Michael Smyth
Province

Thursday’s tax break for new-homebuyers shows there’s an old saying that’s highly applicable in B.C. politics these days: the squeaky wheel gets the grease.

Or, in this case, a reduction in your HST bill.

The Gordon Campbell government’s move to raise its HST rebate threshold on new homes to $525,000 follows a masterful behind-the-scenes lobbying effort — and a high-decibel public snit-fit — by the real-estate industry.

The sector, normally very supportive of Campbell’s Liberals, screamed long and loud about an HST sneak attack that was going to hit developers right where it hurts the most: in their profit margins.

Don’t forget the Greater Vancouver Homebuilders Association was one of the groups told directly in writing by the Liberals that the HST was a non-starter before the May election — only to be double-crossed once the Liberals got back into power.

The gloves were off. The industry went public with aggressive and damaging attacks on the government, including studies showing how the new tax would grossly inflate the price of new homes.

Behind the scenes, I’m told, well-connected real-estate players let their Liberal “friends” know exactly how disappointed they were — especially after they’d been so generous to the Libs in the past. Property developers donated nearly $700,000 to the Liberals last year — one of the party’s biggest sources of corporate loot.

All of which goes to show that if you make enough noise and twist enough arms, the government will take notice.

But it also shows how poorly the Liberals planned the rollout of their HST tax grab. The government originally set the rebate threshold at just $400,000 — arguing that was the average price of a new home in B.C. It was also the same HST rebate threshold introduced in Ontario.

But Ontario and the Lower Mainland are two very different real-estate markets. Just try to find a nice new house in Metro Vancouver for under $400,000!

But while the Liberals have placated one noisy and angry group, there are plenty more with their hands out looking for special HST deals of their own.

The restaurant sector is furious and promising to tighten the screws on the government. Ditto for tourism, mutual-fund managers, school districts, universities and on and on.

But with the government so broke — and with so little wriggle room in the straitjacket HST deal they signed with Ottawa — I suspect only the most vocal and well-connected groups will get the government’s attention.

So will you get an HST break on fast food, coffee and your morning newspaper like all those Joe Lunch Buckets did in Ontario? Don’t bet your TimBits on it.

© Copyright (c) The Province

 

Stephanie Armour
USA Today

A second wave of foreclosures is poised to hit the market, potentially undermining housing recovery efforts as more homes add to the glut of inventory and drive down prices.

These homes largely represent loans that are delinquent but have not yet resulted in foreclosure sales.

About 7 million properties are destined to go into foreclosure, according to a September study by Amherst Securities Group, compared with 1.27 million properties in early 2005.

“There’s a huge supply out there,” says Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. “The foreclosure process can take a long time. When it comes to (the housing recovery), we’re not home free.”

There is often a long lag time between a borrower going delinquent and the bank taking the home. Here’s why:

•Moratoriums. New state laws imposing short-term moratoriums have slowed the timeline from delinquency to foreclosure.

•Overwhelmed lenders. Banks dealing with a surge in refinancing, mortgage modifications and defaults are overwhelmed with demand, so it can take longer to initiate a foreclosure sale.

•Modifications. Many loans now are first examined to see if they might qualify for a modification. This drags out the timeline and means it is taking longer for homes to go into foreclosure.

•Asset write-downs. Banks may in part be waiting to liquidate homes through foreclosure because they don’t want to write down the value of the asset. Lenders can keep homes on the books at a higher value until they are sold at foreclosure.

“There is a lot of foreclosed property in the pipeline that will hit the market and depress prices,” says Mark Zandi at Moody’s Economy.com. Foreclosed homes often sell at prices below those on the market and can therefore drag down overall home values.

The shadow market of foreclosed homes eclipses the number of homes lost this year. Zandi anticipates there will be about 2.4 million homes lost next year through foreclosure, short sales and deeds in lieu of foreclosure. That compares with 2 million homes lost in 2009.

Jumana Bauwens, a spokeswoman at Bank of America, says the bank is projecting an increase in foreclosures in part because customers will not be qualifying for existing loan-modification programs.

 

Move would come at the expense of open public-space target of 2.75 acres per 1,000 people set in 1980s. In this plan, it drops to 1.8 acres

Kelly Sinoski
Sun

Vancouver is opting for denser communities at the expense of open public spaces in its bid to become the world’s greenest city by 2020.

The latest plan — endorsed by city council this week — to transform the former Expo lands in northeast False Creek into a neighbourhood for 7,000 people sets aside just 14 acres of the 72-acre parcel for public spaces and amenities.

This translates to about 1.8 acres per every 1,000 residents, well below a “desired target” of 2.75 acres set by the Vancouver park board in the 1980s. Planners had based the target on an amount historically provided to residents in new developments.

But as the city grows, it continues to struggle to provide affordable housing.

The push for denser downtown neighbourhoods is an experiment in urban living that counts on people accepting fewer public spaces in exchange for other amenities and a greener lifestyle.

The False Creek project is the latest example in a series of developments, including Coal Harbour, the East Fraser Lands and southeast False Creek, that have fallen below the park board standards for open space.

For North False Creek to meet the target, the city would have to add another 19.8 acres for public space.

“When you actually look at it, we’ve never achieved the standard,” Vancouver senior planner Michael Gordon said. “The denser you get, the more challenging it is.”

A city report co-written by Gordon says that the “new civic plaza and hard surface recreational area under the viaduct do not deliver the typical neighbourhood park” but are considered amenities.

The report also states there’s a wide array of open spaces and parks nearby.

Mayor Gregor Robertson argues that while most people would like to see more open spaces, the city’s hands are tied because the land base downtown is so limited. But he noted that about 80 per cent of Vancouverites live 500 metres, or five minutes, away from a public park or green space.

“Dense is critical for being green in an urban setting,” Robertson said. “It’s great to have bigger park spaces and we have a couple in Stanley Park and Pacific Spirit Park and the beaches, but downtown we have to shoot for greener objectives that are more realistic.”

That includes more creative use of public spaces and using money from developers to ensure green spaces are provided in the city, even if there is no room in the specific neighbourhood.

He noted that besides being sustainable, the development would create hundreds of jobs in the region.

“It’s a matter of having people living close to their jobs and there’s a number of people wanting to live in Vancouver,” Gordon said.

The northeast False Creek development is expected to be similar to Georgia Street west of Bute toward Coal Harbour, Gordon said.

City Coun. Suzanne Anton argued that while densification will see more people choosing transit and consuming less, it shouldn’t mean they have fewer public spaces or amenities.

“There’s going to be a lot of people living in the area; there has to be a place for kids to take swimming lessons or skating lessons,” Anton said. “I’m worried about the lack of public facilities there.”

But Maureen Enser, of the Urban Development Institute, agreed that northeast False Creek is the ideal location for higher density because it’s within walking distance of Stanley Park and the seawall, and is close to transit.

“From a sustainability perspective, density should be in an area like this because you have all the amenities close by already,” Enser said. “The need to increase the [open space] numbers per person is not as dramatic as other areas.”

However, park board commissioner Ian Robertson says the city and the Vision majority on council are catering to the demands of developers and adding to a continuing decline of park space throughout Vancouver.

Ian Robertson noted that Concord Pacific’s original plan for the area in the 1990s would have met park board standards, but that city council has continued to add more density in the development.

“We’re constantly looking at all quadrants and regions in the city where we’re park-deficient,” he said. “Certainly this is good for the developer, but not necessarily for residents of this neighbourhood.”

© Copyright (c) The Vancouver Sun

Most of the action was in Vancouver and other South Coast areas

Derrick Penner
Sun

British Columbians racked up the highest number of home sales for the month of October since 2003, the B.C. Real Estate Association reported Tuesday, with Metro Vancouver, the Fraser Valley and Victoria the hottest markets.

Realtors cleared 8,624 sales through the Multiple Listing Service in October, up 115 per cent from the same month a year ago, but 44 per cent of all those sales were in the Real Estate Board of Greater Vancouver’s territory.

Those 3,767 sales in what is primarily Metro Vancouver, represented a 171-per-cent increase from October 2008.

It was a similar situation in the Fraser Valley, where 1,583 sales in October represented a 120-per-cent increase from the same month a year ago.

In Victoria, the 691 sales recorded in October was a 135-per-cent advance from October 2008, and the board that covers Kelowna saw 597 sales, or a 109-per-cent increase.

“Certainly the recession is impacting the resource-oriented communities much harder than the large urban centres that have a much larger service component [to their economies],” Cameron Muir, the B.C. Real Estate Association’s chief economist said in an interview.

However, Muir said many of B.C.’s interior markets rely heavily on the activity of recreational-property purchasers, most of whom stayed out of the market during last winter’s collapse in sales and have yet to return.

Alluding to his forecast released last week, and the estimates of other forecasters, Muir said he expects that South Coast markets will not maintain the pace of sales they’ve seen over the past several months.

Sales in those markets, Metro Vancouver, the Fraser Valley and Victoria, are largely driven by the “pent-up” demand of buyers who sat out last fall and are now being drawn in by current low interest rates.

Muir said the demand that built up is quickly being satisfied, and as prices in the Lower Mainland and Victoria rise, that will help to squeeze more buyers out of the market later in 2010 and act to slow sales.

On a provincial basis, the average MLS home price was $493,328 in October, up 17 per cent from the same month a year ago.

In Metro Vancouver, the average MLS home price was up 15 per cent to $638,948 compared with October 2008. In the Fraser Valley average prices are up almost eight per cent to $445,637 compared with the same month a year ago.

“If you look at sales-to-active-listing ratios we see in the Fraser Valley, Greater Vancouver and Victoria, they’re all over 20 per cent,” Muir said. That is typically “sellers’-market” territory, “which indicates some upward pressure on prices.”

Other markets, however, are below that threshold and in “more balanced” conditions with more stable pricing.

In Kamloops, for instance, October’s average home price of $297,673 was still almost three per cent below the average in the same month a year ago.

“That pent-up demand [in the Lower Mainland] is finite, meaning it is likely to be expended in the coming months,” Muir said. “And home sales, on the coast anyway, will drift down to levels more representative of the state of our economy.”

© Copyright (c) The Vancouver Sun

City green-lights plan to turn final parcel into high-density, mixed-use neighbourhood

Tracy Sherlock and Doug Ward
Sun

City council unanimously endorsed a plan Tuesday night to create a high-density, mixed-use neighbourhood of about 7,000 people around BC Place Stadium and GM Place on the final undeveloped section of the former Expo lands.

The controversial concept includes a new civic plaza plus four million square feet of residential space and 1.8 million square feet of office space.

What it doesn’t include is the 2.75 acres of park space per 1,000 people that city council holds as a goal.

Coun. Suzanne Anton, who unsuccessfully pushed for changes to the plan to include more park space, said she thinks residents will be shortchanged if the developers don’t provide the expected amenities.

“I am an advocate of density,” Anton told The Vancouver Sun. “I think it makes a city more interesting, I think it makes it more livable, and most important, I think it’s better for the environment.

“However, at the same time, if you’re going to ask people to live in high density, you must, as a city, provide the right amenities.”

If the park ratio of 2.75 acres per 1,000 residents was to be met, it would require an additional 19.8 acres of park land for the 7,200 new residents, according to the staff report.

As proposed, densities in northeast False Creek will be among the highest in the downtown peninsula, the report said, noting the high-density push is being driven by the city’s goal of becoming the greenest city in the world by 2020.

Coun. Geoff Meggs stressed that the plan will take years to be implemented.

“This just the first stage of what is going to be a long discussion,” Meggs said. “The onus is now on the developers to bring forward proposals that meet the community test for amenities.”

PavCo, the provincial arm that manages BC Place, wants to cover much of the cost of the stadium’s new retractable roof through the development around the stadium.

“What the community is getting for that new density is the roof,” Meggs said.

The new neighbourhood, according to the staff report, would include rental and market housing — and would “appeal to those who want to live in a busy, vibrant area and who have a tolerance for noise, crowds and activities.”

Patsy McMillan, who lives in Citygate near Science World, said she isn’t happy with city council’s decision.

“Everybody’s very disappointed. There was nothing in [the motion] for the larger park or the community,” McMillan said.

“You’re going to get more of a transient, single population, which is okay, except 7,000 of them is not exactly movement towards a stable community.”

“We’re not in favour of that much density without the appropriate amenities and park space,” McMillan said.

The city’s plan for the new northeast False Creek isn’t exclusively for young singles or childless couples — it calls for housing suitable for families with children, including units sheltered from event traffic and noise.

The report also calls for child care centres. A new elementary school in International Village was also discussed by council, but there are no plans now for a new secondary school in the downtown core.

There is no other comparable development in any North American city.

Some cities have baseball parks or hockey rinks with one or two residential towers located nearby or integrated into the sports venue. No other city has multiple stadiums surrounded by a cluster of towers.

The strategy calls for building design requirements to reduce the impact of noise from the two stadiums.

The city will be reviewing height restrictions and view corridors in January. Buildings in Citygate near the proposed development are between 22 and 28 storeys high.

The five owners of property in the area are Concord Pacific, BC PavCo, Canadian Metropolitan Properties, Aquilini Developments and Central Heat Distribution.

The report, Northeast False Creek Directions for the Future, is written by planners Michael Gordon and Paula Huber.

© Copyright (c) The Vancouver Sun

Frank Luba
Province

There will be more fees and less services in Vancouver if council goes along with the recommendations that city manager Penny Ballem presented Tuesday in her update on the 2010 budget.

Despite the cuts, there’s a shortfall of $11 million and because the city can’t run a deficit, property taxes will have to go up two per cent overall to make up the difference.

Council will get a formal report Dec. 1 and hold a public hearing at a date yet to be determined. The final decision on how much will be cut — or the unlikely option of taxes higher than two per cent — will be made Dec. 15. “We’re in a very difficult economic situation,” Ballem told council. “Everyone is facing these problems.”

Despite signs the economy is recovering, the future will see continuing cuts in Vancouver. “This continues through 2011,” said Ballem.

Mayor Gregor Robertson conceded “none of the cuts is pleasant.”

“I’m satisfied at this stage that staff have done an exhaustive job to spread the load to get to a very modest tax increase,” he said.

Eight public meetings have been held on the budget and a web survey on the city home page will continue through to Friday.

The Vancouver parks board has already voted to increase fees at community centres and are considering closing the Stanley Park children’s farmyard and the 40-year-old Bloedel Conservatory.

Other possible cost-saving moves include:

– The Vancouver Police Department may not fill 35 vacancies.

– Riley Park Library may be closed sooner than planned because it’s being replaced by a new facility.

– The Heritage Railway by Granville Island likely won’t run and the city won’t put up any street banners unless they’re provided by somebody else.

– And there will also be job losses — 158 full-time equivalent positions.

© Copyright (c) The Province