Vancouver considering sanctioned camps for homeless

Mike Howell
Western Investor

A City of Vancouver homeless count conducted over 24 hours in March found that 2,095 people were without a home. Mayor Kennedy Stewart now says the homeless population has grown since then, largely due to the pandemic, with the city thinning out it shelters for physical distancing, no-guest polices at some single-room occupancy hotels and job loss.

This week, Vancouver city council directed city staff to examine a radical series of proposed measures to address homelessness, including creating temporary sanctioned homeless camps and providing permanent city space for low-income people living in recreational vehicles.

The push from council was in addition to three options Mayor Stewart outlined, including, leasing or purchasing hotels and converting city-owned buildings into emergency housing or shelter space.

A “disaster relief shelter” network, as proposed by councillors Rebecca Bligh and Michael Wiebe, that works as an emergency triage centre for homeless people, was also incorporated into council’s requests of staff to study.

“It’s time for this council to step up and really showcase that we do need to find these supports,” Wiebe said.“We are in a dire situation that has our neighbours and friends in really difficult situations.”

The move by council comes as the Strathcona Park encampment continues to grow while residents in Strathcona and across the city, particularly in Yaletown, urge politicians and police to respond to a rise in drug use, crime and street disorder.

In putting forward the proposed actions, councillors emphasized that whatever temporary measures city staff recommend that they do not let the provincial or federal government off the hook to fund permanent housing.

None of council’s measures requested the city seek a court injunction to clear the Strathcona Park encampment, which would have to be done in cooperation with the park board, which is on record of not wanting to take such action.

Council’s decision came after hearing from 23 people September 11 who lined up on the telephone and some in the council chamber to weigh in on the mayor’s motion and wider issue of homelessness.

Residents from Strathcona and Yaletown, along with homeless people residing in Strathcona Park whose repeated mantra was “permanent housing saves lives,” spent four hours outlining their concerns.

Jason Trudeau, who lives in a tent with his wife in Strathcona Park, fought tears while telling his story of homelessness to council. A commercial fisherman, Trudeau, his wife and three children left Winnipeg to begin a new life in Vancouver.

He and his wife stayed in the tent city that popped up earlier his year in a parking lot near CRAB park before moving to Strathcona Park. He described the Strathcona camp as “not a pretty place to be” and that it breeds violence.

“I’m a desperate father…. I don’t want to be in tent cities, anymore,” Trudeau said.

He  said the options outlined in the mayor’s motion couldn’t help him because his children wouldn’t be allowed in a shelter or sanctioned camp.

Claudette Abraham, a 45-year-old Indigenous woman also living in Strathcona Park, said she had a room in a single-room-occupancy hotel but was evicted for being unable to pay rent. Abraham said she came to Vancouver in 2015 from Winnipeg to flee violence.

Katie Lewis, vice-president of the Strathcona Residents’ Association, told council that she supported the mayor’s move to have city staff examine options to address homelessness.

“We know that in the last 12 weeks that our day-to-day life [in Strathcona] has changed dramatically,” she said, noting it’s not just about seeing more garbage on the streets. “We’re finding firearms in our parks. There’s a drug turf war going on. Our kids are not safe.”

She said the encampment at Strathcona Park has grown from 30 tents to more than 400 over 12 weeks. She suggested it was the biggest tent city in Canada and that it was “out of control.”

“Winter is coming, COVID cases are rising, we cannot continue the way we are,” she said, noting she visits the tent city regularly and speaks to campers. “The campers aren’t safe; residents aren’t safe and kids aren’t safe.”

Howard Chow, one of the city’s three deputy police chiefs, told council that encampments typically generate more police calls to the tent city itself and surrounding neighbourhood.

“We’ve seen about a 50 per cent increase in weapons calls around Strathcona, about a 68 per cent increase in break-and-enters, threatening street disorder,” Chow said. “These are concerns that we are talking to residents all the time about and getting the feedback about their sense of fear and security and street disorder that they’re seeing on a fairly consistent basis.”

Many of those same concerns have been raised by residents in Yaletown in recent months, where people have complained about rising drug use, crime, garbage and vandalism.

Some have pointed to tenants residing in the former Howard Johnson hotel on Granville Street as the source of the disorder. The B.C. government recently purchased the hotel for $55 million to house people from the Oppenheimer Park tent city, which was cleared in April under an emergency order.

B.C. Housing, in conjunction with the city and Vancouver Coastal Health, also opened up the Roundhouse community centre to homeless people at the beginning of the pandemic. Tenants moved out June 19.

Yaletown parent Ema Lale, who rents a home and has elementary-school-aged children, told council she’s considering moving out of Vancouver because she feels unsafe in her neighbourhood.

She has called police three times for overdoses behind her building. Drug users have been seen on patios in her complex and discarded needles are a common sight.

“We cannot let our kids play in our backyards,” she said, describing the situation as “really scary” for families. “I’m only concerned about safety. I totally feel for the homeless people, and I really have strong compassion, but I have no compassion for destructive behaviour.”

She told council that allowing the Roundhouse community centre to be used again to house homeless people would be a mistake. Lale said parents rely on the centre for before and after school daycare.

The centre also serves seniors in the neighbourhood and provides programs for children, many of whom attend Elsie Roy elementary school near the Roundhouse.

Vancouver park board commissioners were expected to meet Monday night to discuss motions related to finding a “non-park site” for the Strathcona Park encampment and suspending daily removal of temporary shelters during the pandemic.

There are at least 200 people without a permanent address living in recreational vehicles (RVs) in Vancouver, according to an informal Glacier Media count this summer. A number of these are clustered around industrial and big-box locations near East First Avenue and Clark Drive in East Vancouver.

Since the RV population in the neighbourhood has increased, there have been reports of theft from a business, increases in traffic accidents and near-misses, lack of parking for customers, discarded needles, human waste and garbage strewn across boulevards, local business owners and residents said.

© Copyright 2020 Western Investor

It’s here: Equifax’s new inquiry process begins today

Clayton Jarvis
Mortgage Broker News

Unless you’re one of those unique Mortgage Broker News readers who has been living in a hole for the past five months – and, considering the state of the world, who can blame you if you were? – you are likely aware that Equifax’s new mortgage inquiry process came into effect today.

Word of the updated process first made its way into industry ears in April, when Equifax first announced its intention to have all mortgage brokerages authorize an amended broker contract to ensure that Equifax information can be shared only with credentialed lenders. In May, the company said it would be requiring all lenders to be assigned a unique Equifax Member Number if they wish to continue accessing credit files through industry connector platforms. July 1 was the original deadline for lenders to have their Member Numbers in place, but it was delayed to provide lenders more time to get in line with the new requirements.

On the off chance that some readers are still unaware of what Equifax’s new requirements are, here’s a quick rundown:

• As of today, Equifax requires all lenders to have an identifying Member Number in order to continue receiving files from brokers.
• Only brokers who have signed amended contracts with Equifax will have access to credit files through the industry’s connector platforms (Filogix, etc.).
• Every single credit inquiry will be posted with both the broker’s and lending institution’s name via all connector platforms. Only credentialed lenders will be granted access to these files.
• If brokerages have still not signed their amended contracts, Equifax is urging them to visit https://www.equifax.ca/BOI/en/form, where principal brokers or another signatory of the brokerage can initiate the process.
• Lenders who are not currently credentialed with Equifax are encouraged to visit [email protected].

The changes were made to ensure that the only people in a position to view borrowers’ credit files will be those entitled to see them, which was not the case prior to the change, when credit information frequently found its way into the hands of brokers who hadn’t made the request to see it. In a release earlier this month, Equifax says it is “increasingly important for all of us to do whatever we can to protect consumers and mitigate any potential risks, especially in light of the rising incidence of data breaches and the use of peoples’ information for nefarious purposes.” (The company knows a thing or two about data breaches.)

Equifax says the new inquiry process will benefit all parties involved. The “primary benefit”, the firm says, will be felt by consumers. By providing a complete, accurate picture of who has legal access to an individual’s credit information, Equifax says it is strengthening consumer trust in the industry – while, somewhat ironically, also providing an avenue to monitor the misuse of their data.

“Anything that provides opportunity for the consumer to know what’s happening with their information is a good thing,” Filogix’s Ryan Spence told Mortgage Broker News in July. “It’s certainly beneficial to the consumer to know who’s seeing their information and where it’s being sent.”

By participating in a system that collects all consumer file activity, Equifax says lenders will have access to improved insights and more robust analytics capabilities. According to the company, increased data accuracy “leads to better credit decisions, greater understanding of consumer behaviours, which in turn leads to better account management.”

Brokers, too, are expected to benefit from having access to better data, which can assist them in piecing together a more accurate picture of their clients’ credit histories.

Copyright © 2020 Key Media

CMHC: Around $1bn in mortgage payments have been deferred each month during pandemic

Ephraim Vecina
Mortgage Broker News

Approximately $1 billion in mortgage payments were deferred every month during the COVID-19 pandemic, according to the Canada Mortgage and Housing Corporation.

In its annual residential mortgage industry report released late last week, CMHC said that the average monthly mortgage payment in Canada stood at $1,333 this year, using data from Equifax Canada.

CMHC also said that the national mortgage debt balance will see significant annual growth, largely due to a lower number of Canadians getting ahead on their mortgage payments in 2020.

As of the end of the second quarter, CMHC said that the rate of defaults was more muted than anticipated, although delinquencies are likely to increase once deferral programs end this fall.

“Incomes have been reasonably well-sustained, consumption has slowed, and so savings overall in the economy have gone up. That’s helpful in reducing vulnerabilities,” said Tiff Macklem, Bank of Canada Governor. “Having said that, we’ve been very clear at the Bank of Canada, we’ve underlined the vulnerabilities caused by household indebtedness and too much reliance on the housing sector. Those have not entirely gone away, but when you look at our policy response, the best predictor of whether somebody is going to repay their mortgage is whether they have a job.”

Latest employment figures showed that the Canadian labour market had its fourth consecutive month of gains with the addition of 245,800 jobs in August. The national unemployment rate stood at 10.2%, and the economy has now recovered around 1.9 million of the 3 million jobs lost due to the COVID-19 pandemic.

CMHC said that approximately 20% of Canadians indicated a willingness to move their mortgages to new lenders, as many institutions did not sufficiently accommodate their needs during the height of the pandemic’s economic devastation.

Copyright © 2020 Key Media

How will Toronto’s new registry for Airbnb properties impact investors?

Clayton Jarvis
Mortgage Broker News

Toronto’s Airbnb investors in woke up to a new, potentially risky reality yesterday, as September 10 marked the launch of the city’s new short-term rental registry. Owners of properties that are currently available to renters for less than 28 days a month must register with the city before December 31. After that, new operators will be required to register with the city prior to renting their properties.

“This is good news for Toronto residents and a step in the right direction when it comes to regulating short-term rentals and maintaining the peace and quiet of our neighbourhoods,” Toronto Mayor John Tory said in an August 25 press release. “This system will provide crucial oversight of operators and ensure that they are held accountable and only operate within their principal residences.”

Described by the city as “a necessary first step” in its attempts to better regulate short-term rentals, the registry applies to hosts who wish to rent out either a maximum of three rooms in their primary residence or the entire property, the latter option coming with a 180-day per year limit. Once registered, operators will be issued a unique number that is required for advertising their homes on any short-term rental site. The process is ostensibly an attempt by the city to gather more data from short-term rental platforms, but the reality, is no number, no Airbnb listing. Those caught abusing the system will be fined anywhere between $300 and $1,000 and could potentially face removal from any associated rental platforms.

Thousands of Toronto Airbnb’s have been operating illegally since the city required them to be contained to a host’s primary residence in 2017 (although a lengthy court battle held off the implementation of the rule until 2019). Enforcement of the new registration program will be key to ensuring its success, says Fairbnb Canada’s Thorben Wieditz.

“We’ve seen that a permit system is not necessarily sufficient in ensuring compliance,” Wieditz said in a statement hailing the registry’s arrival. “In Vancouver, for instance, hosts got away with posting arbitrary ‘permit’ numbers and Airbnb let them get away with that. We need to pay close attention that this is not happening in Canada’s largest short-term rental market.”

As a long-time critic of the negative impact Airbnb has had on rental supply in cities around the world, Wieditz welcomed the new rules. He was not alone. 

“Finally, Toronto’s short-term rental regulations will be implemented to address the negative impact that platforms like Airbnb have had on the rental housing market,” said Bahar Shadpour of the Advocacy Centre for Tenants Ontario.

Bahar feels that once the registration grace period is over and the new regulations are in effect, there could be a “significant uptick” in the city’s long-term housing stock. Fairbnb estimates that if half of the city’s non-compliant, entire-home listings offered on Airbnb were converted into long-term housing, Toronto’s vacancy rate would increase from 1.3 percent to 2 percent.

That’s great news for renters; not so much for the city’s real estate investors. High nightly rental rates have been the impetus behind more than a few property purchases in the GTA over the past several years. For many, particularly condo investors with high monthly maintenance fees, the juiced-up returns provided by Airbnb rentals are the only thing preventing their cash cows from becoming albatrosses.

Ryan Coyle, co-founder of Connect Asset Management and a specialist in the GTA condo space, has seen an increase in the number of condo units hitting both the rental and resale markets over the past several months. But he still feels investors have little reason to panic, largely because of the rate at which condos have increased in value over the past five years.

“These people certainly have serious wealth in their condos,” Coyle says, although he admits that there is a “certain percentage” of owners who may still opt to get rid of their units rather than cover the associated carrying costs.

Coyle says investors now excluded from the Airbnb market because their properties are non-primary residences can still make them cash flow by making them available as high-end, furnished rentals. Coyle’s property management company, for example, targets film professionals who come to town for months at a time. Not only do they have the funds available to pay above-market rents, but their stays are often long enough that the investors who cater to them won’t have to register their properties with the city.

Rather than destroy Airbnb’s appeal to investors, Coyle says that by removing so many operators from the market the new rules may actually benefit those who decide to play by them.

“I think it’s going to create an opportunity to make money again on Airbnb,” he says.

Copyright © 2020 Key Media

Vancouver 4,438-square-foot industrial nets $2.55 million

William Wright
Western Investor

The free-standing building fitted out as a martial arts studio and has ample parking on the Graveley Street site in East Vancouver.

Type of property: Industrial

Location: 2619 Graveley Street, Vancouver

Building size: 4,438 square feet (approx.) over two storeys

Zoning: C-1

List price:$2.95 million

Sale price: $2.55 million

Brokerage: William Wright Commercial Real Estate Services

Brokers: Meg Cooney and Amrita Guram

© Copyright 2020 Western Investor

Omicron pitches $26 million shipyard plan near Victoria

Carla Wilson
Western Investor

The 81,500-square-foot space would allow Seaspan Victoria Shipyards to amalgamate its supply-chain operations on one site at Colwood

Vancouver developer Omicron has submitted an application to build a custom $26-million office and warehouse complex for Victoria Shipyards in the new Allandale District, on the Langford-Colwood border, has been submitted to Colwood city hall.

The 81,500-square-foot space would allow Seaspan Victoria Shipyards to amalgamate its supply-chain operations on one site. The plan was presented to Colwood City Hall in early September and appears to have support from the mayor.

Seaspan currently uses three office locations for its logistics and procurement services and stores materials in four warehouses in Greater Victoria.

Joe O’Rourke, vice-president and general manager of Victoria Shipyards, said Wednesday that the “growth and complexity” of Seaspan Victoria Shipyards’ long-term customer contracts have increased its need to consolidate sourcing and management of materials for vessel repair, refit and conversion projects.

The development application for the shipyard site was submitted by Omicron Development Inc. and Lotus Capital Corp., partners in developing a 20-acre mixed-use development plan with new businesses and services on four parcels at Veterans Memorial Parkway and Allandale Road. The 3.95-acre lot destined for shipyard use is on the west side of the parkway.

New zoning is not required on the lot planned for the shipyard because it already allows a range of related uses.

Development of the entire site is estimated to be worth $100 million. Once it’s built out, about 353,000 square feet of buildings are expected on the four parcels, Peter Laughlin, Omicron’s director of development on Vancouver Island, said earlier. A rezoning application for other parcels has been submitted to Colwood.

Construction would take about 18 months and create an estimated 90 jobs.

Mayor Rob Martin said Colwood is thrilled at the prospect of Seaspan Victoria Shipyards and its employees moving to the municipality.

Martin said he welcomes the construction jobs and the long-term shipyard jobs.

“We look forward to it being the first of many announcements for the 20-acre Allandale District which will expand Colwood’s tax base and create jobs for residents.”

© Copyright 2020 Western Investor

The pandemic housing recession that never was

Frank O?Brien
Western Investor

On May 27, 10 weeks after COVID-19 was declared a global pandemic, Canada Mortgage and Housing Corp. (CMHC) released a doomsday-style housing forecast that envisioned a nightmare collapse of the housing market with national sales dropping up to 29 per cent, starts plunging by from 50 per cent to 70 per cent and average house prices dropping as much as 18 per cent with no real recovery until 2022.

“Canada will see a historic recession in 2020 with significant falls in indicators of the housing market,” stated the Housing Market Outlook special edition spring 2020.

B.C. and Alberta would be especially hard hit, CMHC forecast, because of a reliance on the tourism and travel industry and resource prices.

Never happened.

Instead, as of July, Canadian home sales posted the highest level of any month in history after transactions soared 26 per cent from a month earlier, the fourth straight month-over-month increase, according to the Canadian Real Estate Association. Average home prices were up 14 per cent from 2019.
Home sales in Calgary were 14 per cent higher and they rose 10 per cent in Edmonton from a year before.

B.C. became a stellar performer in the Canadian housing market. July provincewide sales soared 26 per cent from a year earlier and the total sales dollar volume jumped 43 per cent to $7.8 billion.

By August, Metro Vancouver housing sales were up 36 per cent from August of 2019 and nearly 20 per cent higher than the 10-year average for the month. Detached house prices, already the highest in Canada, increased a further 6.6 per cent to nearly $1.5 million.

Remarkably, the Canada-wide sale and price surges occurred not only during a national recession but as CMHC tried to curb the market.

On July 1, the federal housing agency established a minimum credit score of 680 for buyers, up from 600. They also limited gross and total debt servicing ratios and outlawed borrowing funds for a down payment, such as with an unsecured line of credit.

It is not just the housing market that has defied predictions.

Statistics Canada reports that the disposable income of Canadian households jumped nearly 11 per cent from the first to the second quarter in 2020, both a record high. The Canadian household savings rate also climbed to a record high of 28.2 per cent in the second quarter of 2020, eclipsing the previous record of 21.2 per cent in 1982. Meanwhile, household credit market debt as a proportion of household disposable income fell to 158.2 per cent in the second quarter, down from 175.4 per cent in the first three months of 2020.

“This is not a typical recession,” said Brendon Ogmundson chief financial officer of the BC Real Estate Association, which is now predicting that provincial housing sales will end 2020 higher than in 2019.

But he added a caution in a special housing report the association released September 9, noting that the pandemic has hit lower-income Canadians the hardest.

“The asymmetric impact of the recession helps to explain the strength in home sales, but also has serious implications for already troubling trends in inequality and housing affordability. This dichotomy may be a lasting legacy of the COVID-19,” Ogmundson wrote.

© Copyright 2020 Western Investor

CMHC: Housing starts activity reaches highest point in 13 years

Ephraim Vecina
Mortgage Broker News

A surge in multiple-unit home construction boosted Canada’s housing starts activity to its highest level since 2007, according to new data from the Canada Mortgage and Housing Corporation.

Nationwide, housing starts increased by almost 7% month over month in August, with the seasonally adjusted annual rate at 262,396 units, the highest in 13 years. The annual pace of urban starts had a similar 7.1% increase in August to 248,154.

Taken together, the annual pace of urban starts involving apartments, condos, and other multiple-unit housing projects grew by 9.1% to 201,214 units. To compare, single-detached urban starts ticked down by 1% to 46,940.

By province, the largest year-over-year increases in starts were seen in Ontario (32%) and Quebec (18%).

“To say ‘this is a solid level of building activity considering the pandemic,’ and all that, would be a massive understatement,” said Robert Kavcic, senior economist at BMO Capital Markets Economic Research. “Another very strong showing in August suggests that builders have fully made up any lost time during the spring. Where we go from here is another question.”

Bob Dugan, chief economist at CMHC, echoed these reservations, saying that the Crown corporation is projecting a slower housing starts trend by the end of the year.

This period will coincide with a sizeable increase in housing inventory, which will precede a possible arrears spike.

A recent Better Dwelling analysis said that widespread lack of liquidity will become more apparent in the first few months of 2021. At the same time, many struggling Canadians will be thus forced to put up their properties for sale.

“The inability to pay doesn’t always turn into defaults when there [are] buyers,” Better Dwelling said. “Instead, people list their homes for sale and hope it sells and closes before the lender tries to claim it. … We should see a spike in inventory first.”

Copyright © 2020 Key Media

Stress test must be revised to reflect market realities ? economist

Ephraim Vecina
Mortgage Broker News

Improved purchasing power will stem from the mortgage stress test being updated to reflect the sub-2% rates currently available in the market, according to economist Will Dunning.

The disparity is particularly jarring when one considers that new borrowers are tested against an interest rate of 4.79%, Dunning said in an interview with the Georgia Straight.

“This is an impediment to many Canadians achieving their reasonable home-buying goals and is also an impediment to the broader economic recovery,” Dunning said.

Moreover, the stress test does not take into account rising incomes, which Dunning said has been a decades-long trend.

“It is omitting one of the most important factors that will affect people’s ability to make their future payment, and so that’s a major flaw in the testing system that exists today,” Dunning said.

The economist added that while it’s “very good policy” to put borrowers through these assessments to ensure that they can actually pay their loans, some adjustments might be appropriate at this point.

“It’s time to recalibrate that policy to say, you know, what is a reasonable expectation about the conditions that will exist in five years and will affect people’s ability to make their payments,” Dunning said. “If you think interest rates might rise by two points over the next five years, and you also have an expectation that incomes will continue to rise the way they have in the past, then the way to simulate that combination is to say that the test should be the contracted interest rate plus three-quarters of a point.”

Copyright © 2020 Key Media

Chinatown development site sells below assessed value

Avison Young
Western Investor

Property type: Development site

Location: 275 East Pender Street, Vancouver

Property size: 2,800 square feet

In acres: 0.70 acres

Zoning: HA-1

Potential: FSR 4.8, to seven storeys

BC Assessment value 2020: $3.08 million

List price: $3.15 million

Sale price: $2.45 million

Date of sale: September 8, 2020

Brokerage: Avison Young, Vancouver

Brokers: Michael Buchan, Mitch Knoepfel, Jake Luft and Justin Omichinski

© Copyright 2020 Western Investor