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City report says vacancy not fuelling real-estate rise. Let the fighting over data begin!

March 9th, 2016 · 10 Comments

The city’s release of a comprehensive study of 12 years worth of electricity use in 225,000 homes has given the most detailed picture to date, in 20 years of arguing, about what is empty in Vancouver and what isn’t.

And it has all gone to prove my newly devised Bula’s theorem: The more data there is, the more disagreement. Data, rather than settling anything, seems to generate new battles on ever more fronts. (Australia has proven that. It collects data on foreign ownership that many people here say is needed. Every time the state issues a report, there is a torrent of people saying the numbers must be wrong, that ownership is really higher than the 15 per cent or whatever, because people are cheating, that the numbers don’t really take into account this or that.)

Anyway, the report is out. It provides data for some interesting things but not others. Since electrical use isn’t combined with any kind of home ownership information, it doesn’t really say anything about foreign ownership or foreign capital or what role investors play or why units are empty.

As staff said yesterday, it showed that vacancy is not correlated with real-estate prices. It showed there were 10,800 units that had been empty for at least 12 months in 2014, which is 2,400 more than in 2002. The rate of overall vacancy hasn’t changed (about 4.8 per cent) but, since there is more housing in Vancouver now than in 2002, the absolute number of units unoccupied has increased.

No one knows why they’re vacant. It’s mostly condos that are vacant, about 9,700 of the total (I’m working on a story as we speak about what might be the cause of that).

And that’s where we are. My story here. The city’s power point here and the consultant’s report here, for those wanting to do a little Talmudic deconstruction.

Categories: Uncategorized

  • Kirk

    If the report shows that our vacant condo rate hasn’t changed, and that the vacant condos are not contributing to rising prices, then why the talk about forcing condo owners to rent out their empty places?

    And, why the push to remove all rental restrictions? I’m really against that. We have a rental restriction in our building, and our strata worries about investment owners who rent out and always vote down paying for any long term maintenance. Right now, we limit rentals to 25%. Imagine if the majority of owners started renting out and after 20 years of neglecting the building, then 80% vote to have the building sold off to a developer.

  • Kirk

    Oh, and can someone report how many are non-vacant and how many are uncategorized?

    We now know 10% are vacant. That doesn’t automatically mean 90% are occupied. I saw on Twitter that there were a lot of homes not counted because they’re under renos. How many? Are we going to see 10% known vacant, 50% known occupied, and 40% unclassified?

    Instead of a report verifying how many are vacant, can we have a report verifying how many are occupied?

  • Tiktaalik

    The vacancy rate is near zero and resultantly rent has risen significantly. There are lots of people that want to see a more reasonable vacancy rate.

    I understand with your concern about deadbeat condo investors, because that’s something that deeply concerns me as well. I wonder if there is a way to better handle this issue by the province finding a way to more strongly assert that condos need to follow their depreciation reports. Can we just have a minimum fee increase schedule somehow?

    Related to vacancy another takeaway is that Vision’s strategy of encouraging purpose built rental might actually be a very good approach. Their programs have been criticized as a giveaway to developers, but I think it could be worth it to guarantee a building with 100% occupancy.

    My first reaction of the 12% condo vacancy rate was that there are lots of lazy speculators in the condo space but if that’s the primary driver of empty condo units, then you’d think that would have risen at least a bit as prices have risen.

    The ultimate thing to recognize I suppose is that 12% unoccupied units basically means that we’ve actually dramatically overbuilt the amount of condos and there’s a sort of hidden over supply of units out there.

  • Tiktaalik

    It’s so nice to finally have actual data so there’s something concrete and real to talk about.

    Instead of speculating about something the neighbour saw, we have clear, real data that can inform and guide the discussion. The data has already had the impact of raising new issues to the surface that weren’t on the radar before.

    I’m looking forward to a future study on Airbnb use in Vancouver and maybe one day some real data on the level and nature of foreign capital investment?

  • A Taxpayer

    Apart from the absolute infringement on the rights of strata owners to decide whether or not to allow rentals and the potential problems you identified, making it easier to rent out a condo would arguably increase the demand for condos putting pressure on prices and making housing even more “unaffordable”. It is a very bad proposal.

  • Everyman

    Easy answer: forbid rentals in condominiums. Force those who want invest in real estate to put money into syndicates that construct purpose-built rental buildings. As Kirk points out, there is nothing worse for a homeowner than to be faced with a phalanx of absentee owners who don’t have the foresight or intelligence to invest in maintenance and upgrades to multimillion dollar condo buildings.

  • Lysenko’s Nemesis

    Depreciation Reports are only guides and cover a wide range of assets. The difficulty of estimating the life expectancy of these assets is compounded by the fact that emergencies arise and swallow funds.

    The Strata Act would have to be serious altered if expenditures were not based on annual budgetary approvals, as they now are.

  • peakie

    And further caveats on the data by Kerry Gold in Saturday’s paper in
    Poking holes in Vancouver’s housing vacancy study
    Kerry Gold, Special to The Globe and Mail
    Published Friday, Mar. 11, 2016 1:36PM EST
    Last updated Saturday, Mar. 12, 2016 10:17AM EST
    theglobeandmail.com/life/home-and-garden/real-estate/poking-holes-in-vancouvers-housing-vacancy-study/article29181730

    The study, which was intended to finally illuminate both city hall and residents on the extent of empty housing in Vancouver, was anti-climactic, to say the least. It reported that a mere one per cent of single-family homes were empty, a figure that hasn’t budged much since 2002. The overall vacancy rate was at 4.8 per cent. Only condo vacancies raised an eyebrow, at around 10,000 units. So what happened?

    The answer to that question is far more nuanced than the report’s use of BC Hydro electricity data can provide. The author of the study, Bruce Townson, is frank about the study’s limitations – and there are several….

    [ MORE ]

  • penguinstorm

    Did you read the post? The point is that there *isn’t actual data.* There is a data set that is skewed by the definitions and criteria set by an arbitrary decision making process which many disagree with.

  • francesbula

    All data sets are constrained by definitions and criteria, as well as problems of missing/inaccurate data and many other things. There is no perfect data.