Canada house prices: How far could they fall?

Fergal McAlinden
other

Sales and price growth have slowed in the housing market in recent weeks
It’s no secret that Canada is currently in the throes of a housing market cooldown, with the pace of home sales falling in April and national house prices also on the way down.
New figures released by the Canadian Real Estate Association (CREA) revealed that the country’s home price index fell 0.6% between March and April, its first decline for over two years, as home resales also dropped by 12.6%.
Unsurprisingly, CREA said that slowdown had been caused largely by recent interest rate hikes, with mortgage rates rising as the Bank of Canada and lenders across the country move away from the rock-bottom-rate environment that’s prevailed throughout the COVID-19 pandemic.
That’s not to say a crash is imminent. The actual national average home price has now declined for two months in a row after peaking in February, according to CREA – but prices are still about 7% higher than last April.
Meanwhile, the home price index is 23.8% up compared with the same time last year, although that represents a smaller yearly increase than the 29% it recorded in February.
While the market isn’t seeing the same number of transactions as last year, that’s mainly because 2021 was an “anomaly,” according to Kitchener, Ontario-based principal broker Tracy Valko (pictured top), founder of Valko Financial.
Read next: Canadian housing starts rose in April – CMHC
She told Canadian Mortgage Professional that activity remained robust, with agents and brokers now having explanatory discussions with their clients and focusing on the educational aspect of what’s happening in the current market.
“I feel we’re busy, but we’re busier educating people and having more economic conversations. I think people understand inflation probably more than they ever have historically, so maybe that’s a good thing,” she said. “I do think there’s a bit of a shift for sure in terms of transactions – we’re doing more second mortgages, more lines of credit.”
The current cooldown is also presenting opportunity for many homebuyers, Valko said, with lower demand and fewer bidding wars meaning a less stressful overall experience for those looking to buy.
“I have to say I find a lot of our clients are finding houses where before they weren’t – they were sitting because they weren’t able to find a house,” she said. “I wouldn’t say there’s more [inventory] on the market – I would say because there’s not as huge demand, they’ve slowed down. I think there’s buyer fatigue and there’s buyer concern.
“I think that people are having more of an opportunity now to get into these properties that they traditionally wouldn’t have been able to, because they would have been snatched up within a couple of hours. Now, they’re taking a couple of days.”
While home price appreciation has recently slowed from its lightning-quick pace of recent years, there’s little indication that a significant correction is on the cards.
Canada Mortgage and Housing Corporation (CMHC) said in its Housing Market Outlook that while the growth in prices is set to moderate this year along with sales levels and housing starts, all three would remain “elevated” in 2022 as GDP growth, high employment, and net migration fuel demand.

Read next: National home sales, prices fall in April
“The growth in prices will likely continue to be led by markets with already low listings, including Toronto, Vancouver, Montreal and Ottawa,” the corporation said.
Real estate giant Royal LePage also said aggregate home prices across the country would continue to rise, revealing in its full-year forecast that it expected that benchmark to increase by 15% this year and land at around $900,000 by the end of 2022.
That would include a 16.5% price hike in the Greater Toronto Area (GTA) to about $1.3 million, with the Greater Vancouver Area (GVA) – the other of the country’s two hottest markets – projected to see its aggregate sale price rise to $1.44 million, an increase of 15%.
Valko said continuing low levels of housing supply were also likely to play their part in keeping values high, even if the barnstorming price growth of recent years was likely to slow.
“I think that, naturally, values are going to stay up to some extent [although] they’re not going to go up [like the] 50% increases over the last two years,” she said. “That’s unrealistic to a sustainable economy, let alone [in terms of] affordability for Canadians when their incomes haven’t gone up.”

Copyright © 1996-2022 Key Media, Inc.

New 79-unit Calgary rental building sells for $36.8 million

Goodman Commercial Inc.
Western Investor

Completed in 2019 near Riley Park and the Sunnyside LRT station, the total leasable space is more than 64,000 square feet in a condo-quality complex

Goodman Commercial Inc., Vancouver, for Western Investor

 

Property type: Multi-family rental

Location: 1124 5th Avenue NW, Calgary

Number of units: 79

Built: 2021

Property size: 64,008 square feet (leasable).

Land size: 26,231 square feet

Sale price: $36.8 million

Brokerage: Goodman Commercial Inc., Vancouver

Brokers: Mark Goodman, Cynthia Jagger

 

© 2022 Western Investor

Provincial government offers to buy $53.5 M of Laurentian University real estate

CBC Staff
CBC Radio

 Laurentian University says the provincial government has offered to purchase $53.5 million worth of its real estate to help the troubled school settle with its creditors. (Erik White/CBC)

Laurentian University is receiving more financial help from the Ontario government.

In its latest motion as part of insolvency proceedings, the university’s administration says the Ministry of Colleges and Universities has offered to purchase $53.5 million worth of Laurentian-owned land or buildings. 

The university is conducting a real estate review and there have been fears that it could sell off the popular trail network surrounding the campus or the historic Bell Mansion, the current home of the Art Gallery of Sudbury. 

Laurentian says this arrangement with the province would allow it to continue to use and occupy the land, or buildings purchased by the province, which would not be the case if the assets were sold to third parties.

Laurentian has asked the province to put the buildings of the newly independent NOSM University at the top of the list, but has not specified any other priorities.

In his affidavit, President Robert Haché says the NOSM University occupies two buildings owned by Laurentian on the Sudbury campus.

“NOSM University occupies approximately 60 per cent of the Health Sciences Education Resource Centre (“HSERC”) and the entirety of the Medical School Building (the “NOSM Building”),” Haché said in his affidavit.

” LU (Laurentian University) has requested that MCU (Ministry of Colleges and Universities) consider the HSERC and the NOSM Building on a priority basis as part of the discussions and as conversations advance with respect to the province’s purchase of identified real estate assets from LU.”

All of the money will go to help the university settle with its creditors.

In addition, the province is replacing the $35 million dollar debtor-in-possession loan it gave to Laurentian with a longer term loan, the terms for which are still being discussed.

 

Dr. Sarita Verma is the president and CEO of NOSM University. (Markus Schwabe/CBC)

Dr. Sarita Verma, NOSM University’s president and CEO, said she has not been privy to any discussions around the province’s proposed purchase of Laurentian real estate.

“One of the awkward issues here is that there is an election underway and the decision makers are in election mode,” Verma said. “It’s likely that we won’t know much until after June 2.”

NOSM leases two buildings located on the Laurentian campus. In March the institution announced it would add 30 medical degree and 41 residency spots over the next five years.

To accommodate that growth, Verma said it would be ideal if NOSM University gained access to the land next to the two buildings it currently leases from Laurentian.

“I mean, we would love to be able to, with the expansion, expand our classroom size, because right now it can only accommodate a certain number of students,” Verma said. “I mean there’s no doubt we’re going to further grow.”

Verma added she remains optimistic that NOSM will be able to recover around $15 million in endowments that are tied up by Laurentian’s insolvency proceedings.

Laurentian and its advisors have continued to negotiate with former federated partners, the University of Sudbury and Thorneloe University regarding the terms of their continued participation in the pension plan. 

They have reached an agreement with the University of Sudbury but not Thorneloe.

Meantime, the court documents show there have been claims totalling $360 million made against the institution.

A judge has approved Laurentian’s request to continue to operate under creditor protection, which began on Feb. 1, 2021, until Sept. 30. 

It expects to return to court at the end of June to seek a meeting order with creditors, which would include the Companies’ Creditors Arrangement Act (CCAA) plan of arrangement in response to claims.

 

©2022 CBC/Radio-Canada. All rights reserved.

Top Real Estate Terms You Need to Know

Daniel Crook
other

 Buying a home can be a challenging prospect, particularly for people looking to get into the market for the first time. There is a lot to be aware of throughout the process, so we have put together a convenient list of the top real estate terms that you need to know when buying a home.

Comparative market analysis (CMA) – An in-depth analysis which is provided by a real estate agent that determines the estimated value of a home based on homes that have been sold recently that are a similar size, condition, age or have similar features and are located in the same area.

Buyers/balanced/sellers market – A buyers market occurs when the number of homes for sale outnumber buyers. A seller’s market occurs when conditions favour sellers, and there are less homes available than there are people looking to buy a home. A balanced market sits between those and is an optimal time to buy and/or sell.

Read: Entering a Balanced Market Spells Relief for Many Buyers: CREA

Housing ratio – This is one of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. This ratio compares the total housing cost (principal, homeowners insurance, taxes and private mortgage insurance) to your gross income.

Debt-to-income ratio (DTI) – A ratio that compares a home buyer’s expenses to their gross income.

Adjustable-rate mortgage (ARM) –  An ARM has an introductory interest rate that lasts a set period of time and adjusts every six months thereafter for the remainder of the loan term. Once the time period has ended, your interest rate will change, as will your monthly payment.

Fixed-rate mortgage – A mortgage with principal and interest payments that remain the same throughout the duration of the loan, because the interest rate does not change.

Private mortgage insurance (PMI) – This is a fee charged to borrowers who make a down payment that is less than 20% of the home’s value. Typically 0.3% to 1.5% of the yearly loan amount., this fee can be canceled in certain circumstances when the borrower reaches 20% equity.

Pre-qualification – This is a basic assessment of your income, assets and credit score which determines what loan programs you might qualify for, if any. An agent may request this or a pre-approval letter before showing a potential buyer a home.

Pre-approval – This is a thorough assessment of a borrower’s income, assets and other data to help determine a loan amount they would be able to qualify for. An agent may request one of these or a pre-qualification letter before showing a buyer a home.

Read: Reality Check: Interest Rates are Rising, Securing a Mortgage Now is Best for Buyers

Approved for short sale – This indicates that a homeowner’s bank has received an offer from a buyer and has determined the reduced listing price on a home meets their short sale criteria, based on the seller’s circumstances and how much is owed.

Origination fee – This is a fee charged by either a broker or lender to underwrite and process a home loan application. This is not a single fee, but a set of lender-specific fees that are part of your costs when closing a mortgage loan.

Amortisation – This is the process of paying off a loan through a series of periodic payments to a lender. This includes two items – interest and principal, which is the amount of money you borrowed.

Closing costs – Costs outside a property’s sale price that need to be paid to cover the cost of the transaction. This could include discount points, insurance fees or survey fees, among others. These can vary from location to location but must be described to you when you submit your mortgage loan application.

Debt-to-income ratio (DTI) – A ratio that compares a home buyer’s expenses to their gross income.

Contingencies – These are conditions that are written into a home purchase contract that protect the buyer, should issues arise with financing, the home inspection, etc.

Equity – The percentage of a home’s value owned by the homeowner.

If you’re considering buying a home in the coming months, contact us to talk to an agent and receive a free consultation.

Considering Getting Into The Market This Spring?

Sign Up for a Free Buyer Consultation

 

© 2015 – 2022 Zoocasa Realty Inc., Brokerage

Top Real Estate Terms You Need to Know

Daniel Crook
other

Squamish Nation signs MOU service deal with Vancouver for 11-tower Senakw development

Nick Laba
Western Investor

The service agreement, designed to provide utilities from the city to the First Nation development, will sit in escrow until details are finalized.
With the traditional, unceded territory of the Sḵwx̱wú7mesh Úxwumixw (Squamish Nation) as a backdrop, the First Nation signed a memorandum of understanding with the City of Vancouver for a service agreement, intended to provide utilities to a planned 6,000-unit housing development on reserve land near Burrard Street Bridge.
At a press event on Wednesday (May 25), Squamish council chairperson Khelsilem and Vancouver Mayor Kennedy Stewart penned the deal, which will sit in escrow until details are finalized. The agreement, when completed, should detail how services like electricity, water and sewage will connect to the Sen̓áḵw development.
It also includes significant upgrades to pedestrian, cycling, transit and road improvements in the area, many of which will blend into the surrounding city land.
The timeline of getting shovels in the ground appears to be delayed slightly, with an initial start date of late last year being pushed to sometime later this year. Squamish Nation spokesperson Sxwíxwtn, Wilson Williams said a completion date in 2027 is the current target.
While Stewart and other members of local government are praising the landmark project, there has been pushback from some in the surrounding Kitsilano neighbourhood. Residents in the area have historically resisted tall residential towers. The tallest buildings in the Sen̓áḵw plan reach 56 storeys or higher.
Concerns have also been expressed about a potential service road going into the development.
At Wednesday’s event, Nation spokesperson Syexwáliya, Ann Whonnock reminded the audience that the traditional name of the region is X̱ats’alanexw, the name of a Squamish chief. Before settlers came, the area had been home to the Squamish people for thousands of years, sharing the territory with xʷməθkʷəy̓əm (Musqueam) and Səlílwətaɬ (Tsleil-Waututh) peoples.
And as the parcel in question is reserve land, the development doesn’t have to conform to typical city rules, like a formal public consultation process.
“The truth is that because it’s an on-reserve development, there isn’t a lot of required engagement pieces,” Khelsilem said. “But I think what this means is that there’s actually a lot of opportunity for the Nation to be innovative and take different approaches.” 
He explained that there would be more public outreach, both within and outside the Nation, when more design and development specifics are available.
An example of where the plan breaks from city bylaws is parking requirements. As it stands, the project is intended for a majority car-less community, and won’t provide sufficient vehicle parking for its population.
‘Largest First Nations economic development in Canadian history’
This project is significant for the Nation in many ways, said Williams.
“It will generate billions of dollars for the nation and set us on a path towards economic independence. Moreover, it will provide secure affordable housing for our members who need it most. Finally, the Coast Salish designs and architecture will promote our culture and remind the people that are out there on our shared traditional territories,” he said.
Stewart said signing the agreement demonstrates the ongoing collaboration between Vancouver and the Nation, underlining the city’s commitment to reconciliation.
“The Sen̓áḵw development is a crucial and ambitious step forward in making Vancouver a city for us all,” he said. “I couldn’t be more proud to support such an historic and visionary project – the largest First Nations economic development in Canadian history.”
In a 2021 update, the Nation said it made an agreement with the Canada Mortgage and Housing Corporation for what it called the largest loan in the Crown corporation’s history. Much of the information on project funding has yet to be released. 
Included in the development is 250 homes available to Squamish Nation members at reduced monthly rents in the first two phases of construction. Planners say the project will create a substantial number of jobs to Nation members as well.
The ambitious project officially got underway in December 2019, after a majority of Nation members approved development of 10.5 acres of land to build thousands of housing units.

© 2022 Western Investor

A Canada housing crash? Don’t count on it, says RBC economist

Fergal McAlinden
other

“This is more likely to be a soft landing than a severe correction or some kind of crash or meltdown”

Homebuying activity in Canada is slowing from its frenzied pace of the past two years – but the prospect of a housing market crash appears slim, according to a prominent Royal Bank of Canada (RBC) economist.
Robert Hogue (pictured top), assistant chief economist at the banking giant, told Canadian Mortgage Professional that there were still multiple factors working in the market’s favour even if home price appreciation begins to level off.
“Our base case scenario is that prices will moderate; we thought starting midyear, but in some markets, they probably have already started,” he said. “But this is more likely to be a soft landing than a severe correction or some kind of crash or meltdown, and there are still a lot of factors supporting the market [with] demographics being central.
“I would not exclude for material price declines in some markets, but as a Canada-wide phenomenon I think at this point the odds are it’s still going to be a moderate correction.”
The Canadian Real Estate Association (CREA) recently revealed that home resales had decreased by 12.6% across Canada between March and April 2022, with the home price index posting its first monthly decline for two years.
Read next: Toronto housing market: Will the slowdown continue?
National home sales were down 25.7% year over year – and in Toronto, one of the country’s most feverish housing markets during the first two years of the pandemic, April sales came in 41% lower than the same time last year.
Still, those results were to be expected, Hogue said, echoing the view of many observers that the record-shattering market of recent times has been in some part an anomaly spurred by the unprecedented pandemic-era buying environment.
“We have to be mindful where we’re coming from,” he said. “We’ve been almost two years in a frantic market… where bidding wars have spread throughout the country and created a lot of frustration for many young Canadian buyers.
“The fact that the market is cooling is not a shock, because the levels of activity up until now were just not sustainable over the longer term. Now, are there risks associated with that? Of course. Once you reach a turning point in any kind of cycle it may prompt some overreaction from certain market players.”
RBC remains confident that the coming correction will be “reasonably well-behaved,” said Hogue, even though it might be more abrupt in certain markets such as Ontario and British Columbia which are likely to face “pretty stiff headwinds.”
“We’ve already seen in April some softening in activity, and even some softening in prices in many markets,” he said of Ontario. “BC was a bit more of a mixed picture, but probably going forward we’re going to see more softness starting to appear. So clearly the highest priced markets will face more challenges in the context of rising interest rates.”
Those rate hikes have been the story of the year so far where Canada’s mortgage market is concerned, with the Bank of Canada having heralded the end of the rock-bottom-rate environment of the pandemic by introducing increases to its benchmark rate in the early months of 2022.
Read next: Inflation hits a new high in Canada
 The central bank is set to issue its latest statement on that trendsetting interest rate next Wednesday (June 01), an announcement that’s widely expected to include a third consecutive rate hike as the Bank grapples with elevated inflation.
Speaking before a Senate committee at the end of April, the Bank’s governor, Tiff Macklem, said it was prepared to act “forcefully” to get inflation under control.
Hogue and RBC are expecting half-percentage-point increases in each of the Bank’s next two rate announcements, and the economist said there was little chance that news of a cooling housing market would give the central bank pause for thought on its planned interest rate trajectory for the remainder of the year.
“I think the Bank of Canada has its eyes squarely on inflation,” he explained. “As long as inflation will remain elevated and the risk [remains] that inflation expectations start to drift higher, I think the Bank of Canada will continue to raise or normalize interest rates.
“Having the housing market correcting, the Bank will pay attention to [that], but I doubt that any development in that sector would prompt the Bank to change course.”

Copyright © 1996-2022 Key Media, Inc.

Top Real Estate Terms You Need to Know as a Home Buyer or Seller

Daniel Crook
other

Buying a home can be a challenging prospect, particularly for people looking to get into the market for the first time. There is a lot to be aware of throughout the process, so we have put together a convenient list of the top real estate terms that you need to know when buying a home.

Comparative market analysis (CMA) – An in-depth analysis which is provided by a real estate agent that determines the estimated value of a home based on homes that have been sold recently that are a similar size, condition, age or have similar features and are located in the same area.

Buyers/balanced/sellers market – A buyers market occurs when the number of homes for sale outnumber buyers. A seller’s market occurs when conditions favour sellers, and there are less homes available than there are people looking to buy a home. A balanced market sits between those and is an optimal time to buy and/or sell.

Read: Entering a Balanced Market Spells Relief for Many Buyers: CREA

Housing ratio – This is one of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. This ratio compares the total housing cost (principal, homeowners insurance, taxes and private mortgage insurance) to your gross income.

Debt-to-income ratio (DTI) – A ratio that compares a home buyer’s expenses to their gross income.

Adjustable-rate mortgage (ARM) –  An ARM has an introductory interest rate that lasts a set period of time and adjusts every six months thereafter for the remainder of the loan term. Once the time period has ended, your interest rate will change, as will your monthly payment.

Fixed-rate mortgage – A mortgage with principal and interest payments that remain the same throughout the duration of the loan, because the interest rate does not change.

Private mortgage insurance (PMI) – This is a fee charged to borrowers who make a down payment that is less than 20% of the home’s value. Typically 0.3% to 1.5% of the yearly loan amount., this fee can be canceled in certain circumstances when the borrower reaches 20% equity.

Pre-qualification – This is a basic assessment of your income, assets and credit score which determines what loan programs you might qualify for, if any. An agent may request this or a pre-approval letter before showing a potential buyer a home.

Pre-approval – This is a thorough assessment of a borrower’s income, assets and other data to help determine a loan amount they would be able to qualify for. An agent may request one of these or a pre-qualification letter before showing a buyer a home.

Read: Reality Check: Interest Rates are Rising, Securing a Mortgage Now is Best for Buyers

Approved for short sale – This indicates that a homeowner’s bank has received an offer from a buyer and has determined the reduced listing price on a home meets their short sale criteria, based on the seller’s circumstances and how much is owed.

Origination fee – This is a fee charged by either a broker or lender to underwrite and process a home loan application. This is not a single fee, but a set of lender-specific fees that are part of your costs when closing a mortgage loan.

Amortisation – This is the process of paying off a loan through a series of periodic payments to a lender. This includes two items – interest and principal, which is the amount of money you borrowed.

Closing costs – Costs outside a property’s sale price that need to be paid to cover the cost of the transaction. This could include discount points, insurance fees or survey fees, among others. These can vary from location to location but must be described to you when you submit your mortgage loan application.

Debt-to-income ratio (DTI) – A ratio that compares a home buyer’s expenses to their gross income.

Contingencies – These are conditions that are written into a home purchase contract that protect the buyer, should issues arise with financing, the home inspection, etc.

Equity – The percentage of a home’s value owned by the homeowner.

If you’re considering buying a home in the coming months, contact us to talk to an agent and receive a free consultation.

Considering Getting Into The Market This Spring?

Sign Up for a Free Buyer Consultation

 

© 2015 – 2022 Zoocasa Realty Inc., Brokerage

Interest in mortgages from credit unions, private lenders up as rates rise: Brokers

Tara Deschamps
CBC Radio

 A for sale sign is seen in front of a Montreal home, Tuesday, March 17, 2015. The Bank of Montreal is cutting its posted five-year fixed mortgage rate, a move that experts say could spur other banks to slash their rates as well as the spring real estate season begins. (Paul Chiasson/Canadian Press)

Canadian home buyers are increasingly considering credit unions and private lenders to secure mortgages as rates rise, brokers say.

They are seeing more Canadians drawn to these lenders as fixed mortgage rates have crept to about four per cent in recent months in many provinces and territories.

Because the qualifying rate on uninsured mortgages under Canada’s stress test is either two percentage points above the contract rate, or 5.25 per cent, whichever is greater, more borrowers are now having to qualify at a higher rate for mortgages from traditional lenders like banks.

However, credit unions and private lenders are often able to offer more competitive rates, even to clients who don’t qualify for mortgages offered by traditional lenders.

“If a client’s looking for a five-year, fixed rate mortgage, they’re now qualifying (with traditional lenders) at say 6 or 6.5 per cent, which really reduces the total amount that they could qualify for,” said Sung Lee, a Toronto mortgage broker.

“With credit unions, they offer more flexibility, where you could qualify at just your five-year contract rate or in some cases, if it’s a variable, like a contract (rate) plus one (per cent).”

Insurance and financial website Ratesdotca says credit unions and private lenders made up about 3.7 per cent of the country’s mortgage business last year and have already handled about 6.7 per cent so far this year.

Credit unions are typically responsible to members instead of shareholders and though they offer similar products to banks, they are not subject to the same federal regulations, including qualifying rate restrictions, allowing them to take on riskier customers.

Housing market slowing

The varying interest comes as the Canadian Real Estate Association (CREA) said the national average home price was slightly higher than $746,000 in April, up 7.4 per cent from about $695,000 during the same month last year.

However, on a seasonally adjusted basis the national average home price slid by 3.8 per cent to $741,517 last month from $771,125 in March.

CREA attributed much of the slowdown to fixed mortgage rates, which have been on the rise since 2021, but have been more impactful in recent months.

“Everyone’s all worried about the rates … because we’ve been accustomed to really low rates for a long time and probably for the last 10 years they’ve been under four per cent,” said Chantal Driscoll, a Burlington, Ont. mortgage broker with RDM Financial Consultants.

“People are getting nervous, but traditionally mortgages should be between four and six per cent. Those are normal mortgage rates.”

Anytime mortgage rates edge up and qualifying for a mortgage becomes harder, she notices a “trickle down” effect on credit unions and private lenders, but current conditions aren’t pushing interest in these lenders beyond what she usually sees, when the market shifts.

However, she is seeing more interest from people who are not qualifying for mortgages from traditional sources.

“They’ll go to … credit unions or private lenders to qualify a little more than what they’d qualify for with the bank,” said Driscoll.

Most of her clients are still managing to qualify under current conditions or through variable rates, even as they also rise, but Driscoll foresees change.

She believes brokers may be fielding even more requests for alternative mortgages in the future because at least one credit union has upped their requirements so all borrowers have to qualify at two per cent higher than the contract or the benchmark rate, whichever is higher.

Meanwhile, Nick Hill has seen a steady stream of interest around credit unions from his clients — and not just ones who are having trouble qualifying.

“I did two deals for people who work at car dealerships,” said the Toronto broker with G&H Mortgage Group. They qualified for a traditional loan but found better rates through a credit union.

 

©2022 CBC/Radio-Canada. All rights reserved.

Vancouver makes significant changes to building bylaws to address climate crisis

Tiffany Crawford
The Vancouver Sun

Among the changes are that all new multi-family buildings will require cooling systems by 2025 and air filtration to protect residents from intense heat waves and fire smoke pollution.

Vancouver council has voted to make significant changes to building bylaws to address the climate crisis. Photo by DARRYL DYCK /THE CANADIAN PRESS

Vancouver city council has voted to make significant changes to construction bylaws to reduce the use of fossil fuels and require cooling and air filtration in all new large buildings.

The changes are aimed at addressing the climate crisis and meeting targets to reduce greenhouse gas emissions.

City staff predict the new bylaws, which council approved last week, will lead to an annual reduction of 50,000 tonnes of carbon emissions in Vancouver, the equivalent of removing 13,000 gasoline-powered cars from the road.

Under the changes, greenhouse gas emissions in all new multi-family and commercial buildings must be 90 per cent less than under the old 2007 rules. That will be accomplished by requiring electric water heaters and either electric heaters or heat pumps n new construction, said Vancouver city spokesman Neal Wells.

All new multi-family buildings will require cooling systems by 2025 and “best practice” (MERV 13) air filtration to protect residents from increasingly common and intense heat waves and fire smoke pollution. MERV 13 captures 85 per cent of fine particulates from vehicle pollution and fire smoke, said Wells.

 

“I think that the proposals are quite well-crafted in that they strike a good balance between reflecting the urgency of the climate crisis and acknowledging the realities of the property development sector,” said Roberto Pecora, director of programs at the Zero Emissions Building Exchange (Zebx,) a local industry hub that helps developers, builders, architects and designers work toward zero emission buildings.

He said developers and builders working in Vancouver are aware that the city has the most progressive green building regulations in the province and have been able to step up to the requirements as the bylaws are aligned with the plan.

“I don’t see why it would be any different with these upcoming bylaw amendments. We have a very competent development, construction and design community in Metro Vancouver that can adapt to these changes,” said Pecora.

 

The emissions reduction aspects of the proposed changes target space heating and heating water for non-heating applications like showers and washing machines, said Pecora, adding that the bylaws don’t target gas range cooking.

“Nonetheless, using gas for cooking has some serious consequences for indoor air quality in homes,” he said. “A much more modern, safe and efficient way to cook is with an induction cooktop.”

Chris Hill, president of B Collective, a design, build and consulting firm, thinks gas stoves will be out of vogue soon.

“People feel like they need it right now. It’s such an important part of their lifestyle,” he said. “When we are talking about air quality and air filtration though, people are not going to want to burn gas in their house.”

 

He said while more developers are looking at building homes with electric induction stoves, most people remain keen on gas stoves.

“But those with a climate conscience understand and, as they explore induction, quite often they are happy with the results.”

Hill also applauded the city’s move to ensure all new buildings have air filtration and cooling systems, which will include low-income housing, as people on fixed incomes can be more vulnerable to heat waves and pollution.

In what the city says is the first in North America, all new builds will require a reduction of 10 to 20 per cent in so-called embodied carbon building materials, which are the emissions associated with building materials such as concrete, steel and foam insulation.

 

So, for example, Wells said a company could build less underground parking, use different materials or better concrete mixes.

Hill said there is going to be a real push to use less of materials that have a high carbon impact like concrete, replacing them with natural materials like wood, but also taking into account sustainable forestry practice.

Rocky Sethi, COO for Adera Development, agrees but said there needs to be more government support for providing timber as a carbon-sequestering material.

“We would like to see support from the various levels of government, in particular the province, in supporting mass timber construction,” he said.

“We support commercially viable efforts to reduce our industry’s carbon footprint, however with construction costs at an all-time high, supply chain constraints negatively impacting our ability to deliver affordable housing, and a lack of skilled labour in the construction industry, we feel the industry is beyond a tipping point.”

 

Sethi said adding onto this are increasing delays with obtaining approvals and permits in a timely manner that is driving up the cost of timber, leading to higher housing prices at a time when interest rate pressure and inflation is creating challenges for B.C. households.

 

As for existing office and retail buildings that are greater than 100,000 square feet, the city now requires all regulated buildings to have zero greenhouse gas emissions by 2040, and reduce heat energy use by 70 to 90 per cent by 2040.

Pecora said the initial requirements are relatively light to begin with or are phased in to assist with the transition. For example, the proposal to regulate emissions from existing buildings would only become effective in 2026 and only affect about 50 buildings to start.

 

Reducing heat energy use is cost effective in large office and retail buildings if done when an existing heating system needs replacing and is replaced with some form of heat pump, Wells said. Heating systems are only replaced every 20 to 25 years, and the city estimates that 30 to 40 per cent of large office and retail buildings should make this change by 2030.

Large existing commercial and multi-family buildings will also have to report their annual energy use starting in 2024.

The city is providing $2 million in grants to add heat pumps to existing below-market housing.

In 2021, Zebx did a cost analysis of seven high-performance buildings in B.C., the kind that Vancouver is seeking with its bylaw amendments. Two of the seven came in at 30 per cent under the cost of similar code-minimum buildings being built in the same area at around the same time.

“It’s not a given that high-performance buildings cost more to build,” said Pecora. “I would argue that what’s affecting the cost of new construction more at the moment are labour shortages and supply chain disruptions.”

 

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