Archive for December, 2005

City after new live/work tax category

Wednesday, December 28th, 2005

Model a ‘very sustainable approach’ that’s created taxation difficulties

Glenda Luymes
Province

Co-director of planning Larry Beasley says changes won’t affect artists and authors. Photograph by : Ric Ernst, The Province

Vancouver City Council will approach the province in the new year about creating a separate tax category for live/work properties, Larry Beasley, the city’s co-director of planning, said yesterday.

“These properties already fall into their own category,” he said. “They’re not strictly residential or commercial, and it makes sense to suggest a new tax category for them.”

Beasley said the city has allowed the development of a number of live/work buildings in which buyers can set up a home and run a small business. The city is concerned about taxation of live/work businesses that have employees and on-site retail customers.

“We’re not talking about commercial activities that are done in private. Artists, authors and people who work from home won’t be affected,” he said.

Beasley first called for the new tax category earlier this month at a leadership summit where the possibility of Vancouver becoming a bedroom community for its growing suburbs was discussed.

At the summit, Beasley dismissed the “urban myth” that housing is gobbling up office sites in the city’s core, and instead promoted mixed-used development.

“We want people to live as close to their work as possible,” he said yesterday. “The live/work model is a very sustainable approach, but it creates taxation difficulties.”

The difficulties stem from the huge disparity between residential- and commercial-tax rates in the city. A Vancouver business owner pays about five times more than a homeowner for a property of similar value.

Live/work properties don’t logically fall into either category.

Small-business owners worry that the high commercial-tax rate will act as a deterrent to new business.

Georges Pahud, president of the Real Estate Board of Greater Vancouver, has said the city’s high business property tax “imposes a significant burden on businesses in the community — most of which are small business.”

But Coun. David Cadman said yesterday the high property tax is partly the result of Vancouver’s position as a “core municipality” in the region. “The level of service is different in this municipality. I have yet to meet a business person in Vancouver who said they’ve had to close their business because the tax rate was too high. Businesses in Vancouver have access to better services and a far larger pool of purchasers.”

Cadman also said he’d like to see the provincial government give city councils the power to determine the tax categories themselves.

“Adjusting the tax category for live/work businesses might be part of the answer to the gap between residential- and commercial-tax rates, but we also have to look at how we work with the province and where our revenue comes from,” he said.

© The Vancouver Province 2005

Architects map city’s future

Tuesday, December 27th, 2005

Graduate students envision communities becoming more complete as the green zone is protected and alternatives to the car are presented

William Boei
Sun

Concept of livable neighbourhoods in Vancouver, such as these work-and-live buildings along Arbutus, is expected to continue to spread. Photograph by : Ian Smith, Vancouver Sun

UBC professor Patrick Condon (left) speaks with Masters in Landscape Architecture students Niki Strutynski and Greg Rouleau about trends in population growth and land-use issues. Hanging behind them is a composite map of the Lower Mainland. Photograph by : Stuart Davis, Vancouver Sun

Think of some of Vancouver’s livable neighbourhoods — along Fourth Avenue and Broadway on the west side, on Commercial Drive on the east side, and increasingly along Main Street in the centre.

There are street-level shops, restaurants and offices, condos on upper floors, apartments and single-family homes around the corner. Many residents can find their daily needs within a few blocks’ walk along safe tree-lined sidewalks, and transit service is frequent and fast.

Imagine such communities along King George Highway in Surrey, North Delta’s Scott Road or Lougheed Highway in Coquitlam.

It’s an achievable vision, two University of B.C. landscape architects said Monday as their graduate students showed off their end-of-term projects.

Patrick Condon’s master’s degree candidates in UBC’s landscape architecture program produced a huge map — nine metres by 13.7 metres — showing what Greater Vancouver might look like in 50 years with its population doubled to four million.

“Places like Whalley or Scott Road or Coquitlam Centre can potentially become much more interesting places to be and provide much more of the urban and cultural amenities that people seem to want,” Condon said.

His students made a huge assumption: that growth in Greater Vancouver can be concentrated around “transit nodes” in the town centres that are outlined by the regional district’s Livable Strategic Plan, rather than sprawling willy-nilly into the Fraser Valley.

“Our communities become more complete, the green zone is protected, there are alternatives to the car presented,” Condon said.

“It’s a big assumption that those things are going be adhered to. We certainly hope that they are. If they are, the map shows what the communities would look like — much like they do now, but in many respects better, in the same way that most people think downtown Vancouver has become much better as its population has doubled from 40,000 to 80,000 in the last 10 or 12 years.”

The students’ map shows more than 100,000 new buildings in the region, many of them in the designated growth areas along major transit routes, based on the regional growth strategy, municipalities’ official community plans and population growth projections.

“We asked them to do it in a way that met a number of sustainability principles such as providing as many jobs close to houses as possible, making sure that you have a mix of housing types, protect and/or restore environmental systems and make sure that everybody lives within an easy five-minute walk of transit services,” Condon said.

Lawrence Frank’s class in land use and transportation in UBC’s school of community and regional planning, meanwhile, focused on how the provincial government’s Gateway Project will affect the region’s growth.

The Gateway plan calls for new truck routes on the south and north shores of the Fraser River, expanding the Trans-Canada Highway between Langley and Vancouver and twinning the Port Mann Bridge.

But the students warned that only building more road capacity could bring about a “triple convergence” as travellers who used to take other routes, or travelled at off-peak hours or used other means of transport all converge on the expanded highway at the same time.

They noted that the Gateway plan is part of a strategy to turn Vancouver into a major container port hub to distribute goods from overseas throughout North America, but that it would channel all the resulting traffic through the Greater Vancouver metropolitan area.

One alternative, they said, could be to expand rail capacity to move the goods through Vancouver, perhaps as far as Alberta, to an inland terminal from where they would be distributed throughout the continent.

They also said container truck traffic could be distributed around the clock, which would require the container ports to expand their hours from the present 7 a.m. to 4 p.m., which forces trucks to compete with daytime commuters for road space.

And they suggested tentative plans to make the twinned Port Mann Bridge a toll bridge run by a private operator could result in pressure to maximize the amount of traffic using the bridge, since the more traffic that crossed it, the more money the operator would take in.

Frank said that kind of scenario can be averted with creative planning, such as applying tolls only during peak traffic hours to encourage traffic to use it at other times.

“I think it can be done,” he said, “but it may need a new model for investment, perhaps a new hybrid between public and private investment.”

Condon said there are hopeful signs for denser development, especially in Surrey, despite its approval of several controversial “big-box commercial developments and far-flung business parks.”

A recent study of the Vancouver, Seattle and Portland regions by Seattle’s Northwest Environmental Watch found that only Greater Vancouver has suburban areas, notably Surrey, that are becoming “substantially more efficient” in their land use and increasing average densities.

“So the underlying trend line is favourable,” Condon said.

The development industry is prepared to play ball with regional planners, said Urban Development Institute executive director Maureen Enser, as long as local governments pave the way with viable policies.

“One of the challenges that we face as an industry is to be able to increase densities around transit nodes without being penalized for doing so,” Enser said.

That may mean reducing the high development fees builders now face if they want to develop in high-density areas.

“You have to make those units as affordable as possible,” Enser said. “Therefore you need to keep those costs associated with development as reasonable as possible, so the end product is fairly priced and it does become an attractive place to live.

“If it’s sensible, it’s well planned and it’s easy to build the product that’s needed and there is a demonstrated need, those are all ingredients for success.”

Frank said the coming months are crucial as provincial Transportation Minister Kevin Falcon prepares to reveal the details of the Gateway Project and a new regional district board settles on a development strategy for the next decade.

Frank said the region would be foolish to reject huge inflows of cash from senior governments and investment from private partners to build transportation infrastructure.

But expanding road capacity without coupling it to the regional strategy will send low-density development sprawling into the Fraser Valley, he said, and the region needs to establish benchmarks so it can measure how proposed projects will affect its future.

“We have to find ways to use those funds in ways that don’t undermine our ability to have the quality of life that we’ve worked so hard to create.”

© The Vancouver Sun 2005

Owners of property in resort employee housing development want resale controls removed

Tuesday, December 27th, 2005

Doug Ward
Sun

WHISTLER – The new mayor of Whistler is upset that property owners in an employee housing development are trying to get rid of controls on the resale value of their homes.

Sixteen residents in the Barnfield Farm subdivision are asking the Supreme Court of B.C. to remove employee housing covenants capping the value of their non-market homes.

“My reaction is one of great disappointment,” said Mayor Ken Melamed. “We had an expectation that there would be price and occupancy controls and today the residents are challenging those covenants.”

With most chalets selling for over $1.2 million and condominiums for over $600,000, Whistler has struggled to provide affordable housing for resort employees. The town’s sky-high land prices have forced many employees to move to Squamish and Pemberton.

There are about 4,000 beds in below-market or restricted employee housing in Whistler, including the Barnfield homes. The idea behind the employee housing, said Melamed, is that the units are to remain affordable “in perpetuity.”

The Barnfield properties, under a formula set when they were purchased in 1997, have appreciated annually at 1.5 per cent.

This means that a $300,000 home built in Barnfield on a $100,000 lot eight years ago would now be worth roughly $440,000 — far below market value.

“We think they knew the formula going in and they say the formula was unclear,” said Melamed.

The controversy has sparked public anger, added Melamed, saying local newspapers have run letters critical of the Barnfield homeowners’ suit.

Bob Barnett, editor of the Pique, a weekly Whistler newsmagazine, wrote in a recent editorial: “There were no public displays of jealousy or disapproval when these people were presented with the opportunity to build their homes in Barnfield.

“On the contrary, there was general support and congratulations when their names were drawn in a housing lottery. But some of that support is evaporating with the lawsuit.”

David Sharpe, one of the homeowners, declined to comment on the suit when contacted Monday, but sent to The Vancouver Sun an e-mail statement from the Barnfield Homeowners Association.

The homeowners, in the statement, acknowledged that their suit has provoked controversy in Whistler. They went on to say that they are not trying to remove covenants restricting the Barnfield properties to Whistler resort employees.

The homeowners association also said it is seeking clarity from the courts about how the value of their homes should appreciate over time.

Mayor Melamed said he is worried that a successful suit by the Barnfield homeowners could prompt other residents in employee housing units to challenge covenants restricting the resale value of their homes.

Melamed said the suit shouldn’t threaten future employee housing projects, including the 2010 Olympic Games’ athletes village, which is set to be converted into price-restricted employee housing.

© The Vancouver Sun 2005

Burst main could close Bute-Pender a week

Tuesday, December 27th, 2005

Gas line ruptures, pavement, sidewalk collapse at condominium construction site

Eva Salinas
Sun

A 20-centimetre water main burst Monday at the corner of Bute and Pender, swallowing pavement and sidewalk. Photograph by : Stuart Davis, Vancouver Sun

City engineering staff look over a collapsed portion of Pender that is expected to disrupt traffic for a week. Photograph by : Stuart Davis, Vancouver Sun

VANCOUVER – A major commuter link to the Lions Gate Bridge in downtown Vancouver is closed today because a section of Pender Street collapsed next to a condominium construction site Monday morning.

A 20-centimetre water main burst at the corner of Pender and Bute streets, plunging sections of sidewalk and street into the excavation, causing damage estimated at hundreds of thousands of dollars.

The street could be closed as long as a week.

“It’s a transit route, one of the major routes connecting to the Lions Gate [Bridge],” said Tom Timm, a city engineering official who was at the site Monday.

The main burst shortly after 10 a.m. in the 1200-block West Pender, sending thousands of litres of water gushing into the construction site and rupturing an adjacent gas line. The water pressure quickly caused giant slabs of concrete, pieces of sidewalk, utility wires and part of the road to crumble into the site.

The noise sent Richard Kurland to the window of his 27th-storey condo on Melville Street.

He looked out to see sparks and flames erupting from the gas line. The roar of the water and the noise of the road breaking up sounded “as if a house was falling down,” he said.

The debris and mud quickly extinguished the fire.

Kurland called 911, and watched as crews arrived. “One fellow delicately danced across the street, and threw a couple of pylons,” he said.

Access from Thurlow to Jervis, and from Melville to West Hastings was blocked off and Murray Wightman, maintenance superintendent for Vancouver’s street operations, said it will take at least a week to repair the road.

Wightman said it appears that broken water main was the result of, not the cause of, the damage, although he was not sure what caused the failure.

The water, gas and electricity in the immediate vicinity were quickly shut off.

Wightman said there was concern that a 60-centimetre water main under the area would also break. Crews rushed to turn off water to that main because, Wightman said, it would be disastrous if it also broke. He said the damage will definitely be in the hundreds of thousands of dollars.

Police Insp. Rollie Woods estimated the water main was spewing thousands of gallons a minute before it was turned off. He said the site is 15-metres deep and is being prepared for a high-rise condominium.

Within hours, the water pooled at the bottom of the construction site and the pavement of the eastbound lane of Pender, which initially only cracked and sagged, caved in.

Representatives of the city engineering department, waterworks, BC Hydro, and Matcon, the excavation company, assessed the damage.

Timm would not speculate on the cost of the damage, but said the city’s position is that the damage was the result of the excavation work being done.

“The shoring system failed,” he said, referring to the concrete and steel that was supposed to hold in the street wall.

He said there may be some dispute with that finding but the immediate concern is to reopen the street.

© The Vancouver Sun 2005

Spacecraft readied for trip to frontier

Tuesday, December 27th, 2005

NASA’s New Horizons faces the longest journey ever attempted: 15 years to Pluto

Nic Fleming
Sun

Man will take a bold step towards the final frontier of the solar system with the expected launch of the first mission to Pluto and beyond next month.

The piano-sized New Horizons probe will travel faster than any previous spacecraft on its journey to the planet farthest from the Sun, its moon Charon and the mysterious, icy Kuiper Belt.

Relatively little is known about the ninth planet and scientists expect the NASA mission to provide important clues to the origins of the solar system and possibly to life on Earth.

They will have to be patient, however. New Horizons will travel at 43,000 kilometres per hour for 61/2 billion kilometres to the only remaining planet that has not been observed at close quarters. It will arrive in the summer of 2015 at the earliest.

Alan Stern, the mission’s principal investigator, said: “Exploring Pluto and the Kuiper Belt is like conducting an archaeological dig into the history of the outer solar system, a place where we can peek into the ancient era of planetary formation.

“Everything we know for sure about Pluto is on about three 3 x 5 file cards. We don’t even know what we don’t know. That leaves a lot of room for discovery.”

While Mercury, Venus, Earth and Mars are called the rocky planets and Jupiter, Saturn, Uranus and Neptune are defined as gas giants, Pluto and its largest moon Charon are known as “ice dwarfs”. Pluto is the only planet whose orbit takes it into the Kuiper Belt, a flattened doughnut-shaped belt of icy, comet-like bodies in the outer solar system.

Pluto is so different from the other planets that many astronomers say it should not be described as a planet but as one of a new class of bodies called Kuiper Belt Objects.

The solar system was formed 4.5 billion years ago when a great cloud of gas and dust began spinning at growing speed and temperature until chunks of material were flung together to form the Sun and the planets. KBOs are the left-over building materials.

Because Pluto’s surface temperature is around -230C, its chemical and structural make-up should have changed far less than that of the inner solar system bodies. Studying it more closely should tell us about the material from which Earth was formed.

Observation of its atmosphere may shed light on how quickly the hydrogen originally present in Earth’s atmosphere escaped into space. That is important information in any attempt to simulate the environment in which life began.

Some scientists believe that bodies originating in the Kuiper Belt and having an impact on Earth were important sources of our water, atmosphere and the complex hydrocarbons that provided the building blocks of life.

The launch, from Cape Canaveral, Fla., will take place between Jan. 11 and Feb. 14.

© The Vancouver Sun 2005

Sinkhole swallows Pender

Tuesday, December 27th, 2005

AT BUTE: Heavy rains to blame; power cut to nearby highrises

Ethan Baron and David Carrigg
Province

Roadway and sidewalk along West Pender were swallowed by a massive sinkhole that also took down a power pole and cut power to nearby highrises. Recent rains are being blamed. Photograph by : Jason Payne, the Province

A massive sinkhole took out a section of West Pender Street yesterday in downtown Vancouver, shutting the road and cutting power to several highrise buildings.

“I was looking out my window and heard a little noise and then saw scaffolding that was holding up some signs collapse,” said Howard Swadron, who lives on the 24th floor of a nearby highrise.

A small section of West Pender at Bute Street then collapsed into an adjacent excavation on the south side of the street, which caused a water main to burst, Swadron said.

“Then the road really gave way,” he said, adding a small electrical fire broke out when a power pole fell into the hole.

Swadron called 911 and fire crews arrived soon after and immediately cut off gas, water and electricity to nearby buildings.

“The one good thing I could say is it happened on Boxing Day and there was no one in the hole, and light traffic on Pender,” said Vancouver Fire and Rescue Capt. Randy Hebenton.

“During rush hour on a busy Monday, it would have been a real disaster.”

It appears erosion from heavy rainfall was a factor in the collapse, Hebenton said.

“Because of the massive flow of water, it was eroding the roadway and collapsing it into the sinkhole.”

Last night, the section of sidewalk and roadway that had collapsed into the excavation was at least 20 metres wide.

Swadron said the site was a “beehive of activity” all afternoon and several buildings remained without power last night.

He said the excavation site where the road collapsed had become very wet over the past week, with pools of water on the ground.

The route of bus No. 19 will be affected by the closure of Pender, but transit officials yesterday made arrangements for a small shuttle to travel on Thurlow, Hastings and Jervis streets.

It’s not yet known how long Pender will be closed, or if the west-bound lanes can be opened while the eastbound lanes are under repair, said Vancouver police Insp. Rollie Woods.

“If it takes a week or two, obviously it has more of an impact,” Woods said.

Power to the nearby buildings is expected to be out for several days.

© The Vancouver Province 2005

 

B.C.’s economy a roaring engine of job creation

Saturday, December 24th, 2005

Gillian Shaw
Sun

“It is now apparent to us that the availability of skilled workers will have the biggest impact on our ability to keep the economy rolling at its current level in British Columbia.”

— Manley McLachlan, president of the British Columbia

Construction Association, on his prediction for the coming year.

British Columbia‘s economy is becoming a victim of its own job-creation success.

Whether it’s the help-wanted signs in the window or the surly pizza clerk who keeps his job despite letting loose with a string of obscenities against a customer, the evidence that British Columbia is turning out more jobs than people to fill them is unmistakable.

In the past 12 months, employment in this province has grown by a whopping 90,000-plus jobs, the highest growth rate of any province in Canada, and the trend shows no sign of abating. Unemployment is at record lows and in parts of the province, like oil-and-gas-driven northeastern B.C., it is too low to statistically count.

“All the predictions we were considering a year ago have come through,” said Manley McLachlan, president of the British Columbia Construction Association. “And the impact of that growth has been more significant than we envisioned.

“Certainly the challenges around skills shortages are front and centre. It has come to the point that the availability of skilled workers is having a real impact on contractors’ ability to take on certain projects.

“Overall, the industry is running full out.”

Finding people to fill the jobs has become the new issue for the economy here.

“It is now apparent to us that the availability of skilled workers will have the biggest impact on our ability to keep the economy rolling at its current level in British Columbia,” said McLachlan.

Aron Gampel, Scotiabank’s deputy chief economist, would agree. The issue is becoming how to keep up with an economy that is going at full steam.

“I think the real constraints in B.C. are capacity-related,” he said. “You can’t get enough workers, you can’t enough material, it’s a logistics nightmare.”

Manufacturing, construction, management, finance and jobs in the hospitality sector combined to make up the lion’s share of the job gains, with 80,000 of the new jobs from November of last year to November of this year being full-time.

If employers had to replace only retiring baby boomers, the demand would be high enough, but added to that is the increase in jobs that comes with the sizzling hot economy.

“It certainly has been a milestone year, with the tourism industry recovering and now starting to take off,” said Arlene Keis, chief executive officer of Go2, B.C.’s tourism industry’s human resources association. “This has been a year of change.

“Everything that we have been predicting for 10 years is happening. The economy is getting better and everywhere people have jobs and the competition is so fierce for people it is impacting businesses in ways it never has before.”

The high demand for workers is pushing up wages, a plus, as McLachlan points out, for construction-industry workers who have failed to see wage gains for a number of years.

“There is fierce competition right now for people,” he said. “There is a growing vacuum in middle managers — estimators, project managers, superintendents — that is at crisis proportions.

“Contractors are not only looking across the country, but also overseas.”

McLachlan said contractors are hiring through job fairs in Europe and the industry is working with the government in recruiting immigrants to the fill jobs. It is also working on a program to help landed immigrants who may want to enter the field work.

Aboriginal communities are working with the industry in training and recruiting for construction work and McLachlan said the industry is also trying to attract women.

“While there are challenges in place, the industry right now is very positive,” he said.

In the tourism sector, the good news/bad news punch of job growth has left some hotel managers changing sheets and adopting other measures to cope with the talent crunch.

“Businesses are having to close early, managers are making beds in hotels, chains are having to lower their hiring standards because they can’t find enough to fill the jobs or they are tolerating behaviours they wouldn’t have in the past because they can’t replace the workers,” said Keis.

Retention has become the buzzword as employers struggle to find the magic formula that will attract and keep employees.

“You see it in all sectors,” said Keis. “Industries are realizing they have to look at retention.

“Employers never had to pay attention to that before because it was an employers’ market, now it is an employees’ market and people are saying, ‘What can I do to be a better employer?’ “

It’s a problem that is cutting across all sectors. Don Cormack, general manager at Manpower in the Lower Mainland and a member of the Vancouver Board of Trade’s skills shortages committee, said his company is placing people in all positions, from labourers through computer operators.

“It is the whole gamut, it goes right across the board,” he said. “What we’re seeing is it is becoming more of a candidate- driven market where the bargaining is being driven more by the candidate than by the employer, so you are going to see wages going up.”

While the resource sectors and such areas as construction have traditionally been boom and bust in this province, there is no sign of slowing yet.

“In the Greater Vancouver area and British Columbia this has been trending now for nearly a year,” said Cormack.

“When you look at the stats, you can read them any way you want — the jobs are going up, the trend is continuing.”

© The Vancouver Sun 2005

Building jobs mean boom has legs

Saturday, December 24th, 2005

Bob Ransford
Sun

My crystal ball is shining with the prospect of a continued buoyant year ahead for local real estate markets. It is all because of the direct connection between real estate and the job creation spawned by increased construction.

Obviously, a boom in real estate markets this last year has had an impact across the economy and it looks like it will continue.

Typically, as the year comes to a conclusion and people turn their thoughts to Christmas shopping and family gatherings, the real estate market tends to slow down. But this year’s market statistics continue to show strength right down to the holiday season.

More than 7,700 homes worth more than $2.6 billion were sold in the province on the Multiple Listing Service (MLS) in November. That represents a 34 per cent increase in dollar volume and a 15.1 per cent spike in the number of units sold compared to the same month last year.

This past year has been a record-setting year for real estate in B.C. Total dollar volume of sales year-to-date province wide until the end of November topped a previous record at $33.2 million. Close to 4,200 more homes were sold this year to date than last year.

It is estimated that for every home sold, an additional $27,873 is spent on things like taxes, legal fees, moving expenses, new furniture and appliances.

In fact, it seems as though real estate and construction are the main drivers behind an economic revival the likes of which we haven’t seen for a decade or more.

All of this real estate activity creates the demand for construction and construction leads to job creation, which in the circle of things, creates more economic activity.

The unemployment rate in our province in November dropped to its lowest level since 1976, the first year in which statistics were available.

Job creation has been strong in both the construction sector and the service sector where much of that extra $27,873 is spent every time a house trades hands.

The next year holds out the promise of even more job creation if you look at many of the Olympic-related mega projects that have yet to break ground or are just mobilizing crews now. Workers will be going at top speed over the next year to make a serious dent in the Vancouver Convention Centre project, the Southeast False Creek Olympic Village, the Richmond Olympic Speed-Skating Oval and the RAV rapid transit project.

At the same time, a number of private-sector projects, like the new Fairmont Hotel, the Woodwards project and the many new residential projects in places like Richmond, Burnaby, Coquitlam and New Westminster, will start up during the next year and a half or so, adding to the demand for workers in the construction sector.

This work will continue on beyond the next year and we’re likely to see continued strong job growth through 2008, which means continued buoyant real estate markets for the next few years. My crystal ball is somewhat cloudy beyond the end of 2008.

At the same time, I see the next year as a bit of a transition year when it comes to the way we go about planning and designing new developments in these parts.

The recent civic elections resulted in some new politicians sitting in local positions of power not just in Vancouver but in many municipalities throughout the province. While most of these new local politicians can’t be labeled as anti-development, I believe a number of them are smarter-growth if not “Smart Growth” advocates.

The Smart Growth movement is North America wide with a local B.C. organization devoted to fiscally, socially and environmentally responsible land use and development that is aimed at avoiding urban sprawl, minimizing the use of cars by encouraging walking, bicycling and public transit, building with green technology and protecting farmland and ecologically sensitive areas.

A few developers have already embraced many smart growth and green building principles. Those who haven’t will likely be more strongly encouraged to do so over the next few years as they present their development plans to Councillors who understand and care about smarter growth.

So, all in all, a bright medium-term future is coming into view in my crystal ball. Happy New Year!

Bob Ransford is a public affairs consultant with COUNTERPOINT Communications Inc. He is a former real estate developer and a director of the Urban Development Institute — Pacific region. Email: [email protected]

© The Vancouver Sun 2005

Disposition of property may result in tax hit

Friday, December 23rd, 2005

Sun

Q: Upon death, what is the maximum amount of residential property that will not have any tax implications? And will one pay probate fees for one’s RRSP balance?

Regino Romero,

Coquitlam

Chartered accountant Arthur Azana, partner with D&H Group LLP in Vancouver, answers:

When a person passes away, Canada’s tax laws dictate a deemed disposition of all property at fair market value, other than property bequeathed to a spouse or to a spousal trust. This deemed disposition may result in capital gains taxes, unless an exemption is available.

The most significant exemption available to the average taxpayer is the principal residence exemption. Fortunately, there is no maximum gain or house value which may be sheltered by the principal residence exemption. If you’re lucky enough to have both a primary residence and a vacation property, there is even some flexibility in deciding which property you wish to shelter to maximize the tax savings.

Having said that, the principal residence exemption rules are quite complex. So if you have multiple properties, or even just a single property with multiple uses, you should work with someone you trust to see how best to maximize your claim.

Although there are reduced rates for small estates, generally the probate fees in B.C. are 1.4 per cent of the gross value of the assets passing to beneficiaries by operation of a will. This includes an RRSP that collapses on death into an estate for distribution to beneficiaries.

One way to avoid probate is to designate within an RRSP a specified beneficiary who can be your spouse or a dependant child or grandchild. This way the RRSP passes outside of the will.

– – –

Q: Re: the article on being an executor (Smart Money, Dec. 16), a tax clearance certificate states that all taxes have been paid which gives the executor the go-ahead to distribute the assets. But what happens if the estate continues to earn income while you are waiting for the certificate? Now you have further tax to pay on that income. This seems to be a Catch-22 situation, so how do you get around it?

— Doug Allen,

Vancouver

Hugh McLellan, of the Vancouver law firm McLellan Herbert, answers:

This is a common problem. In many cases the executor plans on a distribution date following the last trust year-end in which a tax return is filed and then places the funds into a non-interest-bearing account, pending receipt of the clearance certificate. Another solution can be to elect to allocate the income earned after the last trust year-end in which a tax return is filed to the beneficiaries personally (but this does not work in all cases). Some executors just file another return and pay the tax after the tax clearance has been received. In this case they take the risk that the last tax return and amount paid was correct.

– – –

Q: The article on being an executor stated a tax certificate must be obtained from the Canada Revenue Agency before the distribution of an estate. Could that be misleading? From my experience this year with an estate, both the CRA and a tax specialist said a tax clearance certificate is not mandatory.

— William Murdock,

Burnaby

Hugh McLellan answers:

The Income Tax Act (section 159) provides that obtaining a tax clearance is mandatory before a distribution occurs. I do not hold myself out to be a tax expert, but I am aware of a number of situations where a clearance certificate has deliberately not been sought before a distribution was made. In all such cases the executor is still taking a risk, but often the tax advisers will recommend the executor accept the risk, given the particular circumstances of that case. Sometimes in such cases, executors will seek an indemnity from the beneficiaries to reduce their exposure to liability.

– – –

We welcome brief money questions to Michael Kane at [email protected], fax 604-605-2320, or c/o The Vancouver Sun, Suite 1, 200 Granville St., Vancouver, B.C., V6C 3N3

© The Vancouver Sun 2005

Housing in B.C. becomes more affordable

Friday, December 23rd, 2005

Michael Kane
Sun

Strong income growth means more people can afford to buy a home in British Columbia despite soaring prices, according to a report released Thursday.

But it is still as tough to put your own roof over your head as it has been in about a decade, said Derek Holt, assistant chief economist at RBC Economics.

The RBC findings support the view that the B.C. real estate market will remain robust for the next couple of years, said Cameron Muir, senior market analyst with Canada Mortgage and Housing Corp. in Vancouver.

“We have been saying for a while that an improving economy in B.C. and Greater Vancouver has led to some rising wages, and that is helping to offset some affordability concerns around rising prices.”

However, Muir expects the pace of growth in prices to slow down. “Rather than double-digit increases, we expect increases in the single digits.”

Holt said Vancouver and Victoria are holding the number one and number three spots, respectively, on housing price gains. Both cities have seen lower year-to-date construction numbers during the past year, but growth in re-sales remains among the strongest in the country.

The RBC Housing Affordability Index, which measures the proportion of pre-tax household income needed to service the costs of owning a home, improved to 51.4 per cent for a detached bungalow in B.C. That means that home ownership costs, including mortgage payments, utilities and property taxes, take up 51.4 per cent of a typical household’s monthly pre-tax income.

By contrast, a standard two-storey home still requires more than 60 per cent of pre-tax income to carry the costs of ownership. A standard townhouse went up the most, to 41.5 per cent, while a standard condo declined one-tenth of a percentage point to 28.8 per cent.

Across the country, affordability improved for B.C., Saskatchewan, Ontario and Quebec in the third quarter of 2005, and worsened modestly in Alberta, Manitoba and the Atlantic provinces.

Housing affordability across the country is threatened by rising interest rates, but a survey from the Organization for Economic Cooperation and Development notes that three-quarters of all residential mortgages in Canada are locked in at fixed rates. Only about one quarter are at variable rates and exposed to rising short-term rate pressures, a much lower proportion than in most other OECD countries.

“Furthermore, Canadian households have a healthy debts-to-assets ratio, and enjoy strong labour markets and strong wealth gains,” Holt said in a release. “These factors are driving improvements in household net worth and provide support for housing markets going forward.”

© The Vancouver Sun 2005