Musings on Metro housing
Credit to Author: Barbara Gunn| Date: Sat, 28 Dec 2019 13:19:55 +0000
Before putting pen to paper for this 2020 Metro Vancouver real estate outlook, I reviewed my previous Vancouver Sun year-end columns to see when I was right and when I was wrong.
While many predictions turned out to be correct, my timing was usually off. It generally took more than 12 months for most forecasts to be realized, and others have yet to be realized.
For example, I often predicted car-sharing would become increasingly popular with a corresponding reduction in municipal parking requirements. But while car-sharing has become popular in many municipalities, it is not sufficiently widespread throughout the region or province.
Although lower parking standards could improve affordability and reduce traffic congestion and pollution, municipalities still demand too much parking in new developments. If municipalities would convert their minimum parking requirements into maximum parking requirements, we would all be better off.
Over the years, I have repeatedly predicted increased popularity for fee-simple individually owned row houses, since although strata-titled townhouses can offer a carefree lifestyle, condominium living, with its many rules and sometimes authoritative strata councils, is not for everyone.
I was wrong.
Only a few fee-simple row houses have been built and the concept has not become commonplace as it is in Toronto and most international cities, due in part to outdated zoning bylaws and building regulations. Hopefully, changes in 2020 will increase the supply of this much-needed type of housing.
For many years, I predicted relocatable modular housing, set up on vacant lots awaiting redevelopment, would become a viable housing solution for the homeless.
In 2017, Vancouver opened its first temporary modular housing on city-owned land, and thanks to provincial financial support, other municipalities are now creating similar projects.
In the coming years, I predict we will see more temporary and permanent modular housing constructed, not just for the homeless, but for a broader range of households seeking affordable homes.
In last year’s year-end column, I predicted two factors would dominate our housing discussions in 2019: increased concern about climate change and increased income disparity, resulting in many more low-income households concerned about rent increases and ‘renovictions’.
As we now know, the provincial government addressed the latter by reducing allowable rent increases from inflation plus two per cent to just 2.5 per cent in 2019 and 2.6 per cent in 2020.
I also wrote that given the hundreds of thousands of empty bedrooms in the region, we could expect innovative home-sharing concepts to match seniors with other seniors, or seniors with students who might help around the house. While home-sharing programs have been set up elsewhere, few are operating in Vancouver.
I also forecast that co-living would become more popular. Co-living should not to be confused with co-housing, which combines the benefits of individual homeownership and cooperative living. Co-living offers a small furnished room for rent within a shared suite in a building that includes an communal amenities, services and activities.
Co-living can appeal to individuals, especially young adults, seeking a more affordable housing choice in an urban setting.
But it is not just for singles. ‘Kin’ offers co-living for urban families with children.
Major American companies, including WeLive, Common and Ollie, are developing this type of housing across the U.S. and in Europe. While some are looking at Vancouver, they have yet to provide this type of housing.
Last year, I suggested that European-styled retractable balcony glass systems that make balconies more usable and weatherproof would become more popular. While some municipalities now allow them, most do not. However, given their other benefits, including noise reduction and improved energy performance, expect to see retractable glass systems appear on more buildings in the coming years.
So, what else can we expect in 2020?
Just as we have recently been learning about the dangers of vaping, expect an increased focus on the negative impacts of traffic pollution and noise on our health. This will lead to the design of ‘healthier’ buildings and communities. Some municipalities will begin to require health impact assessments for major developments, like the environmental impact assessments that became mandatory for major projects in the past.
When it comes to housing prices, I will offer the same prediction as last year. New home prices will not collapse next year, nor will they surge again.
Housing markets are greatly influenced by supply and demand. Last year, I observed that some Metro Vancouver municipal councils could be expected to respond to residents’ traffic congestion and neighbourhood character concerns by rejecting projects and implementing a go-slow approach to new development. Sadly, I was right.
If this trend continues, and supply does not keep up with demand, expect increased housing prices for both homebuyers and renters, since another 30,000 people will arrive in our region next year.
Three additional factors will increase the cost of housing in 2020.
At the end of 2018, the B.C. government introduced something called the Energy Step Code to help address climate change. It sets out stricter energy design requirements that will ultimately benefit the environment and reduce operating costs. However, these requirements increase construction costs and, in turn, will raise prices for new homes.
New home prices and rents can also be expected to increase due to the plethora of new tax programs that were implemented to deter foreign buyers, second-home buyers and investors. While these taxes, including the so-called school tax, will boost government revenues, do not expect any of them to significantly increase the supply of affordable rental or ownership housing.
Finally, in the coming year, expect your property insurance costs to rise. Climate change is affecting premiums worldwide, and insurance costs will increase next year, sometimes dramatically. This will be especially true for poorly maintained condominium developments and other properties exposed to high risks.
On this sobering thought, I wish you a safe and healthy 2020, and look forward to joining you again in 12 months to examine which of this year’s forecasts come true.
Happy Holidays.
Michael Geller is a Vancouver-based architect, planner, real estate consultant and developer. He also serves as an adjunct professor at Simon Fraser University. He can be reached at geller@sfu.ca and his blog is found at http://www.gellersworldtravel.blogspot.com