An interesting new piece of research from BTAworks, a foundation connected with Bing Thom’s architecture firm, has finally got hold of the famous BC Hydro data on electrical use to find out how many apartments downtown show signs of no habitation. That has been seen as the smoking gun to prove the truth of Vancouver’s most famous story about itself — that all of our downtown condos are dark at night because there’s no one living there. They’re all owned by offshore investors just speculating in our real estate.
Those who read my blog regularly will recall there was a cascade of blogging and stories last fall about “18,000 empty condos” in the city — a cascade that was powerful enough to prompt then-mayoral candidate Gregor Robertson to muse about the need for a possible speculator tax to prevent investors from allowing condos to sit empty.
The research, done by Andrew Yan, found that there is not a plague of empty condos. Instead, his examination showed other problems being created by current patterns of condo-building and ownership downtown. You can read my story here. I don’t expect this study will end the debate, but it will certainly put a dent in the urban myth of the empty condos, one that I’ve been hearing repeatedly for the last two decades.
That myth is so prevalent that I find myself staring at downtown towers everytime I drive through the central city at night, trying to figure out if they have a reasonable number of lights on. It’s funny, because it’s not something we ever thinkg of doing with three-storey walk-up apartments or houses in single-family neighbourhoods. You never hear people walking through Kitsilano or Champlain Heights going, “Aha — no lights. It must be speculators!” And yet there are a lot of dark apartments and houses in those areas too.
Personally, I’ve always felt it was more an expression of our fears about Vancouver, that we are really just a Miguel de Allende of the north, a little peasant town being taken over by outsiders who think we’re cute and then drive the prices sky-high.
The BTWworks full study is available on their website at www.btaworks.com, where all of you astute critics can scrutinize it yourselves. I’m sure Andrew will be happy to answer questions, if there are any.
23 responses so far ↓
1 not running for mayor // May 24, 2009 at 9:38 pm
I think even the people that wanted to beleive in the 18K figure knew deep down inside that the number wasn’t factual.
Glad someone has taken the time to squash it, although like a correction in the paper I imagine the original story will continue spreading while the correction is ignored.
2 Joseph Jones // May 24, 2009 at 11:57 pm
A sample of thirteen buildings …
Is that a stratafied sample?
3 Andrew Yan // May 25, 2009 at 12:35 am
Yes…we attempted to stratify the sample to reflect the overall population of Downtown Vancouver (excluding the West End) along age of buildings, type of building (office to residential conversion and new construction) and geographic location (False Creek North, Downtown South, Coal Harbour, etc) to represent the diversity of condos in Downtown. The sample focused on patterns in the high density towers and did not focus on townhomes or midrise developments.
4 Agua Flor // May 25, 2009 at 4:07 am
“The research, done by Andrew Yan, found that there is not a plague of empty condos.” Really!
Some 60% +/- Vancouverites are tenants.
They cannot afford to buy in their own city! Off shore speculators can: hence the confluence of speculator/tenant.
Yes, those many condos are occupied. Yes, there are few families. Evidently, most sensible people prefer kids to real estate. Hence checking hydro use is a pretty useless exercise.
I am far more concerned that a local magazine fetes a realtor’s morph “to marketer to developer’s consultant to city builder.”
When realtors are city builders the town absolutely is in deep “do do.” Huh! Couldn’t do worse than VPD!
Why would an architecture connected research firm be interesting in disputing the “myth”? It isn’t a myth!
5 Agua Flor // May 25, 2009 at 4:37 am
PS Why? . . . to dispel the “myth” off-shore speculators own the city?
They do!
6 Agua Flor // May 25, 2009 at 6:27 am
PPS
Back in 1987, after Expo, Grace MacCarthy was fetéd, wine and dined by the Jardine Matheson crowd and . . .
Mira!
The town, today, is owned, lock stock and barrel, by off shore speculation . . .
It wasn’t as though there was no eager local talent: wow did they ever cause a ruckus. Sadly, though, they were shut out by Gracie who was gobbling too much caviar and custard!
And here ladies and gentlemen, may I present, the city, we pay through the nose, live in today . . . “doggie runs” and all . . .
7 Agua Flor // May 25, 2009 at 6:50 am
Who is Jardine Matheson? They taught Li Ka Shing the wiles of the British Umpa way back.
I was offered a job with them in 1950. Thanq God I didn’t take it: came here instead.
I now fear, because Gracie et. at. were totally hypnotizes by the colour of easy cash instead of building on a, then, healthy productive economy . . . .we are about to hit in the face pretty hard in the coming months . . .
Despite Bobby’ R’s “green shoots” hallucinations.
8 Wendy // May 25, 2009 at 7:26 am
Good article Frances. I forwarded it to some work colleagues in TO who follow the condo rental market.
I think the key issue came up near the end of the article: the imbalance in favour of 1 bedroom units. This contributes to unaffordability (if that’s a word). A typical 1 bedroom place might be $1000 while a 2 bedroom would be $1500. Two friends can therefore live less expensively in the two bedroom. Two young couples without kids could all live quite inexpensively in a two bedroom. And, as your source points out, 2 bedroom units create good options for families to live in condos.
At the housing affordability summit a month or two back, did anyone discuss creating more two bedroom units as part of the solution?
9 Agua Flor // May 25, 2009 at 8:01 am
Wendy,
It ain’t that easy! Read . . .
http://thetyee.ca/Life/2009/05/25/RentRatRace/
Cool doesn’t work anymore . . .
10 anonymous // May 25, 2009 at 8:20 am
A sample size of a couple hundred would probably be adequate but, if the units weren’t randomly selected, are the numbers in this report statistically relevant at all?
11 Frothingham // May 25, 2009 at 9:04 am
I think the sample size could be statistically suspect. As far as “dispelling a myth” … this study is but one part of the equitation. Two years in one Apartment block near the Burrard bridge was verified by the strata cttee to be 35% EMPTY! Now it could be that after a few $$ crises that these apts are now rented out…
Gracie and company sold out… short term gain for long time pain.
12 foo // May 25, 2009 at 9:48 am
I notice no-one has taken up the point that this survey, while apparently dispelling the myth of the 16k empty condos, also dispels the myth of the 1/2% vacancy rate that CMHC and the other powers-that-be like to promote.
13 Agua Flor // May 25, 2009 at 1:46 pm
I rent: not in Vancouver. Vancouver number crunching would be more revealing of owner/rental interests.
Last year we were given option: leave or accept assisted ownership. The owners were about to convert.
The ownership offer came with a sweetener: down payment gratis.
The rental offer: rents will be raise but will try to keep you in your home: but only if it is not sold then we will try to locate you in another suite.
I am sure everyone had the best of intentions.
If my suite were converted, my rent would transmog., with down payment, to mortgage/tax/strata well over double my, as is, rent.
Mercifully the market nixed conversion.
The point: two-bedroom sharing is no solution.
At current building costs, I’m in the biz, rents and mortgages are unsustainable for any occupancy configuration.
Renter sharing, as the lady describes, http://thetyee.ca/Life/2009/05/25/RentRatRace/ is tricky. Even family sharing is tricky.
Eventually the system will flush the market out. Until then green shoots are a long way off . . .
14 jesse // May 25, 2009 at 1:52 pm
This is actaully bad news for those hoping for high prices. A supply of “dark matter” condos kept off the market would crimp supply; now we know almost all the supply built in the past few years is going into active service.
A high ratio of newly completed units to population growth and pressure on total city income as employment drops. And now no pied a terres to justify the oversupply. I can do the math on that.
15 Michael Geller // May 25, 2009 at 5:01 pm
Folks, the vacancy rate is NOT 0.5%. That is the CMHC vacancy rate, which excludes basement suites, houses that are rented out and most importantly, all the condominiums rented out. Based on information provided to me from developers and housing analysts, I previously reported on this blog that the true vacancy rate was between 5 and 6%.
While I cannot comment on the statistical accuracy of the sample, I was not surprised to see that this study concluded that 5.5% of the units were ‘dark’. Surprise, surprise….
You might also want to check my comments on this blog last year when Gregor first suggested there were 18,000 empty condos…but then, maybe it’s best to let bygones by bygones!
16 foo // May 25, 2009 at 5:12 pm
Yes, Michael, that’s what I was trying to point out. The media, you will notice, is not falling over itself to put a stop to the 1/2% mythology…
17 foo // May 25, 2009 at 5:37 pm
And I guess we can expect to see some articles in the media real soon now putting the notion of the “rich foreigner buying condo’s a half-dozen at a time, for cash” to rest.
18 Agua Flor // May 25, 2009 at 7:16 pm
I dunno . . .
January this year I got occupancy for a 65 unit condo. One guy from Edmonton bought 8 . . . is he a rich foreigner?
19 jesse // May 25, 2009 at 7:20 pm
I think the vacancy rate being around 5% deserves way more press than the CMHC data we keep seeing cited. 0.5% vacancy rate makes absolutely no sense compared to all other evidence.
One thing to note is that often condos can be vacant even though they are rented. This can be the case as tenants move and end up paying rent for two places for a month while only occupying one.
20 Agua Flor // May 25, 2009 at 7:45 pm
Michael;
“Folks, the vacancy rate is NOT 0.5%. That is the CMHC vacancy rate, which excludes basement suites, houses that are rented out and most importantly, all the condominiums rented out.”
That’s a bit weird.
Of course CHMC isn’t going to report occupied basement suite, house and occupied condos as vacant: the operative word is “occupied.”
If they are occupied they ain’t vacant!
Capiché!
PS basement suites are often illegal: hence not officially recorded!
21 LP // May 25, 2009 at 8:00 pm
CHMC has no way of tracking condo rentals, whether occupied or vacant.
That is a huge chunk of rental units in this city and the 0.5% is a useless figure.
Capiche’
22 condohype // May 25, 2009 at 11:18 pm
Hello friends. This is a good study and I agree with Michael Geller that Vancouver’s true vacancy rate is around 5-6 percent. It’s actually not a new finding that most condo buying comes from local investors, but it’s an inconvenient truth that didn’t fit the hype during the boom. For years, Landcor data repeatedly exposed the myth of the foreign buyer.
CMHC rental statistics are all but useless when it comes to Vancouver. Their methodology ignores condos unless the owner has three or more units in the same name. This is a joke for a city where the last 30 years of new rental stock has been provided by strata units.
Thanks for reporting this story, Frances.
23 Andrew Yan // May 26, 2009 at 12:25 am
Thank you for the thoughtful comments and critiques on this blog. It is important to note that this study does not look at vacancy rates. It was an unfortunate wording in the article as unoccupied does not necessarily mean vacant. Indeed, the unoccupied units may not even be available for rent. Page 49 of the CMHC’s Rental Housing Survey for Metro Vancouver and Abbotsford (http://www.cmhc-schl.gc.ca/odpub/esub/64467/64467_2008_A01.pdf) provides their stats on vacancies for condo apartments in the region. Beyond these condo apartments, estimate of the other parts of the secondary market rentals seem to be difficult to find.
This study is also not a representative sample of all the condos in the City of Vancouver nor Downtown Vancouver, but a highly focused examination of ownership patterns in the high density residential towers of Downtown Vancouver (excluding the West End) — a major element of Vancouverism. The study sample is a stratified indicative sample which attempts to cover some of the age, type, and geographic diversity found in these towers.
After completing this study, there are really more questions than answers that will require further quantitative and qualitative research by the various housing researchers in this region with likely the need for bold and creative, but pragmatic housing and economic development policy.
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