Businesses in Whistler are buying million-dollar properties to house employees as living costs drive out workers.

Natalie Obiko Pearson
REP

Move over Vancouver — you’re no longer Canada’s craziest property market.

Benchmark property prices in Whistler, the ski town two hours north, have now surpassed those in the Pacific Coast city. Businesses are buying million-dollar properties to house employees as living costs drive out workers. The cost of visiting has also spiraled, with overnight rates during the winter peak topping anywhere else in the nation.

Phil Bonham, a 31-year-old ski patroller, has been living out of a 1984 Dodge camper van for four years, unable to afford the surging cost of housing.

Styrofoam cutouts are wedged into his windows to keep out the chill during cold snaps, when temperatures can plummet to minus 25 degrees Celsius (-15 Fahrenheit). He doesn’t bother with the propane-fired refrigerator in the tiny kitchen between the driver’s seat and bed — nothing thaws anyway in winter, and he eats fruits and vegetables immediately before they freeze.

The small wood-burning stove in the back corner is the “hippie killer,” a reference to stoves like this that have been known to asphyxiate people in their sleep as they try to stay warm. The winter before last, he found himself lying under the van during a snow storm rebuilding pieces of the engine — “a bit of a low point,” as he describes it. But that’s what a take-home wage of about C$2,800 ($2,180) a month after taxes buys in Whistler.

“I only expected to do it for a season,” Bonham said in an interview in a parking lot near the ski slopes, where he identified at least seven other vehicles being used as full-time residences. “Without getting a second job or a girlfriend, there’s no way I could afford a room to myself. And I make a decent wage in comparison to many other jobs in Whistler.”

Vancouver has made global headlines in recent years, consistently ranking among the top 10 major cities worldwide most at risk of a housing bubble. Last year, Toronto took the top spot giving Canada the ignominious distinction of being the only country with two cities to make the cut in UBS Group AG’s annual list. Yet price price gains in Whistler have outpaced both cities.

“We think housing is the single most important issue we are facing as a community,” Marc Riddell, a spokesman for Whistler Blackcomb, owned by Vail Resorts Inc. and the area’s biggest employer, said in an email.

With a permanent population of fewer than 12,000 residents, there are more than 1,300 applicants on wait lists to either rent or buy homes at below-market rates in a residents-only pool managed by the Whistler Housing Authority. The agency aims to provide housing for at least 75 percent of the town’s employees — a target that “will be very challenging to continue to meet,” according to a December assessment.

Four-Season Destination

It’s the dark underbelly of Whistler’s soaring popularity. Its transition from a skiing mecca into a four-season destination for golfers, hikers and bikers means the pressure for accommodation from seasonal workers and tourists no longer eases when the snow melts. “We’re as busy now in the summer as in the winter,” said Mark Lamming, owner of Purebread, a bakery with two locations in Whistler.

Mayor Nancy Wilhelm-Morden has a task force dedicated solely to resident housing that’s sought to explain the massive run up. Young families have migrated in to fill year-round jobs, but there aren’t enough homes to accommodate them. Suites that once housed local tenants are being replaced by lavish, sparsely used vacation chalets. Online home-share websites have made it easier for owners to illegally rent properties intended for residents to higher-paying tourists.

Restrictive Zoning

Much of the supply-side woes are also self-imposed. Canada’s first resort municipality, Whistler was purpose-built in the 1980s in the image of a pedestrian-free Swiss alpine village, and restrictive zoning and land-use rules to prevent over-development also choke supply. Meanwhile, a byzantine web of rules dictate how residences can be used in the broader community.

In October, the benchmark price of a townhouse in Whistler surpassed C$1 million for the first time. Vancouver is a steal in comparison — only C$835,000. A detached house in Whistler is now C$1.67 million, 4 percent costlier than in Vancouver.

The rental market is more mind-boggling. One recent listing sought two female tenants for a single room in a shared house: the price was C$780 — each — to share a double bed. Many renters spend more than 50 percent of their income on housing. Mayor Wilhelm-Morden, incensed by landlords raking in cash from illegal short-term rentals, has imposed a C$1,000-a-day fine for violators, saying Whistler won’t tolerate “employees shoved out the back door” to make way for tourists.

‘Absolute Gong Show’

“It’s an absolute gong show,” said Russell Kling, a former hedge fund manager turned developer, whose Pangea Pod Hotel is set to open this summer aimed at delivering more affordable tourist accommodation. Whistler was the most expensive place in Canada to spend New Year’s Eve — C$745 for a double room compared to C$414 in second-place Quebec City.

“People told us, ‘Your biggest issue will be accommodation — if your staff can’t find accommodation, it doesn’t matter how much you pay them,’” recounts Kling, whose co-founder is his wife, Jelena. “So we took that risk off the table and purchased a home.”

The seven-bedroom residence cost “close to a couple million dollars” and will house the hotel’s general manager and a handful of key employees. The Klings even looked at buying a second staff property. “But so much of this stuff now — forget about buying, I wouldn’t want to put my worst enemy there,” he said.

They’re not alone. Scandinave Spa, a 20,000-square-foot thermal bath facility, built five housing units on site when it opened in 2010, bought an additional staff property in nearby Cheakamus, and helps arrange rentals for employees. Vail houses 31 percent of its workforce and is considering investing in developments for employee accommodation.

One in three businesses were unable to find enough staff last year, according to the housing authority. The town council has committed to adding 1,000 new resident beds by 2023 though one local developer says that’s less than half what’s needed. It’s loosening zoning rules to allow some neighborhoods to densify and releasing part of its land to build more affordable housing. It plans to require commercial and tourist developers to either construct affordable employee housing as part of their projects or pay cash-in-lieu.

For some it’s too late. Cathy Zeglinski, a family doctor, closed her Whistler practice last September, saying the young residents who once comprised the backbone of her clinic can no longer afford to live in Whistler.

“We’re earning Canadian dollars, but the people coming in aren’t tied to the local economy — we can’t compete,” she said. “Whistler was once a very special place but with real estate prices stratospheric, there’s no place left for locals.” 

Copyright Bloomberg News

Copyright © 2018 Key Media Pty Ltd

Buying a house on leased land is a viable alternative

Neil Sharma
Canadian Real Estate Wealth

As unaffordability spills out of large urban centres and into their surrounding areas, land leasing homes could become a viable alternative.

The land lease model, wherein a resident owns the home but not the land upon which it’s built, is about 30% cheaper than freehold and is being touted as a panacea to the unaffordability crisis that’s gripping major cities.

Lachlan MacLean, vice president of property operations for Parkbridge, says that land leased homes are excellent options for first-time buyers, retirees, and even real estate investors.

“The fundamentals are the same,” he said, “because they own an asset that typically grows in value over time, with the difference being that it’s at a lower entry point. It’s different than someone looking to buy a home, so the entry point is lower and that might create opportunities for people who wouldn’t otherwise have considered buying a home as a user or investor. It’s a rental product that may be more affordable and, therefore, appeal to a broad audience because the buy-in for the investor was low in the first place.”

A land leased home still builds substantial equity, which could then be used to ascend the property ladder. Parkbridge has land leased communities throughout the country, including in Surrey, B.C., where a three-bedroom, two-bathroom single-family detached house is being sold for $199,000.

“The average benchmark price in the Lower Mainland is well over $1.5mln, so immediately there’s a place where people can go where they own their home, have a yard instead of condo living, and they can start building some equity that would allow them to stay in that community or take other steps on the property ladder.”

Although it’s a model of homeownership that isn’t well publicized, CMHC does offer mortgages for land leased homes.

However, for residents hell-bent on living in an urban centre like Toronto, MacLean says land leased homes wouldn’t be feasible.

“We’re typically in smaller urban centres,” he said. “In places like the GTA, the land value doesn’t support any kind of single-family development, let alone land lease, so we’re in smaller centres like Goderich, Wasaga Beach, the Barrie market and the Kawarthas, around Peterborough.”

Copyright © 2018 Key Media Pty Ltd

First-time home buyers aged 25 ? 31 fall short of home purchases

Steve Randall
Canadian Real Estate Wealth

The home-purchasing power of ‘peak millennials’ aged 25-31 has diminished by around $40,103 (16.5%) since the introduction of the OSFI stress test at the start of 2018.

A report from Royal Le Page calculates that nationwide, a peak millennial with a median salary of $38,148 has a maximum homebuying budget of $203,246. This includes a 20% down payment and the impact of the stress test.

That means that most peak millennials are well short of the $605,512 aggregate Canadian home value, meaning waiting to become a home owner or be creative with their home financing solutions, such as borrowing from family or pooling resources.

“We have seen a rare pause this year in the relentless rise in the cost of housing,” said Phil Soper, president and chief executive officer, Royal LePage. “For peak millennials, the group which makes up the bulk of our first-time homebuyers, the path to property ownership has been a challenging one. In our largest cities, it is difficult for young people to purchase a home on a single household income. Some will purchase homes with family or friends, and some are following the age-old practice of saving money and waiting until they can effectively double their maximum budget with a life partner.”

Couples have a typical maximum budget of $406,479 without help from parents, but prices in some areas mean that compromises on space are required for them to afford a home in the $325,000 to $425,000 price range.

In Greater Vancouver for example, prospective peak millennial purchasers can afford the least amount of living space with an average of 788 sq. ft. with an average of 1.5 bedrooms and 1.2 bathrooms.

Halifax delivered the biggest bang for a peak millennial’s buck, offering them an average of 3.1 bedrooms and 3.0 bathrooms. In fact, of the seven cities studied across Canada, the region offered the most living space overall for prospective peak millennial purchasers, with homes in this price range averaging 1,736 sq. ft.

“There are striking differences in the options available to peak millennial purchasers across Canada,” continued Soper. “While $425,000 will largely net an entry-level condo in Greater Vancouver and the Greater Toronto Area, on the east coast, this budget unlocks most of the market, offering prospective millennial purchasers large, detached homes with all of the bells and whistles.”

Copyright © 2018 Key Media Pty Ltd

Old post office to become tech centre

Tanya Commisso
Western Investor

The old Canada Post building at 349 West Georgia Street will be redeveloped into Amazon Canada‘s new Vancouver headquarters, Prime Minister Justin Trudeau announced today (April 30) alongside Amazon VP, Alexandre Gagnon. The headquarters, expected to open by 2022, will create 3,000 new corporate, high-tech jobs. 

This will be Amazon’s third downtown Vancouver office, joining the company’s 156,000 square-foot location at TELUS Garden and a nine-storey office currently under construction at 402 Dunsmuir Street. The company expects to employ 5,000 employs across the three offices. 

“Amazon is excited to create 3,000 more highly skilled jobs in Vancouver,” said Alexandre Gagnon, vice-president of Amazon Canada and Mexico. “Vancouver is home to an incredibly talented and diverse workforce, and these thousands of new employees will invent on behalf of our customers worldwide.”

The new headquarters will be housed within a 416,000-square-foot tower built above the existing Canada Post building. 

QuadReal Property Group will develop the mixed-use project, aptly named The Post. The redevelopment will also include retail and restaurant space. 

“This is great news for Canadian professionals looking for new challenges and new markets, or students ready to enter the job market,” Prime Minister Trudeau said. “I want to highlight Amazon’s commitment to recruiting top talent from our universities, giving students the opportunity to have a direct impact on their technology at an early stage in their careers.”

Copyright © 2018 Western Investor

Residents feel betrayed by builder

Susan Lazaruk
The Vancouver Sun

A magnificent view of English Bay and the North Shore mountains from Quilchena Park near Arbutus Street and 33rd Avenue is going to be lost if a developer is granted rezoning for taller rental buildings at the nearby Arbutus Shopping Centre site.

That’s the fear of a local city group that says the developer after agreeing to keep the buildings under a certain height when the four-building development was approved in 2011 is now proposing to add extra height to two of the buildings.

“This is just a huge, giant change,” Dick Ballard of the Arbutus Ridge, Kerrisdale, Shaughnessy (ARKS) community group, said on a recent sunny day at the park’s best vantage point for the view, which is marked by a bench.

Katherine Reichert, also of ARKS, said the increased height will obscure the view not only for residents, but also for regular users of the park for strolls, picnics, sporting events and its Frisbee golf course. It will also be a loss for those using the new Arbutus Greenway pedestrian/bike path that runs east of the park, she said.

“They’ve got a map of the greenway and this corner (at 33rd Avenue and Pine Crescent) is listed as a resting point where you can enjoy the view,” she said.

The builder, Larco Investments, said the reason for growing the development through a zoning revision is to increase the number of rental units because the city’s rental stock has shrunk since 2011.

“Vancouver is very short of rentals, especially on the west side,” said Larco spokesman Art Phillips. “We’ve seen an opportunity here” to change that.

He couldn’t say how many more units would be added to the 500-unit project.

The proposed revision is being reviewed by city staff. The city said in an email that the view from the park will be maintained under the proposal.

“The changes proposed to height and massing were developed specifically to maintain the public viewpoint” in Quilchena Park, according to guidelines first established in a 2008 report setting out plans for future development of the site, said a city spokesman in an email.

“Additional height is to be located on the northwest portion of the site, leaving the view of English Bay and Point Atkinson from Quilchena Park (Pine Crescent and 33rd Avenue) largely unobstructed,” said the city spokesman.

The 2008 guidelines refer to the “significant public viewpoint at the southeast corner of Quilchena Park, looking northwest toward English Bay and Point Atkinson (in West Vancouver).”

The guidelines also said buildings “generally should not exceed six storeys,” but could go as high as seven and eight storeys in specific parts of the site.

It stated that most buildings should be built below 57 metres to “preserve views of the water,” but “consideration may be given to clustered massing of somewhat taller buildings” of seven to eight storeys, “with limited interruption of the east edge of this view to the water.”

The zoning amendment application proposes to increase one of the four buildings to eight storeys (60 m above sea level) from six storeys (57 m) and the other to 12 storeys (72 m above sea level) from nine storeys (57 m), said the city spokesman.

Reichert said the city at an open house in February displayed photos showing the original approved height alongside the proposed new height and in the latter “the mountains and water are significantly blocked.”

She and Ballard said this isn’t a case of NIMBYism because they don’t oppose densification and agree development of the seven-acre site was overdue.

Ballard said ARKS was involved in the planning process for the 2011 approved changes.

“We worked hard with the (city) planner and the developer and we got a deal,” he said. “They gave ground and we gave ground and we made a deal. We were quite happy with what we negotiated. It took us eight years.”

Reichert said, “Now the developer is just ignoring all this work and we feel that this shows disrespect.”

”It’s a betrayal of the agreement we had in place for years,” said Ballard.

Ballard said he is also concerned the developer a year ago changed its plan to build a project with only rentals instead of a mix of rental units and residential market-rate condos as originally planned.

Ballard said because the developer isn’t building the rentals under the city’s Rental 100 program, designed to grant cost-cutting incentives to builders who agree to maintain the units as rentals for 60 years or for the life of the building, it can decide to sell them as market-rate condos at any time.

Phillips said Larco decided against building under Rental 100 to give it “flexibility” in future.

“We’re not going through any back doors,” he said. “We’ve been transparent about this process from the start.”

City council is expected to consider the proposed change in “coming months,” after a public hearing, said the spokesman.

Construction has begun on the first phase of the development of the two buildings the developer isn’t requesting changes for and it should be complete next year.

© 2018 Postmedia Network Inc.

TD and RBC increase mortgage rates

Canadian Real Estate Wealth

Two of Canada’s biggest banks are raising their benchmark rates for five-year, fixed-rate mortgages.

TD says as of Wednesday it increased its posted rate for five-year fixed mortgages to 5.59 per cent from 5.14 per cent.

Mortgage planner and rate comparison website founder Robert McLister says the increase is “unusual” as the benchmark rate hasn’t seen a jump of 45 basis points or more since March 2010.

TD spokeswoman Julie Bellissimo says a number of factors are considered when determining rates including the competitive landscape, the cost of lending and managing risk.

Meanwhile, Royal Bank spokesman AJ Goodman says the lender plans to raise its posted rate for a five-year fixed mortgage on Monday to 5.34 per cent compared with the 5.14 per cent currently posted.

McLister says the actual rates banks offer to borrowers are not seeing an increase, but notes the Bank of Canada uses the posted rates at the big banks to calculate the rate used in stress tests to determine whether homebuyers qualify for loans. 

The Canadian Press

Copyright © 2018 Key Media Pty Ltd

CMHC says housing sector facing a high degree of vulnerability

Tara Deschamps
REP

TORONTO _ Canada’s housing sector is facing a high degree of vulnerability to market instability for the seventh straight quarter, with Toronto, Hamilton, Vancouver and Victoria shouldering the brunt of the risks.

That’s according to the Canada Mortgage and Housing Corporation, which analyzed overheating, acceleration of home prices, overvaluations and overbuilding in markets across the country in its quarterly assessment, released on Thursday.

“There is a lot of demand for existing homes relative to supply and that is why the overheating indicator is high in Vancouver, Victoria, Toronto and Hamilton,” said CMHC chief economist Bob Dugan.

“We have this constraint on the supply side, but at the same time, the local economies (in Toronto and Vancouver) have been very strong, generating a lot of jobs, attracting people to live in those markets, so there has been a lot of increase in demand in these markets, but without the supply, that demand goes into house price increases.”

Even though stricter regulations around uninsured mortgages from the Office of the Superintendent of Financial Institutions were in effect throughout the quarter, the CMHC report said Toronto’s balance between supply and demand was not affected and the sales-to-new listings ration remained “virtually unchanged.”

The OFSI rules, it said, heightened demand for more affordable housing within the city, just as the city was seeing a decline in the inventory of houses in all categories.

Dugan said there weren’t any surprises CMHC found when compiling the report, but he did spot “a little bit of a softening” of market activity in Toronto and less of a “spillover” in demand from the city to neighbouring communities, including Hamilton.

However, CMHC said Calgary, Edmonton, Saskatoon and Regina had still fared much better. It assessed the cities as having moderate vulnerability because of overbuilding.

Winnipeg, Ottawa, Quebec City, Moncton, Halifax and St. John’s, it said, faced even less risk, earning a low vulnerability ranking.

Montreal also fell into that category, but CMHC warned it might have to revise that assessment, given the rapid growth of house prices in some neighbourhoods.

“We just have our eye on that market to see whether price growth remains sustained and maybe spreads to more neighbourhoods within Montreal,” said Dugan. “It could be enough down the road that we might have to sort of trigger a warning related to price acceleration.” 

The Canadian Press

Copyright © 2018 Key Media Pty Ltd

CMHC report housing market remains at risk

Steve Randall
Canadian Real Estate Wealth

Canada’s housing market remains a large risk for the seventh consecutive quarter according to the latest report from the CMHC.

Its Housing Market Assessment for the three months to the end of March 2018 highlights evidence of overvaluation and price acceleration, especially in Toronto, Vancouver, Victoria, and Hamilton.

“Our market assessment continues to show a high degree of vulnerability at the overall national level due to moderate levels of price acceleration and overvaluation existing together” warns chief economist Bob Duggan. “Regionally, there’s a fair amount of variation, as we continue to see a high degree of vulnerability in major centres in Ontario and British Columbia while Prairie and Atlantic markets range from moderate to low.”

Toronto has seen price declines for single-family homes, but the condo market has seen stronger gains. Inventory for all home types remains tight and there is low evidence of overbuilding.

Vancouver has seen overall affordability weaken amid rising prices in the sub-$1m market, coupled with increasing mortgage costs. CMHC says the city’s housing market is highly vulnerable.

“We continue to see a high degree of vulnerability in the Hamilton housing market due to price acceleration and overvaluation. It’s important to note, however, that overvaluation is easing as house prices are moving further into line disposable incomes, population growth and employment,” said Anthony Passarelli, Senior Analyst, Hamilton.

Calgary, Edmonton, Saskatoon and Regina are all showing signs of overbuilding, with high levels of new and unsold homes and high rental vacancy rates.

Copyright © 2018 Key Media Pty Ltd

Rooftop patios add to Berkeley Village?s appeal

Simon Briault
The Vancouver Sun

Berkeley Village

Project location: 16433 19 Avenue

Project size: 183 two- and three-bedroom townhomes ranging in size from 1,202 to 1,579 square feet. Prices start in the low $600,000 range.

Developer: Ikonik Homes             

Architect: WG Architecture

Interior designer: Area 3 Design

Sales centre: 2485 168 Street

Hours: 12pm to 5pm every day except Friday

Telephone: 778-545-2800

Website: berkeleyvillage.ca

It’s no secret that south of the Fraser River – places like Richmond, Langley, Surrey and Delta – tend to get more sunshine that North Vancouver, Squamish and Whistler. Berkeley Village, a new residential development in South Surrey by Ikonik Homes, takes full advantage of this fact with townhomes that have full-size rooftop patios.

Charmane Learning has bought a two-bedroom, two-and-a-half-bathroom townhome at Berkeley Village and she said the sunshine played a big part in her decision.

“I had been a homeowner in Squamish for ten years and then I sold that place and have been renting in South Surrey since February,” she said. “I like the area. There’s more sunshine here and one of the main things that attracted me to this development was the rooftop patio.”

“I don’t need a ton of space, which is why I bought one of the smaller homes,” Learning added. “But I do a lot of outdoor activities, including riding a motorbike, so having a double car garage will be great for storing all of that stuff.”

Berkeley Village is a development of 183 two- and three-bedroom townhomes ranging in size from 1,202 to 1,579 square feet. Prices start in the low $600,000 range.

With an address of 16433 19 Avenue, the development is near Pacific Heights Elementary School, Earl Marriott Secondary and Southridge School. It’s also only a short distance from Morgan Crossing and Grandview Corners shopping centres, as well as being close to major commuter and transit routes, including Highway 99 and the US border.

Dorris Li is a sales associate at Frontline Real Estate Services, which is handling the sales and marketing of Berkeley Village on behalf of Ikonic Homes.

“We’ve had a good mix of buyers,” said Li. “Definitely a lot of young professionals who are looking to move out of condos into bigger homes.”

“Affordability plays a part for these buyers as well for sure,” Li added. “It’s not realistic for many people to get a townhouse in Vancouver and Burnaby for more than $1 million, whereas here you can get into one for somewhere above $600,000. But the bottom line is that it’s a great neighbourhood, the homes are beautifully laid out and our finishes are impeccable.”

The homes at Berkeley Village include open-concept spaces, nine-foot ceilings on the main floors, oversized windows and durable laminate wood floors throughout main levels. There are contemporary flat-stock baseboards and door casings, plentiful closet spaces finished with white wire single-shelves and hanging racks and smoke detectors on each floor. All homes are pre-wired for security systems.

The finishes at Berkeley Village are the work of Lisa Hansen at Area 3 Design, who met with the marketing team and the developer at an early stage in the project to figure out the timelines involved, the price points and the demographics of the buyers being targeted.

“The area around Berkeley Village is for the most part known for the number of young families that live there – buyers who want a bigger place than a condo,” said Hansen. “Practicality, warmth and a good sense of hominess is important in the finishes we chose. People don’t want it to feel too cold or slick.”

This doesn’t mean there’s any shortage of modern luxury, of course. Kitchens feature stainless steel appliances including five-burner gas ranges and convection ovens, French door refrigerators with bottom-mounted freezers, dishwashers with adjustable racks and concealed controls and slide out range hood fans. There are flat panel cabinets with soft-close doors and drawers and polished quartz countertops with white tile backsplashes.

Bathrooms have wood grain, flat-panel cabinets with soft-close doors, polished quartz countertops with under-mounted sinks and tile on the floors and surrounding the baths and showers.

“Given the rising prices in the region, we were finding people who would have liked to have lived in Vancouver but were being priced out,” Hansen added. “As a result, we geared things a little bit more urban than is normal for this area. So, we have slab kitchen cabinet doors, white tile backspashes and wool blend carpet, which has a very tight construction so it’s very durable for dogs and kids and toys.”

“We also pushed the boundaries a bit by offering black plumbing fixtures and accessories in one of our two colour schemes, which is a little more edgy and young. We tried to appeal to modern families, a slightly more urban and younger type of buyer demographic.”

The Berkeley Village sales centre at 2485 168 Street is open from 12pm to 5pm except Fridays. Completion is expected in the second half of 2019.

“It’s an awesome new neighbourhood in an up-and-coming area,” said Li. “We have some very attractive prices, throughout all the projects we’ve worked on we’ve continuously learned more about what buyers really want and with Berkeley Village there are those rooftop patios, which are definitely very appealing. Everybody loves them.”

© 2018 Postmedia Network Inc.