Government, government, government… Municipal governments control zoning, official community plans and land use. The Province is influencing legislation and taxes. Federally, it’s immigration and interest rates. The pace of change and the extent of change from all 3 levels of gov’t in the past 3 years has been substantial and brisk.
Transportation and Changes in Land Use
The Broadway subway and a possible North Shore rail link are both being studied right now. The Broadway subway will generate changes to land use along the entire Broadway corridor from Clark to Vine Street and north/south from West 1st Ave up to West 16th Ave. In this huge rectangular area, official community plans and land use will change to allocate higher density to many properties, but not just to add more condominiums. Many blocks will be designated as purpose built rental only or other forms of housing which offer social benefits to the community such as seniors housing, below market rental. When a developer buys property from homeowners in order to build a high density building, the developer will also be required to pay the City of Vancouver a fee called a “Community Amenity Contribution” ranging from about $100 up to $300 per buildable square foot depending on the project. This is in addition to development cost levies (sewer & water hook up) and building permit fees. Why is our real estate expensive? West Van and North Van do the same, as do other municipalities.
Greater Vancouver will continue to grow by some 40,000 to 50,000 people per year. GVRD receives a disproportionate share of the wealthier immigrants. Why not? It’s a great place to live! This has not changed.
First Nations are developers now. Some of the bigger master planned communities will be developed by various First Nations working in partnership with developers including the proposed master planned community, the Maplewood Innovation District in North Vancouver, the Jericho Military lands in Point Grey, the former owned CMHC lands at Ontario and 33rd Ave in Vancouver and the Squamish Nation owned lands at the foot of the Burrard Bridge in Kitsilano. Expect to see a lot more leasehold condo and townhouse developments.
Real Estate Developers
Developers have been hardest hit by all the changes in government policy and new taxes. Discounts and incentives are widely available from developers this year. Developers are completing the projects that they’ve already started but, we are seeing many developers cancel or postpone future projects and not go forward with their planned pre-sales this year. In the first quarter of 2019, there were half as many new projects launched compared to the same quarter in 2018. In Greater Vancouver, the total number of developer owned completed, move-in ready inventory stands at 453 units as of the end of Q1/2019 which is more than 4 times higher than Q1/2018 but it’s also 5 time lower than Q1/2014 when there was more than 2100 units of finished unsold developer inventory. Will this lead to a condo or townhouse supply shortage in about 3 years as a result of developers slowing down?