Real estate groups set sights on liberal development plans

Build the future

Nowhere was optimism in the future of the province’s real estate industry better seen following the May 14 election than when Bob Rennie took the podium at the Urban Development Institute’s luncheon in Vancouver on May 16 to the strains of Sam Cooke’s “Having a Party.”

But if the party is to continue, comments at both UDI and commercial real estate association NAIOP earlier in the day underscored the need for strong leadership. Voters, according to speakers, elected the government to create jobs. But any given segment of the electorate has reservations about what form – and more important, where – that development should take place.

NAIOP speakers Vaughn Palmer of the Vancouver Sun kicked off the discussion by summarizing his recent column about those who would Build Absolutely Nothing Anywhere Near Anybody (BANANAs) while Eric Carlson of Anthem Properties Group decried the lack of a philosophical framework that leaves the population vulnerable to their emotions at any given moment.

And then former B.C. finance minister Kevin Falcon – now in Carlson’s employ as executive vice-president at Anthem Capital Corp. – stood up.

“News flash, folks: You can’t do anything in British Columbia without having some group be opposed to you,” he said, before going on to advise government: “Separate the noise, which is always there, from doing what is right, which is really important.”

The approach is one Brent Toderian, former director of planning for Vancouver, pursued with mixed success.

“Listening is key,” he said, shortly after coming to the city in November 2006. “Agreeing is, certainly, a different thing.”

And again, under questions from appraisers regarding formulas for determining Community Amenity Contributions (CACs) in the Cambie Street corridor: “There’s a phrase we use that says, ‘Nobody gets everything, but everyone gets a lot.’”

Developers are counting on Premier Christy Clark to let them do their job; indeed, at the UDI lunch, she pledged her agenda to developers’ success.

“We are going to do all of this because what you do matters,” said Clark, ushered on stage by developer Peter Wall as Brett Dennen’s “Comeback Kid (That’s My Dog)” played. “Government should be here to support you, not get in your way.”

Equity-driven

“Who needs pollsters when you’ve got Bob Rennie and Peter Wall predicting the future?” quipped Premier Christy Clark to the Urban Development Institute on May 16.

If past experience is any guide, Rennie fully expects baby boomers – who sit on about $88 billion worth of property – to continue fuelling Lower Mainland real estate sales activity.

While resale activity remains sluggish, Rennie regaled the UDI with a string of projects coming to market in the coming months and offered a glimpse of what lies ahead for the next 15 years.

It offered some contentious stats chewed over in chatter following his presentation.

Two-thirds of all sales in Metro Vancouver since 2006 were to existing homeowners, Rennie said, arguing that those buyers were using accumulated equity rather than being dependent on down payments and ongoing income.

Moreover, those same buyers are funding property purchases by their children and grand children. Rennie’s surveys of buyers show that 30% to 40% of first-time buyers at recent projects cited parents and grandparents among their financiers.

“So ... 70% to 75% of our market is not solely relying on incomes to purchase,” Rennie said. “This helps me to understand why it all keeps working.”

While critics of affordability levels in Vancouver keep pointing to income levels, the figures – in Rennie’s opinion – suggest that incomes play a far smaller role in the market than many claim.

“Our buyers are just trading equity, not relying on their income,” he said.

“Stay a lifetime”

Among the upcoming projects on the books at Rennie Marketing Systems is Residences at the Hotel Georgia, originally marketed by Sotheby’s International Realty Canada in 2007 and relaunched last summer as units neared completion.

Come June, the remaining residences of the 156 built by Delta Land Development Ltd. will be marketed as an opportunity to “stay a lifetime” rather than just a night at the neighbouring Rosewood Hotel Georgia.

As of last fall, approximately 100 units in the project have been sold. •