Top of mind
Vancouver council voted last week to manage the city’s non-market housing assets as a single real estate portfolio, one worth $2 billion.
“The Vancouver Affordable Housing Endowment Fund (VAHEF) will be dedicated to meeting the housing and affordability needs of Vancouver residents and to create inclusive communities across the city,” read a statement from the city.
The portfolio includes more than 200 properties, and while last week’s release was short on details, the city’s affordable-housing strategy identifies 25,000 units of non-market housing the fund will help preserve. This is in addition to 12,000 new non-market housing units targeted for development over the next 10 years.
It sounds like a lot, but a recent Altus Group survey suggests that housing affordability is the single biggest issue on the minds of those who contributed to its annual real estate development trends report.
A whopping 97% of respondents identified housing affordability as the factor that will most influence future development in B.C.
The city’s endowment fund is symptomatic of the importance we place on housing affordability, but it also underscores how difficult the issue is to resolve. The fact that almost everyone Altus asked ranked the issue as one of key significance suggests that no amount of action has diminished its importance.
An odd balance
The never-ending tide of market analyses can make for interesting reading.
September 13, for example, brought the monthly analysis from BC Real Estate Association (BCREA) chief economist Cameron Muir, who recapped residential sales numbers from around B.C. for August with the pronouncement: “The downturn in housing demand induced by the mortgage stress test is now largely behind us.”
The next day, Landcor Data Corp. issued its own second-quarter sales report.
“The policy-induced downturn of B.C.’s housing markets has worsened,” economist Will Dunning, who authors the reports for Landcor, declared. “Policies of the federal and provincial governments are weighing heavily on housing demand in British Columbia.”
But did the weight of government policies really lift from markets over the summer?
Muir’s third-quarter housing forecast for the BCREA shed further light on the matter. It outlined a battle between the strength of market fundamentals and the effects of government policies such as the stress testing homebuyers seeking a mortgage now face.
“While these rules have had a negative effect on housing demand across the country, the impact has been especially severe in B.C.’s large urban centres because of already-strained housing affordability,” Muir wrote in August.
High employment, wage growth and the rise of millennials seeking homes appeared to be underpinning sales, while fewer home sales meant more listings and in turn greater choice. Average monthly listings within the Real Estate Board of Greater Vancouver’s area, for instance, are 21% above last year.
While policies and purchases duke it out, benchmark prices have continued to rise and remain higher than at any point prior to 2017.
Work it in
Co-working space now accounts for more than 3.5 million square feet in Canada, and of that, IWG PLC operates more than two million. One of the newest in Vancouver is 35,000 square feet under the Spaces banner in Gastown, which IWG describes as the more dynamic, creative sibling of its original Regus brand.
IWG is hosting an open house at its Gastown space this week, and later this year a second location of 40,000 square feet will open on Great Northern Way adjacent to Emily Carr University and the tech incubator at 887 Great Northern Way.
But the biggest space of its local Spaces will be at 400 West Georgia, the new office tower Westbank Corp. is developing. IWG has arranged to lease an additional 120,393 square feet, with opening set for 2021.
The deal pushes the total volume of co-working space commitments in Vancouver a bit closer to the million-square-foot mark, or more than 1.5% of the region’s total volume of office space. •
