Rebecca Osler
Sun

The VSO likes the sound of Vita. ‘Everything about this project is positive and will be a boost to residents of and businesses of and visitors to the area,’ it told city hall.

Despite the roaring scooters and sleek cars, one of the greatest pleasures of Italy’s legendary La Dolce Vita (“the sweet life”) is using the mode of transportation below the waist.

Whether it’s strolling the expansive vias of Rome or hanging out fountainside in a piazza, Italians take full advantage of pedestrian delights.

Symphony Place, a two-tower project right across from the Orpheum, aims to deliver that genre of sophisticated urban living to downtown Vancouver. “Vita,” the first 29-storey concrete highrise, is currently in preview mode and will open for sale Sept. 16. “Dolce,” the second movement, will follow sometime in the future.

“You’re literally steps away from The Orpheum for the symphony, Yaletown for dining and Robson,” says Michael Bosa of Solterra Development Corp.

“We’re going to provide the quality and sophistication level that you’d probably find in Coal Harbour and bring it to the cultural and arts district,” he says.

Bosa explains that Vita will provide an elite, central option for city dwellers who have perhaps outgrown Yaletown’s overt hipness and yearn for a more mature approach to nightlife. For instance, the symphony.

“There’s a need for culture in this city . . . people that bought or rented [in Yaletown] in their twenties, now they’re in their 30s, 40s and 50s and there’s an appreciation for something like that,” he says.

Situated between Richards and Seymour streets and bordered by Smithe, the site currently holds a duo of three storey parkades. Symphony Place will demolish the old structures and replace them with a building that incorporates residential, commercial, office and retail space.

According to city documents, an ample number of short-term public parking spaces will be maintained to support the Granville Street entertainment district and The Orpheum.

In fact, according to a report to council, which is available through the city’s website, the Vancouver Symphony Orchestra wrote a letter supporting Symphony Place. Specifically, they wrote: “everything about this project is positive and will be a boost to residents of and businesses of and visitors to the area.

“Adding hundreds of residential units (occupied by potential patrons) just across the street from the theatre will be of benefit to the VSO and every other organization that utilizes The Orpheum.”

Adorning the parkade will be Vita’s public art contribution of four 120-foot panels of decorative glass designed by Lutz Haufschild, an installment Bosa says “will probably be the biggest public art glass piece in Vancouver.”

As well, Bosa says the building is set back off Smithe to allow for plentiful outdoor seating.

“I’d say the goal is cafes and restaurants,” he says. “Come and have a coffee before you go to the symphony or come for dinner and drinks after.”

It’s a plan that the VSO also applauds.

“The proposed ground-level amenities will make coming to the concerts even more pleasant for our hundreds of thousands of audience members annually,” they wrote in the letter.

Inside, the light-filled apartments offer modern design features such as seamlessly integrated rift white oak, walnut or wenge wood veneer faced cabinetry that extends to the Liebherr refrigerators and Fisher Paykel drawer dishwashers.

Another highlight worth noting is that in the two-bedroom models, the second bedroom is separated from the main living areas not by the typical solid doors, but by sliding partition glass doors. The design provides flexibility for the homeowner who doesn’t always need an additional bedroom but likes having options.

“If you want to use it as a bedroom, it’s private. If you want to use the space to extend your living area, you can use it as a dining room, or you can use it as a den,” suggests Bosa.

Solterra’s upfront approach to upgrades means that most everything in the display suite – including Kohler tiles in the shower, a pantry wall in the kitchen and an Italian commercial faucet – comes standard. There is one exception: buyers can upgrade the carpet in the master bedroom for hardwood floors.

In the case of pasta or gelato overindulgence, Vita’s fifth floor amenity area provides the antidote.

There, residents will discover not only the basic gym, but a yoga/stretch area and “virtual spinning” bay, where stationary bikes will be aligned with screens that simulate the experience of cycling outdoors. A terrace, indoor/exterior children’s play areas and an outdoor hot tub round out the communal offerings.

© The Vancouver Sun 2006

There will always be the working poor in low-paying jobs; they shouldn’t be shut out of the rental market because investors are paying too much for apartment buildings

Howard Rotberg
Sun

Sometimes putting two articles together, from different sections of The Vancouver Sun, can open our eyes to the full dimension of a growing societal problem.

I am referring to Tuesday’s front- page article, “B.C. has largest share of working poor,” and an article in the Business BC section, “Demand still high for Vancouver rentals.”

The first article stated: “More than 72,000 workers — almost one in 10 — live in poverty in Greater Vancouver, leaving the Lower Mainland with the greatest incidence of working poor of any major city in Canada, according to a federal government study.”

Notice that this is not a story about the problems of the homeless, or the disabled, or the unemployable, all of whom urgently deserve more help than we are giving them, based on what activists in the field are telling us.

No, this is a problem for people who are working, but whose income still falls below the poverty line. Greater Vancouver’s figure for working poor is almost twice the figure for second-place Toronto — 9.6 per cent compared to 5.3 per cent.

What is truly shocking in a city where signs of significant wealth — in upscale homes, cars and boats — are so apparent, is that in B.C. more than 10 per cent of the total workforce is made up of those classified as “working poor.”

An economist is quoted as saying, “It’s kind of an affront to our notion that people can do OK, or even well, simply by working hard.”

The article concludes with the question of how best to help the working poor, and surveys such answers as raising the minimum wage and giving additional tax credits and better job training programs.

But the sad fact is that there will always be the need for lower-paid jobs, and I believe that society has an obligation to treat better those who step forward to fill those jobs.

So how bizarre is it to read in the same day’s Business BC an article about how a local commercial realtor is commenting positively on a “new breed of investors … buying up older rental buildings to give them major upgrades and charge higher rents for the next tenants”?

The realtor claims that many tenants have high-paying jobs and can well afford higher rents. He points out that, with substantial upgrades, a one-bedroom apartment in Kitsilano or South Granville can rent for $1,200 after previously renting for $800.

The article quotes the realtor’s newsletter as arguing that this helps landlords to justify paying prices for rental buildings that increase anywhere from six per cent to 23 per cent in one year! The realtor points out in the article that multi-suite buildings are being snapped up by investors within 24 hours of being listed for sale.

I checked out the realtor’s newsletter, and I began to understand what is going on. Buyers of apartment buildings are being urged to pay high prices and accept “capitalization rates” (the percentage of net income to the purchase price) of only 3.5 per cent to four per cent, because the rental rates have “significant upside potential,” as one advertisement puts it.

Putting these two articles together, we begin to see the problem differently: The city in Canada that has the largest share of “working poor” has the quickest sales of rental buildings at prices that only make sense if the buyers charge significantly more for their “upgrades” than what would be justified by the renovation costs alone.

Why? Because they have to make up for buying the buildings at too high a price, at too low a capitalization rate.

Who suffers? The working poor, of course.

I contend that it is bad enough to have a city where hordes of people panhandle or pick through garbage for anything that can be resold. It is even worse when a person willing to do “honest” work falls below the poverty line. It is tragically worse when that person’s ability to obtain decent rental housing for himself or his/her family is decreasing every year.

Vancouver and British Columbia urgently need programs that create inducements for the private sector to channel its wealth and creativity — not into taking units out of the affordable rental range — but to create affordable rental units. These programs are in place in a wide variety of American states, and in Canadian provinces such as Ontario.

Programs that give inducements, such as per-unit forgivable loans to developers who obligate themselves to build and rent units below a certain rent and to rent them to working people who make below a certain income, are working elsewhere. I know, because my company is creating such units in Ontario.

I hope that thinking about these two newspaper articles, and what it means for our future here in Vancouver, will spur some demand that our local and provincial politicians will help to remedy this problem.

Howard Rotberg, president of the Rotberg Development Group, resides part of each month in Vancouver, and part in southern Ontario, where he develops rental buildings for working people with low incomes.

© The Vancouver Sun 2006

Variable rates may look better to some borrowers, but there’s also the worry factor

Fiona Anderson
Sun

Glen Flett chose a variable mortgage as rates may be going down. He trusts his mortgage broker to tell him when to lock in. Photograph by : Bill Keay, Vancouver Sun

Source: Invis Financial

After two years of steady increases in bank rates, economists are now suggesting the next move may be downward. But the real question in most people’s minds is what will this mean for mortgage rates. As well as, what’s better: variable or fixed?

Variable-rate mortgages go up and down along with the Bank of Canada rate. When the rate goes up 25 basis points (or 0.25 percentage points), so does the prime lending rate, and variable mortgage rates are based on prime minus a discount. In the last few years, increased competition among lenders has deepened that discount from 40 basis points to 90, said Paula Siemens, senior mortgage broker with Invis Financial.

So now, with prime at six per cent (calculated as 1.75 percentage points above the Bank of Canada’s current overnight rate of 4.25 per cent) a variable mortgage can be had for 5.1 per cent.

That’s lower than the posted five-year fixed mortgage rates for most banks, two of which lowered their rates this week to 6.75 per cent. But some lenders will go as low as 5.5 per cent for a low-risk borrower, Siemens said.

So at first blush, variable rates look better than their stodgy fixed-rate cousin. And except for a few anomalous situations, that’s true at any particular point in time, Siemens said. But what you need to compare when deciding between a fixed- and a variable-rate mortgage is the current fixed rate and what you expect the variable rate to be in the future.

That takes some guesswork and for some people that’s too uncertain.

“There are two types of people who should probably not be in a variable-rate mortgage,” Siemens said. “One who, based on a five-year fixed mortgage, barely can make those payments so any upward trend in prime rate would put them in a situation that they couldn’t afford their payments. In that case I would suggest stability for them to make sure we are keeping them within a budget they can live with.

“And there might be a person who has an economic profile where they can manage the higher payments [of a fixed-rate mortgage] but they would lose sleep over the fact that they don’t know what their payments are going to be [under a variable mortgage].”

But how scary can a variable-rate mortgage be?

In the last year, the Bank of Canada rate increased 1.75 percentage points, pushing up the variable rate an identical amount, from 3.45 per cent (based on the best discount available at the time which was 80 basis points) to 5.2 per cent, Siemens said.

But if the borrower had chosen a fixed-rate mortgage instead, she or he could have locked in at 4.5 per cent.

On those numbers, it looks like the fixed-rate tortoise beats the variable-rate hare.

Not so fast, says Siemens. While the variable rate went up in the last year, it turned out not to be any costlier. Comparing two $200,000 mortgages, Siemens estimated that the variable-rater would have paid $4,404 on his mortgage over the past year plus $8,817 in interest while the fixed-rate mortgagor would have paid down $4,456 at a cost of $8,826. So while the variable rate went up and eventually surpassed the fixed rate of last September, the lower payments early in the period offset the higher payments later on.

Glen Flett chose a variable rate last year when he was looking for a mortgage because it could be prepaid without penalty. But he also thought over time the rate would turn out to be better. He’s hanging on because he trusts his mortgage broker to tell him when it’s time to lock in.

“[So] I don’t stay up at night [worrying about the rate],” Flett said. “I don’t know if [my broker] does.”

Catherine Runnals chose the fixed-rate mortgage.

“We liked the security of it,” Runnals said. “Coming from a generation whose parents paid 18 per cent, when I saw that my rate was well under five and I could lock in for 10 years . . . we went for it right away.”

Runnals doesn’t care if she ends up paying more interest in the long run.

“I know what my commitments are for the next 10 years and that comes with a great sense of security. And I would rather have that than live at the whim of the world markets,” she said.

There is a wide range of variable mortgages, some that keep payments at a set level attributing more or less to interest depending on the prevailing rate of the day, and others that alter payments along with the changing rates, Siemens said. Some variable mortgages compound interest monthly rather than semi-annually and others provide a deeper discount up front and a smaller one later on. So Siemens recommends using a mortgage broker to crunch the numbers to determine which is best.

ING DIRECT offers a one-size-fits-all variable-rate mortgage as well as a one-size-fits all fixed-rate mortgage that can be applied for online, the company’s senior manager Fredrick Kreutlein said.

The online banking company’s variable rate is 5.2 per cent, which is 80 basis points below prime, while it offers a fixed-rate mortgage of 5.35 per cent.

With one rate a borrower doesn’t have “to go through the hassle of negotiating with the bank and going back and forth and threatening to leave” to get the best rate, Kreutlein said.

Whether to go fixed or variable is a personal choice, he said.

“Some people are more risk-takers and they enjoy having control over that aspect,” he said. “Others just want to know this is what I’m going to be paying no matter what happens in the future.”

© The Vancouver Sun 2006

Stats for June-July see third drop in permit values in 4 months

Sun

B.C. saw the biggest decline in the value of residential building permits of any province in Canada from June to July, Statistics Canada reported Thursday.

The 9.6-per-cent drop, to $579 million from June’s $640.5 million, was the third decline over the past four months, the federal numbers cruncher said.

But the value of home-building permits issued from January to July is up 14.4 per cent compared to the same period last year, from $3.7 billion to $4.2 billion.

And the value of non-residential permits continued to climb, increasing by 11 per cent in B.C. from June ($283.9 million) to July ($315.1 million) and by 11.1 per cent in the January-to-July period compared to the first seven months of 2005.

Commercial building investment in the Lower Mainland-Southwest region of the province led a 25.2-per-cent overall increase in non-residential permits for July compared to the same month last year, reflecting what Keith Sashaw, president of the Vancouver Regional Construction Association, referred to as “the fundamentals of strong economic growth.”

And July residential permit values were down just 3.2 per cent in the Lower Mainland-Southwest region compared to the same month last year.

“The large increase in commercial permits indicates an underlying confidence of private investors who continue to invest and build in the region,” Sashaw said in a press release issued Thursday. “Despite a slight dip in residential building permits, the fundamentals of strong economic growth continue to be reflected in the construction sector.”

The number of residential building permits issued across Canada so far this year remains 0.4 per cent above last year’s pace, with more than half of those for single-family homes, Statistics Canada said.

The numbers reinforce concerns expressed by the Bank of Canada earlier this week that the hot housing market, particularly rising house prices, along with strong consumer spending, pose the greatest risks that the economy could still overheat.

That’s in direct contrast to the U.S., where the sharper-than-expected cooling of the housing market is threatening to sink the rest of that giant economy, possibly into a recession.

In Canada, however, home prices, sales and construction have held up well, although there have been signs of weakness in the central and eastern provinces.

Nationally, residential permits totalled $3.4 billion in July, up 4.6 per cent from June as demand for new housing increased for both single- and multi-family dwellings, Statistics Canada said.

“The housing sector continued to be sustained by the strong economy in western Canada as well as by the high level of employment and solid consumer confidence,” Statistics Canada said.

This stronger-than-expected rise led J.P. Morgan to hike its forecast for August housing starts to 240,000 from 228,200, which would be up 1.5 per cent from 236,500 in July. J.P. Morgan economist Ted Carmichael noted a report on housing construction next week will provide a better reading on the housing market.

© The Vancouver Sun 2006