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Lisa Helps | Victoria | Mayor

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#61 Mr Cook Street

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Posted 18 September 2014 - 12:29 PM

Article on this topic from the WSJ:

 

Here's the first point, for locals: New housing supply benefits the entire city, even if that new supply takes the form of luxury condos. Tenant activists have regularly objected to new luxury developments as just another sign of gentrification. But even if that housing is intended for high-income tech workers, it will take some pressure off the existing units that those tech workers have occupied at the expense of middle- and lower-income residents. In effect, this means that affordable housing advocates who want to block new high-end developments are simply making the city more expensive.

 

I apologize if I came across this article through someone else posting on VV. Anyways, very interesting.


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#62 VicHockeyFan

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Posted 18 September 2014 - 12:30 PM

In the real world, if we want affordable hosing we have to accept some sort of government involvement whether that be in the form of direct investment, tax breaks, zoning variations etc.  The only real argument is about what are the most effective forms of involvement. I personally favour working with private developers and potential homeowners and keeping bureaucrats and politicians out of the process as much as possible.

 

I think we agree.  But who is gong to do the working with the developers, if not the politicians and bureaucrats?

 

The simplest way is to allow increased density, cut red-tape etc., and simplify zoning.


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#63 Baro

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Posted 18 September 2014 - 12:38 PM

Getting rid of a lot of the red tape and just letting developers build what ever density and height they want would bring prices down, but only a bit.  There's a ground floor cost per sqft for construction, and an optimal height for buildings where you've maxed out the units on the land, but any taller and the cost per unit starts to go up as engineering eats away at the density savings.

 

But without subsidies, no private developer can build actual "affordable housing".  To get to that level they'd be building at a loss.

 

Now, the question is how affordable will those buildings be in 10 years, in 20 years, in 30 years.  Don't look to new-built buildings to have an immediate effect on affordability, look to them a generation from now.  That's a long ways off though, which is why cities need to have the long-term vision to keep the supply of new housing stock meeting demands.  That said with our current land values and government subsidized cheap debt, expecting affordable housing to own is a pipe dream right now.  No city-level policy can change that.  The smart money's on renting now anyways with the city's current buy:rent ratio.  But even so, new-built rentals are very expensive, but will they be in a generation?


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#64 sebberry

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Posted 18 September 2014 - 12:46 PM

I think one solution to the affordable housing issue is to allow greater height, but insist a certain % of the units in the building be purpose-built as rentals.  This allows the developer to build some units perhaps with fewer luxuries and put them on the market for less $$ than what suites for sale would rent for. 


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#65 Mike K.

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Posted 18 September 2014 - 02:01 PM

As to your assertion that, "The more housing built, of ANY price, the lower the average price in the overall market." I have to call bullshit. Are there more housing units in Victoria today than there were two years ago?  Has the average price gone down? You need to qualify that statement before it can even approach being accurate.

 

 

 

Supply: housing construction

Demand: population growth, plus renters turning into home owners

 

If we built housing to house 4,000 people, but population + absorption of housing supply equated to 3,500 people, prices would slide. As things stand today, right now and as they've stood for the past 20 years, we've built less housing than demand hence the growth in the secondary suite industry. For a long while vacancy rates throughout the region were at 0.05% and lower, literally unheard of. This is what pushed municipalities to finally legitimize secondary suites and why developers who you insist are building McMansions and forcing buyers into them, responded to the higher cost of housing by building secondary suites (thus increasing the square footage of most new homes). Nowadays if you don't include a secondary suite in a new-build the majority of your potential buyers won't even qualify for a mortgage (the bank wants to see that secondary suite option should it be needed).

 

You're making the real world far too complicated than it actually is :)

 

In the real world, if we want affordable hosing we have to accept some sort of government involvement whether that be in the form of direct investment, tax breaks, zoning variations etc.  The only real argument is about what are the most effective forms of involvement. I personally favour working with private developers and potential homeowners and keeping bureaucrats and politicians out of the process as much as possible.

 

 

But just a few posts back you were saying that it's the developers overcharging for new homes and building excessive homes and therefore causing affordability issues. So you want less government oversight of development but you also don't think developers are incapable of working in our best interest. I just don't think this will fly if what you say is true, or do you concede that maybe developers actually are building what the consumer wants and charging what the consumer is willing to pay?


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#66 jonny

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Posted 18 September 2014 - 02:07 PM

While I agree that we are unlikely to see any major decreases in the cost of housing, where the argument goes a tad sideways is by saying "we can't create more land". Housing does not necessarily equal land. We could all go live in the boonies at a low cost - this country certainly has oodles of land - but that's not where the demand is.

 

What many are trying to communicate here is that by increasing density, we may have the opportunity to provide more housing at a lower total cost. What we're seeing in Victoria is that the red tape and bureaucratic hand wringing unnecessarily hinders the supply of housing.


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#67 sebberry

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Posted 18 September 2014 - 02:09 PM

Vancouver has more land than we do and certainly many more tall condo buildings.  But that hasn't made it "affordable".


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#68 jonny

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Posted 18 September 2014 - 02:13 PM

Vancouver has more land than we do and certainly many more tall condo buildings.  But that hasn't made it "affordable".

 

Well there's that whole demand side of the equation, after all.



#69 29er Radio

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Posted 18 September 2014 - 02:33 PM

isn't this the LISA HELPS thread?
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#70 jonny

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Posted 18 September 2014 - 02:36 PM

isn't this the LISA HELPS thread?

 

In fairness, the discussion was spurred because of Helps' comments on housing.



#71 29er Radio

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Posted 18 September 2014 - 02:42 PM

I appreciate that and although we try not to get too political in our Lisa, Gene and Eric shows, I will ask her to expand on
affordable housing thoughts for next show.
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#72 Mike K.

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Posted 18 September 2014 - 02:46 PM

Why isn't Lisa on VV?


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#73 Baro

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Posted 18 September 2014 - 03:13 PM

Some polite moderated Q&A's with candidates would be very nice.


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#74 RFS

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Posted 18 September 2014 - 03:27 PM

As to your assertion that, "The more housing built, of ANY price, the lower the average price in the overall market." I have to call bullshit. Are there more housing units in Victoria today than there were two years ago? Has the average price gone down? You need to qualify that statement before it can even approach being accurate.


Yes, except population (demand) has also increased. The way demand and supply interact is not really a theory, its just math. Econ 101 stuff.

Supply-and-Demand-Graph.png

I'm not even nesscesarily suggesting that NEW construction will become drastically more affordable (although I think developers have built a pretty good mix in recent years) but if I owned a 70s era 2br and I want 1500 a month for rent, I wont be able to get that if tenants could go rent a brand new unit for a similar price.
I think we both agree that more housing should be built, I just disagree that the city/govt should be able to dictate price levels.
If people really cared about affordable housing they would be up in arms protesting every time the city rejects any residential proposal
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#75 AndrewReeve

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Posted 18 September 2014 - 05:24 PM

Some polite moderated Q&A's with candidates would be very nice.

 

Does anyone know if #YYJchat will be doing Q&A's with the mayoral candidates? That would be neat. It was quite popular in the 2012 federal by-election.


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#76 baconnbits

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Posted 18 September 2014 - 05:30 PM

That's more of less what we've been doing, but you have to remember that a five storey building is expensive to build and units will be out of reach for many. Put a 25-storey building on that lot and you're going to see more opportunities on that single parcel of land.

A developer needs both height and density to make a project affordable for a wide spectrum of buyers and make the units livable. Density only gets you so far. In Victoria a project like Escher starts clocking in at $220k for the smallest, low floor unit (in other words, the same starting price as downtown Toronto condos!). We need to work to bring units down to $150-$175k and enough of them to ensure they won't all go to investors.

I agree

but if you say this three block strip of land is zoned strictly for mixed use residential up to a maximum height of 5 stories (or density of 3:1 FSR (whatever it may be)) that caps prices because developers know that they can only build x. the land value that spits out in a development analysis is a residual value. i.e given all my inputs (costs and revenue plus a margin for the profit i want to make) what can i pay for the land to make the required return. if you constrain the density, you constrain the price of the land. it will float around based on where apartment prices and rents go and where construction costs go as you are able to pay more money, but the largest increases in the price of land come from someone saying "if i buy that, i can get approval for 200 units, which means i'm going to make $x million dollars in profit, therefore i can afford to pay a higher price" 

a five story building is expensive and you don't get to spread some of the base costs over a lot more units - which is why victoria and bc need to (and to an extent already are) allow stick frame/cross laminated timber construction which is significantly cheaper to construct and with stick frame can go to 5 or 6 stories easily and with CLT can go much higher.

this reduces construction costs and if you add on reductions in parking requirements, this also reduces costs.



#77 29er Radio

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Posted 18 September 2014 - 06:27 PM

If the zoning focused on standards rather than limits then you could keep land prices sane. If the unit size was connected to the
height, like 20 story = min unit size 1000 sq ft then maybe we will have units that people can live long term in. Affordable
doesn't have to mean tiny. As Jane Jacobs explored a lot, density is as much about persons per sq ft as unit per sq ft.
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#78 Nparker

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Posted 18 September 2014 - 06:35 PM

Perhaps the mods might want to steer this thread back onto course. It really has deviated quite significantly from discussions regarding Ms. Helps run for the city's top elected position.



#79 VicHockeyFan

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Posted 18 September 2014 - 06:42 PM

Perhaps the mods might want to steer this thread back onto course. It really has deviated quite significantly from discussions regarding Ms. Helps run for the city's top elected position.

 

Sure.

 

Helps has a nice campaign office on Fort St.  

 

No sign of an Ida Chong HQ yet.  No sign of a Changes the Clown HQ.  And Dean has not announced yet if he's running.


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#80 Nparker

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Posted 18 September 2014 - 06:51 PM

...No sign of a Changes the Clown HQ....

I am assuming we'll see a very small car parked somewhere in the City from which "Changes" and his entire campaign team will emerge.


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