Vancouver council approves duplexes in most neighbourhoods

Decision came despite opposition from some residents

City council voted to allow duplexes in most single-family neighbourhoods in Vancouver in a 7-4 decision after a two-day contentious public hearing that ended Sept. 19.

NPA councillors George Affleck, Elizabeth Ball and Melissa De Genova, as well as the Green's Adriane Carr, voted against the proposal, which was considered one of the "quick start" actions in the city's new Making Room program that aims to increase housing diversity in Vancouver.

Council's decision means duplexes will be allowed with or without small lock-off suites. It's an option for new construction only, and it doesn't include an increase in floor area over what's currently permitted. Laneway houses also won't be allowed in conjunction with duplexes. City staff say they don't anticipate land value to escalate thanks to those restrictions.

The rationale for allowing duplexes wasn't based on affordability, although they will be cheaper than single-family homes. It's meant to increase housing options.

Before voting in favour of the proposal, Vision Vancouver mayor Gregor Robertson said the city needs more options between single-family and higher-density housing forms. He pointed out laneway homes and secondary suites were also controversial, but allowing them has worked out well.

"The big challenge that we have as a council is, in these neighbourhoods, we need to make decisions that are not just for the people who live in the neighbourhoods right now, but as Coun. [Raymond] Louie said, for the people who want to live there and who, hopefully, will be able to live there for many years to come," he said.

Coun. Andrea Reimer said despite complaints there wasn't enough consultation, a great deal took place through the Housing Vancouver strategy, which led to the Making Room program.

Reimer said the duplex proposal isn't a huge step, but it's a matter of justice to give less affluent residents hope that council will use "tiny tools" such as zoning to try and help meet their needs.

Coun. Raymond Louie said "if this is not gentle density, I don't know what this is because there is no extra density."

But De Genova argued consultation wasn't robust enough before she voted against the proposal.

"Zoning needs to be led by Vancouver's 22 neighbourhoods," she said.

Carr said she didn't see any evidence that the zoning change was important or needed.

"The real point is that we need to build affordable homes through different kinds of housing types than the ones that are aimed [at] the upper end of the income scale," she said.

Affleck took aim at Vision Vancouver in his remarks.

"After 10 years of Vision Vancouver leadership, this council has become renowned for lack of public consultation," he said. "If you tear this city apart to achieve these goals, you've not achieved much at all."

Ball said the sense of betrayal some residents feel won't be a good legacy for council, while Hector Bremner, who supported the proposal, questioned how duplexes could be an affront to democracy.

In comments before the vote, senior planner Paula Huber said staff anticipate there will be a shift away from building single-family dwellings to building duplexes. Currently, the city gets about 800 applications for new single-family homes a year. She expects half of that figure might flip to duplexes so there's the potential to produce 800 duplex units.

She estimated new East Side duplexes go for about $1.2 million, while West Side ones go for upwards of $2.5 million.

Duplexes will likely appeal to households earning $150,000 or more, according to Huber, which accounts for about 15.5 per cent of the city's households.

There are currently 283,000 dwelling units in the city, she added, 4,500 of which are duplexes, which translates to 1.6 per cent of the housing stock.

During the first day of the public hearing on Sept. 18, there was mixed reaction about the proposal, while on the second day the bulk of speakers raised objections, including Judy Graves, the city's former advocate for the homeless. Graves said she spent the past two decades moving First Nation families, immigrants, single parents and working class seniors, as well as other individuals, into suites across the city, which she now fears will be torn down in favour of duplexes.

She called for amendments to the proposal that would guarantee that displaced families would be relocated into suites in the same school district and that displaced seniors would also be relocated into their same neighbourhoods because elderly people aren't comfortable with change.

Other critics, meanwhile, outlined many of the same complaints lodged on the first day of the hearing, including the fact that councillors, most of whom aren't running for re-election, were making a decision that they won't be accountable for, that there wasn't nearly enough consultation, that many residents likely didn't even know the proposal was up for consideration since notices weren't sent to individual homes, that character homes will be knocked down, and that it will lead to land speculation by developers, worsening the affordability crisis.

Colleen Hardwick, an NPA candidate in the upcoming election, called the process fundamentally flawed.

"That you would even consider sweeping changes without due process is unconscionable. You need to listen to the people, and you have not."

Hardwick argued if council passed the rezoning it would be like "putting out a fire with gasoline. It will be a feeding frenzy."

Janice Wong said the changes contravened community plans, which undermines residents' faith in the process.

"The public must have meaningful input in the planning of their neighbourhoods," she said.

The city says its Housing Vancouver strategy, which was adopted in 2017, included consultation with more than 10,000 residents over 18 months. That process identified a desire for "missing middle" housing options across Vancouver, which led to the Making Room program, which was adopted in June. The program included the duplex proposal as a "quick start" action.

Four information sessions were held this month about the proposal.

The meetings were advertised in the newspaper, at community centres and libraries, and through a social media campaign. Email notices were also sent to neighbourhood organizations and individuals who had signed up for notifications through the Housing Vancouver process.

Individual notices were not sent to homes. The Vancouver Charter only requires the city to notify the public about rezoning proposals in the newspaper and at city hall.

For site-specific rezonings, the city notifies residents within a certain proximity directly, which goes beyond what's required by the Vancouver Charter. Residents are typically not directly notified for citywide rezoning proposals. That was also the case when laneway housing was introduced in single-family districts in 2009 and when additional density was added to single-family zones to allow secondary suites that same year.

Representatives from Abundant Housing Vancouver, who spoke in favour of the plan at the public hearing, were happy the duplex proposal passed but stressed it was a very small step.

"With all the work that the planning department put in, I would have been very disappointed if it didn't pass," Owen Brady told the Courier. "We've been saying it's a step in the right direction, but it's a very small step. I don't think any of the disaster scenarios are going to come true."

Stuart Smith agreed.

"It's just such a small thing that we are up in arms over the idea of simply allowing two families to share the same square footage that we currently require [single-family] homes to consume. The drama over this is crazy... This isn't any extra density and it was called an atomic bomb. What would you call it if the proposal was for a four-storey apartment? What would that be? Would that be the Death Star?" he said.

"So yes, it's a positive step. It's a positive step simply because it gives more options, more ways to live in Vancouver. Some people want duplexes, some people don't. That's fine. Some people want single-family homes, that's fine. You don't need to tell people how to live. It's one extra choice, so why not? There was a councillor, Geoff Meggs, who once said tiny homes are not the solution. And this is true, tiny homes are not the solution, but homes like that, and laneways, and duplexes, work for some people. We do not need to look for a housing typology that works for every single person in the population. We need to allow lots of different housing types that work for lots of different people."

 

Naoibh O’Connor Vancouver Courier
September 20, 2018
Westerninvestor.com

B.C.'s capital region sees rental housing construction boom, especially Langford

More than 900 housing units started this year in Langford, triple the amount of the next closest municipality

DB Services Victoria is so busy building rental projects in Langford that it turns away new projects every month, says the company’s director of development.

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Workers pour footings for the Arc, a 93-unit rental building at the corner of Bryn Maur Road and Hockley Avenue. August 2018 — ADRIAN LAM

The Langford-based firm is one of the developers supporting the West Shore’s building boom, where rental apartments, condominiums and single-family houses are under construction.

In the first seven months of this year, 911 housing units were started in Langford, far outpacing other Greater Victoria municipalities. Saanich followed with a distant 284 housing-unit starts.

So far this year, 2,185 homes have been started in the capital region, up from 1,913 for the same seven months in 2017, according to Canada Mortgage and Housing Corp.’s latest report.

And every CMHC report shows strong construction in the West Shore, where the population is growing and where councils say they are committed to an efficient approval system.

“We have been turning away work for about two years here. We have five years worth of work lined up on the books right now. It’s all rental stock,” said Matthew McKay, partner with his mother Margaret McKay and with Gary Lahnsteiner, in DB Services.

DB Services is building three rental projects in Langford. It builds and owns about one-third of its projects, with the rest constructed for clients. The Arc, at 2849 Bryn Maur Rd., is being built for a client. The six-storey, wood-frame building will have 93 units. “We just poured our first footing there today,” McKay said Thursday.

The Arc is next to Hockley Corners, 765 Hockley Ave., which will have 63 units and be owned by DB Services. It is the first residential building on Vancouver Island to be built with cross-laminated timber, although some local institutional buildings have used that product, he said. It replaces a traditional floor system.

“We erected today pretty much our whole floor system,” at Hockley Corners, McKay said. That work would normally take five days and require more workers.

Prefabricated cross-laminated timber floor panels, supported on glue-laminated timber and parallel strand lumber columns, were used in the University of B.C.’s 18-storey Brock Commons student residence, which opened in 2016.

DB Services’ third under-construction project is the 11-storey, steel-and-concrete Danbrook One, which will have 90 units in the core of Langford.

The company only builds rental. That type of housing is in demand in the growing West Shore and financing is easier to obtain with rental developments, because it is not conditional on presales, as with condominiums, McKay said.

In June, the company finished the 63-unit Peatt Commons Phase One, at 2854 Peatt Rd. “Before we even turned it over to the client it was fully rented,” he said.

Despite the year-to-date climb in housing starts, the 417 starts in July was lower than the 695 in the same month last year, CMHC said.

Month-to-month housing starts numbers can vary significantly depending on timing of projects. Longer-term figures reveal a more accurate picture of the state of housing construction.

The number of Greater Victoria homes under construction — some projects can take two years to complete — stood at 4,731 as of July, CMHC said.

As well, the value of building permits, which signal builders’ plans, has climbed.

The value of building permits in the region was $160.4 million in June, up by 29.5 per cent from June 2017 when the value was $123.8 million, Statistics Canada said in its monthly report.

June of this year was up by 9.2 per cent from May, when permit values reached $146.9 million.

“It is definitely the residential market that is driving some of our bigger numbers with the permit data. It’s continuing to demonstrate that it is a strong market,” said Rory Kulmala, chief executive of the Vancouver Island Construction Association.

Greater Victoria’s low rental vacancy rate is one factor driving market demand for more housing, he said. “I think we are seeing that in a lot of communities on Vancouver Island.”

Carla Wilson Times Colonist, August 10, 2018, Westerninvestor.com

Commercial sales volumes down – except in multi-family market

Multi-family assets continue to be crowd favourite among investors, while sales in office and industrial properties slow due to limited supply

 

Sales volumes in nearly every commercial real estate sectors have declined in the second quarter of 2018 – though not for a lack of demand, according to a new report. 

The growing disconnect between supply and demand in Canadian real estate has lead to a decrease in sales velocity and an acceleration of lease rates, according to research by the Morguard Corporation

"A drop in transaction volume in the second quarter is very much a function of low product availability rather than a drop in demand," said Keith Reading, director of research at Morguard. "With quality office and industrial space at a premium, apartments are a crowd favourite as investors search for yield."

Office sales have dropped nearly 50 per cent across Canada year-over-year, while industrial volume has plunged 17.8 per cent. Meanwhile, multi-family sales increased 17.5 per cent.

Average sale prices for multi-family properties also increased year-over-year, from $8.5 million in the first half of 2017 to $13 million during the same period of 2018. 

Morguard expects investor sentiment in residential rental properties to remain strong into next term. 

 


 

 Tanya Commisso | Western Investor | July 18, 2018

Zoning could be key to funding downtown relief line

Toronto’s downtown relief subway line—should the political will needed to build it ever materialize—could partly fund itself, to say nothing of the skyrocketing valuations that will result.

According to Andy Manahan, executive director of the Residential and Civil Construction Alliance of Ontario, the municipal government can use zoning as a bargaining chip with developers to pay for the proposed network expansion by negotiating additional storeys.

 

“If a building is only zoned for five storeys but the developer is given 20 storeys, that extra 15 storeys is worth a lot of money and developers would be willing to pay it,”said Manahan. “If we build a relief line, we have to place more density at the station so that there’s more land value capture. If you do that link between land use and transit, you can do some creative financing in the long-run as well, and get some more developers on board.”

Many existing TTC subway stations were created as architectural monuments rather than into the sides of buildings, which is what would adequately succour density.  And if the mere rumour of below-grade infrastructure is enough to cause property values to rise, imagine what a unit 25 storeys above a subway platform would be worth.

“Typically, once an announcement is made about where the line will go, property values do increase, so the trick is how we ensure we can capture some of that increase in value,” continued Manahan.

However, more is at stake than optimizing real estate values. Toronto’s current subway network is overcapacity and its platforms dangerously brim with people. Given how many skyscrapers will continue sprouting downtown, not to mention the already low office vacancy rate, Manahan warns that the network’s capacity troubles are worsening.

“We have a lot of growth in the downtown core, and it’s not just residential,” he said. “There’s about 5.7mln square feet that will be added to the downtown office segment by 2020.”

Davelle Morrison of Bosley Real Estate echoed Manahan: “Right now, without further additional building of office space downtown, we already know we need the relief line. If you add more people working downtown and more people living downtown, because immigration numbers are high and more and more people are moving to Toronto in particular, it’s a no-brainer to me about why you would need the downtown relief line. It’s already needed, but 10, 15 years from now, it’s going to be needed even more.”

The RCCAO has been an outspoken proponent of the downtown relief line, taking out full-page newspaper ads and even launching a Twitter campaign called #GimmeRelief.

The earliest the downtown relief line could complete is 2031, however, there’s no official plan to build it. In fact, it’s as much of a pipe dream today as it was a decade ago—and making matters more frustrating for commuters, the Scarborough subway line has been given priority.

Backwards thinking, says Manahan, because sequencing is important and dictates building the network outward rather than inward, where support infrastructure is presently non-existent.

But he takes solace in Ontario’s political parties acknowledgment that the downtown relief line needs to be built.

“Over the last 50 years, the relief line is talked about occasionally and never gets built. It’s an important project and recognized by all four provincial parties. After June 7, no matter which party is in power, they will have to continue.”

by Neil Sharma30 May 2018 | Canadian RealEstate Wealth

Chinese e-commerce giant seeks real estate for Vancouver office

Alibaba is seeking to lease real estate for a Vancouver office that within “two to three years” will employ at least 30 people, Alibaba Group North America general manager Steve Wang told Business in Vancouver May 11 at a forum that the Chinese e-commerce company hosted at the Hotel Vancouver.

“We do not have a specific announcement about an office opening today,” he said. “Today, we are focused on educating on Alibaba’s solutions to help Canadian businesses access the China market. We are committed to Canada and Vancouver for the long term and intend to expand our operations here.”

Wang, who lives in Vancouver and travels extensively, oversees hundreds of Alibaba workers, who now are based in six North American locations: Seattle, San Francisco, Los Angeles, San Mateo, Washington D.C., and New York City.

Alibaba has yet to base any staff in Canada and no Canadian office outside Vancouver is currently being contemplated, although small teams may be created across Canada, said Candice Huang, who is Alibaba’s senior manager of international corporate affairs.

The move to make Vancouver the first city in Canada to get an office, instead of Toronto, is a surprise given that Alibaba's first Gateway conference was in Toronto, and the company had seemed to be making Toronto a first priority.

Huang said that staff in the future Vancouver office will likely work to help B.C. and other Canadian entrepreneurs understand and access Alibaba’s platforms. Other employees are likely to work to link tourism-related businesses with  Alibaba’s online travel platform Fliggy, which facilitates travel mostly for Chinese residents.

Canadian tourism-related businesses, such as Air Canada or the Capilano Suspension Bridge, would be able to create their own online stores on Fliggy, Huang explained.

B.C. businesses have long been selling products on Alibaba, and the number of those businesses has risen considerably since September 2016, when Prime Minister Justin Trudeau went to China, met Alibaba CEO Jack Ma, and announced an agreement between the Canadian government and Alibaba.

That agreement aimed to make it easier for B.C. companies to reach what is now 500 million or more consumers who use Alibaba platforms.

The Canadian government then set up an online store on Alibaba’s Tmall platform.

 

Lululemon Athletica Inc.Arc’Teryx and Norco Bicycles are among the other B.C. companies selling products on Alibaba platforms.

By 2022, the combined population of Canada and the U.S. is expected to reach 378 million, while China’s middle-class population is projected to exceed 600 million people.

Cross-border retail e-commerce spending in China is expected to grow six-fold between 2015 and 2020, to US$245 billion, according to AliResearch, Accenture.

The largest import categories for products sold on Alibaba are beauty, fashion, healthcare, home supplies, baby supplies and snacks and beverages.

Selling on Alibaba, however, can be complicated.

The company operates various platforms, including Taobao, Alibaba.com and Tmall sites.

 

Chinese entrepreneurs pay to create online Tmall stores and then set up web pages to sell their products.

Canada’s Canadian Pavilion site is an example of one of those stores. When buyers click to buy items, they get redirected to one of the Canadian stores operating on Tmall.

SunRype’s Chinese partner, for example, operates a Just Order store, but the Kelowna-based company also resells SunRype products to owners of other stores so they can sell the goods.

Glen Korstrom Business in Vancouver

May 14, 2018

Unlikely Canadian city attracting foreign buyers

Ottawa is experiencing a rental shortage, and savvy foreign investors are swooping in.

“There’s a shortage of inventory in the rental market here, so there’s a need for rental properties,” said Chris Lacharity, a sales representative with Marilyn Wilson Dream Properties, which deals in the luxury market. “An astute buyer knows that. There are a lot of foreign buyers who buy for personal use, but there’s a lot of investment, too.”

 

The nation’s capital is situated between Toronto and Montreal—two cities with significant foreign buyer activity—so the presence of non-resident investors shouldn’t come as much of a surprise.

“Ottawa is growing faster than it ever has, but there’s still growth potential,” said Lacharity. “It has a ways to go, in terms of growth, but it’s also a capital city, a government city. It has rivers and lakes, and it’s aesthetically pleasing. If you have a family, it’s safe and hasn’t experienced all the issues that come with large metropolises. It’s also close to Montreal and Toronto.”

Montreal has arguably the hottest real estate market in Canada right now. Government initiatives brought in to cool skyrocketing housing prices in Vancouver and Toronto are believed to be responsible for that. But Ottawa is another city in the midst of a renaissance. In addition to an LRT project, it has a thriving tech sector, robust student population, and well-paying government jobs.

It is also very stable—and given investors’ distaste for volatility, that’s perfect.

“Real estate doesn’t just shoot up, it conservatively rises here 3-5% on average,” said Lacharity, adding foreign buyers park money in the city’s real estate. “It’s a pretty safe bet for that.”

Bernadette Deschenes of Your Choice Realty notes overheating in Toronto and Vancouver are catalysts for foreign buyer activity in Canada’s capital city. But the city’s two universities have also impelled foreign buyers into action.

“They buy more student residences, like condos or townhomes,” said Deschenes. “Most of our foreign buyers are buying for their children who are attending university. We have a huge student population in this city. There’s a fair bit of older brownstone that’s near Ottawa U in the Sandy Hill region.”

by Neil Sharma09 May 2018 | www.canadianrealestatemagazine.ca

Vancouver usurped as 'Canada's craziest property market'

Benchmark property prices in Whistler, the ski town two hours north, have now surpassed those in the Pacific Coast city. Businesses are buying million-dollar properties to house employees as living costs drive out workers. The cost of visiting has also spiraled, with overnight rates during the winter peak topping anywhere else in the nation.

Phil Bonham, a 31-year-old ski patroller, has been living out of a 1984 Dodge camper van for four years, unable to afford the surging cost of housing.

Styrofoam cutouts are wedged into his windows to keep out the chill during cold snaps, when temperatures can plummet to minus 25 degrees Celsius (-15 Fahrenheit). He doesn’t bother with the propane-fired refrigerator in the tiny kitchen between the driver’s seat and bed -- nothing thaws anyway in winter, and he eats fruits and vegetables immediately before they freeze.

The small wood-burning stove in the back corner is the “hippie killer,” a reference to stoves like this that have been known to asphyxiate people in their sleep as they try to stay warm. The winter before last, he found himself lying under the van during a snow storm rebuilding pieces of the engine -- “a bit of a low point,” as he describes it. But that’s what a take-home wage of about C$2,800 ($2,180) a month after taxes buys in Whistler.

“I only expected to do it for a season,” Bonham said in an interview in a parking lot near the ski slopes, where he identified at least seven other vehicles being used as full-time residences. “Without getting a second job or a girlfriend, there’s no way I could afford a room to myself. And I make a decent wage in comparison to many other jobs in Whistler.”

Vancouver has made global headlines in recent years, consistently ranking among the top 10 major cities worldwide most at risk of a housing bubble. Last year, Toronto took the top spot giving Canada the ignominious distinction of being the only country with two cities to make the cut in UBS Group AG’s annual list. Yet price price gains in Whistler have outpaced both cities.

“We think housing is the single most important issue we are facing as a community,” Marc Riddell, a spokesman for Whistler Blackcomb, owned by Vail Resorts Inc. and the area’s biggest employer, said in an email.

With a permanent population of fewer than 12,000 residents, there are more than 1,300 applicants on wait lists to either rent or buy homes at below-market rates in a residents-only pool managed by the Whistler Housing Authority. The agency aims to provide housing for at least 75 percent of the town’s employees -- a target that “will be very challenging to continue to meet,” according to a December assessment.

Four-Season Destination

It’s the dark underbelly of Whistler’s soaring popularity. Its transition from a skiing mecca into a four-season destination for golfers, hikers and bikers means the pressure for accommodation from seasonal workers and tourists no longer eases when the snow melts. “We’re as busy now in the summer as in the winter,” said Mark Lamming, owner of Purebread, a bakery with two locations in Whistler.

Mayor Nancy Wilhelm-Morden has a task force dedicated solely to resident housing that’s sought to explain the massive run up. Young families have migrated in to fill year-round jobs, but there aren’t enough homes to accommodate them. Suites that once housed local tenants are being replaced by lavish, sparsely used vacation chalets. Online home-share websites have made it easier for owners to illegally rent properties intended for residents to higher-paying tourists.

Restrictive Zoning

Much of the supply-side woes are also self-imposed. Canada’s first resort municipality, Whistler was purpose-built in the 1980s in the image of a pedestrian-free Swiss alpine village, and restrictive zoning and land-use rules to prevent over-development also choke supply. Meanwhile, a byzantine web of rules dictate how residences can be used in the broader community.

In October, the benchmark price of a townhouse in Whistler surpassed C$1 million for the first time. Vancouver is a steal in comparison -- only C$835,000. A detached house in Whistler is now C$1.67 million, 4 percent costlier than in Vancouver.

The rental market is more mind-boggling. One recent listing sought two female tenants for a single room in a shared house: the price was C$780 -- each -- to share a double bed. Many renters spend more than 50 percent of their income on housing. Mayor Wilhelm-Morden, incensed by landlords raking in cash from illegal short-term rentals, has imposed a C$1,000-a-day fine for violators, saying Whistler won’t tolerate “employees shoved out the back door” to make way for tourists.

‘Absolute Gong Show’

“It’s an absolute gong show,” said Russell Kling, a former hedge fund manager turned developer, whose Pangea Pod Hotel is set to open this summer aimed at delivering more affordable tourist accommodation. Whistler was the most expensive place in Canada to spend New Year’s Eve -- C$745 for a double room compared to C$414 in second-place Quebec City.

“People told us, ‘Your biggest issue will be accommodation -- if your staff can’t find accommodation, it doesn’t matter how much you pay them,’” recounts Kling, whose co-founder is his wife, Jelena. “So we took that risk off the table and purchased a home.”

The seven-bedroom residence cost “close to a couple million dollars” and will house the hotel’s general manager and a handful of key employees. The Klings even looked at buying a second staff property. “But so much of this stuff now -- forget about buying, I wouldn’t want to put my worst enemy there,” he said.

They’re not alone. Scandinave Spa, a 20,000-square-foot thermal bath facility, built five housing units on site when it opened in 2010, bought an additional staff property in nearby Cheakamus, and helps arrange rentals for employees. Vail houses 31 percent of its workforce and is considering investing in developments for employee accommodation.

Read more about local reaction to Vail’s takeover of Whistler’s ski resort

One in three businesses were unable to find enough staff last year, according to the housing authority. The town council has committed to adding 1,000 new resident beds by 2023 though one local developer says that’s less than half what’s needed. It’s loosening zoning rules to allow some neighborhoods to densify and releasing part of its land to build more affordable housing. It plans to require commercial and tourist developers to either construct affordable employee housing as part of their projects or pay cash-in-lieu.

For some it’s too late. Cathy Zeglinski, a family doctor, closed her Whistler practice last September, saying the young residents who once comprised the backbone of her clinic can no longer afford to live in Whistler.

“We’re earning Canadian dollars, but the people coming in aren’t tied to the local economy -- we can’t compete,” she said. “Whistler was once a very special place but with real estate prices stratospheric, there’s no place left for locals.”

 

Copyright Bloomberg News

 

by Bloomberg30 Apr 2018 | by Natalie Obiko Pearson - www.canadianrealestatemagazine.ca

Abbotsford, Mission emerge as commercial power centres

Cities to the east of the Lower Mainland are easing the growing pressure for commercial and residential demand in Metro Vancouver

The latest residential data underlines the strength of the economy of the far east of the Lower Mainland as Abbotsford and Mission report 1,777 new homes under construction in March.

Abbotsford reported record-breaking building permits in 2017, representing a 92 per cent increase over the previous year to a total value of $480 million.

Mission tallied $52 million in 2017 permits, up from $43.5 million a year earlier.

“Abbotsford Mission will post a real GDP gain of 2.5 per cent in 2018, led by strong gains in industrial production, as well as solid domestic demand, as it continues to attract families living in the Vancouver region who are seeking out more affordable housing,” the Conference Board of Canada stated in its recent Metropolitan Outlook 2018 report.

The region’s goods-producing sector will lead the way over the next two years, thanks to growing business opportunities, a lower Canadian dollar and a solid U.S. economy, the report noted.

Manufacturing activity is expected to remain healthy, especially in the key wood products industry.  

“The outlook for the construction sector is also bright, with housing starts and non-residential investment both poised to be strong,” said Alan Arcand, associate director with the centre for municipal studies at the Conference Board of Canada. 

While many think of Abbotsford as an agriculture community,  aviation and aerospace is the No. 1 sector driving the city’s economy. The Industry Training Authority predicts the sector will need 4,000 new staff in the next five years alone. Abbotsford International Airport, the  fourth busiest airport in B.C. and No. 20 in Canada, handles 114,528 aircraft movements per year and more than 677,000 passengers.

Abbotsford is also, of course, the agriculture capital of Canada, with gross farm receipts three times those of Ontario’s Niagara region, which is Canada’s second most productive agricultural area. 

“A growing and diverse community, Abbotsford is affordable, conveniently located with access to vital transportation networks, and boasts a skilled and educated labour force,” said Mayor Henry Braun. 

The availability of relatively affordable land and a welcoming approach to investment have made Abbotsford a darling of the real estate development community.

Last year, Abbotsford was named “Most Business Friendly Municipality” under the NAIOP Awards for Municipal Excellence, The award is given annually by NAIOP, the commercial real estate development association. The award was in recognition of the city’s increase in building permit issuances from 2015 to 2017, as evidence of it attracting businesses, encouraging the growth of existing businesses and promoting industrial development. 

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In addition to recognizing the increase in building permits, NAIOP highlighted Abbotsford’s extensive effort to increase the amount of industrial land available by requesting the conversion of 600 acres from the Agricultural Land Reserve (ALR). Abbotsford launched a comprehensive four-stage industrial land supply planning process to identify opportunities for future industrial growth in the city last year.  Currently, the city  is in Stage 3 of the industrial land study. The background research and analysis conducted in stages 1 and 2 looked at the city’s optimal role in serving both the local and regional industrial markets, and the suitability and potential to accommodate future industrial development and to meet the community’s employment needs.

Part of the vision for preparing the community to grow to 200,000 people from the current tally of approximately 141,400 was the recognition that more land would be needed. 

Braun said the municipality decided to limit residential growth and seek extra land for jobs space only.

“[We] are not going to be looking for exclusions in the ALR for residential growth,” the mayor said. “We need to densify, and go up, and that’s welcome news for lots of people.”

Braun said the city is focusing on infill opportunities, not just to limit sprawl but also to limit the expense on civic infrastructure.

Mission  

The district of Mission is also becoming a destination for industrial real estate due to a lack of supply and higher prices in Metro Vancouver. With easy freeway access and just 15 minutes from the U.S. border, Mission is seen as ideal for distribution facilities. 

There are two main industrial parks in the Mission area: Mission Industrial Park that allows light industry, warehouse, office use and even accessory retail; and Silver Creek Industrial Park, which has direct railway and Fraser River frontage. 

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The 39-acre Silver Creek Industrial Park has bays for sale or lease ranging from 3,060 square feet to 6,370 square feet.  

Mission Industrial Park has lease opportunities for much larger spaces, from 10,000 square feet to 80,000 square feet, according to a District of Mission report.

Mission industrial space leases for an average of $8 to $9 per square foot. 

Last year, industrial building permits in Mission reached $1.85 million, up about $500,000 from a year earlier. 

Downtown Mission has a mix of historic buildings and modern architecture and amenities to support a city of nearly 40,000. Downtown street-front retail lease rates average $8 to $13 per square foot. 

At Heritage Park Marketplace, close to the University of the Fraser Valley’s Mission campus, lease rates range from  $22 to $26 per square foot, triple net. Rents are even higher at the Junction Shopping Centre, a 250,000-square-foot power centre, where lease rates average $32 per square foot,  triple net. 

 

Mission’s commercial building permits were $1.9 million in 2017, with 27 permits.

Residential is the dominant construction factor in Mission, though, confirms Stacey Crawford, the district’s economic development officer.

He notes that Mission residential building permits hit $39.1 million last year, up from $31.9 million a year earlier and far outstripping all other sectors. 

In all, about 90 new detached houses have started this year in Abbotsford and Mission and, while less expensive than in Metro Vancouver, they are not cheap.  The average price for a new detached house in Abbotsford-Mission is now $978,530, up from $956,000 a year ago.