Thanks, Collywobbles. I'll post the whole Globe article here because it will disappear behind their pay wall in a few days, and later readers will certainly want to see it. It's worth reading on their site, though, for the comments.
Empty condo myths untrue, research shows
Majority of Vancouver's downtown units are lived in, although at least half are owned by investors, rented out
By Frances Bula
Vancouver — Special to The Globe and Mail, Monday, May. 25, 2009
Vancouver has long cherished the urban myths that many of the thousands of condos built in its downtown neighbourhoods since Expo 86 are owned by offshore investors and sit empty while those speculators wait for the market to rise.
Neither of those beliefs is true, according to comprehensive research done by an architecture foundation that looked at electricity use, home-ownership grants, and condominium council records.
“It was a bit of a surprise to us to discover that very few condos are empty,” said Michael Heeney, a partner with architect Bing Thom, whose foundation, BTAworks, sponsored the research. “There have been all those urban stories out there that they were all owned by foreigners and half of them are empty.”
There has been much public grumbling over the years, with people blaming foreign-owned, empty condos for contributing to the city's exceptionally tight housing market. Last fall, when Gregor Robertson was campaigning for the mayor's job, which he eventually won, he briefly suggested the city should consider a speculator tax on empty condos to force owners to either use them for housing or sell them.
But the research done by urban planner Andrew Yan for BTAworks showed only 5.5 per cent of condos, in a representative sample of 2,400 units in 13 buildings, showed electricity use below 75 Kw a month. That kilowatt usage is considered a threshold indicating a unit is vacant, because it's an amount so low that it would indicate that only enough power to maintain a refrigerator was used. When the threshold was upped to 100 Kw, it indicated a vacancy rate of 8.5 per cent.
But even that, Mr. Yan said, is within normal parameters, because it's likely that any city sees some vacancy at any given point as apartments turn over, because people are on vacation, or because apartments are used as second homes. As well, he said, Vancouver probably has a higher-than-usual number of people who live downtown but work elsewhere at least part of the year, like he does.
Mr. Yan's research showed that the vast majority of the condo units are lived in, although at least half are owned by investors and rented out. The statistics from homeowner grants and B.C. Assessment Authority information indicated anywhere from 52 to 61 per cent of downtown condos are investor-owned.
The study also showed that of the investors who rent them out, few were from outside Canada: Eight-seven per cent of the units were owned by investors from Canada and half of those Canadian investors were from the Lower Mainland.
However, that high level of investor buying has distorted the market to the detriment of Vancouver families, said Mr. Heeney. Investors tend to prefer small one-bedrooms that they believe they can rent out easily. That's creating a downtown that has little room for families, except those willing to squeeze into small places.
“The city has a plethora of small units because a high proportion of the buyers are investors. And developments have made so much money selling to those investors that they're reluctant to change,” he said. “But that doesn't serve people with families. If this city is serious about wanting to progress, it needs to provide market housing for families.”
Mr. Heeney, who is also a member of the Vancouver Economic Development Commission, said the reality of Vancouver's economy is that it is made up of small-scale entrepreneurs and lacks big head-office-style businesses.
The people who work in those start-ups need the kinds of places to live that they're not finding, which is inhibiting the city's economic development, he said.
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