Archive for February, 2009

Good news on home-reno tax credits

Sunday, February 22nd, 2009

TONY GIOVENTU
Province

Dear Condo Smarts: Our strata council has been receiving inquiries from our owners asking if they will be able to qualify for the new federal home reno tax credit. Will strata corporations qualify? If so, would it apply to each unit or does the strata corporation have to file returns? How are owners supposed to know how much they will be able to qualify for?

There is good news for resident strata homeowners. In the case of condominiums (strata property in B.C.) and co-operative housing corporations, the individuals who share the cost of eligible expenditures for common areas will qualify. The credit will be based on expenses for work performed or goods acquired after Jan. 27, 2009, and before Feb. 1, 2010.

Eligibility for the tax credit will be family-based, and a single credit per family may be shared within the family. Eligible expenditures need to be incurred in relation to a renovation or alteration to an eligible dwelling or related land f o r m i n g p a rt of the dwelling. It includes the cost of labour, professional services, building materials, fixtures, rentals and permits.

Your strata must maintain and retain copies of agreements, invoices and receipts that clearly identify the type and quantity of goods purchased or services provided.

There are some practical implications for strata corporations and strata managers. It will require the strata corporation to produce a financial statement of the types of expenses that will qualify, and the strata will likely be required to issue to each owner at the end of the period on Feb. 1, 2010, a statement showing the total costs, and the share of each unit based on unit entitlement.
Owners do not have to submit supporting documents with their tax returns, but they must be available should they be requested by the CRA.

It will be critical that your strata corporation tracks the eligible expenses this year and maintains all of the related records.

Eligible repairs include kitchen, bathroom or basement renovations, new flooring, new additions, decks or fences, a new furnace, a new driveway or painting of the interior or exterior of your homes.

For more info go to www.budget.gc.ca/2009 or www.cra-arc.gc.ca

[email protected]

Building up to a green homes future

Sunday, February 22nd, 2009

OUTLOOK: B.C.

Vancouver’s B.C. Place stadium

Sunday, February 22nd, 2009

Foolish spending

Province

A preliminary sketch depicts how Vancouver’s B.C. Place stadium would look with its planned new retractable roof. The provincial government plans to fund the $365-million roof through condo sales.

How very nice — we’re going to spend $365 million on a facility that most residents of B.C. have never been to or even seen. We all helped build B.C. Place in the ’80s. Now we are going into debt to refurbish a place that most of us couldn’t even find with a map and a flashlight. On the other hand, the Whitecaps are not allowed to build a facility at their own expense.

Don Brewer, Yarrow

© Copyright (c) The Province

Credit rating takes Olympic-sized hit

Sunday, February 22nd, 2009

After the downgrade, Vancouver must pay more to borrow money

Christina Montgomery
Province

The $750-million Olympic Village is now the $875-million Olympic Village. It is scheduled for completion by November. Photograph by: Gerry Kahrmann, The Province

Vancouver‘s credit rating — and its ability to borrow money cheaply — took another hit Friday over its role in financing the billion-dollar Olympic Village.

At least one reputable ratings agency says the downward pressure on the city’s ratings won’t ease for 12 to 18 months, pending some sign that condo sales in the housing will go well and the city can recover its investment.

DBRS, a Toronto credit-rating agency, announced Friday it was downgrading the city’s rating from AA (high) to AA in a trend that is “now negative,” it said.

The change came just days after the city began to draw on a line of credit set up to buy out the previous lender for the False Creek housing project and take over financing to Millennium, the developer.

The city has already shovelled more than $450-million into the project.

The city’s involvement “is expected to boost debt substantially” and there is “significant uncertainty regarding the financial outcome of the project,” the DBRS announcement said.

In late January, when ratings agency Moody’s dropped the city’s ratings, Mayor Gregor Robertson estimated that a single drop in the rating could potentially cost the city $250,000 to $300,000 in interest charges on each $100 million of money it borrows.

The better the city’s credit rating, the cheaper the interest rates lenders offer.

The project, an 1,100-unit multi-building complex, will house athletes and officials during the 2010 Olympic Games.

Some 250 units are to be used as social housing and 850 market units sold after that.

The project has grown so costly that city council voted this week to study ways of managing the cost of the social-housing and affordable housing units — and whether they are still viable at all in the project.

The Olympic Village budget was originally set at $750 million, excluding land costs. It has since jumped by about $125 million.

DBRS’s announcement confirmed that sales of the units “could help reduce debt to more manageable levels and replenish reserves,” but said “considerable uncertainty remains with respect to the city’s ability to prevent further deterioration of the project, the extent of the debt financing needed beyond the $400-million project and the value to be realized from the sale of the housing units.

“As a result, the downward pressure on the city’s rating is expected to remain high over the next 12 to 18 months.”

This week, the city secured a $400-million line of credit, $90 million of which it tapped to buy out the original lender.

It also used $240 million from its cash reserves to help with the buyout. In addition, $134 million in construction advances have been made to Millennium since September, when the New York-based lender Fortress stopped the flow of loan money.

Vancouver‘s total investment in the project is now $464 million, leaving more than $400 million in additional funding required to complete the project by the November deadline, according to DBRS.

The agency says that tax-supported debt is expected to grow well beyond $2,000 per capita by the end of 2009, including Vancouver‘s share of net debt held by the regional transit authority.

DBRS is the third credit-ratings agency to fret publicly this year about the city’s financial involvement in the Olympic Village.

© Copyright (c) The Province

 

All-in-one storage for digital media

Saturday, February 21st, 2009

Sun

LaCinema Classic

iBoo,Speakal

COOLPIX P90, Nikon

LaCinema Classic, LaCie, $230

This is a 500-gigabyte multimedia hard drive device that you can load up from your computer and then plug into the HDMI port on your television to see the contents on the widescreen. It lets you digitally store movies, music and photos, making your entertainment collection mobile. It has a high-speed USB 2.0 to plug into any PC or Mac computer. www.lacie.com

Home Media Network Hard Drive, Iomega, $290

More on the home entertainment front arriving in Canada, this hard drive lets you share photos, videos and music around all the devices on your network. Save the files in one spot and play them back on your game console, digital photo frame, your networked television or other devices. It has built-in iTunes support.

www.iomega.com.

iBoo,Speakal, US$90

It somehow seems out of season — the iBoo which launched this month looks like it would be right at home at Halloween. With a built-in iPod docking station, it combines form and function with the smiley mouth a sensor for receiving remote control commands and the eyes mid- and high-range speakers with the subwoofer hidden below. It delivers 15 watts of sound and comes with its own remote control. As well as the iPod dock it includes cradles and the standard auxiliary 3.5 mm input jack to provide connectivity to a range of audio players, cellphones and other devices.

COOLPIX P90, Nikon, $500

Nikon’s new COOLPIX line has the new P90 for photo enthusiasts and others who want features more advanced than the typical point-and-shoot camera. It has a 24-times optical zoom Nikkor lens with 12.1-megapixel resolution. Its three-inch (7.6 cm) vari-angle LCD monitor can tilt as much as 90 degrees upward or 45 degrees downward. Its smart portrait system automatically detects as many as 12 faces in a shot and a smile timer automatically releases the shutter when the subject of the photo smiles. www.nikon.ca.

© Copyright (c) The Vancouver Sun

 

$75B anti-foreclosure plan is a ‘chance to rebuild,’ Obama says

Friday, February 20th, 2009

Richard Wolf and Stephanie Armour
USA Today

Fans reach out to President Obama after he unveiled his administration’s plan to help homeowners facing foreclosure while at Dobson High School in Mesa, Ariz., on Wednesday. By Larry Downing, Reuters

MESA, Ariz. President Obama added the nation’s housing foreclosure crisis to his economic recovery agenda Wednesday with a $75 billion plan to help up to 9 million troubled homeowners stay in their homes.

The program is tailored so up to 4 million homeowners can reduce their mortgage payment so it is no more than 31% of their income. As many as 5 million more facing foreclosure or who owe more on their mortgages than their homes are worth would have a chance to refinance, as long as their mortgage is not excessively higher than their home is worth.

The plan “will give millions of families resigned to financial ruin a chance to rebuild,” Obama said before a packed high school auditorium in a state that’s been racked by the housing crisis. But the president said the plan won’t help every distressed homeowner. “All of us must learn to live within our means again.”

Fannie Mae and Freddie Mac, the two mortgage giants, could receive an additional $100 billion each from the government. As a result, the plan’s cost could be as much as $275 billion.

Homeowners whose total monthly debt payment is more than 55% of their income would have to go to credit counseling to get help from the plan.

Housing Secretary Shaun Donovan said help would not be available to homeowners whose mortgages are more than 5% above what their homes are worth because lenders would probably not approve new financing for people so far underwater.

“You have to have a reasonable chance of success,” he said.

Obama said it “focuses on rescuing families who have played by the rules and acted responsibly,” rather than speculators, home flippers and people who bought far more than they could afford.

That appealed to Patrice Caldwell, 55, a widow in the audience whose Phoenix home is worth $80,000 less than her mortgage.

“I really like the part that it’s for the responsible people, who through no fault of their own are affected,” she said.

The plan earmarks $75 billion, mostly from financial rescue funds already approved by Congress. Lenders would be responsible for lowering interest rates so a borrower’s monthly payment is no more than 38% of their income. The government would then help pay for the costs of reducing a borrower’s loan payment so it becomes 31% of income.

Republicans blasted the plan for leaving taxpayers on the hook.

“The president’s plan actually will use taxpayer money to pay people to do what they are already supposed to do — pay their mortgage,” said Sen. Richard Shelby of Alabama, top Republican on the Senate housing committee. “It also uses taxpayer money to pay banks to do what they should already be doing — modifying mortgages.”

Some elements will require congressional approval — notably an overhaul of bankruptcy rules to allow judges to reduce mortgages on primary residences to their fair market value.

New-home building to take a dive, CMHC says

Friday, February 20th, 2009

Prices could fall another 10 per cent this year, according to forecast

Derrick Penner
Sun

The balancing of supply and demand in British Columbia housing markets should result in a 34-per-cent decline in housing starts and a further 10-per-cent slide in home prices, according to Canada Mortgage and Housing Corp.’s latest forecast.

Canada Mortgage and Housing, in a forecast update issued Thursday, called for new-home starts of 22,800 in 2009 down from 34,321 in 2008.

The national housing agency also estimates the average B.C. home price will hit $407,700 in 2009, down from $454,599 in 2008.

Carol Frketich, Canada Mortgage and Housing’s regional economist for B.C., said the slowing economy and rising unemployment will lead to weaker demand for housing over the next two years.

“We’re going to see consumers rein in their spending, and that includes spending on housing,” Frketich said in an interview, and builders will slow down construction on new homes as a result.

Frketich said the decline in starts will be below the level of construction that would be expected considering B.C.’s population growth and the rate that new households are formed in the province.

Based on that growth, B.C. would expect to see 30,000 to 32,000 new homes built in 2009 if the economy were stronger.

“In a period where you have a strong economy and strong job market, which we did see over the last few years, you build above [population] demand,” she said.

Frketich added that the forecast numbers are still higher than the 15,000 level experienced during the last correction in B.C.’s real estate markets.

Tsur Somerville, director of the centre for urban economics and real estate at the Sauder School of Business at the University of B.C., said B.C. saw a period between 1994 and about 2001 where housing construction didn’t keep up population growth and the increase in household formations.

“That’s why you can have starts be above household growth for a while and not necessarily be overbuilding,” he said.

However, B.C. built so many new homes in the last few years he thinks there could be room for housing starts to fall further than the Canada Mortgage and Housing forecast.

Thought Frketich’s forecast calls for a 34-per-cent decline, Somerville said “that still seems to be closer to the optimistic end of the range,” compared with the level of sales in provincial home-resale markets.

“Right now, our starts are not as low as they have been in previous downturns,” Somerville said. “Yet our sales numbers are dropping off significantly. That seems to suggest start numbers are going to be low for a while.”

Housing starts trail housing sales, Peter Simpson, CEO of the Greater Vancouver Home Builders Association, said in an interview. So he is not surprised to see expectations for housing construction decline as slower sales spilled from 2008 into 2009.

Simpson said the drop in housing starts will reduce employment in the sector — from construction sites to the manufacturing plants that produce building supplies.

Frketich expects housing markets to balance out in 2010 with the return of some economic strength and as buyers are attracted to the reduced home prices and lower interest rates on mortgages.

© Copyright (c) The Vancouver Sun

An artful restoration of Chinatown’s oldest building

Friday, February 20th, 2009

Transformation to unique complex has price tag of more than $10 million

John Mackie
Sun

Bob Rennie at one of the light wells featured in the heritage restoration of the Wing Sang building, Chinatown’s oldest. Photograph by: Ian Lindsay, Vancouver Sun

The first thing Bob Rennie wants you to know about his restoration of the oldest building in Chinatown is that it isn’t a condo development, it’s an office and art gallery.

“If it was condominiums it would just get all confused by the community that it’s a real estate deal,” says Rennie, arguably the most successful realtor in Vancouver history.

“It’s a crime of passion. We want a house for the art, and this is where we’re going to put it.”

He could have added “cost be damned,” because his restoration of the 1889 Wing Sang building has proven incredibly expensive.

He doesn’t want to give an exact figure, but admits the project is “100 per cent over budget.” Asked if it’s a $10-million project, he smiles and says “it’s over that.”

Still, he doesn’t seem overly distraught. In fact, he’s quite excited about his four-year transformation of one of Vancouver‘s most historic structures into something unique.

The Wing Sang property at 51 East Pender is two structures, a three-storey building in front and a six-storey building in back. The front building was built by Chinatown patriarch Yip Sang for his import-export business, the Wing Sang Co. Originally two storeys, a third was added in 1901. In 1912, Yip added a six-storey building in back, where he housed his large family — four wives and 23 children.

Together the buildings have 27,000 square feet of space. Rennie plans to use 6,000 sq. ft. in the front as offices, and allocate the rest to his art gallery. It will feature items from his large art collection, but won’t be accessible by the public — it’s a private gallery.

The project should be finished by the fall. It promises to be a dramatic space. The main floor in the front building will have high ceilings, about 14 feet. But that’s small potatoes compared to the art gallery in the back building, where several floors are being removed.

When construction is finished, it will be a four-storey space — 40 feet.

There will be an adjacent space with a 20-foot ceiling in the front building where films and videos will be shown, as well as a rooftop sculpture garden.

“You can park a car on that roof,” says Rennie, 52.

“One of the sculptures is two tons, [so it was rebuilt] to take the weight.”

Rennie is a serious art collector, with works from internationally known contemporary artists like Britain‘s Thomas Houseago (who did the two-ton sculpture), Germany‘s Anselm Kiefer and Vancouver’s own Rodney Graham, Ian Wallace and Brian Jungen.

There’s about 40 artists we have in extreme depth,” he notes.

There’s different parts of the collection that have to do with identity and prejudice, there’s a painting collection, there’s sculpture.”

His restoration is a work of art in itself. The architect for the project is Walter Francl, and the heritage consultant is Robert Lemon, but the vision is Rennie’s.

The two buildings are red brick, with wood frames. The front building was in relatively good shape, but the back building had been vacant since the mid-’70s, and was a mess. Pigeons had been roosting there for decades, leaving behind a foot of droppings.

“They had a team with hazmat suits [go in],” says Rennie. “It was unbelievable. We put a rat trap in every room.”

It took a few months, but eventually they cleaned it up. But there was another problem with the back building: because it hadn’t been heated in decades, the brick was in rough shape.

They installed temporary bracing, then poured shotcrete inside the original brick walls to support the structure. With 20/20 hindsight, Rennie says it would have been cheaper to tear down the back building, build a new one, then put a brick facade over top. (The back building was condemned when he bought it.)

He offset some of the costs by selling off $4,850,000 in heritage density bonuses to the Jameson House development downtown. But the cost was far higher than the money he received.

He shrugs. “But it’s done now, that’s all water under the bridge.”

The ground floor of the front building will be occupied by Rennie and Associates, the retail wing of the Rennie empire (it does condo resales). Rennie Marketing, which deals with new condo developments, will be on the second floor. Rennie’s own office will be on the third floor.

“I’ve never had an office before,” he says with a laugh.

“I share a round boardroom table with four other people. I do not have a computer. Yet. I’m going to get one. I do everything on a BlackBerry, and Kevin who runs the office enters everything. But I’m going to have an office.”

The heritage gem of the project is the boardroom on the third floor. It was a schoolroom for Yip Sang’s children, and is virtually unchanged since it was built in 1901, with beadboard wainscotting on the walls and ceiling and a large blackboard with ancient writing.

“[Yip Sang’s son] Henry said those are bowling scores from 70 years ago,” marvels Rennie.

“Through all of the controversy, all the vacancies, it seems everybody’s always had a respect for this room. The writing stayed, nobody abused it.”

The rest of the building has been more or less stripped down to the bare walls and rebuilt, but the schoolroom is being saved as is. They aren’t even going to paint it.

“We decided to just scrub it and clean it,” says Rennie. “Put in contemporary furniture, and just let it live the life it has.”

There used to be an alley between the front and back buildings, but it has been covered by a glass roof. The ground floor of the back building is parking, so visitors will walk up some stairs to the gallery, which will have an arched entrance 24 feet high.

The roof should be quite cool. Birch trees will be planted along the east side, and poppy plants on the west and north, a reference to the opium trade that flourished in Chinatown before it became illegal in 1908. Yip Sang, in fact, imported opium into the building. (Yip’s main job was working with the Canadian Pacific Railway — he brought thousands of Chinese workers into Canada to build the CPR.)

There will be one piece of art the public will be able to see — a 75-foot-long neon sign by Britain‘s Martin Creed that will be placed along the top of the back building.

“It says ‘Everything is going to be all right,’ ” Rennie says.

“It has a lot of meanings, looking at the challenges in the area and the challenges in the economy. You’ll see that in the Olympic Village.”

Rennie is well aware Creed’s statement may provoke some controversy, given its location near the long-troubled Downtown Eastside. But the life-long Vancouverite purposely bought in the neighbourhood rather than downtown, because “I wanted to be part of the new vision for the Downtown Eastside.”

The first building he tried to purchase was the old Blue Eagle restaurant on East Hastings. It wasn’t available, so he bought the Wing Sang building for $1 million. It was a quick deal — he was told he could buy it if he put the money up that day, so he did, without ever setting foot inside.

He’s an interesting fellow. The day we met, he was trying to get hold of Premier Gordon Campbell’s cell number so he could talk to him about the Olympic Village site, where Rennie is selling the condos.

A few minutes later, a street person came up and asked if Rennie could charge his cell phone in his car lighter.

Rennie obliged, and talked to the guy about his life on the streets for about 10 minutes. Then he gave him back his charged phone, along with a $5 bill “to go get some lunch.”

Rennie has no interest in moving the down-and-out from the area.

“My goal is to balance the street, with the fortunate and less fortunate walking together,” he says.

“If you’re moving into this area, you’re buying into diversity.”

© Copyright (c) The Vancouver Sun

Grim forecast for housing

Friday, February 20th, 2009

Tumbling prices and fewer starts expected for some time to come

Province

Don’t let it bring you down — it’s only more grim news about B.C.’s housing market.

Not only will B.C. post Canada‘s largest drop in resale house prices this year, it will be one of only two provinces to see a decline next year, Canada Mortgage and Housing Corp. said yesterday.

And not only will B.C. see Canada‘s biggest fall in housing starts in 2009, it will again be one of only two provinces to see a drop next year, CMHC added in a market outlook.

B.C. resale prices will tumble 10.3 per cent this year to $407,700, with another 0.6-per-cent decline to $405,400 next year, CMHC said. Ontario will be the province’s sole partner in decline in 2010, with a one-per-cent drop, it said.

Starts in B.C. will plunge 33.6 per cent to 22,800 in 2009 and drop 9.2 per cent next year. Quebec, the only other province to see fewer starts next year, will post a drop of 0.5 per cent, CMHC said.

CMHC’s outlook foresees a silver lining, as have earlier reports. High levels of existing homes listed for sale and fewer overall sales are helping buyers, CMHC said.

“Market conditions will favour homebuyers, who will benefit from more choice and lower prices than in recent years,” it said. Homebuyers will also be drawn back to the market by stronger job growth in B.C. next year, it said.

In the Vancouver area, the average house price will fall to $527,000 this year from $593,767 in 2008. The price should rise slightly to $528,000 next year, CMHC said.

Nationally, new-home construction is expected to drop 24 per cent but rebound in 2010, CMHC said.

Housing starts are expected to be 160,250 units for 2009, down from 211,056 units in 2008, CMHC said.

Looking to 2010, starts should rise a bit to 163,350 units, CMHC said, while home sales and prices are also expected to climb. The average national home price will crawl upward to $288,100 from $287,900 in 2009, it said.

© Copyright (c) The Province

Vancouver Projects on hold skirting property taxes by re-zoning the lots from Class 6 (Business) to Class 8 (Recreational or non profit)

Thursday, February 19th, 2009

Christina Montgomery
Province

The new community garden at the corner of Burrard and Davie streets in Vancouver’s West End yesterday. Photograph by: Jon Murray, Province

A couple of shrubs and a few park benches thrown up on vacant land owned by developers means they can dodge hundreds of thousands of dollars in tax bills.

These miniparks or vegetable gardens have sprouted on some half-a- dozen sites in Vancouver and are saving the developers $1.3 million this year. And that has the city worried that more requests will arise as the economy tanks and developers seek cheap ways to carry property as they ride out the storm.

Council voted Tuesday to put together a detailed argument to the province asking that the loophole be closed.

Classification of property for tax purposes is done by the B.C. Assessment Authority and would require the province’s involvement.

To reclassify, developers create parks or garden space and apply for rezoning from Class 6 (business or commercial) to Class 8 (recreational or nonprofit). That move cuts taxes by about 70 per cent.

Among the proper- ties that have been re- classified in Vancouver recently:- Omni Group’s popular gardens at Pacific and Seymour. The seven parcels are worth an assessed $24 million. All are now Class 8, saving Omni $357,000 this year alone.

– Prima Properties’ community garden at Burrard and Davie. The $24-million site was headed for retail and condos. As Class 8, it saves Prima about $345,000 a year.

Sunco Enterprises’ gardens at Oak and 16th. On land worth just over $3 million, Sunco saves $47,000 for the scraggly site.

Cressy Developments’ two community parks, one at West 1st and Columbia and one at Drake and Howe alongside the Granville Street Bridge.

The first, directly bordering Olympic village construction, is worth $14.9 million and earns a tax break of $222,000. At the moment it features two benches, a line of young trees and a stretch of gravel. The other, the site of a former Travelodge hotel, is worth more than $20 million. Its two benches, handful of saplings and gravel earns it a $308,000 annual tax break.

© Copyright (c) The Province