B.C.'s real estate industry gathers to set tone for 2020, slams government policies
Developers set the tone for 2020 targeting everything from the slew of various government taxes against speculation and vacancy to long waits for project approvals and completion timelines to those who are against increasing housing density.
The real estate industry gathered Thursday to hear several developers set the tone and make forecasts for the coming year, with some slamming government policies that have curbed demand for what had been runaway home sales and prices.
They pointed to the arrival of large, tech companies in Vancouver as a sign that many more employees will be in need of housing that isn’t being built quickly enough because banks are growing wary of financing projects in an uncertain market.
Complaints targeted everything from the slew of various government taxes against speculation and vacancy to long waits for project approvals and completion timelines to those who are against increasing housing density.
“I’m getting sick of this bulls—,” said Beau Jarvis, president of Vancouver-based Wesgroup Properties and the new chair of the Urban Development Institute, which represents residential, commercial and industrial builders.
His self-described “rant” entertained the crowd of willing listeners, and there was little dissent in the packed hotel ballroom of over 1,200 builders, planners and real estate executives.
Jarvis described government policies that are being made “in silos” and how they “are competing with each other.” He made light of arguments by some residents against markedly taller buildings by asking, “Do we have a shadowing crisis or a housing crisis?”
He talked of costs that have escalated “exponentially” while revenues are “frozen” and warned that “capital has a low tolerance for uncertainty,” explaining that banks loan based on land values, which are based on zoning, and that some municipalities were eroding some of these “land rights.”
He predicted that with measures such as speculation and vacancy taxes that have curbed the demand for housing sales, and without federal money in B.C., plus the possibility of vacancy controls, the industry would “continue to under-build” even much-needed, purpose-built rental units.
Meanwhile in commercial real estate, office space is tightening in areas such as downtown Vancouver. There will be a shift in anchor tenants to major technology and entertainment companies from San Francisco and Seattle, said Chuck We, senior vice-president of Hudson Pacific Properties for Western Canada, which bought and is redeveloping the office and retail space at Bentall Centre in Vancouver.
He said this will be accompanied by thousands of new executives and workers, who have higher wages and will need homes. Some will come from more expensive housing markets where, even with good salaries, renting is the norm. “The rental (market) just has to be there,” said We.
Jon Stovell, president of Reliance Properties and now past president of UDI, described Vancouver as a “city of two tales” where there is a “war” between those for and against more housing, and “right now” there is a moment to become either a “museum city” or a “global city”.
When asked if there was a “glimmer of hope” for the industry considering all the current hurdles, Stovell allowed that “the supply topic is a much harder conversation” and that, even with all the focus on curbing demand, some government officials might quietly be coming around to “embracing the idea” of increasing supply and that over the next few years, it will mean they will need to again engage the real estate industry.