3868 replies to this topic

[lanforod]

It's almost like if it becomes more expensive to build, people build less! 

 

Oh wait...

[Mike K.]

Yup.

More expensive to build, rental controls, and very expensive carrying costs. Now with the provincial upzonings, land is more valuable as well.

[Victoria Watcher]

Comment: Greedy everybody: Housing costs in Victoria

 

Writing here as a small-time and occasional residential developer, let me break down development costs for you.

 

 

 

A commentary by a Victoria resident with a lengthy resume of community involvement with an urban design focus. Through his company New Landmarks, Miller conceived ASH (Affordable Sustainable Homes), a 100 per cent efficient houseplex, each of whose suites has its own front door.

 

In an effort to increase the ­supply of affordable and straight market housing, the province has put rules in place to simplify and speed municipal development approval and has mandated the relaxation of single-family zoning, now permitting up to six dwellings — either suites in a houseplex or townhouses on ­corner lots, as I understand it.

 

 

https://www.timescol...ictoria-7930335

 

 

 

Writing here as a small-time and occasional residential developer, let me break down development costs for you. While there may be parts of the region where some costs — property in particular — are somewhat lower, my numbers here generally hold true in the Victoria setting.

 

A standard lot with an existing house is, in most locations, likely to run not less than $1.2 million or, assuming six new units, $200,000 a door as the “dirt cost.”

Assuming a modest two-bedroom unit size of 750 square feet and current construction costs of about $500 a square feet, construction to finish will come to $375,000 a door.

 

Soft costs (architect, municipal fees and permits, lawyer, consultants, interest costs on borrowed money, etc. etc.) at a low estimate of 20 per cent of construction adds $75,000 a door.

 

Then there is a contingency, real estate sales commissions and developer profit, all totalling, let’s say, 25 per cent of $650,000 per door costs sub-totalled above, or $160,000 (rounded); all of this leading to likely per-dwelling pricing of around $750,000, or $1,000 a square foot. (Note, by the way, that a risk-averse bank or other lender will, as a condition of project lending, require a thorough and accurate project budget including a credible projected profit as proof of project viability.)

 

 

 

 

 

 

 

I really do not understand architects fees.  I should be able to use a relatively simple online computer program to produce my drawings, after I enter all my parameters, lot topography, and my desired options.

Edited by Victoria Watcher, 06 December 2023 - 07:22 AM.

[dasmo]

Sounds like we need more rules and regulations. DO SOMETHING!

[aastra]

A new tax might help. Call it the development costs tax to help reduce development costs.

[Mike K.]

I suspect the sale price will have to be closer to $1,100 to make it all work out at today’s interest rates. Or $825,000 at minimum.

Presumably that’s also without parking.

The province is now looking at requiring elevators for two-storey buildings. Would that also apply to MMHI buildings?

[Victoria Watcher]

Colliers is pleased to present a rare opportunity to acquire a +/- 9,000 SF building on nearly one acre of land in the Royal Oak Industrial Park. The property benefits from significant exposure to the Patricia Bay Highway and is bordered by municipal and highway lands on three sides, affording exceptional signage opportunities. The property offers ample surface parking with only a 19% site coverage. It possesses the potential for the expansion of the existing building or, alternatively, redevelopment of the site into a mixed-use residential development.

 

 

$7,200,000

 

 

https://www.realtor....anich-royal-oak

 

 

 

Edited by Victoria Watcher, 07 December 2023 - 06:38 AM.

[Mike K.]

Is that where the Mike Geric Construction project was to be located, at least partially?

[Victoria Watcher]

This is interesting, transit allowance.  As you can see, this station is absolutely not in a high density area now, all those lots are SFDs.

 

 

 

[dasmo]

I have a friend that lives in that area. Multiple business owners and this is the only area they could afford that had a yard. Bought a duplex with family and split it. That level of affordability is now gone, overnight. Good for someone's numbers though. The land value in that area just ticked up a billion dollars. 

[spanky123]

I suspect the sale price will have to be closer to $1,100 to make it all work out at today’s interest rates. Or $825,000 at minimum.

Presumably that’s also without parking.

The province is now looking at requiring elevators for two-storey buildings. Would that also apply to MMHI buildings?

 

Well he didn't factor demo costs into his pricing and I would have to imagine that his development loan would be at least 10% per annum. 

[Beacon]

Yup.

More expensive to build, rental controls, and very expensive carrying costs. Now with the provincial upzonings, land is more valuable as well.

 

and even if they did start building like bonkers, I wonder what that would do to the price of labour and materials....oh wait..

[Beacon]

I have a friend that lives in that area. Multiple business owners and this is the only area they could afford that had a yard. Bought a duplex with family and split it. That level of affordability is now gone, overnight. Good for someone's numbers though. The land value in that area just ticked up a billion dollars. 

 

Also an issue is the tax implications.  Properties are taxed at their highest potential use, if it's a SFH now on a property zoned for 20 stories, well you may have won in land value but you may not be able to stay living in the same house anymore due to the tax increase.  Business tax too, same issue.

[dasmo]

Also an issue is the tax implications.  Properties are taxed at their highest potential use, if it's a SFH now on a property zoned for 20 stories, well you may have won in land value but you may not be able to stay living in the same house anymore due to the tax increase.  Business tax too, same issue.

That's the idea.... Equity means bringing everyone down. Only those that fly the jets to talk about climate change rules get to have houses. 

[Mike K.]

Yes, there are going to be massive implications on taxation.

[aastra]

 

Only those that fly the jets to talk about climate change rules get to have houses.

 

That's misleading.

You make it sound like they pilot the jets themselves.

[spanky123]

Yes, there are going to be massive implications on taxation.

 

Not necessarily. If everyone's assessed values go up then their property tax will stay the same (subject of course to annual inflation plus 1% increases).

[Beacon]

That's misleading.

You make it sound like they pilot the jets themselves.

 

Hey! don't forget the ones that collect exchange fees for carbon trading platforms, they will get homes too!

[Beacon]

Not necessarily. If everyone's assessed values go up then their property tax will stay the same (subject of course to annual inflation plus 1% increases).

 

No, this is specifically around transit hubs.

[dasmo]

This is the price we pay for equality on the global stage. Remember the majority of people live in poverty….