City councillors to examine a proposal to restore Chinatown’s historic clan society buildings

Randy Shore
Sun

VANCOUVER – The clan associations have been a vital economic and cultural force for 100 years in Chinatown, but their once-glittering buildings have fallen into disrepair.

Next week, city councillors have a chance to help reverse the slide when they consider a proposal to put up $500,000 to begin the rehabilitation process.

Under the plan, societies can receive grants of up to $100,000 to plan for repairs by putting up $20,000 of their own money.

The tall, narrow buildings mainly speckled along two blocks of Pender Street are iconic, defining the look of Chinatown and, in turn, Vancouver‘s identity.

You don’t need to be a Wing or a Mah to feel some kinship with these buildings and their historic neighbourhood.

If you grew up here, Chinatown is surely a source of colourful memories.

But if you are a Wing or a Mah, or a descendant of the city’s Chinese pioneers, the clan associations are an important institution, hailing from a time when the Chinese community was economically and socially marginalized.

In the late 19th and early 20th centuries, many of the city’s Chinese immigrants were men, living in a new world without family. The clan associations, organized mainly by surname or home county in China, provided them with a social network in Vancouver.

Most were also affiliated with clan associations in Chinatowns in San Francisco and New York and with clan societies in China, making them a potent economic network.

Walk down Pender Street today and you will see and hear that some of the buildings are thriving.

The Mah Society building is still beautifully decorated with crafts and historic photographs. The Lim building was built in 1903 and houses a massive ancestor altar.

Others have lapsed into disrepair, their upper floors scantly used or hosting noisy mah-jong games in their meeting halls.

Despite the decay, the clans and their buildings are vital to the future of Chinatown, according to Vancouver city planner Jessica Chen.

“Of 32 heritage buildings in Chinatown, the clan associations own 12,” she explained. “From a heritage preservation point of view, their participation is critical.”

The clan associations are long-term property owners in Chinatown, not just by choice. Some of the societies have written constitutions that do not allow the society to ever sell their buildings.

According to a city report to council, the societies have been hamstrung in their efforts to modernize and preserve the buildings by elaborate and unwieldy decision-making structures, limited financial resources and a lack of in-house expertise, due mainly to their history as member-based community organizations.

But with the city’s advice the 11 societies owning the 12 clan buildings formed the Chinatown Society Heritage Buildings Association to pursue the rehabilitation.

“This program is really crucial to the revitalization of Chinatown, and so are the clan associations,” Chen said.

Chinatown, in a sense, is a victim of more recent waves of immigration to Vancouver and the spread of Chinese commerce across the region. With Chinese businesses ubiquitous in Metro Vancouver, Chinatown is no longer the economic hub that it once was.

But the clan associations continue to draw thousands of people each month into the neighbourhood for meetings and cultural events, keeping local businesses and institutions alive.

Rehabilitation is a large and expensive task, warned Chen.

The first phase will cost $500,000 just to plan rehabilitation for five buildings.

“If this is thing worth doing, the clans, government and the community will have to come together to make it happen,” Chen said.

© The Vancouver Sun 2008

 

Upscale residence has five bedrooms and a view of Blackcomb Mountain

Derrick Penner
Sun

Whistler has a new real-estate record with the pending $17.5-million sale of a sprawling luxury home on 1.9 hectares with a view of Blackcomb Mountain.

The house, a five-bedroom, 5,000-square-foot wood-and-stone luxury home at 6715 Crabapple Dr., was listed on the Multiple Listing Service last July for $22 million.

The property’s listing firm, Thornhill Real Estate Group, confirmed the sale to The Vancouver Sun. Realtor Maggi Thornhill declined to discuss the deal in detail.

The deal has not yet closed, but the $17.5-million price tag will make it the second most expensive home to sell in all of B.C., according to data compiled by Landcor Data Corp. from the provincial land titles registry.

The most expensive transaction, according to Landcor’s list, was the $28.2-million sale of 3330 Radcliffe Ave. in West Vancouver.

That house previously attracted attention in 2004 when it sold for what was then a record $17 million.

In an earlier interview, Thornhill said she has noticed money coming back into Whistler over the past 10 months or so, following a lull in the market that has lasted several years.

However, while buyers were taking a breather on Whistler, other high-end resorts saw their markets rise, Thornhill said, so now Whistler isn’t the highest-priced real estate.

Patrick Kelly, with Whistler Real Estate Co., said market activity has not been the strongest at the “super high-end,” but “certainly interest has increased for more expensive family-oriented property.

“And that’s a trend right across North America. That’s not just a Whistler thing.”

Kelly said that Whistler is becoming more of an icon resort because of the Olympic venues that have been built there.

“I haven’t talked to anybody who’s been to the new [Olympic] Nordic centre who isn’t just raving about it,” he said.

“I don’t think it will ever be an Aspen or a Vail,” Kelly said, but right now Whistler’s stock is rising.

© The Vancouver Sun 2008

 

The downturn in the US economy has some Metro Vancouver home owners and home buyers worried and asking,

Nick Carey
Other

CHICAGO (Reuters) – The U.S. housing crisis has focused attention on adjustable rate mortgages (ARMs) and the danger posed by their spiking interest rates.

But mortgage bankers, industry experts and nonprofit officials say that the impact of one particularly nasty kind of ARM — called the Option ARM — involving hundreds of billions of dollars of loans has yet to be felt. And, they say, it will hit prime borrowers and subprime borrowers alike.

People like Bruce Rose, 53, who never should have got a loan.

Rose, 53, bought his home in Boston in 1986. After stress and depression forced him to retire as a state employee in April 2006 he “maxed out” his credit cards on his annual income of around $16,000.

On medication, he refinanced his debts through the largest U.S. mortgage lender, Countrywide Financial Corp (CFC.N: Quote, Profile, Research). The new loan totaled $439,000. Rose said he did not know his mortgage broker and Countrywide used a stated income loan — also called a “liar loan” because no proof of income is required — and that they claimed his monthly income was $12,166.

“If I had known what I was signing I would never have agreed to the loan,” he said. “Now I may lose my home.”

With an Option ARM, borrowers can make a minimum monthly payment like a credit card, but if they do the principal increases. Rose’s minimum payment rose from $1,200 a month to $2,800 and his loan now totals more than $500,000. He is fighting foreclosure.

“No reasonable lender would have given him a loan like that,” said Virginia Pratt, a foreclosure prevention counselor at ESAC, a Boston nonprofit group, who is seeking legal counsel for Rose.

Rose’s is an extreme case, but industry insiders say Option ARMs, also called Payment Option ARMs, will be the next chapter in the U.S. housing crisis and could push hundreds of thousands more subprime and prime borrowers into foreclosure.

“So far the public is largely unaware Option ARMs are going to cause problems,” said Scott Stern, Chief Executive of Lenders One Mortgage Cooperative, whose 100 members originate $40 billion in mortgages annually. “But mortgage servicers know what’s looming in the pipeline.”

Subprime borrowers have weak credit histories, while prime borrowers have good credit. Industry insiders say a skewed system that paid mortgage brokers more to sell Option ARMs than traditional loans has left even prime borrowers struggling with monthly payments and unable to either sell or refinance.

“So far we have only seen the tip of the iceberg of this problem,” said Michael Lefevre, CEO of trade group the National Association of Mortgage Professionals (NAMP).

NEGATIVE AMORTIZATION

Option ARMs have existed since the 1980s, but according to a U.S. Federal Deposit Insurance Corporation report, “Outlook Summer 2006,” as recently as 2002 they were still quite rare.

Like a normal ARM, the interest rate on one of these loans resets periodically. But the payment option allows you to make a minimum monthly payment instead of the full interest-only payment. The trouble is that the portion you don’t pay is added to the principal of the loan, so your mortgage goes up. This process is called negative amortization.

“This product is suitable for people with a lot of money who are financially astute,” said David Zugheri, president of First Houston Mortgage, which offers loans in 18 U.S. states. “But very few people fit that category and that’s why we didn’t make many of these loans.” 

Unfortunately, many other lenders did.

According to the Fed, in 2005 $1 trillion in new mortgages were issued, with another $1 trillion in 2006. ARMs made up about half of the total, according to the Mortgage Bankers Association (MBA). The MBA said Option ARMs made up 7.2 percent of all home mortgages in 2005 and 14.4 percent in 2006, giving a total of around $210 billion for those two years alone.

“This product has been used by far more borrowers than it was ever intended for,” said Brian Chappelle, a partner at mortgage consulting firm Potomac Partners LLC.

U.S. regulators tightened standards on Option ARMs in late 2006 and the number of new loans tailed off.

Until then, many mortgage brokers liked Option ARMs as they netted a far higher commission than a safer, fixed-rate loan.

“If you’re a broker and you can get $4,000 commission for a traditional loan and $12,000 commission for an Option ARM, which one are you going to pick?” said NAMP’s Lefevre.

Option ARMs also allowed people to buck the system and buy well beyond their means.

“An Option ARM fed the American aspirational mentality and allowed people to get into a home beyond what they could afford,” said Joe Dombrowski, an executive consultant at Brookfield, Wisconsin-based Fiserv Lending Solutions. “The minimum payment makes that possible.”

The problem is paying for it. According to a December 2006 Fitch Ratings report, almost 90 percent of people who got an Option ARM in 2006 used little or no documentation and more than 90 percent were suffering from negative amortization.

Industry insiders estimate at least 60 percent of Option ARM borrowers make only the minimum monthly payment. A Jan 22 issue of “Mortgage Strategist” a research note from investment bank UBS, estimated up to 80 percent pay the bare minimum.

“If you continue to make the minimum payments, a $600,000 loan can become a $750,000 loan within a couple of years,” Fiserv’s Dombrowski said. “You may have good credit, but now you’re in a trap.”

“And because you have good credit and are making your minimum monthly payments,” he added, “you’re not on anyone’s radar screen yet.”

STUCK IN A TRAP

Industry insiders say that as long as housing prices continue to rise and selling a house is not a problem, Option ARMs are straightforward to refinance.

“Unfortunately the economic conditions are working against a lot of borrowers facing resets,” said Dale Vermillion, a mortgage industry consultant and consumer advocate.

With falling house prices, selling is difficult for Option ARM holders as they would net far less than they still owe their lender — even supposing they can sell in a slow market.

As they owe far more than the house is worth and the market has been hit by a credit crunch, they also can’t refinance. Bruce Rose’s house in Boston, for instance, was valued at $325,000 in January 2006, but he owes more than $500,000.

“Falling house prices and negative amortization make the proverbial perfect storm,” said Potomac Partners’ Chappelle.

In the meantime, as borrowers continue to make their minimum monthly payments their mortgage increases in size. But the minimum payment also rises as a result.

“If people keep adding to the principal on their loan, eventually it becomes the bank’s problem,” First Houston Mortgage’s Zugheri said.

For those borrowers who could never afford a conventional fixed-rate mortgage for their properties, most will probably end up losing their homes through foreclosure.

Others could afford their mortgages if a deal were struck with their lender for a fixed-rate mortgage with no spike in payments that comes with an Option ARM.

But that would leave investors who bought Option ARM-related bonds at a premium short on cash. Lenders One’s Stern said that to avert a disaster with Option ARMs, U.S. Congress needs to broker a solution that “meets the needs of borrower, the needs of bond holders and preserves the sanctity of the housing market.”

That may be too late for borrowers like Bruce Rose.

“Everything my lender told me was a lie,” he said. “Surely that’s illegal?”

 

Record amount driven partly by new activity and partly by rising costs to build

Derrick Penner
Sun

Metro Vancouver set a record in 2007 for the value of new construction started in the region, driven partly by new activity and partly by costs to build new buildings that simply kept rising, according to Statistics Canada’s latest report on building permits.

The agency reported Wednesday that builders took out permits worth just over $7 billion in 2007, six per cent more than the previous year.

“Obviously, there is an inflation component built into [the numbers],” said Keith Sashaw, president of the Vancouver Regional Construction Association. “But I can tell you our guys are busy. Their order books continue to be full, and there’s still strong optimism in the Metro Vancouver area.”

Sashaw said builders started work on a higher number of housing units in 2007 than during the previous year, and 2007 was the fifth year in a row that the amount of commercial construction increased.

The Vancouver Regional Construction Association compiles its own report on building activity using the Statistics Canada figures that encompass a wider area than Metro Vancouver. Within that wider region, the association counted permits issued worth $7.8 billion. Within that, institutional and industrial construction dipped a bit, but was more than made up for by substantial increases in commercial construction and residential permit values.

Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association, said that the cost to build new housing increased in 2007 on continually inflating prices for land and labour. However, he said builders are trying to control unit costs by designing smaller housing units.

“Maybe more homes are at the lower end [of the price scale],” he added.

The City of Vancouver issued 5,087 permits in 2007, which is almost 1,000 fewer than those issued in 2006. However, the 2007 permits still added up to a record $2.6 billion, despite a three-month municipal strike.

David McLellan, Vancouver‘s deputy general manager of community services, said the development of southeast False Creek was the biggest generator of permits, and that some 5,400 dwelling units were covered by the permits issued in 2007.

In 2006, McLellan said, the higher number of permits covered only 3,600 new dwelling units.

Provincewide, municipalities issued $12.5 billion worth of building permits, a 13-per-cent increase from 2006 and a new record for B.C.

Residential permits worth $8.6 billion, up 13 per cent from the previous year, accounted for most of the activity.

And nationally, permit values were up 12 per cent to a record $74.3 billion, Statistics Canada said in its report, with the gain spread more or less evenly across the country.

In 2006, the report said, the increase in permits was fuelled mostly by “the tremendous demand in Western Canada.”

Records were set for both the value of residential and non-residential construction.

New homes, with permits valued at $45.6 billion, accounted for most of the building activity, Statistics Canada said.

“Higher construction prices for new dwellings contributed significantly to the gain,” the report added, as permit values in 2007 increased by 11 per cent while the number of dwelling units increased by only two per cent.

 

© The Vancouver Sun 2008

 

Benchmark prices are rising, but sales are slowing

Derrick Penner
Sun

Home-sellers in Greater Vancouver listed properties for sale faster than they sold in January, according to real-estate board figures.

Sellers listed 4,670 properties on the Multiple Listing Service, a 15-per-cent increase from January 2007, which is what forecasters expected.

“We’ve been expecting to see inventories rising,” said Robyn Adamache, a market analyst with Canada Mortgage and Housing Corp., “and this should lead to a little bit more balance in the market and help to slow the rate of price growth.”

Year-over-year, the so-called benchmark prices for typical units in each housing type are still showing double-digit increases.

The benchmark prices for detached houses hit $742,490 in January, almost 16 per cent higher than a year ago.

For townhouses, the benchmark was $462,627, up 12 per cent. The condominium benchmark was up almost 14-per-cent to $378,336.

With higher inventory, Adamache’s forecast is for those price gains to slow to eight per cent over the year and five per cent in 2009.

The benchmark for detached homes in Port Moody dropped 6.7 per cent to $633,837.

Adamache added that sales in the Real Estate Board of Greater Vancouver’s region, which takes in most of Metro Vancouver except for Surrey and includes Squamish, Whistler, Pemberton and some of the Sunshine Coast, are still strong.

She said that over recent months, homes on average sold for 98 per cent of their asking price, “which is still strong sellers story.”

Sales through the Multiple Listing Service in January hit 1,819 units, a marginal 0.7-per-cent increase from January 2007.

Adamache added that January’s sales figures were higher than those in January 2005, which wound up being a record year for sales.

Real estate board president Brian Naphtali said that with listings outpacing sales, “it appears the market is heading toward more balance.”

Naphtali added that the slight gain in sales occurred entirely among apartment properties.

Some 860 condominiums sold in January, a near 12-per-cent increase from the same month a year ago.

However, sales of detached homes, at 641, were down 7.8 per cent from January 2007.

Sales of townhouses, at 318 units, were down almost seven per cent from January 2007.

Adamache added that it is no surprise to see more strength in condominium markets given the high numbers of condominiums built over the past five years ago. She said apartment sales accounted for about one-third of all sales 10 years ago. In January, apartments were 48 per cent of sales.

© The Vancouver Sun 2008