Demoviction protesters removed from apartment

Jeff Lee
The Province

They may wear the same social democratic cloth and run left-leaning councils, but Burnaby Mayor Derek Corrigan and Vancouver Mayor Gregor Robertson have vastly different ideals when it comes to housing affordability and their municipal roles in shaping it.

As RCMP moved in Wednesday to evict protesters from a low-rent Metrotown building about to be demolished and replaced with condos, Corrigan has come under fire for not adopting some of the rental development incentives Robertson has used to create more housing. Corrigan, who has held sway in Burnaby for 14 years, says he’s not about to give in to downloading what he says are provincial and federal responsibilities.

Vancouver’s Robertson has loudly pronounced that local governments have a moral responsibility to do everything they can, even when the federal and provincial governments don’t step up. His Vision Vancouver council has introduced a dizzying array of programs and incentives to try to create rental housing, some more effective than others.

Burnaby’s Corrigan, however, has drawn a firm line, arguing his municipality has neither the resources nor the mandate to take on the provincial and federal governments’ housing responsibilities. Instead, he insists that money his city gets from developers in return for bonus density should be spent on the amenities and services new populations will require.

Both men are career social democrats. Robertson served as an NDP MLA and his Vision Vancouver policies are all left of centre. Corrigan is a dyed-in-the-wool party-faithful New Democrat married to an NDP MLA.

Yet the two men and their cities have radically different approaches to the rising pressure on the region’s diminishing low-income and affordable housing. Even on housing the homeless Burnaby and Vancouver are worlds apart. Where Vancouver has pushed for homeless shelters and needled the province to fund emergency winter facilities, Burnaby has not a single shelter and has resisted provincial offers to set up a permanent shelter.

And Corrigan hasn’t helped, at one point telling a journalist that some who live in Vancouver’s shelters are the type of drug-addicted, mentally-ill and habitually criminal folks who would steal a dying person’s gold fillings.

For Corrigan, Wednesday’s police action, in which four “demoviction” housing activists were pried out of an Imperial Street building and later released after promising not to return, was disturbing because it directly challenged his council’s long-standing message.

“This is the first time we’ve had things like what happened on Imperial Street. I think all of us were in shock because for a long time we’ve thought that people understood that we were trying very, very hard and were perhaps the most aggressive in challenging the other orders of government about what they are failing to do,” he said.

“I am empathetic with the issues that (the protesters) are raising. The problem is they are focusing their attention on the wrong order of government.”

Under Robertson, Vancouver gave up those kinds of arguments. In 2011 it created a housing and homelessness strategy aimed at creating space wherever and however it could. It has since pumped more than $600 million into housing, watching as 12,000 rental units — a blend of secured market rentals, social and supportive housing, suites and laneway homes — were built by developers. In a controversial move, it rezoned part of the Downtown Eastside to give rental-only developers preference over condominium builders.

By contrast, Burnaby’s efforts are more subtle. It is legalizing secondary suites and it offers developers bonus density in return for 20 per cent of its profits going into a dedicated housing fund. But Corrigan says that money is earmarked for two things: purchasing bare social housing sites that still require provincial capital and operating funds, and the community amenities required, such as daycares, schools and parks. The city has also stepped in to buy and hold land it knows is needed for schools and social housing.

“I don’t agree, and I said this at the latest meeting we had of (Metro Vancouver’s) regional planning, that we should be subsidizing the market for market rental housing,” he said. “The idea that we would be giving a developer bonus density to build rental housing instead of getting bonus density money for amenities is in my view a waste.”

Corrigan said Burnaby and the Union of B.C. Municipalities have unsuccessfully lobbied the province for the right to zone for tenure, such as rental-only zoning. Such a policy would automatically protect existing rental stock but that doesn’t appeal to the Liberal government.

The new Trudeau Liberal government in Ottawa also has misplaced its priorities, he said.

“I find it ironic that they are sitting there arguing about spending $35 billion on fighter planes when the reality is that we can’t provide housing across Canada. That seems insane to us.”

But housing advocates say Burnaby’s stand, however principled, is wrong. Over the last four years Burnaby has lost at least 500 units of affordable rental housing, according to Kishone Roy, CEO of the B.C. Non-Profit Housing Association.

“What I am certain of is that if you continue to sit on your hands, nothing will ever happen. There is no excuse for a major city like Burnaby to go through this major period of growth and have a net loss of hundreds of units of rental housing,” Roy said. “They are holding back the whole region, and that is not even including social housing, which is critical.”

Two years of surveys by the association have shown that Burnaby has the worst municipal rating in Canada on its rental housing index. The interactive index factors in five categories, including affordability, overcrowding, income gap, shortfall of bedrooms and amount of income spent on rent.

“You get the choice as a community to build and design the kind of place you want to live in, and Burnaby is a fantastic place to live in,” Roy said. “But in those choices they haven’t made space for social housing or rental housing.

“I don’t see the City of Burnaby promoting the development of multi-bedroom family sites or having a policy that prevented the demolition of all those rental units. I don’t see them taking advantage of all those SkyTrain sites to have affordable housing.”

In NDP leader John Horgan’s thinking, both mayors are justified in their approach.

“Gregor … is speaking up for renters as Derek is speaking up for them, in different ways,” he said.  “I think they’re both correct, and I think the moral responsibility rests with the provincial government.”

He made his comments in Coquitlam’s Burquitlam neighbourhood, in front of two complexes set to be demolished to make way for condo towers. A total of 122 rental units are facing the wrecking ball, and less than half will be replaced in the new development.

Hundreds of rental units are expected to disappear from the neighbourhood over the next few years as developers get set to cash in on the new Evergreen Line.

“It’s not just a Burnaby issue, it’s not just a Coquitlam issue. It’s a province wide issue focused here in the Lower Mainland. What’s needed here is not action by municipal governments; it’s action by the province,” said Horgan.

© 2016 Postmedia Network Inc.

Commercial Drive tower battle threatens social housing plan, sponsor says

JOHN MACKIE
The Vancouver Sun

The latest incarnation of the Grandview-Woodland community plan calls for a mixed-use development that would rise between four to nine storeys at Commercial and Venables.

That is three storeys fewer than the Kettle Friendship Society and Boffo Properties have proposed for the tower on the site, which would have include 30 social housing and 150 to 200 market condos.

The tower has been whittled down after fierce opposition in the Grandview-Woodland neighbourhood, where a No Venables Tower petition has gathered 4,426 signatures. But nine storeys proposed by the city doesn’t sit well with the Kettle’s Nancy Keough, who said that size won’t work without a subsidy.

“We need 12 storeys in the density to make the project self-sustaining,” she said. “(That would) give us the space we need to run our community services and drop-in, and to get 30 affordable housing units. If we can get the extra density and those three extra floors that’s added to the draft plan, then we can build our project.”

The Kettle has been on Commercial Drive for four decades, and operates a drop-in centre that serves between 120 and 150 people a day.

It has been working with Boffo on a self-sustaining plan that would build social housing on the lower floors of a new building and condos above. The 12-storey plan would have a budget of about $110 million, but would require no government subsidy. The Kettle has gathered 2,200 signatures on its own petition in support of the project. 

The Kettle and Boffo sent their concerns in a letter to city council Tuesday. But the No Venables Tower coalition sent its own letter to the city with an alternative calling for a six storey building on the north part of the site, which is currently a parking lot owned by the city. That would allow 30 units of supportive housing for the Kettle and 21 units of “affordable-family sized rental housing.” The Kettle’s service work would be done on the first floor of the structure.

“We believe the city could provide its land on a long-term nominal cost lease, worth $2.6 million,” said the coalition’s Barbara Cameron. “The six-storey residential building would be approximately $10 million.”

The southern part of the site is owned by Boffo and Kettle, and the No Tower plan said it could be redeveloped using the existing zoning, which allows for a four storey building.

© 2016 Postmedia Network Inc.

Group defends ad after Real Estate Council launches investigation

? STEPHANIE IP
The Vancouver Sun

The Real Estate Council of B.C. is investigating a marketing video advertising a “future redevelopment opportunity” that isn’t possible under current city zoning and policies.

However, the real estate agents behind the ad maintain they’ve done their due diligence. They noted that the concern at city hall over the video is just a distraction from the issues surrounding the city’s rental stock in a highly politicized discussion on real estate.

“We’ve been writing about this issue for the last decade and City Hall does not like us because we’ve basically outed them,” said Mark Goodman of the Goodman Report.

The Goodman Report is a Vancouver-based group specializing in commercial real estate that has been publishing regular reports on the real estate industry since the 1980s. The news of the investigation came just days after Carolyn Rogers, the superintendent of real estate with the Financial Institutions Commission (FICOM) presented a report on behalf of the Independent Advisory Group on Real Estate Regulation in B.C. (IAG) to Vancouver City Council, where the topic of whose duty it is to regulate aggressive and misleading real estate advertising was discussed during question period. Rogers is the former chair of the IAG.

Rogers said the FICOM “recognizes the public’s concern about aggressive real estate marketing practices, and the Real Estate Council is increasing its focus on industry practices following the Report of the Independent Advisory Group.”

The video released by the Goodman Report showcases an assembly known as Southview Gardens, located at 3240 East 58th Ave. The 6.58-acre property is the site of a rental complex, housing 140 townhouse and apartment units across 16 buildings. Many of those rental suites are three- and fourbedroom family units. Advertising material accompanying the video boasts an annual holding income of about $1.42 million, and invites interested buyers to “capitalize on extreme demand for new market and rental housing in an established neighbourhood.”

In the video, block renderings of a “future redevelopment opportunity” resembling condo towers and large buildings are superimposed onto an aerial view of the property. The video notes that the area’s zoning allows for apartments; townhouses; seniors’ and public housing; retail, service and entertainment establishments; gas stations; public parks; as well as church and related schools.

The site featured in the video, which was posted to YouTube earlier this year, has been designated and protected for rental housing according to land-use policy developed by the city in the 1970s. It is also part of a group of sites, which includes the nearby Champlain Mall, that is under single CD-1 zoning, which has no remaining capacity for further development.

“We have screened the marketing video submitted to our offices, and the Real Estate Council has opened an investigation,” said Rogers.

However, a lawyer representing the Goodman Report forwarded a statement from the Goodmans Tuesday, noting that no complaint was received.

“The information we have from the Real Estate Council of B.C. is that no formal complaint has been received by them with respect to the marketing or advertising of the subject property,” the statement read.

According to the City of Vancouver, there had been inquiries about the listing, but officials have put out the same information each time.

“It’s the speculation that’s associated with it that is inconsistent with our policies and bylaws,” said Susan Haid, the city’s assistant director of planning for Vancouver South, noting the redevelopment suggested in the video isn’t in line with the area’s community vision plan or the city’s rental housing stock development plan. The only development permitted under current zoning bylaws would be a “1:1 requisite replacement of rental housing along with tenant relocation strategies.”

“We would not entertain a rezoning of the site.”

Haid said if any changes were to occur, it would require “a major community initiative” and planning process be undertaken, something the city has no intention of pursuing at this time.

Mark Goodman says his firm has been in communication with the city and that there have never been any concerns expressed about the handling of the listing, which was sold about three weeks ago and is slated to close in the fall. The buyer plans to keep Southview Gardens as rental property for the foreseeable future.

“We’re not suggesting you can demolish anything now — we’re suggesting, in the future, it will make a very nice redevelopment opportunity for market housing, assisted social housing, affordable rental housing — all the initiatives that the city wants to see,” he said.

David Goodman, who founded the Goodman Report, said they were upfront with every interested party who inquired about the property and directed them to the city for more information on applicable zoning policies.

“We have not represented this as a development site, it is a future redevelopment site and frankly, half of Vancouver is a future redevelopment site,” he said.

Of the city’s concerns over the Southview Gardens advertising, he called it a “witch hunt,” noting the Goodman Report has been “critical over the past six or seven years of the city’s housing policies.”

“We believe the city’s policies have been regressive and not pro-rental,” he said, noting the 140 rental units at Southview Gardens could be 500 or 600 rental units instead, if regulations were loosened by the city.

Jon Stovell of Reliance Properties said his company was interested in the Southview Gardens listing, but eventually decided it was not for them.

He said he understands how the video might alarm residents currently living in Southview Gardens, but that anyone in the discussion to purchase a multimillion-dollar property would make no mistakes over something like zoning.

“We certainly never felt that we were presented with something that was a promise that would lead to an erroneous conclusion,” he said.

© 2016 Postmedia Network Inc.

For the first time, townhouse owners can more easily access the true value of their property

Frank O’Brien
REW

This spring, an 88-year-old teardown house in Vancouver’s Point Grey sold for $9 million, more than one million dollars over the asking price. 

Across most of Metro Vancouver, many older detached houses on even small lots can sell for $1.5 million, yet are soon demolished.

It is all about the land value, of course, not about the building. So, if a single house on a 33-foot lot is worth that much, how much is a home sharing an acre worth?

We are about to find out as, for the first time, owners of old townhouses get a better chance to cash in on the value of the land beneath their floor. Get used to the term “townhouse teardown.”

Change Fueled by Change to Strata Property Act

The reason is a transformative change in B.C.’s Strata Property Act that now makes it easier for strata owners to vote to disband their strata corporation, and sell the entire complex to a developer. 

When the change was first made, it was suspected that owners in older condominium apartment buildings, especially those facing higher and increasing maintenance costs, would be the main beneficiaries.

But I believe the biggest potential is for townhouse owners. When the first townhouses were built in Vancouver four decades ago, they were competing with detached houses. This means larger lots with lower density and often in prime locations, such as close to hospitals, transit improvements or parks. As well, townhouses are almost invariably constructed in wood, which makes a two-storey project much easier to tear down than a concrete condo tower.

The lower density also means there can be less than two dozen owners in older townhouse projects, some of which can sprawl over half a city block.

But a dilapidated bungalow on the same street is often worth more than twice the price of a larger, nicer and newer townhouse, because strata owners could only access the value of their unit, not the land value. 

The new rules change that. In a 20-unit townhouse project, just 16 people can vote to sell the entire property. There are reports of developers offering such owners two to three times the unit’s appraised value. 

Cashing In on Allowances for Increased Density

If you own a townhouse unit in an older complex, investigate the land values in your neighbourhood and apply it against the size of your development. Find out about recent density zoning in the area. If it is higher than the existing floor/space ratio of your project, the potential land value could be much higher than you suspect. Then, meet with your fellow owners and talk strategy.

Townhouse teardowns should be a welcome development. They will allow construction of better and more homes, expand the tax base and community amenities and, most importantly, allow many owners to finally realize the full value of the property.

© 2016 Real Estate Weekly

Steve Randall
REP

The Canada Revenue Agency says that it is investigating real estate transactions in British Columbia to search out tax cheats. Reuters reports that the probe will particularly focus on foreign investors.

The CRA said that as prices have surged, especially in Vancouver, there is concern that tax has been evaded in deals involving flipping. Underpayment or non-payment of capital gains or sales tax; and false claims for tax rebates are key areas of the investigation.

The agency has brought in specialist auditors to look into hundreds of transactions as part of the multi-level governmental focus on increasing BC prices and the impact of foreign investment in the market.

Copyright © 2016 Key Media Pty Ltd

Thousands register for new 40-unit project

SHAWN CONNER
The Vancouver Sun

Project name: Oak + Park Townhomes

Project location: 7600 Oak Street

Project size: 40 townhomes, 3-bed + den + flex

Residence size: 1,280 — 1,600 square feet

Price: from $1,100,000s

Developer: Alabaster Homes

Architectural design: Ciccozzi Architecture

Interior design: Occupy Design

Website: alabasterhomes.ca/oak-and-park

Sales centre: 301 — 1788 W. Broadway

Phone: 604-558-5851

Sales: Began Friday

Occupancy: Fall 2018

In a city where single-family homes are all but unaffordable for many people and where condos can often be seen as too small, townhomes have become an ideal form of residency for many Vancouver homebuyers.

On the west side, Alabaster Homes is among the forefront of townhome development. The developer has already completed two projects in the area — Osler Residences and Shaughnessy —  with 18 and 15 townhomes, respectively.

But Oak + Park, its latest project, is “the first significant townhome community to be built in Marpole,” said Yosh Kasahara, director of sales and marketing for Alabaster. “It’s a flagship project, not only for the company, but for the neighbourhood as well.”

There’s been considerable intial interest, with over 3,000 people registering for the 40-home project, which has just launched sales. “There’s this unprecedented demand leading up to the launch of [this] new product,” Kasahara said.

The development’s exterior will feature white brick and include decorative metal elements, and mullion and additional muntin bars that will give the windows a traditional look. Kasahara said Ciccozzi Architecture “really does an excellent job of this West Coast interpretation of classic design.”

“Each unit has a sense of identity, from its own gate to a steep-pitched gabled element at the front door,” Rob Ciccozzi said. “We brought in a high level of detail, higher than is typical for most townhomes.”

The architect said he “wanted to bring a bit of the Shaughnessy character to Oak Street. That’s where I came up with the traditional pitched roofs and some of the materials, like the brick and the siding.”

“Having a front door and your own entry to your home is a key aspect of living in a townhome relative to, say, a condo building,” Kasahara said, noting details like heritage-style black doorbells and door-knockers.

The development is on Oak Street, flanked by Park Drive to the north and a lane a short distance from West 63rd Avenue to the south. Front entrances of the homes running along Oak face the street, while the front entrances of the other homes face a courtyard that runs between the two halves of the development.

All townhomes will have three bedrooms and dens, and all have multiple areas for outdoor living — in front and back, along with a deck on the third level, outside the main bedroom. All the residences also have direct access from the underground parking level into the homes.

The outdoor living areas that face the courtyard are “generously sized,” Kasahara said, and include privacy screens and natural gas hookups for barbecues.

Interiors feature two colour schemes, light and dark, for cabinetry and flooring. The main level, where the living, dining and kitchen areas are located, features extra-wide engineered hardwood flooring and nine-foot-high ceilings.

Kitchen features include quartz countertops, tile backsplash and flat-panel cabinetry. Appliances include a Bosch cooktop, separate wall-oven and dishwasher, a Broan pull-out hood fan and a Fisher & Paykel refrigerator.

The second floor is given over to second and third bedrooms (each large enough to fit a queen-sized bed) and a den. The master bedroom and ensuite, along with an outdoor deck, are on the third level. Ensuite features include Kohler fixtures, a unique “hextile” backing in a large stand-up shower, large-format floor tile and in-floor radiant heating. All homes also come with central air-conditioning, high-efficiency hot water heaters and a basement space for storage.

The layouts of the four floor plans vary only slightly. The homes along Oak Street, for example, are smaller, ranging from 1,280 to just over 1,300 square feet, and “are more affordably priced,” Kasahara said. The developer is pricing these in the $1.1-million range.

Based on buyers of the developer’s other two townhome projects in the west side, Osler and Shaughnessy, Kasahara is expecting Oak + Park to attract young families.

“The key driver for them is the neighbourhood and the school catchment,” he said. The development is near Sir Winston Churchill Secondary, a school with an international baccalaureate program that offers university-level courses to high school-age students. Oak Park is also nearby, along with the Marpole Oakridge Community Centre.

“Single-family homes have become impossibly unaffordable on the west side,” Kasahara said. 
“Townhomes have become the alternative of choice. When you look at the development happening surrounding this area, in Kerrisdale and Oakridge and the Cambie Corridor, Marpole was the final piece to the puzzle on the west side.”

The developer realized this early enough to “take a significant position in terms of acquiring sites here,” Kasahara said. “What we didn’t see was the ramp-up in prices over the last few months. I think that took everybody by surprise.”

Kasahara says that there is still a lack of supply in the area, and that the developer “would love” to build more and bigger projects there. But Marpole is still predominantly a single-family neighbourhood. “It really depends on what individual property owners are wanting to do with their homes.”

“This was an important project for us,” Kasahara said of Oak + Park. “It’s such a prominent site. Everyone sees it when they’re driving on Oak Street. We wanted to create something that would be a lasting legacy for the company.”

© 2016 Postmedia Network Inc

Politically-connected RCI helps rich foreigners get Canadian residency

PETER O?NEIL
The Vancouver Sun

OTTAWA — A B.C.-based company says it has brought $2 billion to Canada under the Quebec government’s cash-for-visa program, a scheme that some say is a factor in Vancouver’s housing affordability crisis.

Vancouver-based RCI Capital Group, which helps resource companies develop strategies and raise money in Asia, has a Montreal-based subsidiary that has been active for years in the Quebec Immigrant Investor Program.

The Quebec program has become increasingly controversial in Metro Vancouver as critics point to it as one of the drivers of sky-high housing prices, since the vast majority of successful Quebec applicants immediately establish themselves in Toronto and Vancouver.

RCI’s Montreal subsidiary is Renaissance Capital, one of the companies recognized by the Quebec government as an “intermediary” for rich foreigners who want to use the Quebec investor program to become a permanent resident of Canada.

“We can take care of all the details to maximize the chances of success of your immigration process,” the company website advises potential clients, who must prove a net worth of $1.6 million and be willing to invest $800,000 of their wealth in government five-year bonds.

The applicants get the $800,000 back after five years, but forgo the interest, pay various fees and pay the commissions to companies like Renaissance.

Vancouver immigration lawyer Richard Kurland estimates the total cost to get a permanent resident status through the Quebec program is around $125,000, though others say the costs are higher.

RCI is headed by John Park, an entrepreneur who likes to recruit former politicians to help him pitch business deals in Asia.

Ex-Conservative cabinet minister Stockwell Day is RCI’s lead director, while prominent B.C. Tory John Reynolds was for years involved with the company after he retired from politics.

Day, who retired from politics before the 2011 election, delivered speeches and gave media interviews during the 2013 election to help the B.C. Liberals. Since then he’s remained chummy with Premier Christy Clark and the Liberals. He contributed $11,850 since late 2014, mostly through the law firm McMillan LLP, where he is a senior strategic adviser. Clark tweeted a photo of her and Day together at a Kelowna event earlier this month.

Park has also had links to the premier, briefly hiring her to head an RCI subsidiary in 2007 when she was out of politics, though the premier said she never did anything for the company and wasn’t paid.

Park worked hard to build contacts with the former Conservative government as a founding member of the Canada Korea Foundation, which was launched in Vancouver in 20111 at an event where then prime minister Stephen Harper was guest speaker. The foundation promoted bilateral trade ties but was also used as a vehicle to garner Tory support in Canada’s South Korean community, according to evidence at a 2014 B.C. Supreme Court trial relating to a dispute among the Foundation’s founding members, including Park.

Twice, in 2012 and 2013, Park was part of business delegations with the premier on Asia trade missions.

Park, who specializes in mergers and acquisitions, said political links are necessary because he deals frequently with executives from state-owned enterprises in China and South Korea, who are most comfortable dealing with government officials.

“If I was selling T-shirts, I wouldn’t need politicians,” Park, who contributed $14,825 directly or through RCI to the Liberals since 2011, said in an interview.

The Park-Day connection to the premier has raised eyebrows among some of those questioning why B.C. hasn’t aggressively challenged the Quebec investor program.

Earlier this month, Kurland, who regularly briefs federal MPs on policy matters, said Ottawa could take direct and indirect measures to slow down or terminate the Quebec program, which admitted a record number of applicants in 2015.

“(But) the feds won’t risk a loss of political capital in the Quebec region when it is only B.C. being hurt and B.C. does not ask them to fix it,” Kurland said in an email exchange. “There is no appetite politically in Victoria to go near any of this.”

New Democratic Party MLA David Eby speculates the Clark government’s lack of aggressiveness on the issue is connected to her party’s connection to people like Park and Day, and her close relationship with those who are getting wealthy off Vancouver’s housing boom.

“The obvious reason for the premier’s silence is I think her relationship with firms like RCI, and her relationship with developers and people in the real estate industry who are benefiting from what’s going on,” said Eby. “I haven’t heard the premier contradict that and her actions are entirely consistent with supporting this program indefinitely into the future.”

Democracy Watch spokesman Duff Conacher cited research suggesting that “reciprocity” — the sense of obligation to return the favour after a gift is received — is a key motivation in decision-making.

“There is a conflict of interest created when anyone or any business donates large amounts.”

Ben Chin, Clark’s communications director, said he wouldn’t “dignify” Eby’s conflict allegation with a response.

He said B.C. has spoken to Quebec about problems with the program, and also pointed to B.C. Jobs Minister Shirley Bond’s recent statement that she has pushed Ottawa to provide B.C. with extra settlement funding to offset the arrivals from other provinces.

Day, who last week posted comments on social media critical of those suggesting foreign money is behind Vancouver’s housing affordability crisis, said in an email exchange that he has no involvement in the RCI subsidiary’s work attracting millionaire migrants to Quebec’s program.

“My focus is advisory on cross-border trade-related issues, principally in the natural resource space.”

Park doesn’t accept the criticism of the Quebec investor program from people like Kenney, who in 2013 called the program a “fraud” that hurts B.C.

He called Kenney’s comment “political” and cited a 2010 study by Canadian economists Pierre Fortin, Pierre Emmanuel Paradis and Roger Ware saying Canada’s economy gains about $2 billion a year for every 2,500 investor immigrant families, with that gain “clearly” outweighing extra costs such as health care.

The paper was written long before the former Conservative government, in 2014, shut down the national program because it concluded that there is “little evidence” the investors, who pay roughly $125,000 for a Canadian visa, are providing a “positive economic contribution” to the economy.

But there have been conflicting academic studies. In 2014 the Migration Policy Institute, a Washington, D.C.-based think-tank funded in part by George Soros’s Open Society Foundation, concluded that Canada is among many countries struggling to come up with investor-luring programs that have integrity and clearly demonstrate their economic value.

The Institute’s president emeritus, Demetrios Papademetriou, said Canada’s problems with the now-defunct federal program, and the continuing Quebec program, are typical of western countries.

He said all countries have run into problems with fraud, public hostility to the notion of people buying citizenship that others have to earn, the inflationary effects of the program, and questions about the economic benefits.

“For those people who think these are generators a significant amount of economic activity, (we say) that’s not the case,” he said in an interview.

But Park said he believes the studies that favour the Quebec investor program.

“I can’t say ‘B.C. benefits’ or ‘Quebec benefits at the expense of B.C.,’” said Park.

The bottom line is that “Canada benefits.”

Park said his Montreal subsidiary has participated in Quebec investor program-related investments totalling around $2 billion, though he acknowledges that most of the money, $800,000 per investor, is later returned to the investor, who may or may not live and pay taxes in Canada.

Criticism, he added, shouldn’t be directed at the owners of the Quebec government-approved financial intermediaries involved in the program, like Renaissance, a variety of Quebec firms, several subsidiaries of Toronto-based financial institutions and the Montreal office of Vancouver-based HSBC Canada, part of the U.K.-based global financial services giant.

“If we want to equal out the costs and benefits more, it’s up to policy-makers in Canada to do that. It’s not up to businesses to do that. It’s not up to businesses who are working hard to bring in foreign direct investment into Canada.”

Park said that as a Canadian taxpayer he is among those who don’t appreciate foreign investors settling their families in Canada but not paying income tax because they continue to work offshore and don’t declare their global income.

He also noted that the mobility rights in Canada’s Charter of Rights and Freedoms prevents Quebec from forcing successful immigrations applicants to stay in that province.

© 2016 Postmedia Network Inc.

Metro Vancouver residents feel soul-crushing reality of sky-high rents

CHERYL CHAN
The Vancouver Sun

Danny Delgiglio has come to terms with the fact he may never own a house in Vancouver, where he was born and raised.

The 36-year-old computer technician and his partner have been content to rent a one-bedroom in an older West End apartment tower.

But after learning the owner plans to tear down the building within the next two years to construct a proposed 42-storey highrise, the couple has started combing Craigslist and Kijiji ads and pounding the pavement for a new home. Their budget: about $1,200 a month.

They’ve sent out dozens of inquiries, but rarely hear back. They’ve had potential landlords cancel viewings because the unit was suddenly taken.

“You feel like you’re not even given a chance,” said Delgiglio.

The apartment hunt has strained their relationship. “It’s been an emotional drain,” he said. “You feel that you have no control. Being born and raised here, you feel a bit of anger, I’ll be honest with you.”

Delgiglio is just one of the people who make up the 51 per cent of people in Vancouver who rent. Much attention has been paid to home ownership being out of reach for locals, but skyrocketing house prices also affect the city’s renters, who are squeezed by high rents, limited supply and a near-zero vacancy rate.

A Vancouver City Savings Credit Union report released last week put the spotlight on the acute problems facing renters in a city where the average rent was $1,233 a month and the vacancy rate was 0.6 per cent.

Vacancy rates are similarly tight in other Metro municipalities. They range from about .4 per cent in North Vancouver to 1.9 in Surrey (experts say a healthy vacancy rate is about three to four per cent.)

“It’s a crisis,” said William Azaroff, the vice-president of community investment for Vancity. “It is dire. More people rent in our neighbourhoods than we think, and a third of those people are millennials.”

The report found rental rates in Metro Vancouver have outpaced salary increases by nearly double — jumping 11.4 per cent between 2011 and 2015, while weekly wages grew by only 6.6 per cent in B.C.

“There’s an assumption that for people who can’t afford to buy, or don’t want to, there’s always the rental market,” Azaroff said. “But when you look at the level of affordability we are at, you find that’s not true. The rental market is not a viable alternative to owning in a lot of cases.”

Competition for rental units is fierce. On apartment-wanted ads, prospective renters put their best foot forward. No parties, they promise; no pets and no drugs. Good credit. Very clean. Others have more creative offerings: Can do maintenance work. Can plant veggie garden. A single dad looking for a place in Surrey posted a link on his ad to a Vancouver Sun story on how he saved his previous landlords from a fire. Yes, even heroes are having a difficult time finding a place these days.

Laurie Eadie and Adam Payne were recently told by their landlady that their East Vancouver basement suite, near Trout Lake, required major renovations and they would have to move.

During a two-month search for a new home, they looked at 25 to 30 places across the city and what they found was a market that’s gone bonkers. “It’s ridiculous out there,” said Eadie, 42.

Cancellations were frequent and open houses common. “Forty to 50 people,” recalled Eadie of one open house, a 900-square-foot condo in Olympic Village listed for $2,800 a month. “Everyone’s just on top of each other because there’s nothing out there. It’s awful.”

Still, Eadie and Payne are among the lucky ones. Both work in the film industry and can afford higher rents to get what they want. But many — those on income assistance, those who have pets, are younger or new immigrants, or lack credit history or employment — struggle even more.

And the hot real estate market, which saw benchmark prices for homes in the city soar 54 per cent in the west side and almost 64 per cent in the east side over the last five years, has exacerbated the rental crunch.

With housing prices outpacing income, many people have to take out huge mortgages to buy and may be looking to charge higher rents in secondary suites to help offset the cost. The soaring prices could also encourage owners to cash out right now, displacing tenants in the process. 

While last month was the highest-selling June on record for residential sales in Metro Vancouver, rental buildings also exchanged hands at a frantic clip.

According to the Goodman report, which tracks purpose-built rental apartments in the region for apartment building owners and developers, sales of rental buildings in Vancouver have increased by 108 per cent in the first six months this year compared to the same time period in 2015.  

An increasing number of developers purchase the properties based on their land value, rather than rental income, noted the report — propelling a 47 per cent jump in the average price of unit from $332,513 in 2015 to $448,715.

And that means higher prices for renters, said report co-author David Goodman. 

“Investors who buy buildings are now having to pay more for the buildings, so they’re saying we’re in it for the long haul, and if there’s any vacancies … they are less inclined to leave it at $900 a month (and will) want to rent it out for $1,200 because there’s 100 people lined up to rent the suite and there’s virtually no supply of rental suites,” he said. “It’s simple economics 101.” 

This business-like mentality permeated Eadie’s viewings and interactions with prospective landlords and agents. “It was cutthroat,” she recalled. When landlords agree to meet with tenants in person to ensure a good fit “it’s ‘how much can I get?’ Not ‘what kind of tenant am I getting?’ ”

For Ruth Kozak, her three-month ordeal to find a new place was a soul-crushing exercise.

“I can’t tell you how many places I was diligently applying for and not getting anywhere,” said Kozak, a fit 82-year-old who goes for daily walks and works as a freelance writer to supplement her retirement income. “I think being a senior was going against me, even though I have really good references.”

In January, her landlord said he was going to sell the Grandview unit she had lived in for 10 years near Victoria Drive. She loved that place, a $945 one-bedroom with her own washer and dryer, balcony and lots of storage space. Early in the search, she resigned herself to paying up to $1,100, even though it would leave her “practically penniless.”

At one garden suite, Kozak was about to ask for an application form when she learned 300 people had visited the place. Intimidated, she walked away.

She applied to three places, including one in Metrotown she felt positive she was going to get. The rejections left her despondent.

“I was desperate. I was lying awake at night, thinking: What am I going to do? Time was ticking by. I thought I was going to have to get into a shelter.”

In the gleaming towers of downtown Vancouver and the Olympic Village and newly built condos along Cambie Street, or in trendy Mount Pleasant, many units are available for rent. For example, ads for units at the brand new Telus tower were plentiful on Craigslist last week, ranging from $1,800 for a one-bedroom place to $3,300 for two bedrooms. 

But, as Azaroff noted, availability is one thing. Affordability is another. “Those two things have to work together. If there’s rental stock but you can’t afford it, that’s a problem.”

Sarah McMillan has a well-honed strategy that’s worked for her in a competitive market where she has been asked to pay above the asking price three times in the last five years.

Every time she goes to see suites, she brings a “rental resume” that includes a blurb about her, her work and education history, written landlord references, photo, hobbies and reason for moving. She brings a cash deposit and a deposit receipt form. If she thinks it’s going to be a hot property, she brings a bottle of wine or flowers — “something to make me memorable.”

When Zack Mosley and Amanda Mombourquette’s lease on their 650-sq.-ft. two-bedroom apartment on the main floor of a 100-year-old house in the Commercial Drive area expired in July they thought they’d carry on with the standard month-to-month term. They got a nasty shock when their landlord said they can only stay if they pony up $95 more a month in rent, an increase of seven per cent to $1,475 a month.

“He basically let us know he puts all his tenants on fixed-term one-year leases and they negotiate every year,” said Mosley.

The couple refused, mostly on principle, even if they don’t feel they have a legal leg to stand on as they had signed the fixed-term clause. Added Mombourquette: “The idea of living in yearly fear of our rent getting kicked up to a point where we have to move was too much.”

The couple, who have since moved, want to warn other prospective renters of the practice.

While fixed-term leases are helpful for parties who know they only want to rent out or rent a place for a specific period of time, in the majority of instances, “it’s a loophole,” said Mosley.

“You’re really leaving it up to the landlord to regulate themselves and why would any landlord choose to do that except out of the goodness of their hearts?” asked Mosley, a touch cynically. “They have tenants over a barrel, especially in this landlord’s market.”

There are glimmers of hope on the horizon, said Azaroff.

The city of Vancouver’s Rental 100 program, which incentivizes the construction of purpose-built rental housing buildings, is starting to bear fruit. Construction of 358 affordable homes by the Co-operative Housing Federation is underway on four sites owned by the city.

“The pipeline is improving,” said Azaroff. But if you’re someone who has been renovicted or is struggling to find a place, these projects are cold comfort, he added. “It’s not going to help you today. It’s going to take a little time.”

Goodman said the new units created by the Rental 100 program are only a drop in the bucket compared to the number of rental units the city should be adding to make a difference. 

“There’s just meagre increases in supply of 500 to 600 units a year when it should be 2,000 to 3,000 a year,” he said. 

For now, many renters are making compromises and concessions.

Eadie and Payne are moving into a house in East Vancouver for $3,300 a month. They had to pay rent for two places for two weeks in order to make the transition work.

“To pay that just about killed us,” said Eadie. “It’s so much money. But if we want to be in this neighbourhood this is what we have to pay for what we need. Or else we move to Surrey.” 

Their former suite, where Payne had lived for 14 years, was listed on Craigslist for $1,895, almost $500 more than what they were paying.

Kozak thanks her lucky stars every day that she managed to find a new apartment within her budget, thanks to a friend who knew about her predicament.

Her new place, a three-storey walk-up near the PNE, is located at a noisy intersection and has no elevator or storage space. But there are bonuses. It’s $15 a month cheaper, slightly bigger, and has new appliances. “And the stairs are not as difficult as I thought. I’ve lost 10 pounds since I’ve moved in.” 

Delgiglio still scours Craigslist every day, and emails or calls prospective landlords when suitable units come up, but is not optimistic they can find a place before the fall. 

LANDLORD’S PERSPECTIVE 

A one-bedroom unit in Kitsilano, blocks from the beach, was listed on Craigslist two weeks ago at $1,495 a month. A 30-minute open house on a summer afternoon drew 12  interested parties, including some who put in applications. A week after the viewings, the apartment was still available for rent. 

Despite the belief it’s a landlord’s market, good tenants are tough to find, said the landlord, who asked his name not be published.

“We want the best people. It’s a nightmare trying to get decent people,” said the man. The last tenant, he noted, was evicted for listing the unit on Airbnb and compromising the safety of other tenants.

At the viewing, he met a young couple who would have made great tenants, he said, but they objected when the application form asked for their driver’s licence and banking information. He acknowledged neither item of information is mandatory, but feels he should be allowed to conduct due diligence on tenants.

“For a $1,500-a-month unit, that’s an $18,000 transaction we’re making. You’re going to be living in a multimillion-dollar facility. We’re talking big dollars. We get to select just like they get to select.” 

© 2016 Postmedia Network Inc.

Justin da Rosa
REP

Canadian home sales declined in June, according to CREA’s most recent stats.

National home sales fell 0.9% month-over-month in June, according to the Canadian Real Estate Association.

“June sales extended trends observed the previous month,” Gregory Klump, CREA’s chief economist, said. “As was the case in May, the monthly decline in national sales activity was led by the Lower Mainland of British Columbia and markets in or around the GTA. In keeping with the law of supply and demand, exceptionally low inventory combined with high demand continues to translate into strong price growth in these housing markets, where year-over-year price gains have been running in double-digit territory since late last year.”

Still, sales increased 5.2% year-over-year.

British Columbia saw a 14.3% year-over-year jump; Ontario, meanwhile, saw its home sales increase by 6.5%.  Alberta (-9.2%) and Saskatchewan (-10.7%) didn’t fare as well over the past 12 months.

Rounding out the month’s performance, Quebec experienced a 2.3% year-over-year jump; New Brunswick sales jumped 3.2%; Nova Scotia’s fell by 4.6%; P.E.I.’s increased by 12.5%; and Newfoundland & Labrador’s sales saw a significant hike of 28.6%.

“While national sales activity remains strong, there are still significant differences in housing market trends across Canada,” CREA President Cliff Iverson said. “While home sales activity and price growth are running strong in B.C. and Ontario, they remain subdued in other markets where homebuyers are cautious and uncertain about the outlook for their local economy.”

The average Canadian home now costs $503,301, up 11.2% year-over-year.

The average Ontario home jumped 13.9% to $544,009 and the average home in British Columbia now costs $694,925 – up 10% year-over-year.

Alberta continues to struggle, with the average home price falling 1.4% to $397,269.

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