concrete highrise buildings — is well under way.

“It’s not over,” said Carmen Maretic, a real estate agent who has been advocating for leaky condo owners for years. “It’s very much still a problem.

“People are still dealing with the whole process of evaluating their buildings and going through whether a majority of owners can agree to do repairs.”

Maretic, who heads the CASH (Consumer Advocacy and Support for Homeowners) Society, said HPO statistics show that in the last eight months, the HPO approved nearly $139,000 per day in repair loans.

“As shocking as these costs are, this only represents a portion of the true repair costs as many homeowners do not qualify for HPO no-interest or deferred loans,” Maretic said.

Her figures indicate the average loan has more than tripled, from $19,733 as of March 2000 to nearly $60,500 in the last eight months.

Maretic called on the provincial government to provide more help for leaky condo owners and press the federal government to kick in more money.

Ottawa kicked in about $28 million early on for the HPO interest-free loans fund, but serious negotiations for a larger federal contribution petered out years ago.

One highrise after another, along the New Westminster waterfront, on the North Shore, in downtown Vancouver and elsewhere in Greater Vancouver, is getting its walls stripped down to concrete, scaffolding erected to roof level and green shrouds draped over the building to keep the rain out during repairs.

Advocates like Maretic and James Balderson of the Coalition of Leaky Condo Owners are keenly aware of them, engineers like Pierre Gallant of Morrison Hershfield who oversee the repairs say they’re seeing more leaky highrises relative to low-rises, and the HPO’s Cameron acknowledges there are proportionally more highrises joining the lists of leaky buildings.

On virtually all of them, the outer cladding — usually “face seal” systems attached to the concrete walls with steel studs — has failed to keep the rain out. The fix is to strip off the cladding and replace it with rain-screen wall systems that include a cavity between inner and outer wall components to let any water that gets in drain out again.

Leaky highrises were predicted in the late 1990s by Dave Ricketts of RDH Building Engineering, among others.

“It would be surprising if these buildings did not leak,” Ricketts wrote in the engineering journal Innovation in 1999. “The key difference is the time it takes for the problems to manifest themselves and create a health and safety hazard.”

Gallant agreed. It takes longer for highrises to show problems because, simply, “wood rots faster than steel rusts,” he said.

A face-seal wall “relies on perfection” to keep the rain out, “and therefore fails.”

Low-rises with face-seal walls often leaked in spots where doors, windows, balconies and other features are attached to the walls, and the joints are imperfectly sealed, especially on the upper floors, which are more exposed to rain and wind.

“The exposure on highrises is much higher because the wind exposure is far greater. But the materials are more robust and take longer to decay, typically,” Gallant said.

A few highrises have failed catastrophically: Sections of cladding have let go and plunged to the ground. But most of them just show the same symptoms as leaky highrises — water inside the windows, wet spots and mould on the walls.

Highrise or lowrise, the expert advice is that the longer you put off repairing a leaky building, the more expensive it will be.

Yet there are still dozens if not hundreds of low-rise wood-frame buildings where the owners haven’t realized their walls are rotting, or are refusing to acknowledge the problem, or have tried cosmetic fixes when major repairs are needed, or are deadlocked with their neighbours over whether and how much to spend on repairs.

Many strata councils are pursuing slow-moving lawsuits, trying to recover at least some of their repair costs from developers, contractors, architects, engineers, window manufacturers, municipal governments — anyone connected with their leaky buildings with deep enough pockets to sue.

Most of the suits are settled through mediation and with non-disclosure agreements attached, so there is no public record of the average settlement. But lawyers say strata councils typically get 40 to 60 cents back for every dollar they spend on repairs.

For those who can’t reach a consensus, or can’t muster the resources to get through the daunting process of hiring technical and legal expertise to assess the damage, finance the repairs and recover at least some of the cost, it’s an unending nightmare.

“The longer you wait, the more the damage,” said Gallant. “And the cost is going to be higher not only because there’s more damage, but because construction costs are going up. So putting your head in the sand is not going to solve the problem.”

“Many people are still suffering,” Maretic added, “particularly those that went into bankruptcy and those that have health consequences.”

After all these years, no one can yet say with any certainty just how big the problem is.

There are no solid statistics for the number of leaky condos or how much it is costing to fix them, although the HPO is sticking with a five-year-old estimate that about 65,000 condo and co-op units have suffered water damage and the total repair bill will be about $1.5 billion.

But there is no registry of leaky condos, no comprehensive list, no certainty about how many buildings have been touched by the rot.

“No one knows the extent of B.C.’s leaky condo crisis,” said Louise Murray, who operates the bccondos.ca advocacy website, “because, unbelievably at this late stage in the game, no one is tracking it.”

It is guesswork whether the HPO’s loan statistics reflect actual repair costs.

Only those who can show they don’t have the assets and income to shoulder the cost of repairs, and are prepared to follow the HPO’s repair guidelines, are eligible for the loans. Those with more resources, whose homes may be more expensive and cost more to fix, are not eligible and not counted. Those who try to make do with patch-work repairs are not counted. Not surprisingly, many suspect the HPO’s numbers are low.

“We’ve never trusted their estimation,” said Balderson. “We continue to think they underestimate the magnitude of the problem and the total cost.”

Balderson says only 20 per cent of condo owners qualify for HPO assistance — leaky condo welfare, he scathingly calls it.

That means 80 per cent of the problem is not accounted for by HPO statistics, and Balderson notes the 80 per cent includes upscale buildings where no one qualifies for loans, and repairs run as high as $125,000 per unit or more.

“I think their number’s low on total costs incurred,” concurred John Singleton, a lawyer whose firm, Singleton Urquhart, has defended many building professionals in leaky condo suits. “My sense is it’s over $2 billion.”

That’s for residential buildings. The HPO counts only leaky condos and co-ops. But they were not the only buildings affected by design and construction problems in the ’80s and ’90s.

“We have seen failures in all kinds of buildings,” said Gallant, whose company is one of the region’s leading engineering firms for building remediation work.

Rental housing, social housing, office buildings, schools, churches, even shopping malls are infested with the same problems as leaky condos. Water gets in the walls, it can’t get out again, and the wall components slowly rot. We don’t hear much about them because they don’t have angry owners clamouring for media attention. Gallant says their owners file insurance claims, do the repairs and file lawsuits with no public fanfare.

So what’s the grand total? Nobody knows.

Might it be higher than the official estimate?

“It might,” Cameron conceded. “It’s hard to say.”

Gallant and others with an overview of the construction industry guess that residential housing probably accounts for the majority of the damage. So if the real cost of repairing leaky condos is more than $2 billion and repairs to all other types of buildings amount to only one-third of the total, the bills add up to at least $3 billion — double the province’s estimate.

© The Vancouver Sun 2006