VREG Blog

Good news! This past Monday, the Park Board approved a plan to create a new ‘naturally managed park’ at E 18th and Victoria Drive, in a location known as “Gibby’s Field.” The site contains the last part of Gibson Creek, and is “likely the site where two tributaries of China Creek once met.” The preservation of the site follows a long-standing community effort to preserve the site, dating back to 2001. Park Board Report: Park Board: General info on Gibby’s Field Heritage Vancouver Foundation: Places that Matter – Gibby’s Field Image: Rendering of Gibby’s Field as a naturalized park space courtesy of City of Vancouver

You may have heard that City Council is contemplating a planning process to revitalize Granville Street downtown. This idea was first floated a couple of years ago, and is a positive move. A draft Terms of Reference was discussed by Council on January 18 of this year, and there will be further debate coming up this week. While we’re generally supportive of the initiative, we feel that the scope of the proposed work could be bolder. From our perspective, the current approach is constrained by two key factors: an unnecessarily limited geographic scope and the need for a stronger, more comprehensive and unified focus on the role of the street as a central public space. With this in mind, we’re sharing seven key suggestions that we thing would improve the proposed Terms of Reference and result in an improved planning process for this important public space. (1) Expand the Granville Street study area so that it stretches “shore to shore” across the Downtown Peninsula As currently envisioned, the proposed planning area covers the five block stretch between Robson Street and Drake Street. This area coincides with policy geographies set out in the Downtown Official Development Plan (DODP) dating from 1975. Given the prominent role that Granville Street plays, the various urban design and transportation considerations at play, and the way visitors and residents actually use the street, we feel this insufficient. In our opinion, the current focus on the entertainment district would be better served were it to be part of a study area that spanned the full 12 blocks between Granville Square and the Granville Bridge. This would allow for a more integrated consideration of critical rapid transit connections, an assessment of the existing (2009) public realm treatment (which needs to be refreshed), the inclusion of other large rezonings (the Bay, Granville Loops), not to mention the broader public life opportunities that come with treating the street ‘as a whole.’ The street has a number of different character areas, but what makes it exciting is the opportunity to make them work together. We note that the original Council motion (referenced on page 2 of the report) directs staff to deliver “a scope of work and budget for a future planning program for Granville Street Downtown.” This pan-peninsula scope is important. (2) Bring special attention to key intersections While the idea of a promenade is important, one of the important features of Granville Street downtown is its centrality on the downtown peninsula. Intersections are key punctuation marks in the sequencing of the street – ones that invites a pause, curiosity, decision, transition and more. They are also, functionally, linkages to and from other key areas – such as Robson Square, the civic facilities of Georgia St, the Davie Street Village. A larger geography allows for more attention to be put on these core intersections, and suggests the possibility of developing more substantial connections (and related public realm connections) to nearby amenities. Public space is a network – so let’s ensure this program approaches Granville St. with this sort of ‘systems’ thinking. (3) Ensure laneways are included as part of the planning effort While the focus of the planning program will be on Granville Street, there is a further opportunity to bring additional focus and attention on improving laneways in the study area, turning these spaces into vibrant people places. Some important initial work has been undertaken by the DVBIA and others, but this planning program could accelerate this work in a more comprehensive fashion. How can these sizeable areas – often overlooked because of their secondary functions – be enhanced and better integrated into the fabric of the downtown? Done strategically, this could enable additional programming opportunities for restaurants and cultural spaces, or provide additional seating or gathering opportunities. The scale of these areas – often more intimate than the city’s main streets – makes them an important opportunity. (4) Consider Howe/Seymour transit opportunities An assessment of opportunities for Granville Street would be further strengthened by incorporating Howe and Seymour into the conversation. During the lengthy construction of the Canada Line, these streets effectively took over bus routing functions that were normally on Granville. As was noted during the Council discussion, there is only a limited right-of-way on the street. This brings a related challenge in establishing priorities – is the street a bus “mall” or a pedestrian promenade? A space for moving people, or a place for people to linger, gather, spill out of cultural facilities? It is difficult for the street to do both without needing to make compromises. Can we be bolder here? Perhaps it’s time to think about the role of Granville as part of a network of key pedestrian primary streets – in the same vein as current thinking about Water Street, Robson, and other key areas. (5) Ensure public space is the central focus of the Terms of Reference It was encouraging to hear staff recognize Granville Street’s long and storied role as a significant public space in the city. Looking forward, a focus on ensuring the highest quality public realm and a thoughtful activation of the street will be critically important. In our opinion, and given the array of tools that the City has at its disposal, there is a need to better centre the role of public space and public life in the present Terms of Reference. While public space functions are named in a number of

“I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble…” “Housing prices went up 17% in a year where underlying wage growth is stagnant…” “I called the bubble in the US in 2005-2006… I was looking at price to rent ratios, I was looking at price to rent ratios… household exposure to RE… I’ve got news for you… the numbers in Canada now are worse than they were in the US 13 years ago” [asked about colleagues who say there is a “bubble in calling bubbles in Canadian RE”] “Bubbles can go further than you think, but they don’t correct by going sideways…” “I listen to… Stephen Poloz [BOC governor]… it’s like listening to Ben Bernanke in 2006 when he told everybody “Oh, don’t worry… house prices nationwide never go down“.. “Bubbles can last a long time, but we’re in a very unstable situation”. excerpts from economist David Rosenberg’s Bloomberg interview, 24 March 2021

As a mortgage agent, Lorina Serafico, a home-financing adviser with Scotiabank, often gets asked when is a good time to buy a home. “If a household has the income, down payment, and the credit score to qualify for a mortgage, it is always the right time,” she said. According to Serafico everyone needs a home, whether owned or rented. “I consider mortgage payments as a forced savings plan,” Serafico said. “A $500,000 property you bought today will be worth $873,000 in 10 years. That’s an average of 7.45 percent annual increase, beating a medium-risk investment portfolio.” … With more than a decade as a mortgage agent, Serafico has served numerous customers, and a number of them have started meeting with her again. They’re usually owners of townhouses and condos, and now they’re thinking of upgrading to single-family homes. “They like what is happening in the market. There’s more inventory; prices have stabilized; and interest rates are good,” Serafico told the Georgia Straight in a phone interview. On March 27 this year, the Bank of Canada slashed its key interest rate—which determines bank lending rates—to its lowest level of 0.25 percent. – excerpt from ‘Mortgage holders can seize on opportunities to upgrade’, Carlito Pablo, Georgia Straight Vancouver’s News & Entertainment Weekly, 17 June 2020 “It’s hard to make predictions, especially about the future.” – attributed to Yogi Berra. One would think that people, especially finance professionals, had learned not to say things like “…it will be worth…”, “…7.45%…”, and “…always…”. – vreaa

“Two days ago, my mortgage holder (a Credit Union, no less) called and told me that after 22 years, I was no longer an “A-list” borrower, and they would not renew my mortgage. I have no credit cards, never late with a payment, never late with utilities, taxes, etc., etc., BUT, because of the ‘new’ mtg. rules, they could not renew my mtg. because two years ago (as a result of a series of family crises), I took a small 2nd mtg. (ridiculous rates, but I’ve met EVERY payment, etc. – the credit union wouldn’t ‘help’). My total debt is only the two mtgs. against the property and, together, they are less than 1/2 of my equity (compared to the assessed value). My son (who is on disability) lives with me and takes care of me (as I do him), and we share our expenses with our two limited incomes. I’ll be 73 in a couple of weeks, am not well, have been isolated at “home” since the beginning of March. None of that ‘counts’. Nor does it ‘count’ that for over 50 years, I’ve been involved in environmental and social justice issues, worked pretty much full time my whole life (never collected EI, even!), contributed to my community (have received awards), raised a family, supported many others in crisis. In a month, I, and my son, could be homeless. I don’t even have the strength to champion my own personal needs. To those of us that are experiencing the REALITY of the NOW – those living in corrupt care homes, or homeless, or helplessly addicted, or victims of genocide or poverty, or racism, what it’s “called” is moot. — from commenter ‘dda’ 30 May 2020, under the article, ‘Normal Is The Problem’, by Andrew Nikiforuk, The Tyee, 30 May 2020 Also see: A Confluence of Whammies: A Single Realtor (& Airbnb-host) with a dependent child, an elderly dependent parent, two lost tenants, and dwindling business is forced to sell their house (presumably at a loss) and take a $30,000 mortgage penalty. TD Bank charges $30,000 mortgage penalty to woman forced to sell home due to pandemic – 1 Jun 2020, CBC News. Your banker may seem like a friendly guy, but the banks will always look after themselves – first and last. – ed.

According to CMHC estimates, the ratio of household debt to GDP in Canada could reach 130 per cent in the third quarter of this year, a sharp increase from around 99 per cent before the pandemic. Debt as a share of disposable income, meanwhile, could also rise precipitously to 230 per cent in the third quarter, up from 176 per cent. Siddall said those ratios are well over a critical 80 per cent threshold, above which “the Bank for International Settlements has demonstrated that national debt intensifies the drag on GDP growth.” Such high debts risk future economic growth by “effectively converting future consumption into debt service payments,” he said, at a time when households and governments are increasingly leveraged. Adding to real estate concerns amid COVID-19, the agency also sees housing prices plummeting in the next calendar year. “The resulting combination of higher mortgage debt, declining housing prices and increased unemployment is cause for concern for Canada’s longer term financial stability,” Siddall said. The CMHC sees housing prices declining between nine and 18 per cent over the next 12 months. Those estimates are loosely in line with an earlier projection by DBRS Morningstar, a credit rating agency, says which says housing prices could fall between 10 and 15 per cent by 2022. By way of comparison, the owner of a $300,000 home at a five per cent down payment could lose around $45,000 if housing prices fell by 10 per cent, Siddall said. He said the agency is “debating whether we should change our underwriting policies” as a result of the pandemic, potentially restricting the future lending environment as debt levels soar. “Our support for home ownership cannot be unlimited,” he said. “It’s like blood pressure, you can have too much, [but] you need some.” – excerpt from ‘Bloody terrifying’: COVID-19 will raise household debt levels and ‘drag on GDP growth,’ CMHC warns’, Jesse Snyder, 19 May 2020, National Post Remarkably straight talk from the organization that has played such a large part in extending rope to participants over the last 20 years. And we’d guess that ‘18%’ is just a best guess estimate of the first step. As we’ve postulated over the years, when the bubble bursts, few are going to step in and overextend themselves to go into debt to buy assets that are falling in value yet still very overpriced by every metric. The Vancouver market has been predicated on prices that only go up, and the result has been prices that are about three times those determined by fundamental utility value. Once the drops start, we see no way of this all bottoming at 18%-off. In Vancouver, the direct and indirect economic effects of a drop of 18% in RE would alone almost definitely guarantee a larger drop. – vreaa

According to CMHC estimates, the ratio of household debt to GDP in Canada could reach 130 per cent in the third quarter of this year, a sharp increase from around 99 per cent before the pandemic. Debt as a share of disposable income, meanwhile, could also rise precipitously to 230 per cent in the third quarter, up from 176 per cent. Siddall said those ratios are well over a critical 80 per cent threshold, above which “the Bank for International Settlements has demonstrated that national debt intensifies the drag on GDP growth.” Such high debts risk future economic growth by “effectively converting future consumption into debt service payments,” he said, at a time when households and governments are increasingly leveraged. Adding to real estate concerns amid COVID-19, the agency also sees housing prices plummeting in the next calendar year. “The resulting combination of higher mortgage debt, declining housing prices and increased unemployment is cause for concern for Canada’s longer term financial stability,” Siddall said. The CMHC sees housing prices declining between nine and 18 per cent over the next 12 months. Those estimates are loosely in line with an earlier projection by DBRS Morningstar, a credit rating agency, says which says housing prices could fall between 10 and 15 per cent by 2022. By way of comparison, the owner of a $300,000 home at a five per cent down payment could lose around $45,000 if housing prices fell by 10 per cent, Siddall said. He said the agency is “debating whether we should change our underwriting policies” as a result of the pandemic, potentially restricting the future lending environment as debt levels soar. “Our support for home ownership cannot be unlimited,” he said. “It’s like blood pressure, you can have too much, [but] you need some.” – excerpt from ‘Bloody terrifying’: COVID-19 will raise household debt levels and ‘drag on GDP growth,’ CMHC warns’, Jesse Snyder, 19 May 2020, National Post Remarkably straight talk from the organization that has played such a large part in extending rope to participants over the last 20 years. And we’d guess that ‘18%’ is just a best guess estimate of the first step. As we’ve postulated over the years, when the bubble bursts, few are going to step in and overextend themselves to go into debt to buy assets that are falling in value yet still very overpriced by every metric. The Vancouver market has been predicated on prices that only go up, and the result has been prices that are about three times those determined by fundamental utility value. Once the drops start, we see no way of this all bottoming at 18%-off. In Vancouver, the direct and indirect economic effects of a drop of 18% in RE would alone almost definitely guarantee a larger drop. – vreaa

“If homeowners can just hold off selling, the Canadian housing market will emerge fine from its current “deep freeze”. According to a recent TD Economics housing forecast update, the market is expected to gradually recover from the effects of the COVID-19 pandemic. After an anticipated “historic” plunge in sales in the month of April 2020, a “much stronger activity” is seen next year. A lot of that depends on whether homeowners can avoid distressed selling during this pandemic. “Absolutely key to our forecasts is the assumption that listings mirror sales by dropping substantially in the near-term and recovering gradually thereafter,” Rishi Sondhi, an economist with TD Economics, wrote. By holding off on selling, homeowners can do one thing for the market. “This puts a floor on prices and sustains relatively tight-supply demand balances across most markets, allowing for the resumption of positive price growth as provincial economies are re-opened,” Sondhi explained.” – excerpt from ‘Homeowners avoiding distressed selling key to Canadian housing market recovery: TD Economics’, Carlito Pablo, 1 May 2020, Georgia Straight No, folks, that ‘analysis’ is not from ‘The Onion’. Seems like the TD analysts have found a sure fire way of maintaining every bull market, forever… (it’s easy: just get sellers not to sell). It’s remarkable that this kind of ‘analysis’ can get parroted on & on without getting called out. Remember: Sellers aren’t competing with Buyers, they’re competing with other Sellers. How many Vancouver RE speculators (essentially each and every buyer for the last 10-15 years) are going to realize their thus-far-paper profits? We are already seeing many anecdotal examples of people who bought in 2016 or later taking losses on resales. – vreaa