Douglas Todd: Condos changed Metro Vancouver forever, for better and worse

Posted by Michael La Prairie on Friday, October 19th, 2018 at 6:42am.

It was 1968 — the year that Metro Vancouver got its first condominium complex.

A great deal has changed in the ensuing 50 years. Now roughly one out of three residents of the region live in a condominium. Metro Vancouver has about 600,000 condo units, with the city of Vancouver having 130,000 of those. The province in total has about 900,000 units, according to the Condominium Homeowners Assoc. of B.C.

Metro Vancouver could be the poster city illustrating the results of the legal changes half a century ago that made condominiums possible. A strong case has been made that the “condofication” of Metro Vancouver has done more than anything else to define this West Coast city. It’s come with some benefits, including for many owners, but the deeper structural effects have not all been pretty.

The condo metamorphosis has led to increased density, higher land prices, more vacant dwellings, more vertical neighbourhoods, fewer purpose-build rental units, more investor owners (domestic and offshore) and discord between different kinds of condo owners and users.

The condo boom has arguably provided many people who could not afford a detached property the chance to own a less-costly dwelling through a strata title, without directly owning a private chunk of land.

Douglas Todd: Condos changed Metro Vancouver forever, for better and worse

And it’s clear the property laws that made condominiums possible increased the density and shape of the city and its neighbourhoods — bringing far more tower clusters and making land in general more expensive. The vast majority of Metro’s more than 1,300 highrise residential towers are condominium buildings.

But the expansion of condominiums has also, many say, discouraged the construction of purpose-built rental buildings. Developers generally prefer constructing condo complexes, since they can sell the units right away, or in advance, and realize their profits quickly. They don’t have to patiently wait years to collect their profits in rents.

One of the most intriguing pieces ever written about the condofication of Metro Vancouver, and other parts of North America, is by Douglas Harris, a specialist in legal history and property law at the University of B.C. His article is titled Condominium and the City: The Rise of Property in Vancouver.

One of the many points Harris makes is that the laws that made condominiums possible in Metro Vancouver contributed to the high-end gentrification of the city, and to some extent the squeezing out of low-income residents.

“Much of the explanation for the higher prices in the last two decades lies in the influx of overseas capital and migrants,” Harris writes. “Enormous economic expansion in East Asia coupled with moments of political uncertainty and instability brought people and capital to North America and its west coast in particular.”

The condo phenomenon especially ignited in the late 1980s, Harris says, after the Social Credit government shocked many British Columbians by selling Vancouver’s former Expo 86 lands to one of Asia’s most wealthy businessmen, real-estate developer Li Ka-shing of Hong Kong.

People from Hong Kong, Taiwan and China became particularly active in the skyrocketing condominium market in Metro Vancouver. “Since the 1990s, Vancouver has had the highest residential housing prices in the country,” with condominium law providing the mechanism that “expanded the market for land, embedded the city in international flows of people and capital, and, by doing so, contributed to the rising prices.”

While the mushrooming of condominium units has made it possible for many residents to buy into housing options other than single-family dwellings, it’s also led to conflicts between those who own them, live in them, rent them and leave them empty.

It’s hard to obtain hard province-wide figures on the number of investor-owned apartments. But one reliable report to Vancouver City council, based on B.C. Assessment data, found 35 per cent of condo units in the city were owned by investors.

Tony Gioventu, executive director of the Condominium Homeowners Association of B.C., said it’s reasonable to estimate 35 to 40 per cent of the province’s strata units are investor owned. Thatwould mean more than 300,000 apartments are not lived in by those who bought them (whether using money made in a Canada or transferred from foreign lands).

The majority of investor-owned units are rented out, said Gioventu, especially since 2010, when the B.C. Liberals changed the law to allow developers to designate most new units as rentable for 100 years.

Another result of investment and speculation is that many units remain empty, even in the midst of Metro’s housing and rental affordability crisis. There are hundreds of condo towers in Vancouver’s downtown core, and Gioventu estimated 25 to 35 per cent of their units are vacant.

That is just one of many factors that have led to condominium stresses: Between people who live in their apartments, those who rent them, speculators and recreational-property owners who leave them empty and investors who turn them into businesses through Airbnb.

One of the most notorious conflicts involving investor-owners and owner-occupiers was to go this week before B.C.’s Human Rights Tribunal, but was settled out of court Monday with a non-disclosure agreement. It centred on condominium owner Andreas Kargut’s protest against Mandarin-language-only strata council meetings at his Richmond complex.

But it’s not hard to find other forms of discord between investors and owner-occupiers. The condominium rental study for Vancouver City council discovered complaints absentee owners were “less willing to spend on additional or unforeseen maintenance” and were negligent at screening renters, some of whom crowd into small units.

While generally defending the many renters in condominiums (including a large portion of the more than 100,000 international students in Metro Vancouver), Gioventu said serious problems, if not horror shows, are arising because some investors are hawking their units as short-term Airbnb rentals.

Too many condo owners don’t realize they’re liable for all damages, complaints and illegal activities related to renters, including those who sub-rent through Airbnb, Gioventu said. Not only do some Airbnb “guests” cause noise problems, flood bathtubs and use their units for illicit purposes, a portion take advantage of their condo security access to break into storage lockers and the units of others.

It’s an understatement to say condominiums have been a game changer in North America. Condofication has caused a revolution in urban history — and no more so than in Metro Vancouver. The story of condos is only beginning, and their consequences will continue to unfold in far-reaching ways.

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