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The Globe and Mail:Rising land values in Vancouver spurring demolitions
Kerry Gold | June 17, 2018

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Rising land values in Vancouver spurring demolitions

From Issue No. 270 | July 20, 2018

A demolition site in East Vancouver. A new study shows that it would take an average of 168 years for the energy-efficiency gains of a newly constructed single-family house to make up for the negative environmental impact of materials used in construction.

John Lehmann

 

As sky-high housing prices and rents in Vancouver continue to make life miserable for many residents, the idea that the city should rezone areas currently reserved for detached housing has continued to gain traction.

It came up repeatedly at a recent Urban Development Institute (UDI) debate, where academic John Rose called it "the biggest supply question" and "the most controversial." And it is included in a frightening new University of British Columbia study on Vancouver's unhealthy construction frenzy, co-authored by architecture professor Joseph Dahmen at the School of Architecture and Landscape Architecture. The study shows the wastefulness of Vancouver's rampant house demolitions. It points out that it would take an average of 168 years for the energy-efficiency gains of a newly constructed single-family house to make up for the negative environmental impact of the materials used in construction.

Despite radical efforts to build homes to a more efficient standard, the teardown cycle means we're adding, not reducing, greenhouse gas emissions. The demolition craze is fuelled by rising property values, with people tearing down homes and building bigger ones, often to house fewer people.

Mr. Dahmen says that if we're throwing so many perfectly good houses into the landfill and increasing overall greenhouse gas emissions in the process, then we might as well replace them with rowhouses, townhouses and condos to house more people. He's not saying to tear down all houses, because it's not a single-solution problem, he says. But the higher the land price relative to the building on it, then the higher the probability of demolition. A multi-unit building would be more financially valuable, and therefore less likely to be demolished, he says.

"This is a complex issue and we don't want to eliminate zoning for single-family houses and go row-housing everywhere. It needs to be done carefully, judiciously, with great regard for design goals," Mr. Dahmen says.

"The question is, can we afford to have the attitude that everywhere there is a single-family house we only want another single-family house? We have to think about what we want to protect and what is off limits.

"Let's not forget that one in four houses being bought and sold right now in Vancouver is being torn down and replaced with something new."

Misha Das, a student at the UBC School of Architecture and Landscape Architecture who co-authored the study, which was funded by the Peter Wall Institute for Advanced Studies (analyst and supply advocate Jens von Bergmann also collaborated), estimates that about 32,000 detached houses in Vancouver will be torn down by 2050. "It's mind boggling," Mr. Das says, especially because that number represents almost half the detached housing stock. Clearly, we're not doing enough to preserve the historic homes, he says.

"For me, it's very important we consider all the costs associated with rebuilding the city – because the city is being rebuilt whether we like it or not," he says. "It will be a very different place 20 years from now.

"Growth, for the most part, isn't a very green process."

A greater selection of housing makes sense in a city where residents need to earn about 35 times the average household income to afford the benchmark price of a detached house.

But if the city followed through and blanket rezoned single-family for denser housing, would it actually translate into affordable housing? And would we end up with a livable city – or a city beset by overcrowding and never-ending gridlock?

These were the questions posed at the UDI debate by Josh Gordon, assistant professor at Simon Fraser University's School of Public Policy, and John Rose, instructor at Kwantlen Polytechnic University's department of geography. Mr. Gordon and Mr. Rose argued that speculative demand, driven by global wealth sloshing into the Vancouver region's housing market in the last several years, had created a crisis. They argued that merely rezoning areas and building more market supply won't solve the problem, and could end up exacerbating the crisis. Mr. Rose questioned why communities would buy into the idea.

"I highly doubt you will find neighbourhoods willing to embrace densification if they do not see the anticipated benefits and affordability," he said. "[People will ask] ‘Why are we densifying if this is just going to be purchased by speculative investors and prices are going to be jacked up so local residents can't live in any of it?'"

"It's not about ‘anti-supply' or ‘anti-densification.' In the context of where you have speculative investment, it is, ‘How do you sell this?'"

But pro-supply groups say land-consuming detached housing is a major barrier to affordability. Fifty-seven per cent of the city's land mass is zoned for one-family dwellings, according to housing analyst Andy Yan (it should be noted that the overwhelming majority of houses are used to house more than family, so "single family" is a misnomer.)

Even UBC economist Tom Davidoff, who supports rezoning, didn't sound confident at the debate that affordability for the average-income earner would be on the menu. Instead, Mr. Davidoff saw foreign wealth, when it was at its peak, as a boon for the economy, and a way to get money out of the land and subsidize housing for locals. He also said a market flooded with multifamily housing would result in lower prices, and even if only high-income earners could afford it, that's better than nobody. And because of the NDP government's new tax measures, which were partly based on a proposal put forward by a large group of local economists, including Mr. Davidoff, there's now more money on the table for locals.

"If somebody from overseas wants to buy a condo and leave it empty, good for them," he told the audience, made up of young people in the development industry. "They are going to pay 20 per cent up front in [foreign-buyer] tax, 1 per cent for the city's empty homes tax and 2 per cent for the provincial speculation tax, so on a $1-million condo, they are going to pay $200,000 upfront and $30,000 a year for an empty box. That's a great deal for the city … So the beauty of the new tax regime is regardless of what was driving things, what's the objection now to getting more affordable stuff built? If people want to pay us taxes for nothing, great.

"I just don't see a loss in adding multifamily, especially if the city [increases] community amenity contributions while doing approvals."

Mr. Rose asked: "Is the purpose of densification to increase tax revenue or to provide affordable housing to local residents?"

And Mr. Gordon later said: "You can sell off Vancouver and all the land to wealthy buyers – but will you get affordability?"

In a follow-up interview, Mr. Gordon said we would need a policy framework that captures some of the profits ("land lift") that would result from blanket rezoning – in the form of community amenity contributions, for example. Otherwise, land owners, realtors and developers would simply pocket the substantial gains and create housing that remains out of reach for locals.

He cites redevelopment of detached houses into major projects along Cambie Street, which are unaffordable for most locals.

"There are people who own 20 detached houses on the west side who are tapping their fingers, waiting for municipal governments to [rezone detached houses], on the basis of affordability, when it won't generate that," Mr. Gordon said. "We need to be very, very cautious about rezoning single-family detached areas."

Mr. Gordon suspects that the development industry is behind a lot of the talk for more supply. Last fall, UDI chief executive officer Anne McMullin called for municipalities in the region to remove single-family restrictions, for consumers and developers.

And Mr. Gordon notes that there is a civic election coming up, and people are pushing their agendas.

"They are trying to rezone Vancouver and they are trying to do it without the proper mechanisms for land lift in place, and it will not generally deliver affordability as they maintain it will," he says. "This is a concerted effort on the part of the development industry and associated industries and speculators, to try to make a big windfall profit.

"There needs to be a bigger conversation about what kind of a city do we want to be. Do we want to be a highly dense city like Singapore or Hong Kong? Or do we want to preserve the livability of the city and not try to cram tens of thousands of people into a small amount of space? For obvious reasons, the development industry wants the high-rise strategy."

 

 

 

 

 

 

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