A suite new place to park yourself

Kate Webb
Province

Smallworks designs its coach houses, which all come fully finished, in three styles: contemporary, arts-and-crafts and west coast.

Fertile ground for a big idea about to be showcased at the BC Home + Garden Show is no further than your own backyard.

The next major development trend in Vancouver, according to Greater Vancouver Home Builders Association CEO Peter Simpson, is going to be coach houses: fully finished, detached mini domiciles that can replace the garages behind single-family homes.

The coach houses — which are also known variously as laneway homes, garden suites and granny flats — are expected to become legal in Vancouver this year between mid-summer and early fall. They are already allowed in parts of Surrey, Langley and Maple Ridge, and North Vancouver is working on drafting similar bylaws.

“Coach homes will just add another viable housing form to the mix,” said Simpson, explaining his choice for this year’s GVHBA exhibit at the BC Home + Garden Show, which runs at B.C. Place Stadium from Feb. 18 to 22. “Vancouver has many housing forms, from condos to row-homes . . . and this does have the potential to transform entire neighbourhoods.”

The GVHBA exhibit, created by Vancouver-based builder Smallworks, will showcase a high-end, sustainable model of a coach home, complete with on-site carport and landscaping. “I wanted people to see what one would look like in a setting that replicates a typical Vancouver lot,” said Simpson. “We urge people to come down to the show and make up their own minds.”

Coming to a laneway near you

There is a long list of advantages to converting traditional garages into housing, according to Brent Toderian, who is Vancouver‘s director of planning and responsible for overseeing the laneway-housing zoning transition.

The homes will increase the city’s density, benefiting small, local businesses and facilitating development of more pedestrian neighbourhoods, he said. They will make the city more affordable by increasing rental stock. And, he said, they will increase opportunities for family members who crave independence but still want to live nearby.

Vancouver has already decided that it will not allow strata coach housing due to concerns it would turn the city’s single-family neighbourhoods into new battlegrounds for developer speculation and would create land-value instability.

“This idea is about rental stock, and about more flexible opportunities for families,” said Toderian. “This is for the homeowner, the renter, or the family member.”

There are still important details of the bylaws to be hammered out. The issues of height — whether to legalize one or 11/2 storeys — and parking are sure to be hot topics at remaining public consultation meetings.

Council will have to decide whether to require one or two parking spaces on properties with laneway suites. Currently, each residential suite on a given property must have its own on-site parking space. “There is a sustainability issue on the one side, and on the other side is the issue of neighbourhood parking management,” said Toderian.

Although the city will permit new structures to take up only the same footprint as the existing garage, there are still various possible configurations, such as laneway-entrance parallel parking spaces and attached carports.

The questions of height and parking requirements will be settled when Toderian’s staff report back to council after the first 100 are built. He said that street parking is already over-used in many neighbourhoods, so that is likely not a reliable option.

Small is beautiful

Smallworks, which specializes exclusively in building coach houses, designs its homes in three style categories: contemporary, arts- -and-crafts and west coast.

With polished cement floors, high-end European appliances, cedar siding and built-in bamboo cabinetry, the GVHBA exhibit will fall squarely in the contemporary category. It will be on sale at the home show for a starting price of around $170,000, said Jake Fry, the principle owner of Smallworks.

“We’re making really hand-crafted, beautiful homes,” said Fry, adding that his homes are all first built in modules and finished with everything from millwork and tiles to custom furniture in a Southlands workshop, and then assembled on site.

“You just bring your groceries in,” he said.

Smallworks‘ suites typically range from 450 to 650 square feet, and average $250 per square foot when tear-down of the old garage, cleanup and installation are factored in. A carpenter by trade, Fry prides himself on making the most of every inch, installing storage spaces and functional pieces of furniture everywhere possible.

He said his customers are usually looking to create a private space on their property for a family member, to make more income off their property by renting, or are friends who want to split a mortgage and each get to have their own home.

Lean and green

Another reason the GVHBA chose Smallworks to represent the emerging laneway housing market at the Home + Garden Show is that the company specializes in top-of-the-line green designs. Smallworks homes come with Energy Star-rated wall panelling, high-efficiency European appliances, high-efficiency energy systems, locally sourced materials and low-toxicity textiles.

© Copyright (c) The Province

Worthwhile Canadian Initiative

Other

The legendary editor of The New Republic, Michael Kinsley, once held a “Boring Headline Contest” and decided that the winner was “Worthwhile Canadian Initiative.” Twenty-two years later, the magazine was rescued from its economic troubles by a Canadian media company, which should have taught us Americans to be a bit more humble. Now there is even more striking evidence of Canada’s virtues. Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it’s Canada. In 2008, the World Economic Forum ranked Canada’s banking system the healthiest in the world. America’s ranked 40th, Britain’s 44th.

Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn’t grown in size; the others have all shrunk.

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada’s more risk-averse business culture, but it is also a product of old-fashioned rules on banking.

Canada has also been shielded from the worst aspects of this crisis because its housing prices have not fluctuated as wildly as those in the United States. Home prices are down 25 percent in the United States, but only half as much in Canada. Why? Well, the Canadian tax code does not provide the massive incentive for overconsumption that the U.S. code does: interest on your mortgage isn’t deductible up north. In addition, home loans in the United States are “non-recourse,” which basically means that if you go belly up on a bad mortgage, it’s mostly the bank’s problem. In Canada, it’s yours. Ah, but you’ve heard American politicians wax eloquent on the need for these expensive programs—interest deductibility alone costs the federal government $100 billion a year—because they allow the average Joe to fulfill the American Dream of owning a home. Sixty-eight percent of Americans own their own homes. And the rate of Canadian homeownership? It’s 68.4 percent.

Canada has been remarkably responsible over the past decade or so. It has had 12 years of budget surpluses, and can now spend money to fuel a recovery from a strong position. The government has restructured the national pension system, placing it on a firm fiscal footing, unlike our own insolvent Social Security. Its health-care system is cheaper than America’s by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; “healthy life expectancy” is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America’s largest car-producing region.

I could go on. The U.S. currently has a brain-dead immigration system. We issue a small number of work visas and green cards, turning away from our shores thousands of talented students who want to stay and work here. Canada, by contrast, has no limit on the number of skilled migrants who can move to the country. They can apply on their own for a Canadian Skilled Worker Visa, which allows them to become perfectly legal “permanent residents” in Canada—no need for a sponsoring employer, or even a job. Visas are awarded based on education level, work experience, age and language abilities. If a prospective immigrant earns 67 points out of 100 total (holding a Ph.D. is worth 25 points, for instance), he or she can become a full-time, legal resident of Canada.

Companies are noticing. In 2007 Microsoft, frustrated by its inability to hire foreign graduate students in the United States, decided to open a research center in Vancouver. The company’s announcement noted that it would staff the center with “highly skilled people affected by immigration issues in the U.S.” So the brightest Chinese and Indian software engineers are attracted to the United States, trained by American universities, then thrown out of the country and picked up by Canada—where most of them will work, innovate and pay taxes for the rest of their lives.

If President Obama is looking for smart government, there is much he, and all of us, could learn from our quiet—OK, sometimes boring—neighbor to the north. Meanwhile, in the councils of the financial world, Canada is pushing for new rules for financial institutions that would reflect its approach. This strikes me as, well, a worthwhile Canadian initiative.

© 2009

Sun

A median value is that value with half the values above it and half below.

In the 20 years before this one, 32,400 is the median number of homes, attached and detached, started every year by B.C. builders. (And 30,400 is the average number.) Accordingly . . .

If B.C. builders this year start 19,000 homes — and the B.C. Real Estate Association this week estimated they would — they would start 40 per cent fewer homes than the 20-year median start value (and 37.5 per cent fewer than the 20-year average value.)

The best thing that can be said about the 19,000 estimate is:

[1] 2009 would be one of those years in which starts fall below the median, and

[2] the last year of the previous decade was a worse year, with 16,300 homes started.

The worst thing that can be said is that if history were to repeat itself, the number of starts in 2010 will be lower than the number this year. They were 14,400 in 2000, a retreat of 1,990 starts from 1999. Canada Mortgage and Housing Corp., the national housing agency, provided the numbers for actual starts used in all this calculating.

© Copyright (c) The Vancouver Sun

Opportunities can disappear quickly

Bob Ransford
Sun

It is often said that the best lessons are learned during the toughest times. Well, during this, the fourth cyclical downtown in housing prices and sales in the last quarter century, let me share with you some lessons I have learned about living through the housing market doldrums.

First, some of the best opportunities seem to become lost opportunities when we let the fog of doom and gloom cloud rational decision-making. If you want to buy a home because it’s that time in your life to put your stakes down and invest in a roof over your head, then waiting for the market to bottom-out may mean missing the perfect opportunity today.

If you are searching for your perfect new home, you should understand that the further away the market is from its last peak the less product there is available in the market.

The lesson? You may not be able to find your perfect home at the best price if you wait too long for the market to hit rock bottom.

The second lesson I’ve learned during housing market downturns is that you will end up finding the best customer service and the most attentive sales people, developers, service staff, mortgage brokers and all of the other professionals connected with the housing business when times are tough. It’s the old adage that tough times never last but good people do. Hungry sales people provide the best service.

The third lesson learned during tough times is that a contract is a contract. You better think twice if you believe that the only risk you are exposing yourself to by walking away from a contract of purchase and sale is your initial deposit on the home you agreed to purchase.

In most pre-sale contracts, you are agreeing to buy a home at a future date regardless of where the price of that home is at when the purchase is to be completed. If you decide that you are not going to complete the transaction you contracted to complete then you should know that you are still generally obligated to the seller for the full contracted value of that home. With most contracts, sellers have the right to pursue buyers and collect the difference between the actual value generated by disposing of that home and the original contracted price.

The same caution about a contract being a contract holds true for developers. Developers are generally obligated to deliver a new home at the contracted price on a specific date unless a contract has specific provisions within it about construction cost escalations or completion delays. A developer walking away from a project before it is completed is no more acceptable than a buyer failing to complete on a purchase when the new home is ready for occupancy.

Let me add one disclaimer to this last lesson. I am not a lawyer and there are exceptions to every rule, just as there are exceptional clauses in every contract of purchase and sale.

There could be specific circumstance and specific contract provisions that provide for deviations from this last lesson. That brings me to another lesson–read the fine print in any contract you sign.

One final lesson learned during tough times in the housing market. A house is a home. You buy a home to live in it. A home is shelter.

It may be the biggest single investment you make during your lifetime but it shouldn’t be your biggest roll of the dice. Speculating or gambling with real estate –especially the home you plan to live in — is a dangerous game.

The housing market shouldn’t be a game.

Oh, one more lesson. Through four downturns over the last 25 years, I’ve learned that the market always comes back. Hold on for the next boom.

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.

E-mail: [email protected]

© Copyright (c) The Vancouver Sun

Sun

The receipt of a gold medal by a smaller and newer competitor in the multi-residence categories of the annual Georgie competition organized by the Canadian Home Builders’ Association of B.C. is a rarity.

This year, however, a tower by a relatively new and little known developer was named high-rise of the year. It is the Grace (left) in Vancouver‘s Yaletown neighbourhood and it was a new-home project from James Schouw & Associates.

Comments by Schouw (above) on Grace’s success in the competition included two lovely reminders. One was about the contribution of site to design, that compelling architecture takes its cues from its surroundings.

The other was about those aspirations for Vancouver that so many of us hold and, more likely than not, have had to park as we negotiate an international recession.

”As downtown Vancouver matures into a leading global example of what an urban environment can represent, it’s important to reflect that richness and intensity in the quality and character of its buildings,” he said in an interview.

The Grace was competing against Tapestry (Concert Real Estate); Dockside Green (Dockside Green Partnership); Aria 1 (Onni); and Elan (Cressey).

© Copyright (c) The Vancouver Sun

House’s ex-owners, realtors subject of suit concerning rural property

Keith Fraser
Province

Joe Brown, 68, and Pauline Stone, 71, stand under one of many damp patches on their ceiling Thursday in Quesnel. The couple have been living in the house for two years. What should be a relaxing retirement has turned into a stressful legal battle due to there having been a marijuana grow-op in the house at one time. Photograph by: Susan Smith, for The Province

A retired couple who bought a rural Quesnel property are suing the former owners and the realtors who sold it to them because it had a former marijuana grow-op on the premises.

Pauline Stone and Joe Brown say that before their purchase of the property in August 2006 the vendors signed a property disclosure statement denying that the premises had been used as a grow-op or to manufacture illegal drugs.

They say the sellers knew or ought to have known that the representation was false and after they agreed to buy the property with a house and a barn, they informed the realtors they suspected the barn had been used as a grow-op.

The couple also believed there were material deficiencies with the buildings and the realtor agreed to rectify the problems if they completed the sale, says a statement of claim filed in B.C. Supreme Court.

The deficiencies have not been rectified and since the completion, the couple says they have suffered from residual chemical pollution and excessive mould and moisture.

“We started getting sick not too long after moving in,” said Stone, 71, a mother of two and grandmother of six. “Since we’ve been here we’ve been to the doctors more times than I care to think about with upper-respiratory infections and breathing difficulties.”

Added the 68-year-old Campbell: “We’ve been going through pretty horrible moments because this was our nest egg and we were going to be retired, no mortgage to pay. We’ve ended up in one awful mess.”

The couple are suing for general, special and aggravated damages.

Named as defendants are former owners Serena Douglas and Lynn Carole Douglas, realtors Dale Peter Yaffe and Christine Clayton, also known as Christine Yaffe, and Prism Realty Ltd., doing business as Royal LePage Prism Realty.

The Douglases could not be reached.

Christine Yaffe said her father-in-law, Dale Yaffe, handled the deal for the buyers while she acted for the sellers.

“They were the ones that actually stumbled onto the grow operation,” she said of the buyers. “I had never seen it. I had never heard of it.”

Dale Yaffe could not be reached.

In February last year, the Real Estate Council of B.C. issued a “consent order” finding that Dale Yaffe had committed professional misconduct in his handling of the sale and ordered him to pay $750 in enforcement expenses.

No statements of defence have been filed.

© Copyright (c) The Province

Couple tried to renegotiate deal after existing home didn’t sell

Derrick Penner
Sun

Vancouver Sun / Lou and Donna Skoda couldn’t sell their apartment to raise the money to close on their Aria 2 purchase in Port Moody, behind them. Lou Skoda says when Onni heard of their difficulties, the company offered them a six-per-cent price reduction. Photograph by: IAN SMITH, Vancouver Sun

At least one buyer being sued by the Onni Group of Companies for not completing his purchase of a Port Moody condominium plans to fight back.

Lou Skoda who, with his wife Donna, signed a pre-sale contract in September 2007 to buy a two-bedroom apartment in Onni’s Aria 2 building in Port Moody, is looking for a lawyer to take on his case.

Onni is suing 20 purchasers in the Aria 2 development for not completing their purchases. It is the second developer in recent weeks to file suit against pre-sale buyers for the same reason. Amacon was the first.

Skoda will argue that Onni amended Aria 2’s initial project disclosure statement twice, but never delivered copies to the couple, a requirement under real estate development marketing rules.

Skoda said the couple always wanted to complete the purchase, but the downturn in Metro Vancouver’s real estate market got in the way of their plans, and Onni wouldn’t renegotiate their deal.

Skoda said they wanted to use money he had received in a court settlement to buy a place with more space for visits by their two young granddaughters.

The couple promised to pay $456,000 for the Aria 2 apartment, and believed they would easily be able to pay for it when they sold their existing apartment nearby, which they tried to do last fall.

“When the time came, we put our apartment for sale, but it was no good,” Skoda said. “We bought [in Aria 2] at the height of the market, and were trying to sell our apartment when real estate prices went through the floor.”

Without an offer on their existing property, Skoda said they wouldn’t have the money to close the Aria 2 purchase. At age 79 and living on a very limited fixed income, Skoda said there was no way he would be able to get a mortgage to buy the new apartment.

Skoda said he asked Onni for an opportunity to renegotiate the deal.

“I thought under the circumstances, I could make a deal and get at least some of the deposit back,” Skoda said. The answer, however, was no.

Now the couple stands to lose the $68,350 deposit they put down on the property, plus additional damages that Onni is seeking in its suit against them, starting with lost property value.

In January, Skoda learned that Onni was putting the apartment the couple wanted to buy up for resale at a price 25 per cent less than their contract price as part of the developer’s “liquidation” of 375 unsold units.

On that basis, Onni could seek at least an additional $45,000 from the Skodas.

Skoda said he approached Onni again, offering to buy the apartment at the reduced price.

“I made my case [to the developer] and showed him that at a 25-per-cent discount we can really swing [the purchase],” Skoda said. “It would not be easy, but we would really like to proceed and finalize the sale.”

However, the best Onni could come back with was a $27,000 discount — about six per cent — which was not enough of a break.

Real estate lawyer Ken Pazder said the most common question he is getting these days is from pre-sale buyers looking for options to get out of their contracts, and the majority are not speculators simply looking to abandon a bad deal. At least three hold contracts in the Millennium Water Olympic Village development.

“In a lot of cases, it’s that they can’t close,” Pazder said. “Their bank is only going to lend them money based on the [unit’s] current appraised value, which in some cases is $100,000 less than what they’re paying.”

Pazder added that pre-sale buyers have to take a close look at their contracts and their project’s disclosure statement to see if the developer has lived up to the letter of its obligations.

If a developer did not deliver an amendment to the disclosure statement within the required period, that would allow a buyer to rescind the contract. Also, if an amendment substantially changed the contract’s terms, that would be another.

Pazder said “nine out of 10” pre-sale contracts include clauses that allow the developer to seek forfeiture of deposits, plus additional damages.

“I haven’t seen any [pre-sale] contracts that are remotely fair,” Pazder said. “They are completely skewed to the developer.”

If a developer fails to complete a contract, he said, the buyers’ only recourse is to get their deposit back.

© Copyright (c) The Vancouver Sun