Pacific Metropolis

Housing Vancouver's Homeless

There was an interesing post over on PriceTags the other day, covering the City's recent efforts to expand and/or improve the quality of our social housing.

It turns out that so far in 2007, 255 units have either been upgraded or newly added to Vancouver's supply of social housing, while another 695 units are currently under construction.

More substantially, the construction of another 649 units plus 613 rooms has already been funded, and is presently under development.

The Grand Total - 1,357 housing units, and 855 rooms are on their way, so far.

To put these numbers in perspective, the average 30-storey condo building brings about 150-180 new units onto the Vancouver condo market, while larger projects such as the Woodwards building will create 736 new units (of which 200 are for social housing).

For further comparison - Concord Pacific's entire 6-building North False Creek development will add as many as 1,100 new units to the City's growing condo supply.

As PriceTags goes on to note, it's unfortunate that stories like this don't get as much press as they deserve - definitely not as much as the more controversial demonstrations by some 'homeless advocates'.

By no means is this to say that we should consider Vancouver's homeless problem to be solved. But it is worth giving credit where it's due, and to shed some light on the fact that the grown-ups in charge are actually doing a lot more for the homeless than we hear about.

As it turns out, these new social housing units can't be completed fast enough, in light of the role that local slum-lords have been playing, in adding to our housing problems.

Putting the Olympics' Pricetag in Perspective

Since there's been a lot of talk lately about Olympic construction cost-overruns, and the supposed 'waste of public funds' for what is 'nothing more than a two-week party', we thought we'd take a closer at the numbers behind the 2010 Winter Games.

Indeed, when one hears that it will cost about $1.7 billion to put on the Olympics, or that the Vancouver Convention Centre Expansion project is $235 million over-budget,  it does sound as though there's a lot of money being thrown around on the Games and related projects (ie: the Canada Line, the Sea-to-Sky Highway, etc.)

• Total cost of Olympics: $1.7 billion
• Of which, $580 million will be spent on venues
• Another $200 million is earmarked for security

Essentially, we taxpayers are on the hook for the $580 million that's been earmarked for venue construction and upgrades, although we'll get to use the facilities long after the Olympics are over (ie: the UBC rinks, the Richmond Oval, etc.)

As for the rest of the $1.7 billion budget, including security - that will be covered by the sale of broadcast rights, corporate sponsorship revenues and ticket sales. To date, VANOC has raised at least $550 million in sponsorship deals, with a few major sponsor categories still to be filled.

It's also worth considering that this isn't just a 'two-week party,' as many critics like to suggest.

The Games will showcase Vancouver to a global audience of more than 1 billion people, and for a province where tourism is a $10 billion industry, the OIympics will indeed be paying dividends for years to come.

But to see Olympics-related spending in another light, below are the five largest categories of federal government spending, according to the 2005 budget.

• Interest payments on the national debt - $34.1 billion
• Support for seniors (Old Age Security, etc.) - $27.9 billion
• Health Care transfer payments - $15.2 billion
• Employment Insurance (EI) - $14.7 billion
• Social assistance, education transfers - $7.9 billion

The federal government also provided nearly $12 billion in tax benefits and other cash payments to low- and middle-income families during 2005.

It's important to keep in mind that this is what the federal government spends each year.

So, during the 2004-2010 period (during which most of the $580 million in taxpayers' money will be spent), the federal government will also spend $204.6 billion on interest payments on the national debt, and $72 billion on social assistance programs.

Unfortunately, most people aren't given this context when the headline-grabbing numbers of Olympics spending are thrown around.

While it's good to keep the heat on VANOC, to ensure that they don't dig us into a financial hole, let's not lose our heads over what will in fact be an investment that pays for itself over many years to come.

Vancouver Condo Supply

A few weeks back, the Vancouver Housing Blogger released his annual summary of new condo construction, as a means of gauging future supply for the downtown market.

Not surprisingly, it has emerged that many buildings' completion dates are not always what the developers say they will be - of the 18 buildings (2891 units) that were supposed to be completed in 2006, only 11 (1584 units) were actually finished on time.

Although there were no cancelled projects, completions have evidently been pushed back by a few months, or more.

Looking ahead over the next 3-4 years, the VHB has come up with the following totals for new construction on the downtown peninsula:

• 2007: 27 buildings, 4221 units
• 2008: 22 buildings, 3043 units
• 2009:  6 buildings, 1462 units
• Proposed: 18 buildings, 1491+ units

This gives us a grand total of 73 new buildings and 10,217+ residential units that are likely to be built between now and 2010, with 2007 and 2008 being the busiest years for completions.

Note that for several proposed buildings, unit totals are not available. Furthermore, the VHB's numbers don't include the new development proposed for the SEFC neighbourhood, nor does he include new buildings along the Broadway corridor.

Not to steal his thunder, but it would seem that by late 2007, early 2008 the market is going to be hit with a lot of additional supply.

What's different about this economic cycle, is that by pre-selling their projects, developers have succeeded in pushing much of the risk of any late-boom oversupply onto buyers, as opposed to carrying it themselves.

Non-Residential Construction

According to a new study by the Credit Union Central of BC (link to press release here), non-residential construction spending in British Columbia will increase by an average 8.8% through 2008, up from 6.3% annual growth over the past three years.

As reported in the Province yesterday, below is a list of the top ten non-residential construction projects in the Lower Mainland, by dollar value:

• Canada Line - $1.9 billion
• YVR Airport expansion - $1.78 billion
• Twinning of the Port Mann Bridge - $1.5 billion
• Cogburn magnesium quarry and ore processing plant (Hope) - $1.3 billion (USD)
• Evergreen Line (Coquitlam) - $953 million
• South Fraser Perimeter Road (Surrey) - $800 million
• Golden Ears Bridge (Langley) - $650 million
• Vancouver Convention Centre expansion - $615 million
• Sea-to-Sky Highway upgrade - $600 million
• GVRD Capilano/Seymour Water Filtration Plant - $600 million

It's worthwhile to note that some of these projects are still in the proposal stage, while funding for many of them comes from a range of sources - local, provincial and federal governments, and in some instances, through contributions from the private sector.

BC Construction

In the third quarter of 2006, there was a record $109.9 billion in construction projects underway in BC, according to the provincial government's Ministry of Economic Development.

In total, 783 major capital projects were under contruction in the province, as compared to 650 projects worth $82 billion during the same period one year ago.

Among new starts in the Lower Mainland, the five largest projects to begin in the region were the following, by dollar value:

• Fairmont Pacific Rim Hotel - $350 million
• Azure Towers/Plaza 88, New Westminster - $300 million
• Olympics Speed Skating Oval - $178 million
• Cypress Mountain Expansion - $70 million
• The Falls Golf and Country Club, Chilliwak - $70 million

The BC government's quarterly report provides a comprehensive list of construction projects throughout the province, including lists of recently proposed and completed projects.

You can find a copy of the November 17th press release on the Ministry's website here, and a copy of the September 2006 report here (link to pdf).

Vancouver Developments

As most people are well aware, modern development in Vancouver has been laid out and planned according to major neighbourhood projects. Here's how they compare by relative size:

• False Creek Flats: 308 acres
• North False Creek/Concord Pacific site: 204 acres
• Downtown South*: 128 acres
• Gastown Waterfront: 94 acres
• Southeast False Creek: 80 acres
• Coal Harbour/Bayshore Gardens: 64 acres
• Citygate: 9 acres

What's interesting to note is that three of these seven neighbourhoods are still to be developed, comprising 54% of the total 887 acres: False Creek Flats, Gastown Waterfront, and Southeast False Creek. The Downtown South area is still under development.

*The Downtown South area is north of Pacific Street, south of Robson, and east of the West End. It includes Yaletown.

New Condo Construction

The Vancouver Housing Blogger has done a superb job of counting the number of new condos that will be coming onto the downtown Vancouver market over the next five years.

In total, the VHB counts 62 buildings and 10,577 condo units that are either currently under construction or proposed for future development. Broken down by year, new developments are slated to come on the market as follows:

• 2005: 1 building, 180 units
• 2006: 18 buildings, 2915 units
• 2007: 29 buildings, 4669 units
• 2008: 5 buildings, 1094 units
• 2009: 3 buildings, 897 units
• Proposed: 6 buildings, 1002 units

An extensive chart can be found here, which includes links to developers' websites, downtown maps, and further building-specific information.

Downtown Vancouver Office Vacancy Rates 2000-2006

Vancouver's market for office space has recently been described as being in a recovery, after downtown vacancy rates have fallen from a peak of 13.5% in 2003 to 8.6% as of mid-2005.

Historical data from Avison Young (link to pdf) show that overall downtown office vacancy rates (across all classes) were between 4% and 7% during much of the late 1990's, but then climbed sharply to their peak of 13.5% in 2003. Downtown Vancouver office vacancy rates for 2000 to mid-2005 are below:

• 2000: 4.1%
• 2001: 6.9%
• 2002: 13.2%
• 2003: 13.5%
• 2004: 10.3%
• 2005: 8.6%

Looking ahead to next year, Avison Young goes on to estimate that vacancy rates will fall to below 6% by the middle of 2006. In total, downtown Vancouver has 19.2 million square feet of rentable office space, of which 1.6 million square feet are available as of mid-2005.

In its most recent forecast update, CB Richard Ellis noted that Vancouver's shortage of office space remains a "critical problem" for the longer term, especially as groups related to the 2010 Olympics add to the demand for space.

Vancouver Employment by Industry

Since the type of work that its citizens engage in plays a role in defining a city's character, it's interesting to see that as of 2004, of the 1.14 million jobs in the Vancouver regional area 81.2%, or 932,600, of them were in the services sector, while just 207,800 were in the goods producing sector.

Using data from Statistics Canada, the GVRD reports that the top five industries (by number of employees) within the services sector are as follows:

• Trade (retail and wholesale): 170,400
• Health Care and Social Assistance: 116,300
• Professional Services: 104,500
• Finance, Insurance, Real Estate: 90,300
• Accomodation and Food Services: 89,900

Of the 170,400 jobs in the trade industry, 128,000 are in retail. Legal, architectural, and computer design jobs are included within the professional services segment. Outside of the top five industries, 81,300 people are employed in the educational services industry, and 65,600 are employed in the 'information, culture and recreation' industry.

Statistics Canada counts Vancouver's 79,100 construction jobs as part of the goods producing sector. Within this sector, construction is second to the manufacturing industry, which provides 107,500 jobs. The agriculture industry employs 11,500 people in the Vancouver area, while the forestry, fishing, mining, oil & gas industry employs just 4,300 people within the "goods producing" category (presumably several more people are employed in related services).

Average Home Prices in Vancouver: 2000-2005

According to the Canadian Real Estate Association, the average price of a home in the Greater Vancouver region has reached $419,718 as of May 2005, a 12.4% increase over May 2004.

The CMHC has gone on to report (using CREA data - link to pdf) that the average price of a home in Vancouver has already climbed from just under $296,000 in 2000 to $373,877 in 2004.

• 2000: $295,978
• 2001: $285,910
• 2002: $301,473
• 2003: $329,447
• 2004: $373,877

Following Vancouver, Victoria had the second highest average home prices in Canada this May, at $373,685. Toronto was third at $346,474, while the average price of a home in Calgary was $259,903, according to CREA figures.

By comparison, during the first quarter of 2005 the median price of a home in San Francisco was $689,200 (USD). In Seattle, it was $321,100 (USD), and in Los Angeles, it was $474,700 (USD).  (Source: NAR - link to pdf).

Note - median prices are lower than the average; US prices are a rough comparison.