B.C. residents see ownership benefits, but most will wait a year

Province

Seventy-eight per cent of B.C. residents — the highest percentage in Canada — believe they’re in the midst of a buyer’s market, according to a new Royal Bank of Canada survey.

Homebuying intentions in B.C. have shown no change from last year, with 26 per cent of residents planning to buy in the next two years, the bank said yesterday.

Still, 55 per cent believe it makes more sense to wait until next year to buy a home rather than purchase now, according to the survey done for the bank by Ipsos-Reid.

“Based on these figures, most British Columbians believe that the time is right for buyers and most remain largely confident that the long-term value in a home makes for a good purchase,” RBC spokesman Kevin Lutz said.

Eighty-one per cent of people surveyed in B.C. believe that buying a home is a good or very good investment, the poll found.

B.C. homeowners estimate the value of their home at an average of $355,571 — the highest average home value in the country.

On average, B.C. residents estimate the value of their homes rose 10 per cent in the last two years.

Nationally, most Canadians also believe it is a buyer’s market, with more first timers planning on purchasing their own homes, RBC said.

“The current economic environment does not appear to have dampened Canadians’ overall confidence in the housing market,” RBC spokeswoman Karen Leggett said.

Sixty-five per cent of Canadians said they believe it’s a buyer’s market, with 27 per cent saying they plan to buy a new home over the next two years. That’s up from 23 per cent in 2008.

At 48 per cent, almost half of respondents said it makes sense to buy a home now instead of waiting until next year.

Younger Canadians, those under 35 years old, are most likely to spark an upsurge in homes sales, with 48 per cent planning to buy a home, up from 36 per cent last year.

Renters appear to be tired of paying someone else’s mortgage.

The survey shows 38 per cent of the renters plan on becoming homeowners in the next two years.

“Low mortgage rates and favourable housing prices are influencing home purchase intentions this year and may be the reason why more Canadians are poised to purchase over the next two years,” RBC said.

A large majority of Canadians, 83 per cent, remain positive that home ownership is a good investment.

In a marked change from last year, 54 per cent of Canadians believe housing prices will be lower in 2009, up from 31 per cent in 2008.

© Copyright (c) The Province

Stephanie Armour
USA Today

WASHINGTON — The Obama Administration on Wednesday outlined key details of a $75 bilion housing rescue plan expected to help as many as 9 million homeowners rework mortgages into more affordable monthly payments.

Among the details, borrowers who want to qualify for the loan modification plan will have to provide proof of financial need and payment ability, including an affadavit of financial hardship, their most recent tax return and two pay stubs.

The program will apply to loans made on or before Jan. 1, 2009 and modifications will be allowed only once. Those with first mortgages of more than $729,750 do not qualify.

“Today’s annoucement means you should call your lender to find out if you qualify,” says Lawrence Yun, chief economist with the National Association of Realtors (NAR). “This should get the ball rolling.”

The outline of the rescue plan was announced Feb. 18. Among the details added Wednesday:

• Loan Refinancing. Up to five million homeowners with a solid payment history on mortgages held or owned by Freddie Mac and Fannie Mae will be eligible to refinance into more affordable terms.

The rules announced Wednesday say homeowners may be able to refinance even if they have less than 20% equity in their homes. An appraisal may be necessary.

The program will end in 2010.

• Loan Modifications. Lenders and other loan servicers can begin making modifications that could help up to four million at-risk homeowners stay in their homes.

To be eligible, homeowners with a first loan can have an unpaid principal balance up to $729,750. Higher limits will be allowed for owner-occupied properties with two to four units.

All borrowers must document income, which includes providing two most recent pay stubs and an affidavit of financial hardship.

The program will run until Dec. 31, 2012. Incentives are provided to get lenders to modify mortgages if a borrower isn’t late on payments but is at risk of default.

“I like the plan because it addresses (homeowners) who are not behind on payments,” say Yun, with NAR. “It addresses people who could default. It’s proactive.”

• Lenders and other servicers. Lenders will be required to use a formula on each loan that is 60 days past due or delinquent.

Lenders should take into mind the likelihood that homeowners can afford terms of the new loan.

Servicers also must follow an established process to reduce the monthly payment to no more than 31% of the borrowers’ gross monthly income. To do that, lenders will first reduce the interest rate on the loan and then could extend the term of the loan to as many as 40 years.

Servicers will get financial incentives, such as an up-front fee of $1,000 per modification, to encourage participation.

Vacancy rates are low, but builders say rents aren’t high enough to cover costs

Fiona Anderson
Sun

The number of rental properties being built in British Columbia is increasing, but the numbers are a far cry from what they were a decade ago. And a surge in apartment building construction is unlikely in the near future.

In 2008, 748 new rental units were started in Vancouver, and 1,449 were started in B.C. That’s a steady increase from the 509 starts in Vancouver and 1,096 starts in the province just two years ago.

But those starts represent only about four per cent of total residential construction in both the city and province, well below the 25 per cent level reached in 2001, and the 10 to 11 per cent in the early 1990s, said Carol Frketich, B.C. regional economist with the Canada Mortgage and Housing Corp.

The problem is that building rental units is not financially viable, Frketich said.

“We’ve had a very strong housing market in B.C. where land prices have risen significantly and land is a large component of the building of a rental,” she said.

And while the rental market is tight — with vacancy rates of 0.5 per cent in Vancouver in the fall — rents have not had the double-digit increases land prices have.

“So financially for someone to build, it was more viable to build a condo and sell it than it was to build a rental unit,” Frketich said.

Brian McCauley, executive vice-president of Concert Properties, and a speaker at an Urban Development Institute seminar on rental housing Tuesday, said new rental residential construction in Vancouver is not going to happen “without significant concessions from various levels of government and a continuing softening of constructions costs.”

Between 1990 and 2001 Concert built about 2,700 rental units in the area “but the fundamentals were dramatically different,” McCauley said.

Land values and construction costs were about a third of what they are today. And while rental rates have increased, they have not risen enough to cover the increased costs, he said.

Marg Gordon, CEO of the B.C. Apartment Owners and Managers Association, attended the seminar and is not optimistic that new rental units are going to be built.

Despite a decision earlier this year by Wall Financial Group to turn its 414-unit Wall Centre False Creek condominium project into rental apartments, Gordon said there is no trend toward rentals.

“There are one-offs, but is there a move toward purpose-built rentals, and is this something that is looming on the horizon? Unfortunately not,” Gordon said.

Last summer Grosvenor, an international property development company, completed building The Rise on Cambie Street in Vancouver and, rather than selling the artist lofts, decided to rent them out.

Renting the units was financially viable because the company bought the land when land prices were reasonable, said Michael Mortensen, senior development manager with Grosvenor.

Helmut Pastrick, chief economist for Central 1 Credit Union, believes conditions for rentals are improving.

There is a low vacancy rate in B.C. and financing costs are down, Pastrick said.

“And we’re now in an environment where building costs are coming down, land prices are coming down, so the cost side is favourable as well,” he said.

But what is also needed is an investor with a long time horizon, Pastrick said.

“It’s not like building a condo where you assemble land, build and sell all in the space of a year or two,” he said. “In a rental the payback isn’t until a minimum five or ten years.”

© Copyright (c) The Vancouver Sun

A few more buyers are dipping into the market, but analyst predicts continued slide in prices

Derrick Penner
Sun

As of February, Lower Mainland housing prices were about halfway to the bottom of their expected down-cycle, a Canada Mortgage and Housing Corp. analyst said Tuesday.

Both the region’s major real estate boards reported February sales figures Tuesday showing continued low sales levels similar to those experienced in the early 1980s, although transactions did surpass the dismal lows experienced in January of this year.

“Overall, we’re looking for a 24-per-cent decline,” Robyn Adamache, Canada Mortgage and Housing’s senior analyst for the region said in an interview.

“We have seen prices trending down since spring of last year, and are about 12 to 13 per cent down depending on what type of property you’re looking at. So if we’re looking for 24 per cent, we’re about halfway there.”

The so-called benchmark price for a typical detached home in most of Greater Vancouver hit $653,342 in February, down about 14 per cent from the same month a year ago, the Real Estate Board of Greater Vancouver reported.

That benchmark was generated from 1,480 Multiple-Listing-Service (MLS) registered sales recorded within the board’s region, which includes the Sunshine Coast and Squamish, but excludes Surrey.

Those sales were about 45 per cent below the same month a year ago, but almost twice January’s 762 transactions.

In the Fraser Valley, the benchmark price for a detached home was down just over 10 per cent from the same month a year ago to $456,683, though that was slightly higher than January’s $452,145 benchmark.

Fraser Valley realtors saw 682 sales in February, which was 48 per cent lower than the same month a year ago, according to figures from the Fraser Valley Real Estate Board.

However, it was 75 per cent higher than January’s sales.

Adamache said February’s jump in sales represents “a pretty normal seasonal trend,” and not one she would see as heralding a dramatic turnaround.

However, the level of sales compared to a year ago seems to indicate that the rate of sales decline is slowing, 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 in an interview.

“To some extent, it looks like the rate of [sales] decline has really peaked and as we go into summer, things will only be down a little bit, or will have stabilized,” Somerville said. “[That is] not presupposing that stuff doesn’t get really bad in the economy.”

Somerville added that housing markets tend to be a leading indicator of the economy, so “the housing market gets worse before the economic numbers turn down,” and vice versa.

In that respect, Somerville said B.C. likely hasn’t seen the end of its economic downturn, and as it does, “a plateau [in sales] is a lot more likely than a bounce-back.”

Both major real estate boards, however, reported higher traffic at open houses compared to the standstill of last fall, when news of the world financial crisis first hit.

Watt said the major mortgage lenders all report having pools of pre-approved potential buyers who “from a pure lack of confidence, are still sitting on the fence.”

However, Watt said a larger group of potential buyers seem to believe that while they don’t think prices have reached “whatever bottom they’re going to reach, they’re comfortable that the price adjustment was adequate for them to become more interested, and the cost of borrowing is down about 25 per cent in terms of actual payments.”

© Copyright (c) The Vancouver Sun

 

David Baines
Sun

Former Vancouver lawyer Martin Wirick and real estate developer Tarsem Gill have elected to be tried by judge and jury on charges that they defrauded lenders out of more than $30 million.

The two men appeared briefly Monday before Vancouver Provincial Court Judge Joseph Galati with their high-profile lawyers, Richard Peck for Wirick and David Crossin for Gill, to make the election. Appearing for the Crown was veteran prosecutor Kevin Gillett.

Wirick, tall and gaunt, was dressed in a rumpled black nylon jacket and dark blue pants. Gill was also casually dressed in a windbreaker, khaki pants and running shoes. Neither man said anything in court.

Crossin requested a preliminary hearing, which he estimated would take eight days. He said the hearing “won’t necessarily be a full preliminary,” suggesting it will focus on certain issues.

The judge asked the parties to return to court on Thursday to set a date for the hearing. Due to scheduling conflicts with the various lawyers, it may be many months before it is held.

In August, Wirick and Gill were charged with two counts of fraud and theft against 77 different homeowners, and two counts of fraud and theft against lenders in 30 different loan transactions. Wirick was also charged with two counts of uttering false documents and Gill with one count of possession of stolen property.

The total amount of money alleged to have been unlawfully taken from homeowners and lenders exceeds $30 million.

The B.C. Law Society has already deemed that a fraud has occurred. Its special compensation fund, which insures clients for lawyer fraud, has paid out $38.4 million in claims on account of Wirick’s dealings on behalf of his client Gill. Whether their conduct amounts to criminal fraud will be determined by the court.

Gill’s method of operation, as described in the law society’s Benchers’ Bulletin, was to develop a property and sell it to one of his nominees. The nominee would arrange a mortgage on the property and then sell it to an innocent purchaser.

The purchaser, in turn, would arrange financing from his lending institution and forward the money to Wirick on his undertaking to pay off the original mortgage loan and register a new first mortgage. But rather than disburse the money as promised, Wirick simply paid the funds to Gill and his Vanview group of companies.

In many cases, Wirick would provide false discharge documents, and a portion of the purloined money would be used to keep the original mortgage payments current, so neither the purchaser nor the original mortgage lender would be any wiser.

The new mortgage lender, meanwhile, naturally assumed he had obtained a first mortgage against the property. But since the original mortgage hadn’t really been discharged, he was actually in second position.

In some cases, this process was repeated, enabling Gill to mortgage the property many times over and generate more money than it was worth. Eventually the scheme collapsed, revealing a tangled web of transactions, mortgages and competing claims.

When the scheme was uncovered in May 2002, law society officials took over Wirick’s practice and audited his books and records. They found that, from January 1998 to May 2002, $52.7 million passed through Wirick’s trust accounts to Gill and his companies.

Of this amount, $32.6 million was used for development and construction costs; $12.5 million was paid to lending institutions to keep mortgages up to date, including those that should have been discharged; $3.2 million was paid to Gill and related parties and only $600,000 to Wirick.

After the scheme was discovered, Wirick resigned from the society and subsequently declared bankruptcy. Since then he has been working at KoKo’s Gourmet Pet Food in North Vancouver. Gill has continued to develop properties in the Vancouver area.

© Copyright (c) The Vancouver Sun

 

Jon Ferry
Province

I never thought I’d say this, but I think what we need to tackle the slum-housing problems in the Downtown Eastside is a government task force.

I don’t mean one of those task forces that loll around, leisurely compiling turgid reports. I’m talking about an action-oriented group of building inspectors and other expert public servants dedicated to a clear goal — cleaning up the city’s squalid SRO buildings.

This SRO (single room occupancy) task force would get tough on landlords who violate city building and health regulations. It would start with the six SRO hotels cited by the Pivot Legal Society, the Carnegie Community Action Project and other housing advocacy groups. Then, it would go after any buildings that raise red flags in a comprehensive report now being compiled by Vancouver City staff.

It could be modelled, in fact, on the eight-person task force set up by the City of Montreal in 2007 to target delinquent landlords who repeatedly refused to repair or clean up their buildings.

And I’m happy to say Vancouver Mayor Gregor Robertson agrees it’s a great idea. “I think Montreal‘s approach is very compelling for Vancouver, to have an SRO team focused specifically on the worst buildings,” Robertson told me. “And it should be a mix of licensing and legal and health staff, so they can have a comprehensive approach to enforcing the laws and getting these buildings back up to snuff.”

Yes, it’s time for a real enforcement blitz — one that restores a basic level of humanity in a “progressive” city less than a year away from hosting the Olympics. Not that the Olympics should really have anything to do with it; it should have been done years ago.

Now, I know some of you will say that those who live in SROs are not always angels. Many of them are, in fact, incorrigible drug addicts. But it’s also true many are mentally ill, badly abused or are simply down on their luck.

Whatever the reason they’re down there, they deserve a modest room that meets or exceeds our current housing and health standards — one not infested with bedbugs, cockroaches or rodents.

That’s why we also need a public database, as proposed by tenants’ rights advocates, where anybody could look up basic information about the bigger rental buildings, including possible health and safety violations. After all, there’s nothing like shedding light on a problem to get it solved.

Mayor Robertson likes that idea, too: “The more information we have out there and the tougher we get on the offenders and ensure the city upholds the laws that protect us, that’s critical.”

Not all SRO landlords are bad guys. Many are doing their level best to provide a much-needed service in extremely trying circumstances. The best way to support them, however, is to raise the standards for all — and nail those who just don’t seem to give a damn.

© Copyright (c) The Province

 

Where top dollar buys squalor

Lora Grindlay
Province

Incredibly, Downtown Eastsider SRO renters pay more than luxury penthouse residents

Single-room-occupancy hotels are just as vital as they are the scourge of the Downtown Eastside.

They’re widely thought of as the city’s cheapest accommodation, but in fact 100 square feet (the average size of an SRO unit) of squalor in the Downtown Eastside costs more per square foot to rent than almost anything else in the city, including the most luxurious and well-appointed condos.

According to the City of Vancouver‘s most recent low-income housing survey, in 2007, residents in the downtown area’s 5,916 SRO units were paying an average of $389 per month in rent. For the square feet they get, that is very high and has much to do with the very limited number of building owners who are prepared to rent to them.

The SROs have always been the housing of last resort for the poor. But in recent years they’ve become a refuge for people known as “hard to house” — those with mental illness or addictions whose behaviours make it impossible for them to rent from any private landlord outside of the Downtown Eastside.

“It’s both about poverty and it’s about what people look like and what they do and who will rent to them,” said Janice Abbott, head of Atira Property Management, which manages some of the 25 downtown hotels now owned or leased by B.C. Housing.

The hotels are “a necessary evil,” said Jim Frankish, a University of B.C. professor who specializes in homelessness research.

“The fundamental solution to homelessness is homes,” he said. “There’s nothing that poor people can afford to rent. The vacancy rate is very low. They are faced with the choice between these truly disgusting hotels and nothing — or homelessness.”

Said Vancouver Mayor Gregor Robertson: “They are critical to the supply of housing units, but the conditions are really sketchy in some buildings and there are people who would rather live on the street.”

It’s bewildering, then, why many have been allowed to fall into such deplorable condition. Despite a city bylaw that demands the most basic of living conditions in buildings and a Residential Tenancy Act designed to protect tenants from unscrupulous landlords, the hotels are home to rampant drug trafficking, welfare fraud, violent assaults and illegal evictions.

A solid majority have bedbugs or rodents, and numerous reports written over the years read like horror stories.

As bad as the conditions are, they’ve been worse, said Judy Graves, co-ordinator of the city’s tenant-assistance program.

“The filth and the stench in the buildings was beyond anything that you see now,” she said.

When Graves returned home after visiting tenants in the hotels in the early ’90s, she would go through her own de-contamination process.

“I’d step inside my door, stand in a garbage bag, take all of my clothes off, tie the garbage bag and have a shower and wash my hair,” she said. “I would put on fresh clothes and launder everything I’d worn that day because everything, everything was covered with little, tiny cockroaches.”

There’s been improvement since then, she said, but not enough. “And now we are fighting a bedbug epidemic.”

Ken Frail, a retired Vancouver police officer who worked in the Downtown Eastside for 12 years, said the SRO hotels create an environment contributing to the area’s underground economy revolving around drugs, stolen property and welfare fraud.

“The condition of those hotels and the way that they are run creates an environment that allows the Downtown Eastside to be sustained,” he said. “The only way the owners can make money is by living off the backs of the poor.”

Frail was also an author of the Hotel Analysis Project for the Vancouver Agreement, a report that found that, in 2005, the 54 SRO hotels that were part of the study generated 11,269 emergency-service calls (police, fire and ambulance), an average of about three calls per room. It was found that, out of 3,100 rooms, 80 per cent had bedbugs and 77 per cent had rodents and/or cockroaches.

The report revealed that Vancouver fire inspectors found 2,283 fire-code violations. In one room inspectors found a working barbeque with a 20-pound propane tank, in another a five-gallon outboard-motor tank full of gas.

In 2003, the City of Vancouver enacted a bylaw to protect SRO hotels from being redeveloped for non-social-housing purposes. In 1997, there were 5,699 units. There are now fewer than 5,000. Owners have to apply to council before converting or demolishing any of 184 designated downtown SRO buildings. Council can charge a fee of $15,000 a room for permits. Critics of the bylaw say it doesn’t prevent owners from evicting tenants and shutting their doors, which can make the building more attractive to buyers.

In order to preserve the housing stock, the province has spent more than $63 million since 2007 on building purchases and now owns or

leases 25 downtown buildings comprising 1,550 living units. It will spend more than $82 million renovating the SRO hotels it has purchased before turning them over to non-profits to run as supported housing. Many have already been renovated and are open; others will follow this year.

B.C. Housing will provide funding for 24-hour support staff at a cost of about $700,000 for every 50 units. Maintenance will cost an additional $200,000 a year for every 50 units.

Minister of Housing and Social Development Rich Coleman said having support staff providing care and links to services is necessary for positive outcomes.

“We have examples of people who have been in and out of the hospital and mental-health system as many as 100 or 200 times a year that haven’t been back because they finally got supports that helped them with their mental-health issues, helped them with their addictions issues and turned them around,” Coleman said.

The minister said there are about 200 severely mentally ill and addicted people in the Downtown Eastside who can’t function in supported housing. For that population, B.C. Housing teamed up with the health ministry last summer to open the Burnaby Centre for Mental Health and Addiction, which provides long-term clinical care. Plans are under way for a similar facility in the Fraser Valley.

Atira’s Abbott said SRO rooms aren’t considered permanent or ideal housing, because most lack private bathrooms or kitchens.

“Imagine if you had to share a bathroom your whole life with 72 people?” she said. “You are poor. Food is an issue if you don’t have anywhere to store it or cook it. It just adds to your poverty.”

© Copyright (c) The Province

 

Penthouse a steal compared to an SRO

 

In the Downtown Eastside, a typical 100-square-foot SRO room — simply four walls with a separate shared bathroom and kitchen that are not always in working order — rents for about $400 a month, or $4 per square foot.

A quick comparison with some swanky rental properties currently advertised in Vancouver shows that many SRO tenants are paying a fortune for the most unsafe and decrepit housing in town.

Take the penthouse suite atop The Melville in Coal Harbour. With spectacular views and a long list of luxuries, it is available at $5,500 a month for its 1,890 square feet, or $2.91 per square foot. Downtown Eastsiders on welfare pay more per square foot than that and they don’t get swimming-pool access, two parking bays, granite counter-tops or a separate wine cellar.

Or try the 1,380-square-foot, open-style penthouse in Gastown’s Koret Lofts that’s advertised at $3,500 a month. With its great views of the North Shore mountains, it rents for $2.54 per square foot.

The money for the apparent $4-per-square-foot extravagance comes from the B.C. government, which, at the last count in 2007, was paying income assistance to 7,100 people in the Downtown Eastside. Of those, 5,200 received the maximum monthly support of $960 a month, which consists of a $375 shelter allowance, a $230 support payment and $350 for their disability. The remainder got the $610 basic welfare amount. All of these people pay at least their shelter allowance directly to landlords.

© Copyright (c) The Province

 

Better or worse? Mark Smith responds

 

Mark Smith Executive director, RainCity Housing

We asked two questions:

1) What are the key issues facing the Downtown Eastside? and

2) Are things getting better or worse?

1. Homelessness, mental health and addiction are the key issues in the Downtown Eastside. In our experience, these issues are due to unimaginable trauma suffered by so many of the people we work with and house. Supported housing that addresses their complex health needs is the foundation on which we build solutions. Many of the homeless are unable to maintain housing because of their substance use, untreated mental illness or involvement in sex work. At RainCity Housing we believe in housing such people. If you simply evict people for their survival behaviour, you never get the chance to connect them with the world in a different way. People don’t behave in a vacuum. There is always a reason for the behaviour — no one just wakes up one day and decides to be a mentally ill substance user.

2. Things are getting better and worse. There have been improvements to the quality of housing available. Unfortunately, the quantity of housing is under tremendous pressure. We have a vacancy rate of 0.6 per cent and construction workers arriving from Calgary. They have money and references, so they stay at SROs until they can find something better. Meanwhile the homeless don’t get housed at all.

© Copyright (c) The Province

 

‘There were wall-to-wall rats’

 

Various states of disgusting. Crazy, deplorable stuff. Something out of a Charles Dickens novel. Horrendous. Absolutely shocking. Beyond compare.

Those are just some of the ways housing advocates describe what was found behind the doors of many of the single-room-occupancy (SRO) hotels in downtown Vancouver that B.C. Housing has bought or leased in recent years.

Structurally, most of the previously privately owned buildings were death traps. Beams holding up the Walton Hotel at 265 East Hastings were soft to the touch, rotten to the core. If left that way much longer, the building would have collapsed.

Very few had working smoke alarms, accessible fire escapes or toilets that worked. Plumbing was so corroded and old that it crumbled when touched.

Bathrooms were filled with mould and slime. Heating systems rarely worked and the buildings were smelly and stifling in the summer due to a lack of ventilation.

And then there were the mice, rats, bedbugs and cockroaches. In some of the hotels, all of which are about 100 years old and are rooming houses originally built for short-term stays by miners, loggers and fishers, one couldn’t walk down the hall without stepping on cockroaches. They were always underfoot.

Janice Abbott, executive director of Atira Women’s Resource Society, whose property-management arm now manages 11 of the SRO hotels taken over by the provincial government, recalls being in the Gastown Hotel at 110 Water Street last year.

The Gastown and its 95 units were purchased early last year for $5.2 million.

“The ground floor was alive with rats. The whole floor was undulating with rats. There were wall-to-wall rats,” said Abbott.

It cost $40,000 to spray the Gastown for bedbugs. All the beds had to be thrown away.

And then there were the bathrooms at the 96-unit St. Helen’s Hotel at 1161 Granville Street. The province paid $7.5 million for it in 2007.

“There was plastic stapled up over the framing in the showers. You could see in behind about up to your knees was water and in it was floating algae and mould . . . You are basically showering with crap floating behind plastic around you.”

James Weldon, B.C. Housing’s senior manager of building standards, said when he first entered the Carl Rooms at 335 Princess Street, he was met with needles in the stairways and “yelling, screaming and people arguing in the corridors.”

There were also a number of “shell-shocked” people confined to their rooms, he said, targets of physical abuse by resident drug dealers.

“There was an element in that building that was oppressing people. I think people were living with quite a cloud over them, a shadow of abuse,” said Weldon.

Abbott said one resident and rather successful drug dealer had set up his own security system in one of the hotels. He had surveillance cameras set up outside his room and the building.

“Most of the people in the building were scared to come out of their rooms while he was living there because he and his associates were assaulting people,” she said.

At first, Abbott said, management was changed, criminals were evicted and full-on fencing operations were shut down along with staff loan-sharking operations that charged tenants 100-per-cent interest.

Then, said Weldon, the buildings were stabilized. Emergency systems were repaired, temporary improvements were made to heating and plumbing, massive pest-control programs began and renovations were planned.

“Although we couldn’t fix the buildings immediately — there is no magic wand — just changing the management made a big difference to the good-willed tenants,” said Weldon. “The change was amazing from when we first took over to going back maybe a month later.”

The takeover had begun. Now the front doors were locked to drug dealers and other predators. Crime, which may be hard to totally eliminate, is monitored and police are called.

Tenant-liaison workers have been brought in, mental-health workers and doctors visit and support staff keep an eye on people and offer help when required.

“Just being there and caring” has made such a difference, said Abbott.

“Tenants felt they could trust people. They knew they weren’t going to get manipulated by management.”

© Copyright (c) The Province

KEVIN CARMICHAEL
Other

OTTAWA – The Bank of Canada cut its benchmark lending rate to within spitting distance of zero, and signalled that it is prepared to increase the money supply to spark a rebound that policy makers acknowledged could be farther off than they first thought.

As most economists expected, the central bank cut its overnight lending rate by half a percentage point to 0.5 per cent, the lowest ever, prompting the country’s biggest lenders to quickly match, dropping their prime rates to 2.5 per cent.

The surprise in Tuesday’s statement was the declaration that Governor Mark Carney and his advisers on the governing council are preparing the ground for a program of “credit and quantitative easing.”

Such an effort would pump money into Canada‘s financial system by giving banks and others a new buyer for assets such as government bonds and corporate debt. The Bank of Canada’s current credit-market programs are different because they only offer short-term loans, taking banks’ paper assets as collateral.

The Bank of Japan already is buying company debt, and the U.S. Federal Reserve and the Bank of England are considering similar plans because some markets for credit remain unusually tight more than a year into the financial crisis.

“Given the low level of the target for the overnight rate, the bank is refining the approach it would take to provide additional monetary stimulus, if required, through credit and quantitative easing,” the Bank of Canada said in a statement.

The central bank declined to provide further details, saying it will “outline a framework for possible use of such measures” when it publishes its next quarterly report on economic conditions on April 23.

A program of quantitative easing would take Mr. Carney into unchartered territory, as such measures, which risk stoking runaway inflation, have never been tried in Canada.

“Simply put, the bank is preparing to pull out all the stops to support the economy,” Doug Porter, an economist at BMO Nesbitt Burns in Toronto, said in a note to clients.

Mr. Carney is struggling to reverse Canada‘s first recession in almost two decades. The collapse of the market for U.S. subprime loans more than a year ago sparked a global financial crisis that is now shrinking the economies of the world’s richest countries.

Statistics Canada reported Monday that gross domestic product declined at an annual rate of 3.4 per cent in the fourth quarter, the biggest contraction since 1991 and worse than the 2.3 per cent rate of decline that the Bank of Canada predicted in January.

“While this played to the script of the Bank of Canada’s forecast, the miss on their fourth-quarter growth rate projection will leave the economy even more battered-and-bruised than they anticipated and justified their actions today,” Dawn Desjardins, assistant chief economist at the Royal Bank of Canada, said in a note for clients.

In its statement, the central bank acknowledged that economic growth through the first half of the year will be weaker than it expected, noting that the “output gap” – the difference between current economic activity and the pace policy makers reckon the economy can set without stoking inflation – is wider now than it was at the start of the year.

“Potential delays in stabilizing the global financial system, along with the larger-than-anticipated confidence and wealth effects on domestic demand, could mean that the output gap will not begin to close until early 2010,” the statement said.

That will keep inflation “slightly lower” in the months ahead than originally thought, policy makers said in the statement.

As a result, Mr. Carney likely will keep borrowing costs low for some time.

The central bank aims to keep inflation advancing at an annual rate of about 2 per cent. In its January forecast, the Bank of Canada estimated the annual inflation rate would be 1.2 per cent this quarter and that prices would decrease in the second and third quarters.

“Consistent with returning total [consumer price index] inflation to 2 per cent, the target for the overnight rate can be expected to remain at this level or lower at least until there are clear signs that excess supply in the economy is being taken up,” policy makers said in the press release explaining their decision.

Because so much of Canada‘s wealth comes from exports, the central bank said a rebound will depend heavily on the efforts of U.S. President Barack Obama to stabilize the world’s largest economy.

The Obama administration is spending hundreds of billions in an effort to stimulate demand and buttress some of the world’s largest banks, which teeter on the edge of insolvency.

The Bank of Canada wasn’t all negative today.

Policy makers said in the statement the Canada‘s economy should rebound faster than that of other nations once the extraordinary stimulus from governments and central banks kicks in.

The United States economy contracted at a 6.2 per cent over the same period. The European Union’s GDP reversed at a 5.9 per cent pace and Japan‘s economy collapsed at a 12.7 per cent pace.

Mr. Carney has slashed the benchmark lending rate by 4 percentage points since December, 2007, to buoy spending in Canada and loosen credit markets.

Interest rate cuts act with a lag. The central bank said Monday that its efforts over the past year will begin show up in the second half of the year and into 2010.

“Once the global financial system stabilizes and global growth recovers, the underlying strength of the Canadian economy and financial sector should ensure a more rapid recovery in Canada than in most other industrialized nations,” the Bank of Canada said.