Our share of equalization payments could drop, premier says

Peter O’Neil
Sun

OTTAWA — British Columbia would be punished for its high property values with a reduction of hundreds of millions of dollars in transfer payments if a federal panel’s recommendations on the equalization program are implemented.

The recommendations would result in Quebec getting a $1.5-billion-plus annual windfall while B.C. would get nothing from the wealth-sharing equalization program.

“It punishes British Columbia by including sky-high property values as a basis for equalization entitlements when they have no relationship to taxpayers’ ability to pay higher taxes or a province’s ability to generate revenues,” Premier Gordon Campbell said.

B.C. has the highest real estate values in the country, with the average home going for $367,000 this year compared to $192,000 in Quebec, according to the Canadian Real Estate Association.

The report, to be discussed later this week by the premiers in Edmonton, proposes a new formula to calculate payments for the $11-billion program that dispatched $459 million to the B.C. provincial treasury this year.

The panel sides with Quebec and against B.C. in a increasingly bitter debate over whether assessed property values should be included in determining whether a province can tap into the program created to ensure all Canadians receive similar levels of services.

That change alone would reduce by more than $500 million B.C.’s equalization claim under the panel’s proposed new formula, while increasing Quebec’s by $355 million.

The change would have only a marginal impact on other provinces.

The panel, struck by the previous Liberal government, was also wrong, Campbell argued, to include both renewable and non-renewable natural resources in a new 10 province formula for calculating provinces’ ability to raise tax revenues.

He described that provision as bad for B.C. and a “stealth” version of the hated National Energy Program of the early 1980s that fuelled western alienation, especially in Alberta, for years.

Campbell questioned why the Tories’ 18 B.C. MPs would want to support such a move “when it’s their taxpayers and their constituents who are being asked to foot the bill.

“It so badly tilts the scale against British Columbia by including resource revenues and our property assessments as determinants of equalization, that British Columbians would never be eligible for equalization again — even in an economic downturn.”

Finance Minister Jim Flaherty was non-committal on the report, saying it would be considered along with other input as Prime Minister Stephen Harper moves ahead with reform of the transfer-payment program.

The panel, headed by Alberta economist and former provincial bureaucrat Al O’Brien, included in its recommendations a new method to take more fully into account assessed real estate values across the country.

“In the panel’s view, the [former] approach consistently over-estimated the capacity of Quebec to collect property taxes while it under-estimated British Columbia’s capacity,” the report concluded.

O’Brien said on Monday that B.C. was already heading back towards its pre-1999 status as a “have” province which, like Ontario and Alberta, wouldn’t receive equalization payments.

“I think the most important factor in the impact on British Columbia is simply improving economic and fiscal circumstances,” O’Brien told a news conference.

“They’re much better off and therefore, according to our calculations here, would no longer be eligible for equalization under our formula.”

However, O’Brien’s own report made clear that even with a strong economy, B.C. would be eligible for equalization transfers next year if the method for assessing property values wasn’t changed.

Campbell, who shares Ontario Premier Dalton McGuinty’s view that the equalization program already had enough funding, has urged Harper to focus on funding in areas like transportation and aboriginal programs.

But the panel instead came up with a plan that would play nicely into Harper’s agenda to answer Charest’s complaint that there is a “fiscal imbalance” between Ottawa and the provinces.

The panel’s proposed formula would boost the equalization pot from $11.3 billion this year to $12.6 billion next year.

While the changes wouldn’t impact Ontario and Alberta, they would benefit every other province except B.C. and Newfoundland — the only two provinces to actually lose transfers under the proposal.

Quebec’s $1.5 billion gain, from $5.5 billion to $6.9 billion, is by far the largest total gain, though Saskatchewan would enjoy the highest per-capita increase.

© The Vancouver Sun 2006

 

INTERSECTION: Cambie St. and Broadway to be new city centre

Jeani Read
Province

Cross Roads is indeed a crossroads but it’s more than that. Soon, this reviving industrial area could become a whole new city centre.

“In the new world, Broadway and Cambie will be a key intersection,” says Grant, president of PCI Group, developer of Cross Roads.

And that looks pretty likely. Down here a whole town’s worth of new projects will anchor the new neighbourhood growing between Cambie and Main.

And the actual crossroads will not only be Cambie and Broadway but two major rapid-transit lines, too: the Canada Line to Richmond and the east-west Millennium Line.

“This is going to be the first opportunity outside downtown to have a condo with access to rapid transit,” says Grant.

He also sees this mixed-use project (office, retail and residential) as a lifestyle project. Key here is the pairing of the giant Whole Foods chain within the retail space, a combination that’s dynamite south of the border and groundbreaking here.

Esthetically, Cross Roads, which should be completed in June 2009 or late 2008, will be very 21st-

century: dark basalt, enormous windowed walls and accents of wood.

Views are unique, finishes top of the line and, above the three levels of retail, the townhouses and a health club will open onto a huge garden level.

Pretty irresistible to Eddie Mok, who was looking at buying into Cross Roads long before it came on the market.

“I’ve looked at it for some time,” says the 41-year-old. “I’ve been studying this complex significantly.”

For Mok, location and lifestyle was indeed the key. “It’s the convenience and the amenities of that area, and the fact that Whole Foods will be [on the site],” says the health-conscious Mok.

What he calls the “vibrancy” of the area, which has a mixed demographic and is multi-ethnic, is a big draw, too, plus the fact that Cross Roads will be transit-central.

“You can get anywhere,” says Mok. While considering a new home Mok did look in Yaletown but “midtown is different. You can’t buy in this price range downtown. It’s reasonable here.”

He likes the idea of the health club and gym on the premises, and the restaurants and other diversions in the neighbourhood. For a while, Mok couldn’t make up his mind between the condos and the townhouse on which he eventually settled.

“The condos have different views and you don’t necessarily have to pay the big-ticket price for those views.”

DECOR TIPS

Scott Trepp of Scott Trepp Interior Design and Merike Lainevool of KudoDesign gave Cross Roads its sleek contemporary look. We asked them for decor ideas and space-maximizing strategies.

– In small kitchens, finding the space for a pantry dramatically increases the amount of storage space. Here, Trepp and Lainevool created a full-height, 12-inch deep pantry.

– Counter-depth fridges increase circulation space in the kitchen. “The refrigerator we picked was a 24-inch wide LG titanium-finish model,” says Lainevool. “It holds much more than you’d expect and the sides are the same titanium finish as the door, making them much more attractive than the [usual] crinkled black sides.”

– The kitchen counter is polished white granite. “If you are selecting granite, we recommend that you go to your stone supplier’s warehouse. Granite is a natural material that may not [match] showroom samples.”

– Lainevool and Trepp chose slate flooring for the bathroom and used a “T brick” mosaic slate of the same colour in the shower. “Slate looks rich and warm and provides good slip resistance,” they say.

– The bathroom tiles are large, 12-inch-by-24-inch glossy white, giving a fresh, modern look that’s easy to keep clean.

– “We avoided (using anything) trendy,” says Lainevool. “We wanted clean lines and modern detailing that would complement any buyer’s decor. We opted for clean, classic lines for the cabinetry — no panel styling, just slab-style doors. When updating at home, this [is] something to keep in mind.”

QUICK FACTS

CROSS ROADS

What: Eighty-eight homes in a multi-use building

Where: 536 West Broadway

Developer: PCI Group

Sizes: One-bedroom and flex, two-bedroom, two-bed and flex, three-bedroom and townhomes, 650 sq. ft.-1,417 sq. ft.

Prices: Start at $390,000

Open: Noon to 6 p.m. daily except Friday; 604-729-8695; www.crossroadsvancouver.com

© The Vancouver Province 2006

 

AMALGAMATION: Be prepared to pay double the fees for double the space, and talk to a lawyer

Tony Gioventu
Province

Amalgamation of more than one strata lot into one is a growing trend and is achievable, but owners considering doing this should approach with care and be armed with information.

Recently, the Grays of Vancouver wrote to say that, with a three-child family, they decided to buy two two-bedroom apartments and renovate them into one larger apartment — but have met with resistance from the strata council, who say they will exceed their occupancy limits and do not want to reduce the Grays’ strata fees to those of one unit.

Here’s information to keep in mind when you want to amalgamate two or more units into one:

– The alterations will affect the individual units but also, possibly, the common property. If there are structural alterations as well as external alterations that affect the common hallways, common property or the common-service facilities like electrical or plumbing, they will require the written approval of the strata corporation.

– Owners can amend the strata plan technically, consolidating the two lots, without strata approval if:

1. The unit entitlement of the consolidated strata lot is the same as or less than the combined unit entitlement of the two or more units consolidated;

2. The total number of votes of the consolidated strata lot is the same as or less than the number of votes of the two or more strata lots being consolidated;

3. The amendment will not increase the share of the common expenses borne by a strata lot, other than the strata lots being consolidated.

– Before you proceed, you will need construction permits, reasonable co-operation of your strata and your neighbours and increased personal-insurance coverage.

– Your municipal office can assist you with occupancy limits when you apply for permits.

– By amalgamating two units your liability for common expenses will likely double, so be prepared for the future costs of operating or unforeseen assessments as well. As well, if this building was built after 1990, there may be a warranty limiting certain alterations.

– Give some consideration to the marketability of your home if you ever decide to sell. Will there be a market for your condo or will you be forced to return it to two units to successfully sell the property?

– Finally, there will be some legal agreements and complications in your purchase and sale, so have a discussion with an experienced strata lawyer before you proceed.

Contact Tony Gioventu, executive director of the Condominium Home Owners Association at 604-584-2462 or toll-free 1-877-353-2462, fax 604-515-9643 or e-mail [email protected].

© The Vancouver Province 2006

 

REAL ESTATE: Slight drop in Vancouver no cause for concern

Gordon Clark
Province

Home sales continued to dip slightly last month in Greater Vancouver but they rebounded in the Fraser Valley, which hit a record for May sales.

In Greater Vancouver, sales of detached, attached and apartment properties reached 4,297 units in May, down 3.1 per cent from the May 2005 sales of 4,434 units, the Real Estate Board of Greater Vancouver says in its monthly report.

The largest drop occurred with apartment properties, which saw sales fall by 10.8 per cent to 1,760 sales in May compared to 1,974 in May 2005. The average Greater Vancouver apartment cost $321,559, up 24.4 per cent from a year ago.

Detached home sales also dropped — although only 0.6 per cent — from 1,776 sales in May 2005 to 1,765 last month. The benchmark price was $635,926, 21.5 per cent higher than a year ago.

Attached properties bucked the downward trend, recording a 12.9-per-cent jump in sales to hit 772 sales in May from 684 sales in the same month a year earlier.

The benchmark price was $396,455, 21.7-per-cent higher than in May 2005.

Board president Rick Valouche said the number of residential properties available for sale last month was 14 per cent higher than in the same month a year ago.

“The increase in listing activity we saw this May is great news for homebuyers in the Greater Vancouver market,” he said.

Despite the two-month drop in sales, realtors aren’t worried, said Dave Watt, the board’s second vice-president.

The drop was largely caused by a decrease in apartment sales, which is partly due to the increasing number of condo pre-sales run by developers that don’t show up in multiple-listing statistics, he said.

“Overly concerned? Not at all,” he said, noting that over-riding economic factors such as low interest rates, an inflow of residents and the growth in jobs is swelling the ranks of homebuyers.

The Fraser Valley Real Estate Board reported Friday that sale in May set a record for that month of 2,245 sales — nine per cent higher than the 2,067 sales in May 2005.

“We knew it was going to be a strong month but we couldn’t have predicted that strong,” said board president David Rishel, who noted the strong demand and lack of new inventory resulted in a decline in active listings.

The average price of a single-family detached home in the Fraser Valley was $463,100 in May, up 19 per cent from $389,288 from May 2005. The average condo increased 16.2 per cent to $291,079 from $250,447.

© The Vancouver Province 2006

 

Peter Simpson
Sun

Not long ago an appeal to consider significant green concepts in homebuilding would have prompted an industry response that might have sounded like this: “Go away, you granola-eating, hemp-wearing, Kumbaya-singing, flower-picking, sandal-wearing, bongo-drumming freak.”

Nowadays? Not so much.

Green building — with its environmentally-conscious construction-techniques and innovative building-products designed to reduce energy and water consumption, and enhance a family’s comfort and health, is gaining acceptance and is at the tipping point of entering the mainstream of homebuilding.

I remember the first National Green Building Conference in the U.S. in 1999. Exhibitors outnumbered visitors in the display hall; you could have fired a cannon and not hit anyone. Today the annual conference — with seminars, networking and sold-out trade show — draws capacity crowds.

A ”Google” on “steel building” on the Web generates 69.2 million results; “concrete building,” 78.6 million results; “wood building,” a predictable 102 million. But “green building” will generate 189 million results. Look out world, the Green Wave is upon us.

Herein lies the challenge. There are so many green brands, it is confusing for builders and likely doubly confusing for consumers.

I suspect few buyers are walking into show homes looking for green components. If a builder plastered a show home with signs promoting green building, it might prompt the occasional question from an inquisitive visitor. But if the prospective buyer doesn’t like the kitchen cupboards, backyard or master suite, forget the green stuff, it’s off to the next show home.

Green building is not new. The use of resource-efficient building design and materials actually dates back to the 1960s with framing techniques that reduced lumber usage and improved energy efficiency. (I don’t recall that. Then again, if you remember the ’60s you probably weren’t part of it.)

Anyway, in the mid ’80s I tried to persuade Toronto builders they needed to pay attention to the amount of wood waste they were generating on the jobsite.

I knew how to quantify the volume but I had to give the builders a picture of what the massive pile would look like. We used this description: “The amount of dimensional lumber waste (2×4, 2×6) generated by the homebuilding industry in the Greater Toronto area would fill the Skydome football field to a height of five storeys.”

That graphic visual aid did the trick. Everyone could visualize the mass. The responses were, “wow, that’s a heck of a lot of wasted lumber – and money!” Builders bought in to the program, which we coined Making a Molehill out of a Mountain, and another rung on the green ladder was climbed.

A few weeks ago I spoke at a workshop presented by the Greater Vancouver Regional District. There were eight other Vancouver-based speakers who shared experiences with green building, including case studies and excellent examples of leading-edge residential projects. The workshop, entitled Building Blocks for Building Green, was one of the best forums of its type anywhere.

Builders who resist even a cursory examination of green building strategies are somewhat surprised when they learn they are already incorporating many green features in their homes – energy-efficient windows/doors/heating systems/appliances, finger-jointed framing lumber, faucet and shower flow resistors, low-flush toilets, mold-resistant drywall and engineered-wood beams.

It’s not really a quantum leap to the next plateau, which might include dual-

flush toilets, low VOC (volatile organic compounds) paints, or recycled content in building materials.

If builders are considering launching a green project, they must add to their team a green building consultant who will provide advice on the most environmentally beneficial strategies that can be implemented within the budget, and be marketable to consumers. There is a cost premium to building green, so the resistance is understandable. With more widespread acceptance and implementation, these costs, up to 10% higher than conventional practices, will likely moderate.

One innovative project worth singling out is Pomaria, an apartment tower under construction in downtown Vancouver. The management team, which included consultant reSource Rethinking Building, made sure green and sustainable features were understandable to buyers and sales staff.

Educating the buyers and unifying the green message in all printed promotion and website material was critical to the project’s success. Reaction to the green components was positive once potential buyers fully understood the significance and uniqueness of Pomaria, which included geo-thermal heating and cooling, energy- and water-saving measures, large opening windows and cross-ventilation, and a host of other environment-sensitive features. Buyers liked the notion of living in a healthier environment and this “icing on the cake” helped them finalize their purchase decisions.

The Canadian Home Builders’ Association of B.C. is rolling out BuiltGreen, an initiative which encourages builders to use technologies, products and practices that improve energy efficiency and indoor air quality, reduce maintenance and preserve natural resources. Achieving the standards required for BuiltGreen status must be certified by independent, third-party testing and verification.

Although there have been a few scattered BuiltGreen homes constructed in B.C., Morningstar Homes has decided to walk the talk and build Canada’s first complete BuiltGreen community in the Yorkson area of Langley. Homes will go on sale this month and representatives from all levels of government are expected to attend the opening. This move is significant because Morningstar is a rising star on the single-family homes front and its president, Dale Barron, is a stickler for research and detail.

Forget about cautiously sticking a toe in to test the waters, Morningstar is aggressively cannonballing into the green-building pool because Barron and his enthusiastic team believe there will be sufficient interest in this type of home to quickly fill an entire community.

I don’t want to steal Morningstar’s thunder, and you will hear much more about this project in the near future, but features include the use of sustainable materials and construction techniques, enhanced stormwater management, even an assortment of products with recycled content.

Other builders will be watching this project with great interest. If it is a sales success, others will jump on board. This will be how the green-building movement will nudge closer to the mainstream.

When U.S. builders – some with decades of experience, others with just a few years – were asked recently why they are building green, their No. 1 answer was this: “It is the right thing to do.”

My daughters will be pleased I wrote this column. This world will be theirs some day. Peter Simpson is chief executive officer of the Greater Vancouver Home Builders’ Association. E-mail [email protected].

© The Vancouver Sun 2006

 

REAL ESTATE I Vancouver sales drop 3.1% as buyers seek ‘more value’ for dollar in suburbs

Derrick Penner
Sun

The affordability exodus continued in May with an increase in housing sales in the Fraser Valley and a slight decline in sales within Greater Vancouver.

The Fraser Valley Real Estate Board on Friday reported its May sales recorded through the Multiple Listing Service were up nine per cent to 2,245 units, the most ever for the month. Active listings, however, declined 16 per cent to 5,496 units.

The Real Estate Board of Greater Vancouver reported 4,297 MLS sales in May, a 3.1-per-cent decrease from May a year ago. And active listings increased more than 14 per cent to 5,789.

“That’s entirely consistent with what we’ve been seeing over the past several months,” Cameron Muir, a market analyst with the Canada Mortgage and Housing Corp., said in an interview. “Homebuyers start shifting out towards the suburban markets because they identify more value for their housing dollar.

“That’s something we have experienced in the last several housing cycles in Greater Vancouver.”

Single family homes dominated the Fraser Valley market. Some 1,227 homes traded, a 3.6-per-cent increase from May of 2005.

However, it was townhouses that saw the biggest gain in sales — 24.3 per cent over 2005 — at 429 units. Apartment sales were also up 10.6 per cent at 335 units.

Dave Rishel, president of the Fraser Valley Real Estate Board, said members are seeing a lot of demand, and agreed it has to do with affordability.

The median price of a single family home in the Valley was $463,100 in May compared with $600,944 on Vancouver’s east side and $1.1 million on Vancouver’s west side.

Even Port Moody’s median for a single-family home was $675,000.

The Fraser Valley median price for townhouses was $287,000 compared with $438,000 on Vancouver’s east side and $629,250 on the west side.

Apartments in the Fraser Valley had a median price of $176,000 versus $260,750 on Vancouver’s east side and $398,000 on the west side.

“What we’re hearing is that people who are having a look downtown [in Vancouver] are still seeing better value in the valley,” Rishel added.

Within Greater Vancouver, MLS-recorded sales declined below 2005 levels, but did not retreat as far as 2004.

Apartment sales saw the biggest drop with the 1,760 transactions measuring 10.6 per cent below May of 2005’s sales. Detached home sales were also down 0.6 per cent to 1,765 units.

Townhouses, however, saw a 12.9-per-cent gain in sales with 772 transactions.

Dave Watt, the Greater Vancouver board’s second vice-president, noted that the apartment sales statistics are skewed by the fact that many realtors who market apartment projects do not list them on the MLS system, so their sales aren’t reflected.

Watt said that sales are still strong, and while creeping interest rates seem to have slowed price increases, prices are still up 20 per cent over a year ago. Even with higher inventories, Watt said realtors are still looking for more.

“For the moment, it’s still a seller’s market,” Watt said.

© The Vancouver Sun 2006