Thousands needed
Vancouver’s housing crisis is well known, but an Urban Development Institute (UDI) discussion on April 30 will focus on accommodation for visitors.
UDI typically advocates for housing to handle B.C.’s growing population, but with condos gobbling up development sites, it will host a panel including development consultant Gary Pooni of Brook Pooni Associates; Ty Speer, president and CEO of Tourism Vancouver; Charles Gauthier, president and CEO of the Downtown Vancouver Business Improvement Association; and Emma Cahalane of accommodation provider Sonder Inc. to discuss a new interim policy Vancouver has drafted to encourage hotel construction.
“Although the economy related to tourism and conferences has continued to grow, the number of hotel rooms in the city has declined by 1,105 rooms over the past decade,” city staff reported last year. “A further 1,674 hotel rooms are at risk in the short and medium term for redevelopment, primarily to residential.”
“We have a very significant problem with our hotel inventory,” Speer said last week.
Closure of the Empire Landmark and Coast Plaza Stanley Park in the West End removed 626 rooms from the market, and the closure of the Four Seasons Hotel Vancouver at the end of this year will eliminate another 372 units. Offsetting these closures are 202 rooms that Executive Hotels and Resorts opened at 475 Howe Street in Vancouver at the end of 2018, and a further 118 rooms set to open this year, but no new units will be added in 2020.
Speer says the additions are nice, but not nice enough. Plans by Prima Properties Ltd. for hotel units on Burrard at Davie are promising, but what the city needs are “several thousand” new hotel rooms to meet demand over the next five to 10 years.
While he knows developers in a land-constrained market like Vancouver can find “more profitable things to do with land,” he says hotels are fundamental to welcoming guests to the city whether for leisure or business. Moreover, in a gateway city, hotels accommodate those passing through to other parts of the province, making the lack of rooms here a disincentive to visit surrounding regions.
“We see hotels as fundamental infrastructure in the city,” he said.
Attractive destination
Vancouver’s welcoming environment extends well past visitors to foreign capital.
A discussion at the recent Vancouver Real Estate Forum highlighted Vancouver’s brand as a place where, according to Premise Properties Ltd. president Avtar Bains, investors have a high level of trust in business practices.
This isn’t the case everywhere, as Bains heard from Andrew Weir, regional senior partner for accounting firm KPMG in Hong Kong and vice-chair with KPMG China.
“China is ruled by law, and Canada and the U.K. and others are the rule of law. They’re different,” he quipped, noting Canada offers foreign investors security and a safe offshore haven for their wealth.
It’s also affordable.
“Compared to other alternative markets, hard as it may seem to people in the audience and this very valid concern about local buyers, it is relatively good value,” Weir said.
The response from buyers Macdonald Real Estate Group speaks with in Shanghai underscores the point.
“They’re blown away with how cheap it is,” said president Dan Scarrow, contrasting Vancouver with condos in Ha Long Bay, Vietnam, that sell for $1,000 a square foot. “As this world becomes more and more globalized, that’s the world we’re going to be competing in.”
And limiting foreign ownership of certain types of property isn’t necessarily a bad thing, Weir noted.
“My personal view is it’s probably right to have a foreign- buyer’s tax,” he said, noting that Hong Kong and Singapore also tax foreign real estate purchases without losing their appeal among investors. This is because, unlike B.C., they were seen not as limiting activity but as improving the playing field.
There’s also a sense in which local opinion of the taxes may be more negative than foreign opinion.
“From the outside, the view on Canada and Vancouver is still very positive,” he said. “I’ve been surprised in the last few days how low the [local] view is at the moment.” •
