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.

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 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!

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 . . .

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?

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?

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.

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.

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…

I dunno . . .

January this year I got occupancy for a 65 unit condo. One guy from Edmonton bought 8 . . . is he a rich foreigner?

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!

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.

Michael, Foo et. al.

Somewhere in this conversation I get a suspicion someone is promoting and agenda: huh I wonder why?

Prior to coming here, and after 35 years Vancouver practice, I lived two years in La Ciudad de Mexico: ostensibly the largest, not largest, chaotic, sublime, dangerous, safe, ugliest, most beautiful city in the world: assessments all correct.

Vancouver: sound familiar?

CMHC numbers? Pricey rentals? Reasonable rentals? Tight condos? Condos, plenty! Market in recession? “Thu hall” freezes hiring? Green shoots a-sprouting?

I dare only speak from my professional experience as of 2009: but not in Vancouver.

Award winning Vivo Gallery Residences: 65 units 3.5 storey urbanely integrated mixed use.

Views? . . . of course!

We commenced marketing, I say we, I am only the architect, in 2006. Reasonably priced, no frills, it was a mad house: sold out in a matter of days!

Then somewhere along the line oil spiked, owners hesitated.

Defaults, but not many. Now the place is fully occupied with some rentals.

In my own rental, not in Vivo, we are happy for the time being: we live a life of luxurious poverty: magnificent views 270⁰.

Conversion plans, mooted last year, on hold. The owners can thanq their lucky stars we blocked their plans ‘cos if they gone ahead they’d be fighting bankruptcy now!

And Michael y Foo thanq your lucky stars too. You bought before the bubble.

Paz

“Somewhere in this conversation I get a suspicion someone is promoting and agenda: huh I wonder why?”

What can I say? My ‘agenda’, if you like, is to ensure that we make important decisions based on accurate data…it was for this reason that I questioned whether it was necessary to implements measures to force people to rent out their empty apartments, when I questioned whether there really were 18,000 empty apartments being held off the market.

I am entering this conversation now since the City of Vancouver is looking at a number of initiatives to increase the supply of rental housing based on the CMHC 0.5% vacancy rate (including a possible prohibition on Strata Councils that want to restrict units from being rented). It is my contention that there is not a shortage of rental housing in the city and region. However, there is a shortage of AFFORDABLE rental housing. It is important to distinguish between the two.

I know from personal experience, and discussions with landlords that the market has changed quite significantly since last September. At that time, there were long line ups for one bedroom suites renting for $1200 + near 14th and Fir. Today, there are quite a few ‘for rent’ signs on the very same buildings. Just as the stock market, and condo market have changed in the last 9 months, so has the rental market.

The city is also considering a range of other ‘incentives’ to get more rental housing built….including either reducing or deferring permit fees, development cost levies, etc. As a taxpayer, and based on my real estate knowledge, I do not think my City Council should be forgoing such fees. If it feels it must do something, to be seen to be doing something, there are other far more effective things to consider….such as:

1. Change the parking requirements! For well located buildings, I would advocate requiring visitor parking, but not necessarily mandating the number of resident spaces. (Mandate parking for co-op cars instead.) This could significantly reduce the cost and rent for a smaller suite, and potentially contribute to a reduction in the number of cars on the road.

It might also facilitate new rental housing developments on existing well-located parking lots…shopping centres, churches, etc.

Offer density bonuses for rental housing. Yes, there is a ‘cost’ to the city when additional density is provided, but it may be less costly than forgoing permit fees…and this initiative will work as long as any required rezonings do not take forever….

Other solutions? laneway housing; relocatable modular housing; reduced suite sizes; and most importantly, lobby the federal government to eliminate tax provisions and CMHC insurance fees that PENALIZE developers of rental housing.

OK agua Flor…I hope this helps clarify my ‘agenda’….over to you!

Condohype, I disagree with your assesment that the CHMC numbers are worthless. Although they aren’t completely accurate they do provide a picture. As it’s unlikely that the vacancy rate between apt buildings and condos vary significately over the medium term. Id anything the CHMC figures provide a very good picture of affordable rentals as the condo units tend to carry a premium.

Has not anyone seen a problem with these numbers? The report states “the definition of an “empty condo” was suggested by BC Hydro where a unit that uses less than 75 kilowatts (Kw) of electricity usage per month is classified as empty.” Kw [sic] (kilowatt, or kW) is not a measure of electrical energy or usage, but of electrical power. This is no subtle distinction.

The proper unit, as BCHydro employees and anyone working on such a study as this should well know, is kWh (kilowatt-hour). For the sake of argument, let’s assume this is what is meant, for the numbers presented are at least in the right order of magnitude.

For example, modern Energy-Star-rated refrigerators will draw 40-60 KWh per month (source: http://www.energystar.gov). In the survey’s 5 pre-2000 buildings with somewhat older appliances and in newer apartments not outfitted to highly green standards, apartment refrigerator draws will fall within 70-100 kWh per month, roughly half of the efficiency.

Of course, an occupied apartment with lights, heat and/or air conditioning, and maybe an electric stove, a dishwasher or laundry, will–according to BCHydro PowerSmart–drive average monthly power usage in a 500-999 sf apartment with a single occupant to just over 200 kWh. This is of course an average, and PowerSmart shows a low of 150 kWh average usage for average, “profile” apartments without electric heating of any kind.

So, setting the bar at 75 or 100 kWh (vice “Kw”)–half of BCHydro’s suggested average–for defining the lower limit of occupancy appears ludicrously low and statistically indefensable. It is no surprise that so few units fell below these numbers, and thus hardly proof of anything.

The real finding here was that over a half of these units were bought as investments, and investments with significant and ongoing operating losses, not the kind of assets people tend to hold through recessions.

Guess we’re below average, I was scanning my bills and according to them my monthly average is below 100kw/h in fact I only surpassed that figure twice in the last year. Mind you we have a gas stove and central heat/hotwater. We are also out of town a far bit both on business and pleasure which reduces our comsumpation. Wonder how much that plays a factor with others. Perhaps my suite is “vacant”.

The rat race story is actually a good six months old. She lives back east now and the rental market has shifted since then. At that price point, you’re still hard-pressed to find something decent. However, if you walk downtown enough you will notice that you can see “for rent” signs in neighbourhoods and buildings where these used to be quite scarce. The tides are turning.

I still don’t believe a 13 building sample is conclusive. There is data available to see what demographic is buying into our downtown condos. The most common summary is along these lines, “primary purchasers have been Persian and Indo Canadian investors from Vancouver, Surrey and the North Shore. These buyers have purchased with the intention of renting out or selling their units at a later date. ”

You can browse the craigslist “for sale” listings for anecdotal proof of this.

Meanwhile, other buildings are favoured by overseas investors and there are a few that are primarily purchased by vancouver-based professionals who make good coin and like a certain neighbourhood. Because each building has a different preferred buyer, my own feeling is that this study is highly dependent on the sample selected. The size and location can sometimes have less impact on “emptiness” than the ethnic background of the developer.

Regardless of the intentions of the study, the Vancouver media can always be counted on to spin a story to the benefit of it’s advertisers….

The figure I’ve heard is that Bob Rennie was paying $7 million a year in advertising. You can look at westcoast homes in the sun for proof of the spending power. Full-page ads don’t come cheap. Since the once profitable classifieds business was lost to craigslist, something has to pay the bills.

Even if the pressure isn’t direct and overt (i’m not suggesting death threats from realtors and developers here), it’s hard to see the editors pushing anything through if it might threaten their life line. Journalism is pretty fragile these days. A lot of people are worried about their jobs, and I know this because there is a ridiculous amount of news on the industry. The odd “balanced” housing story might squeak through, but the overwhelming trend is to side with the industry that is signing their paycheques.

Conspiracy theory #2: the city’s most esteemed journalists have benefited from the bubble and have a serious stake in protecting their investments. Housing is a hard thing to be impartial about because the sides are drawn quite plainly. We’re all either renters or home-owners. Demographics indicate that a large cohort is nearing retirement with a near-zero savings rate. Extending upon this, the dot-com bubble scared the hell out of a generation and caused a lot of boomers to reallocate their wealth from intangible equity holdings to real estate, an asset that has two things going for it: It is less affected by the innumerable Bernie Madoffs out there and you can also show it off to your friends! You connect the dots and can understand why there might be some cognitive dissonance.

My last point is totally anecdotal. I work in a field where I have a fair bit of access to data and I am occasionally asked to write press releases. I know contacts I could partner with to write stories on the real estate market to promote both our companies. While I don’t have a stake in the market’s direction, these contacts have told me they are unwilling to add their data and participate in a story if it might lead to conclusions that would upset their clients.

I can go on, but you add it all together and it can start to feel like the military-industrial-congress complex.

Thank you, Rand Chatterjee…I stand corrected…Editing got a little overzealous and it is KWh/month after reviewing my notes from BCH. This is the benefit of crowdsourcing and constructive criticism.

I do however take exception to the suggestion of “spin” in this story. Frances has been very diligent in presenting this story and has NOT in anyway manipulated any of our findings.

It was a bit of a surprise for me at the lack of empty condos based upon these criteria as much as anyone else. However, I stand by the results of this study and how Frances has presented the story as we use one possible measure of quantifying empty condos.

In the face of limited research resources, our indicative stratified sampling technique was to focus on high density towers in Downtown Vancouver (excluding the West End). Any extrapolation on the overall city or even the entire downtown peninsula is NOT what this study examined. Indeed, the interest as articulated in this board and others reflect the need for a much more comprehensive study of the subject on a citywide level muchless a regional wide level to get a complete understand of the housing ecology in the region. Anyone out there up for this?

At the beginning of the project, we explored a number of possible metrics such as water use, garbage weight, photographic analysis, but they were systematically ruled out for practicality as well as responses from folks like Metro Van. Hydro usage emerged as the most feasible metric. This type of research and insight is built on a constructive and collaborative dialogue between researchers and those interested in the area. We just wanted to start this conversation with one attempt to look at empty condos and ownership patterns in Downtown Vancouver condos. I should however caution that the plural of anecdote is not data.

After completing this study, I have concluded that going after “empty condos” may not necessarily solve our ongoing affordable housing problems. Indeed, more towers, if developed and sold like the ones in Downtown Vancouver over the last 20 years with the dominance of one bedroom, non-owner occupied units, might not be sufficient to allow families with children at any income to stay in the city. So given all that is said about Vancouver, the big questions for me are still “what kind of city do we really want to be?”, “how do we get there?”, and “what are we willing to do?”

Andrew, I agree the best thing to come out of your study is support for the notion that Vancouver is NOT a family-friendly city.

Many people have been complaining for years that the policies of the city planning dept are leading to the very opposite of the sustainable, diverse city that they claim to want. Maybe studies like this will actually make them take notice.

Journalism is about analysing and reporting facts.

The simple fact is that Andrew Yan’s study found a 5.5-8.5% vacancy rate in the Yaletown/West End condo supply, using very low thresholds on hydro use of 2.5 or 3.4 kWh per day.

This usage, below which an apartment is considered likely empty, compares with BCHydro PowerSmart’s own published average power use profile for 500-999 square foot apartments of 5.0 to 6.8 kWh per day, depending on its use of electric heat and/or hot water, or neither.

But even if we accept this 5.5-8.5% rate of vacancy as the true number, look at the real estate crisis down in America’s worst-hit cities, and you will find these home vacancy rates for the 1st quarter of 2009:
Los Vegas – 4.8%
Phoenix – 2.6%
Orlando – 5.2%
Miami – 5.6%
Atlanta – 4.4%
Source: http://www.census.gov/hhes/www/housing/hvs/rates/index.html

Now, what about this Bing Thom study would make ANYONE write “Empty Condo Myths Untrue,” and dismiss this impending crisis while Vancouver Council debates incentives to encourage the construction of even more new residential units.

Blind overbuilding and overcapacity has plunged the US economy into the worst recession and banking crisis in 70 years. Why are we continuing to stoke the very same fire here, when it is already out of control?

To be sure, Bing Thom’s press release title, did state “‘Empty condo’ phenomenon largely a myth,” but the study itself came to no such conclusion, if anyone–including anyone in the media–actually read it, let alone thought for just a second what this meant.

“Rip and read” is not a form of journalism, but a violation at the very core of journalistic ethics, one all too common in Vancouver, and one that will cost the public dearly.