Council to decide June 13 on Beedie?s proposal for ?heart of Chinatown?

Mike Howell
Vancouver Courier

One of the first stories I wrote when I joined the Courier some 15 years ago was about how merchants and business organizations wanted to revitalize Chinatown.

It was dying, they said.

The reasons were many, including development of large-scale Chinatowns in Richmond and Burnaby that lured customers away, exorbitant lease rates and property tax bills, drug-fueled crime and the lack of attractions for young people such as bowling alleys and movie theatres.

At the time, there was only one bubble tea house.

I heard much of this concern from Albert Fok, the operator of Kiu Shun Trading Co. on Keefer Street, a herbal medicine business that had been in his family for 25 years. Fok was then the newly elected chairperson of the Vancouver Chinatown Merchants Association.

“One must evolve with the trends or you will be eliminated,” he said all those years ago.

I was thinking about what Fok and others told me in 2002 as I sat in the council chambers Monday and listened to speaker after speaker state their reasons for opposing a proposed 12-storey development at Keefer and Columbia streets.

You might know the property as a parking lot, adjacent to the Chinatown Memorial Square, where there is a monument to honour Chinese veterans and Chinese railway workers of the late 19^th century.

Many say it is in the heart of Chinatown.

Beedie Holdings Ltd. owns the land and says its project will include 25 social housing units for seniors on the second floor and 106 strata residential units on levels three to 12. The ground floor will be for businesses.

Just another new building in Chinatown, right?

Some might think so, considering Chinatown has seen two highrises recently constructed just up the street at Main and Keefer. Five other developments, all at least 90 feet high or taller, have also been built – or are in the works — in the past decade at 718 Main St., 221 Union St., 219 East Georgia St., 183 East Georgia St. and 129 Keefer St.

Public hearing sets record

I don’t recall much pushback on those projects, although there has been some noise over the years about the gentrification of Chinatown. Nowhere near, though, have the dissenting voices been as loud as they were over four days of public hearings on the Beedie proposal.

More than 300 people registered to speak to council. That’s got to be a record of sorts. It’s more people than turned up to a hearing for the expansion of gambling at the Edgewater casino (141), the Rize development proposal for Broadway and Kingsway (160) and the reshaping of Point Grey Road for bikes (118).

The common complaints from the detractors of Beedie’s proposal were that the building was too tall at 115 feet, too big, and a wrong fit for a cultural precinct that includes the Chinese Cultural Centre/ Chinese Canadian Military Museum, Dr. Sun Yat-Sen Garden and the Memorial Square.

The proposal, they said, also does little, if anything, to address affordable and social housing needs of seniors and others struggling to find and afford a home in Chinatown.

Some compared the fight against the proposal to the community’s battle in the 1970s to stop a freeway from being built through the neighbourhood, and that this project — approved or rejected — will somehow represent a defining moment in Chinatown’s history.

“My opposition is not because I’m anti-growth, anti-change, because I’m not,” said Rachel Mai, a young architect, emphasizing the property is an anchor site for Chinese culture and should reflect that. “I’m a supporter of smart and well planned urban development.”

Mai encouraged city council to have the city buy the land or work out a land swap with Beedie, which is an interesting but expensive suggestion. City staff told council Monday the land is worth at least $22 million.

‘Pure nostalgia’

Another architect – this one, retired – spoke in support of the project. Ron Yuen, who has worked on a variety of developments in Vancouver over the years, including those involving “hundreds of units” of social housing, noted the property at Keefer and Columbia has been vacant and used as a parking lot (and gas station) for 40 years.

“The site has no heritage structure and this area was in need of a development that would help stimulate the economy of a moribund Chinatown,” said Yuen, who acknowledged in his opening remarks that his son worked for Beedie. “Those who think they can bring back the good old times, well that’s pure nostalgia – and nostalgia will not pay the rent, nor bring back the energy or vitality.”

Yuen went on to say those opposed to the project have provided few ideas for the property “that makes any sense, or how to revitalize our Chinese community.”

“From my perspective, there seems to be the notion that if it wasn’t owned by the Chinese, built by the Chinese, occupied by the Chinese, that it would be detrimental to Chinatown,” he said. “That attitude, in my opinion, should not be tolerated.”

He made the historical point that Strathcona was once home to a large Italian population before the Chinese moved in. Now, “a whole new multicultural society” is growing up in Strathcona.

“That’s the evolution, that’s the change, that’s what keeps it alive and moving,” Yuen said. “So what’s going to happen in the next 10, 15, 20 years, I can’t tell you that. But it will happen, or else it will die.”

Yuen’s words were in contrast to those of Casey Wei, an artist and musician. She warned council what approval of the proposal would not only say about the democratic process — which saw the majority of speakers call for rejection of the project — but what it will mean for Chinatown.

“If this proposal is approved, and yet another soulless condo is erected, this will only add in a monumental way to the insidious entitlement of gentrifiers who are nothing more than modern day colonizers,” Wei said.

The Vancouver Chinatown Merchants Association, which I mentioned off the top and has worked for decades to revitalize the community, supports the project. One of its directors, Henry Tom, told council during the hearings that it will bring more residents to Chinatown and, therefore, more customers.

Was this what Fok was talking about in 2002 when he said, “One must evolve with the trends or you will be eliminated.” I called him to find out and he answered: “That’s part of it, of course.”

Fok no longer belongs to the merchants’ association but supports Beedie’s proposal. He picked up on Tom’s point about attracting more customers and noted the building calls for seniors’ housing and cultural and recreational activity space.

‘Reverse xenophobia’

Like Yuen, he is troubled by the idea from some in the community who argue that Chinatown is only for Chinese people. Over the years, Fok and other merchants participated in a “We speak English” campaign to attract non-Chinese customers. The idea for that campaign extends to attracting more non-Chinese residents and businesses, he said.

“I’ll probably get in trouble for saying this, but there seems to be a reverse xenophobia in Chinatown,” Fok said. “One needs not to be Chinese in order to be in Chinatown.”

Asked to explain the insatiable interest from the community in the Beedie project, Fok reiterated it was related to the clash of what Chinatown represents to people and what they want it to be in the future. He doesn’t buy the argument by those who compare the project to the freeway proposal that was scrapped in the 1970s.

“Every time there’s an issue brewing in Chinatown, it always goes back to this highway thing, and I don’t think that’s fair,” he said, noting the property in question was a former gas station site. “Keep in mind, we’re not tearing anything down. That piece of land has been barren for 42 years.”

At the closing of the hearings Monday night, Houtan Raffii, vice-president of residential development for Beedie, told council that “whatever happens, we’re humbled by the process.”

City council will decide June 13 on the proposal. I expect an overflow crowd.

© 2017 Vancouver Courier

Martin Pelletier
The Vancouver Sun

Two of the most common mistakes people make when investing are extrapolating past performance into the future and putting all of their eggs in one basket.

Canadians are no different. In fact, we think they have recently been more prone to making these errors than people in other developed nations. Take a look at our economy for example, which is shaping up to be one driven primarily by real estate and a debt-heavy consumer.

The Canadian housing boom is something to be marvelled at, with our home-price-to-income ratio now 40 per cent above the long-term average and among the highest in the developed world. The real estate and related financial services industries have followed pace and represent nearly a quarter of the total Canadian economy, the highest level since data started being collected in the 1960s. In places like British Columbia, real estate, construction and housing-related finance account for an astounding 40 per cent of GDP according to Todd Hirsch, chief economist at ATB Financial.

Consumers have been quick to ratchet up their debt to match higher housing prices and the banks so far have been willing to comply. Nearly half of all Toronto’s mortgages are now considered high-ratio, meaning loan-to-incomes greater than 45 per cent, while Vancouver and Calgary are not far behind at approximately 40 per cent and 35 per cent, respectively.

In regards to diversification, Canada is as close as you can get to being a one-trick pony with financials, energy and materials representing over 67 per cent of the S&P TSX. Therefore as an investor, one should ask if these sectors can deliver over the next 12 months given the current environment.

In regards to energy, we think the biggest gains are behind us as we adjust to an oil price environment that is range-bound with OPEC defending it at any level below US$45 a barrel and U.S. shale producers providing a ceiling by quickly responding to prices above $55 a barrel. Capital is also leaving the Western Canadian Sedimentary Basin and being redeployed in more attractive operating environments such as the Permian Basin or Marcellus Shale therefore making it a lot more challenging to grow north of the 49th.

In regards to the banks, which account for approximately 23 per cent of the TSX, we don’t worry about a fallout from the ongoing situation with Home Capital Group Inc. and the subprime market which is quite small. However, we do have our concerns about their ability to repeat the earnings growth of the past should the housing market top out or worse, roll over.

For example, we tracked mortgage lending over the past few years and it has kept pace with housing prices. As a result Canadian residential mortgages now represent a significant percentage of total bank assets ranging from 15 per cent to 35 per cent.

Then for fun we plotted the total return of the S&P TSX Equal Weight Diversified Banks Index which comprises Canada’s largest six banks against housing prices and discovered a 0.96 correlation. Simplistically, this means the bank stocks are moving in lockstep with housing.

This makes some sense as the banks make more money as their mortgage book expands with a rallying real estate market and personal loan books grow as consumers borrow more to spend on cars, vacations, renovations etc. as they feel buoyed by their higher paper net worth.

As a result, a flat oil price environment leaves housing and its derivative, the banks, to play an even bigger role in driving the S&P TSX return profile. 

Adding eggs to that crowded basket is not something that we feel particularly excited about.

© 2017 Financial Post

Justin da Rosa
REP

The case settled a tricky matter of disclosure between a selling agent and a client.

In a BC Supreme Court case, a former client alleged the selling agent withheld pertinent market information that led to the sellers receiving substantially less money for the sale of their home.

The sellers had listed with a number of agents with no success; they eventually chose the final agent – the one they eventually sued – because she was the agent for a property that had sold on the same street.

The house was then listed at a $10,000 discount and the owners eventually received an offer $100,000 below the listing price.

“(The sellers) alleged that the listing agent ‘pressured’ them into accepting the low offer. The listing agent deposed that she had told the sellers it was up to them whether to accept, reject or counter the offer,” Attorney Brian Taylor wrote in his analysis for BCREA’s latest Legally Speaking analysis. “Although not known to the sellers at the time, the house across the street sold for almost an identical amount.”

However, following the sale, the sellers learned a neighbouring house had sold for nearly $225,000 more just weeks prior.

They claimed they would not have accepted the offer had they known about that sale. They argued the agent was negligent when she didn’t provide that market analysis. They also argued conflict of interest because the listing agent had two similar properties listed across the street from each other.

The court sided with the agent, finding the sellers did not provide sufficient evidence to prove the agent did not meet the required standard of care.

“The sellers’ main complaint was that they were not made aware of the pending sale, which turned out to be close to $225,000 more than the offer they accepted. However, the Court concluded that those details would not have been available to the listing agent until after that pending sale had become unconditional, which was after the time the sellers were considering their offer,” Taylor wrote. “In dismissing the claim, the Court concluded that “the defendants did not have a legal duty to obtain the best possible price for the property.

“Rather, a realtor has an obligation to act in accordance with the applicable standard of care for giving advice on price for a property.”

Copyright © 2017 Key Media Pty Ltd

Proposed condo at the centre of battle between preservationists and those who want change

Douglas Quan
The Province

In this city of towering glass, it could easily have been overlooked as “just another condo.”

But a proposed 12-storey condominium in the heart of Vancouver’s iconic Chinatown has stoked a red-hot debate unseen in this city for years, pitting those who believe the development is needed to revitalize the neighbourhood against those who fear the project will further erode the area’s unique character.

Last week, as city council began to hold hearings to accommodate more than 240 speakers, some of the project’s opponents couldn’t help but compare the current fight to a campaign waged against the city in the 1960s and ’70s over a proposed inner-city freeway that would have gutted much of Chinatown.

Now, instead of a “freeway of cars,” the threat posed to Chinatown is a “freeway of condos,” they said.

“If we don’t manage to stop this development from proliferating, I think we’ve lost the Chinatown we know,” said Shirley Chan, whose family played a pivotal role in stopping the freeway project.

The very survival of the community is now threatened.”

As the National Post reported in December, cities across North America are wrestling with how to balance the goals of rejuvenating their Chinatowns while preserving their heritage.

But the debate in Vancouver, which boasts one of North America’s largest Chinatowns, has been particularly fierce — propelled by the recent unveiling of plaques marking Chinatown’s designation as a national historic site.

No issue in recent memory — not a contentious casino development or the thorny issue of bike lanes — has drummed up this much noise, municipal watchers say.

After going through several iterations, the building proposed by Beedie Development Group on a vacant lot now consists of 12 storeys, 106 market-housing units and 25 social-housing units for seniors, as well as several retail units and a community space.

Supporters, who include the Vancouver Chinatown Merchants Association, say the project will breathe new life into the neighbourhood, improve safety and provide a needed gathering place for cultural groups.

In a letter to council, Albert Fok, who heads the Chinatown business improvement area society, says with the growth of Asian supermarkets elsewhere in the city and in the suburbs, Chinatown has lost some of its allure. The only way it will survive is if it opens up to a wider demographic.

“There appears to be a reverse xenophobia in Vancouver Chinatown of late and that is unacceptable,” he wrote. “Many are flying the so-called flags of heritage preservation and promotion to curtail the influx of new businesses and new developments, particularly those that are non-ethnic-Chinese entrepreneurs and investors. This is absolutely absurd … and should not be tolerated.”

Chinatown, he continued, “cannot thrive on the historical component alone.”

Opponents say the building’s massing and height are not in keeping with the traditional architecture of the neighbourhood — slim structures no more than four storeys with recessed balconies — and dwarfs neighbouring sites, including a classical Chinese garden and a memorial plaza that pays homage to Chinese railway workers and war veterans.

Planning in the neighbourhood should put the needs of the area’s existing, mostly low-income seniors first, critics say. To that end, the 25 units of social housing are tokens at best. And they worry that continued gentrification of the neighbourhood (there are already a couple of new condo buildings up the street) will lead to higher rents and displacement of seniors already feeling squeezed by the encroachment of new coffee shops and eateries that do not cater to their tastes or budgets.

An ongoing study by the Hua Foundation, a local non-profit, has found the number of traditional green grocers, fishmongers and barbecue meat shops has fallen by more than 50 per cent since 2009.

“Chinatown is one of the last sanctuaries for many low-income residents, particularly Chinese-Canadian elders, to readily find housing, community, services and acceptance in the city,” Andy Yan, an urban planner and academic, says in prepared remarks he is set to deliver when hearings resume Monday.

“The failure of development and planning to embrace social, cultural and historical context and neighbourhood need should not be rewarded.”

The debate has been noteworthy for the heavy involvement of Chinese-Canadian youth. One group has been holding regular mahjong socials on the plaza next to the proposed site as an act of protest and as a symbolic way to lay claim to the space.

Many of the twenty- and thirty-somethings say they feel obligated to continue the work of previous generations who fought to keep Chinatown alive.

“Shirley Chan, Joe Wai (a Chinatown architect who recently passed away) and others fought the ’60s freeway, which gave us the Chinatown we grew up with,” said Melody Ma, who heads the #SaveChinatownYVR campaign. “We need to fight the ‘freeway of condos’ today so that the next generation has a Chinatown tomorrow.”

Chan said she never thought that 50 years after the freeway scrap, she’d witness another battle for Chinatown’s survival.

With a council vote possibly early this week, she’s not sure what to expect. The Chinese-Canadian community today is a lot more diverse and dispersed, she said, and lacks the galvanizing influence of such leaders as Wong Foon Sien, who was dubbed the “unofficial mayor” of Chinatown back in the day.

“My gut is telling me if council listens, they’ll vote against,” Chan said. “My fear is that they will not.”

© 2017 National Post,

Vancouver housing project allows people to age in place

Kevin Griffin
The Province

A development on the west side of Vancouver is among the new kinds of housing projects aimed at accommodating an aging population.

Unlike some seniors’ housing complexes that restricts residents to 55 and older, the Opal development at 438 West King Edward has a more inclusive age range. Opal says that only one family member needs to be 55 or older, which allows multi-generational families to stay together.

A luxury, 130-unit development in Cambie Village, Opal by element, is designed so residents can live independently or use assisted living. As well, the project plans to offer 31 licenced care beds which Opal residents would have priority access to if they needed 24-hour registered nursing.

One of the owners of two condos in Opal is Douglas Guest.

Guest is only 37, but has decided to buy into the project as an option for himself and his wife when they get closer to retirement. Until then, he believes his inlaws will move into one of the 1,100-sq-ft suites once the project is completed in February 2019.

The other condo he bought for his mother Michele, 72.

Guest said he grew particularly concerned about aging in place after dealing with his father, who died last year at age 87 after a series of strokes.

Guest said he wanted to start planning now before his mother developed any health problems. He said he wanted to be pro-active about planning rather than re-active once a crisis developed.

Opal also happens to be close to where his mother currently lives on the west side of Vancouver.

“Typically, I find most people don’t think they’re going to age, don’t think they’re going to get sick at some point,” he said.

He chose Opal as a place to spend a total of $2.7 million for the two units because he liked the idea of residents being able to age in place.

“You can be living independently, and then in assisted living,” said Guest, who works in the insurance industry. “If something happens, there is care there that can be stepped up, and eventually have the full complex of care in place.”

Opal is comprised of one six-storey and two four-storey buildings on the south side of King Edward between Yukon and Cambie.

It has 44 condos for sale, 56 for rent, and 30 complex-care suites.

Guest said he found out about Opal by searching online for a residence for his father that could accommodate people with dementia.

He said his experience with his father’s aging has made him more aware and sensitive to issues around aging and housing.

“Everyone is fine at home – until they’re not,” he said.

Isobel Mackenzie, who is B.C.’s seniors advocate, said based on what she has read about Opal, the development proposes to create a community in one complex even if the idea of aging in place is not entirely a new concept for seniors.

What appears to be different, she said, is that it targets a specific market: seniors aged 70 or older who don’t need care now but may in future. Opal has developed a model that is flexible enough to allow people to buy condos and live independently without having to buy meals.

The project is also designed for a unique cohort of seniors living in houses in Vancouver that have appreciated in value so much that they can afford to sell and live in an upscale housing project.

Different models for housing seniors are likely to be built as more Canadians age, Mackenzie said.

“Not everyone will want what Opal has to offer, but some people will,” she said. “For those who want what Opal has to offer, it sounds like it will be quite good. It incorporates a lot of the fundamentals of good retirement living design.”

© 2017 Postmedia Network Inc.

A SCAPEGOAT FOR FOREIGN-MONEY FEARS?

Ian Mulgrew
The Vancouver Sun

The Law Society of B.C.’s ability to police money laundering and offshore real-estate investment is being questioned after a lawyer was found guilty of professional misconduct for nearly $26 million in suspicious transactions.

Lawyer Paul Jaffe said the disciplinary decision Wednesday against his client Donald Gurney imposes standards and expectations of conduct for the profession that may be impossible to meet.

He underscored: “The law society conducted a two-year investigation in connection with the transactions under review by the (disciplinary) panel and were not able to identify any wrongdoing or suspected wrongdoing, or illegality involving the transactions.”

Jaffe insisted that his fellow lawyer, a 49-year veteran of the bar, was a victim of the legal regulator’s desire to show it was dealing with fears about foreign investment and money laundering in the overheated real-estate market.

The watchdog was “under pressure,” he maintained, to show it has procedures in place to regulate its members following a 2015 Supreme Court of Canada decision that exempted lawyers from some financial tracking laws.

“In short, through the disciplinary process, the LSBC seeks to advance policy objectives at my client’s expense,” Jaffe complained.

“While seeking to convince the public that it takes money laundering seriously, it has chosen to not apply its resources against lawyers who are actually engaged in that activity.”

The panel criticized Gurney for being evasive and ignoring “a sea of red flags” in four questionable transactions that saw $25,845,489.87 flow through his professional trust account between May and November 2013. He reputedly took a tenth of one per cent as a fee.

It found he made no inquiries regarding who the lenders were, the source of the funds or the client’s use of the money and concluded he had shown “a gross culpable neglect to his duties to make reasonable inquiries.”

A Law Society of B.C. disciplinary panel has found that West Vancouver Donald Gurney ignored ‘a sea of red flags’ and allowed $25,845,489.87 of offshore cash to float through his trust account between May and November 2013. Junial Enterprises – Fotolia / Postmedia News files

The panel said a lawyer cannot delegate the duty to inquire or rely upon a client’s assurances as to the legitimacy of the transaction, Jaffe noted.

The suspicious transactions — involving funds from Nevis, Marshall Islands and Belize — surfaced during a compliance audit, a regular check of a law firm’s books conducted by the society roughly every six years.

Painting Gurney as a scapegoat, Jaffe said the society had made public no information or evidence to indicate it had applied its regulatory efforts to any real-estate transactions involving offshore parties or how it was policing lawyers handling foreign investment.

He pointed to China as a prime example — “a hotbed” for investment during the past number of years — and cited the reportage of my Postmedia colleagues Douglas Todd and Sam Cooper.

A 2015 study that sampled 172 Vancouver houses, purchased in the last few years for between $1.25 and $9 million, found that 35 per cent were owned by homemakers or students, Jaffe said — one a Point Grey mansion bought for $31.1 million.

Further, he continued, a third of the 100 most valuable properties in Metro Vancouver are owned by holding companies, four are registered offshore, 11 held through nominees and six held in trust for anonymous beneficiaries. 

“Presumably the vast majority of these transactions would have raised suspicions and would have required a lawyer to make reasonable inquiries,” Jaffe noted.

“The lawyer would have to obtain evidence of the identification of all parties involved, evidence as to the source of funds, evidence that the funds are not tainted with illegality, be satisfied of the bona fides of the ownership structure and be satisfied that there was compliance with Chinese currency laws and ensure compliance with Canadian law, amongst other matters depending on the circumstance.”

He scoffed that any lawyer would be able to satisfy such criteria.

“This work would be time-consuming and expensive and may prove impossible to perform,” Jaffe said. “In the end it will be a judgment call by the lawyer as to whether sufficient inquiries have been made, with a risk that the law society may not agree, given the absence of any specific guidelines in the area.”

With the panel’s decision, he said, lawyers should be wary of becoming involved in offshore funding with a Chinese connection “at the inquiry stage of transactions.”

“In fact,” Jaffe warned, “it may be ill advised for lawyers to become involved at all.”

The ruling also has implications for criminal lawyers, he added.

“A lawyer handling a criminal matter such as a drug-trafficking or drug-conspiracy charge who receives cash to apply on his fees must, according to the decision, make reasonable inquiries to verify that the money is not proceeds of crime,” Jaffe explained.

“According to the decision, it is not sufficient for the lawyer to take the word of the client.”

A spokesperson for the Law Society of B.C. said it could not comment because the disciplinary panel had not finished its work and had yet to decide on a penalty for Gurney’s misconduct.

© 2017 Postmedia Network Inc.

Speculators target small acreages to build homes after foreign buyers tax introduced

Sam Cooper
The Vancouver Sun

Sales of farmland in B.C. surged and prices jumped immediately after the provincial government announced a foreign buyer tax on residential land in July 2016, a Postmedia investigation shows.

The surge in agricultural land sales and prices — on property that is not subject to the 15 per cent foreign buyer tax — was largely driven by record-setting sales in the Fraser Valley, South Surrey and White Rock.

Data provided by Landcor for Postmedia’s investigation shows that in July 2016 there were 81 farmland sales in B.C., and the average price was $109,000 an acre. The B.C. Liberal government announced the new residential tax on July 25. In August, farm sales jumped to 144 across B.C., and the average price shot up to $140,000 an acre. Prices continued to rise, hitting an average of $151,000 an acre in September on 142 sales. Sales have fallen back to average levels in the following months, but prices have remained elevated.

By looking specifically at where prices and sales have surged, and reviewing anecdotal reports from realtors, a connection can be suggested between the jump in farmland sales after July 2016 and speculation by offshore investors. The B.C. government has been tracking foreign buyers of B.C. farmland since June 2016, but does not “provide the specific number of purchases” because the data sample is not big enough, Ministry of Finance spokesman Jamie Edwardson said.

Postmedia’s investigation suggests that a disturbing trend is accelerating. Farmland that is crucial to B.C.’s future food needs is increasingly falling into the hands of speculators and builders of luxury property, and farmers are getting priced out. Even before the introduction of the residential tax, a Metro Vancouver government investigation identified that 50 per cent of the region’s agricultural land is not being used for farming, and that many property owners are exploiting tax benefits meant for food producers.

The surge in B.C. farmland prices is a Metro Vancouver story. While prices remained fairly stable in other areas of B.C. after July 2016, farm prices were skewed higher by trends in Fraser Valley, South Surrey-White Rock, Richmond and Delta, Postmedia’s analysis shows. In these areas especially, according to realtors and a May 2017 staff report from Richmond city hall, farm prices are no longer attached to agricultural revenue, but instead are following red-hot Metro Vancouver residential land prices, and reflect a trend of “estate” building on country acreages.

FEARS CONFIRMED

Postmedia’s findings seem to confirm the fears of Richmond Mayor Malcolm Brodie.

Last year, Brodie said he expected the new foreign buyer tax to fuel speculation in farmland. On the day the tax was announced in July, Richmond warned the provincial government of its impacts.

“We said, ‘Why aren’t you applying this to all land?’” Brodie said in an interview. “If you are going to have this tax, it should be applied in a way that it doesn’t attract speculation to farmland. They said, ‘We hadn’t thought of it.’”

Speculators can avoid the 15 per cent tax on residential property by purchasing bare farmland and building a house on it, said Brodie. This kind of development has a number of attractions. First, buyers can obtain farm properties for less than residential zoned land. As a bonus, because of controversial zoning rules, buyers can build much larger mansions on farmland than they can on residential lots. They can also take advantage of very low property taxes on farmland that are meant to encourage food production, get a 50 per cent break on school and transportation taxes, and avoid property transfer tax if a constructed home is lived in by a family member for at least a year before it is sold.

“In the last three years, we have seen the number of transactions on farmland going up in terms of speculation,” Brodie said in an interview. “In Richmond, we are seeing a number of smaller farmland lots being bought because these are attractive to speculators. And we are seeing higher prices per acre. So the trend is up, the prices are increasing, and one of the pressures is the foreign buyers tax. People are buying these properties with farming as an afterthought, just to build estates.”

In January 2014, according to land title data gathered for the combined areas of Richmond and Delta, farmland averaged $540,000 an acre. But the prices exploded to an average of $1.3 million an acre in May 2014. In April 2015, farm prices peaked at $1.6 million an acre in these areas — seemingly in connection with an explosion of speculation across Metro Vancouver, which led to residential land prices surging by over 30 per cent. Prices across Richmond and Delta now sit at about $1.3 million an acre, on average.

n the Fraser Valley, there were 51 farm sales in August 2016 — far more than in any other region in B.C., and the highest monthly total for the Fraser Valley in recent history. Last August, the average price jumped to $550,000 an acre, compared to $510,000 in June 2016. By October 2016, the price hit $620,000 an acre. The prices have more than doubled since July 2014, when Fraser Valley farmland sold for about $250,000 an acre.

“The calls really spiked in relation to the foreign buyers tax,” Langley realtor Danny Evans said. “I was getting a lot more calls on acreages, and I just see the prices going up.”

As in Richmond, it is the smaller farmland parcels of about two to five acres that speculators are targeting in the Valley. Depending on the location and desirability for estate building, these properties are now selling for between $1.5 million and $1.8 million, Evans said. The prices have roughly doubled in the last few years, land title data shows.

“People are not that interested in the farming aspect but they want the tax benefits, and the qualifications are very low. So you put out some beehives or blueberries, and you get about a 70 per cent property tax break,” Evans said. “Investors seek the highest and best use out of the property, so that’s why in Richmond and Langley you see these large homes on farmland.”

In South Surrey and White Rock, there were four farm sales in June 2016, and just one sale in July. In August 2016, there were eight farm sales, followed by seven in September. Prices in this area fluctuated between $300,000 and $600,000 from 2010 to 2015. In July 2016, the average price in South Surrey-White Rock was $1.26 million an acre. In August it was $1.32 million, and by December it had jumped to a startling $1.75 million.

CHINESE, SAUDI BUYERS

Popular two-term Delta independent MLA Vicki Huntington, who chose not to run for re-election this year for health reasons, spent much of her time in office pressing the B.C. Liberal government to protect B.C.’s Agricultural Land Reserve. In the absence of provincial data on foreign ownership, she had her staff digging into land title records. The project took several years, and researchers sometimes had trouble discovering the true beneficial owners, Huntington said, because of opaque ownership structures such as numbered and shell companies.

But Huntington says her staff’s research established a growing trend of farmland purchases in B.C. by offshore interests in countries including Mainland China and Saudi Arabia. There are foreign companies that appear to be holding land for long-term agricultural needs and others buying land strategically near potential port developments, Huntington says. She says her research also pointed to concerns about the building of mega-mansions on ALR land, and foreign and local developers leaving farmland fallow, while holding out for industrial or residential rezoning.

Huntington, who came from a career in RCMP security services, said she is concerned about money laundering, and Canada’s national interests being subverted.

“We are very concerned with the levels of foreign buying of farmland in specific areas like Delta and the lower Fraser Valley, and we think there is trouble brewing,” she said. “Mainland China is certainly part of it, and it is concerning because they are deliberately acquiring land to support their national agricultural needs. They understand the incredible value.”

Huntington believes that B.C., like other jurisdictions including Alberta, Saskatchewan, Manitoba and Quebec, should restrict foreign ownership of farmland.

Another Metro Vancouver politician, Richmond Coun. Harold Steves, a farmer in that city, has argued for years that ALR land is endangered by speculators looking for tax breaks. These days he doesn’t have to make the case because the real estate ads he collects speak for him.

He points to a November 2016 ad from offshore-focused firm New Coast Realty that says: “In recent years many investors prefer to purchase agricultural land in Richmond, Surrey and Langley … with a big piece of land, build a luxurious house … swimming pool, tennis court … with the same amount you can only get a 2,000-square-foot house in other areas of Richmond.”

The ad also encourages speculators to buy B.C. farmland and apply to have it rezoned for residential development, citing potential windfall profits.

An ad from Royal Pacific Realty advertises a small acreage in Richmond with building plans for a 12,000-square-foot mansion: “Set up your own private driving range, swimming pool or tennis court. It’s all permitted on ALR land and because of the farm status, you pay no property tax,” the ad says.

Steves also uses the example of a recent ad posted by a Richmond realtor.

“He says that you can build your 20,000-square-foot dream home, and he will lease some land back from you and grow blueberries, and harvest them for you, and you can collect the tax break,” Steves said. “In my opinion, this is a scam.”

As an example of surreal price gains for a specific size and type of Richmond farmland since the foreign buyers tax on residential land was introduced, Steves pointed to one property listed for $340,000 an acre in 2016, and now on the market for $700,000 an acre. Smaller acreages — with new homes already built on them — are now selling for over $1.5 million an acre, he said.

Recent Richmond city staff reports on the monster home issue in Richmond say that “many ALR sites may be viewed only as residential parcels … consequently, legitimate farmers have difficulty acquiring and farming these properties.”

The reports also show that building permit applications for mega-mansions on ALR land have exploded after the foreign buyer tax was introduced. From Jan. 1 to April 3, 2017, 45 residential construction permits on Richmond ALR land were submitted, compared to just 17 permits in 2015 and 18 in 2016. The average size for the homes proposed in 2017 was 12,900 square feet. The largest was almost 40,000 square feet. Brodie and Steves believe some of the largest applications in Richmond are meant to be illegal hotels.

Richmond staff recommend that council impose a 5,400-square-foot limit for mansions built on farmland. Last week, after public hearings, council opted for an 11,000 square-foot limit instead.

“This permits about 1,000 parcels of farmland that have not had new houses built yet to eventually become (luxury) properties,” Steves said.

DECREASING USE OF FARMLAND FOR FARMING

Reports from Metro Vancouver regional government show the use of farmland for its intended purpose is rapidly dropping. A 2013 report found that 28 per cent of farmland in Richmond, Delta, Langley and Surrey was not used for farming, and said “significant intervention” was needed.

A September 2016 report, based on an earlier farm tax investigation, found that only 50 per cent of Metro Vancouver farmland is used for agriculture, and this is threatening food security in B.C.

Metro Vancouver has asked the provincial government to eliminate tax breaks that are believed to encourage non-farm uses, but the regional government has not received a response because of the recent election, spokeswoman Sarah Lusk said.

“There are an increasing number of property owners in the ALR who are using it for other purposes than farming,” the 2016 report says. “Property owners that do not farm themselves, but rather lease their land to a farmer, receive benefits intended for farmers, including significantly lower taxes.”

The report compares tax and different methods of assessing values on two similar houses, one on ALR land, and one on urban residential zoned land. The home on ALR land is assessed at $750,000, and property tax is $3,800. The home outside the ALR is valued at $4.2 million, with property tax of $13,600.

The report says the provincial government should raise the farm revenue threshold that property owners must claim to obtain major tax breaks on small farms, from $2,500 to at least $3,700. Also, Metro Vancouver wants elimination of a 50-per-cent tax exemption in school, transportation and other taxes that people who build homes on ALR land can receive. In 2015, school exemption taxes reduced ALR property taxes in Metro Vancouver by $4 million. Residences on un-farmed ALR land claimed $3.12 million of the reduced taxes. In addition, the report says, the building of homes on ALR land increases the demand for municipal services, which increases the tax burden for citizens who live in urban residential zoned areas.

GREENS COULD FORCE CHANGES

Mega-mansions on farmland, tax breaks for non-farm uses, and foreign ownership of agricultural land are set to be a hot-button issue in B.C.’s new, uncertain provincial government. The B.C. Liberals have resisted pressure to reform tax breaks and outdated zoning laws for ALR land, and have weakened ALR rules in favour of non-farm uses, says former MLA Vicki Huntington.

In the last term, Green Leader Andrew Weaver proposed legislation to prohibit foreign entities from purchasing Agricultural Land Reserve property over five acres without permission from the provincial cabinet.

Before the May election, he stated: “Since the introduction of the 15 per cent foreign buyers tax on residential real estate in Metro Vancouver, speculators have targeted other areas of the province and our agricultural land. Investors are taking advantage of tax breaks meant to encourage farming — building mansions and using the land for speculative purposes. As a result, farmland is being taken out of production and prices are skyrocketing, making farmland unaffordable for local farmers.”

Weaver, with his new influence on the balance of power in government, could conceivably force action on the farmland speculation issue.

“The issue of the monster homes being built to avoid the foreign buyers tax and the exploitation of tax credits that are meant for farmers is something that any new government will have to address,” NDP MLA David Eby said. “And that goes for B.C.’s housing crisis, in general.”

© 2017 Postmedia Network Inc.

1971 All Seasons Park springs up at the entrance to Stanley Park

John Mackie
The Vancouver Sun

In 1971, the Four Seasons Hotel chain wanted to build a $40-million development on the Coal Harbour waterfront.

The plan would have housed 3,000 people in three 30-storey apartments, and included a 13-storey hotel and townhouses.

The Non-Partisan Association majority on Vancouver city council approved it. But it stirred up a ton of opposition, because the development was at the entrance to Stanley Park.

The 14-acre site had been contentious for years. Originally a small strip of land with small shipyards and repair shops, it was purchased in the early ’60s by a New York developer that wanted to expand it by filling in some federally owned water lots.

In 1964, it was sold to Harbour Park Developments, a politically connected local group that unveiled a $55-million plan with 15 apartment towers, ranging from 15 to 31 storeys high. A photo of the architectural model for the site shows a high-rise forest that ends right at the Stanley Park causeway.

Critics charged that Harbour Park didn’t actually want to develop the land, it just wanted to get civic approval and then flip it. They also pointed out much of the project was on reclaimed land that was still owned by the feds and had been leased to the developers for a song.

The Harbour Park plan went nowhere, and the land languished until the Four Seasons project came along. Mayor Tom Campbell and his NPA colleagues on council liked it, but no one else seemed to.

COPE councillor Harry Rankin called for a plebiscite on the issue. A group of citizens filed a lawsuit. Vancouver Sun columnist Allan Fotheringham savaged the development.

On May 29, 1971, about 70 hippies took matters into their own hands. They ripped down a fence and stormed onto the site to plant some maple trees, then set up camp in tents and ramshackle huts.

They called it All Seasons Park, and their squat lasted for almost a year.

“No rules, no order, no plans,” Christy McCormick reported in the June 7, 1971 Vancouver Sun. “But somehow a park is taking shape on the site set aside for the Four Seasons apartment-hotel complex at the entrance to Stanley Park.”

A sympathetic backhoe owner helped the hippies dig a “rudimentary” canal and excavate an area for a pond. But most of the work was done by hand.

“At the peak of activity Saturday, more than 300 people were involved in the digging, transporting of earth, serving of food or just watching,” wrote McCormick. “The rock group Albatross played in the evening. Some workers stopped to dance.”

About 40 hippies set up tents and ramshackle huts on the site. Dinner was supplied by Cool-Aid, a youth shelter in Kitsilano, and a guy named Shark bought breakfast (porridge) and lunch (fruit) for the squatters with donations he got from sympathizers.

But a problem arose one day when Shark said they would only feed people who worked.

“We don’t want this place to be just a crash pad because it defeats our purpose,” Shark told The Sun’s Fred Cawsey. “We’re trying to build a park.”

It sparked dissention among people like Jim Murray, a 40-something who had been doing a lot of digging but went on a hunger strike to protest the no work-no food edict.

“We don’t think there should be rules like this, because we want this to be a park where people can come and do what they want,” said Murray. “If you make all sorts of rules, then this place will be just like the rest of the city.”

Shark backed down and the people continued to build their park. And the public continued to attack the Four Seasons proposal.

Bowing to public pressure, the combative Tom Campbell announced there would be a plebiscite on the Four Seasons development, but that only property owners could vote.

This was roundly denounced at a public meeting on June 21, when urban planner Setty Pendakur dubbed the project “the biggest abortion in the history of development in Canada.”

Pendakur said the development would create traffic chaos at the entrance to the park, and that council was trying to confuse people with its plebiscite, which stated the cost of buying the site was $9 million.

Ratepayers voted to reject the Four Seasons proposal, but only by 51 per cent. The plebiscite required 60 percent to be enforced, so the Four Seasons announced it was still going ahead.

The federal government effectively killed the proposal on Feb. 10, 1972 by withholding the transfer of a crucial water lot.

The city bought the entire site for $6.4 million in November 1973. It is now known as Devonian Harbour Park, but to people of a certain vintage, it will always be All Seasons Park.

© 2017 Postmedia Network Inc.