FRANK 0'BRIEN (BUSINESS IN VANCOUVER) The February 20 provincial budget emphasized affordable housing, particularly in Metro Vancouver. Guidelines for rentals built under a city incentive program now define that for Vancouver: affordable rent is $1,750 for a one-bedroom and $2,505 for a two-bedroom apartment.
“Those rates will likely go up next year,” said Josephine Kwan, a spokeswoman for Spire Development, which will open a 95-unit rental project this fall in southeast Vancouver that is part of the city’s Rental 100 program that offers incentives to rental developers.
Without incentives, the six-storey Spire building near Fraser Street and East 57th Avenue would likely have one-bedroom rents above $1,900, which online rental search service PadMapper recently estimated was the city average, Kwan said.
The Spire provides perks that no existing rental project in the city could match. For example, the largest multi-unit passive-house development in Canada would reduce energy bills for tenants by approximately 90% compared with a similar-sized building not built to passive-house specifications. The passive-house concept originated in Europe. It is characterized by very thick walls with extra insulation, an airtight envelope, a heat-recovery ventilation system that brings in fresh air without any heat loss, and high-efficiency doors and windows.
Passive house is endorsed under the City of Vancouver’s Greenest City strategy.
Pete Rackow, co-founder of Spire Development, said passive-house construction costs are higher than those of a traditional building.
“However, the final product is much superior in terms of air quality, noise reduction and carbon footprint,” he said. “With the city’s support, we now have the perfect opportunity to revolutionize the rental experience for Vancouverites, especially given our current housing crunch.”
(REBGV) Housing was the dominant issue in the recent provincial budget.
The government released a 30-point housing strategy aimed at reducing housing demand, curbing tax fraud, building affordable housing, and increasing security for renters.
New tax measures include increasing property taxes and property transfer taxes on residential properties valued above $3 million, expanding the foreign buyer tax, and implementing a housing speculation tax.
“We welcome the provincial government’s commitment to address money laundering concerns and increase the supply of affordable, social, and rental housing in our province,” Jill Oudil, Board president said. “We’re concerned, however, about the series of tax measures announced. The budget introduces new taxes, hints at future taxes, and hikes existing taxes on housing. Taxes don’t make homes more affordable.”
Below is a summary of the key real estate measures announced in the February 20 budget. There’s considerable information to go through. We’re analyzing each item to understand the implications to you and your clients and will report back with more information and analysis in future communications.
The province will:
Foreign buyer tax
Property Transfer Tax
Effective Feb. 21, 2018, the Property Transfer Tax on residential properties above $3 million will increase to five per cent from three per cent.
Provincial School Tax
Beginning in 2019, the provincial school tax will increase on most residential properties in excess of $3 million.
Database on pre-sale condo assignmentsThe province will require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases. The information will be reported to a designated government office and shared with federal and provincial tax authorities to ensure taxes are paid.
Online accommodation PST and MRDTOnline accommodation platforms are enabled to collect and remit the Provincial Sales Tax and Municipal and Regional District Tax (Hotel Room Tax).
Property tax treatment for ALR landAs part of the Agricultural Land Reserve (ALR) review, the province is examining residential land in the ALR to ensure land is used for farming.
Clarity of property ownership
Compelling access to MLS®The province plans to enable tax administrators to compel access to information relevant to property transfers, such as information held in a MLS® database. (We’re asking government for clarification.)
Beneficial land ownership registry
The province will require additional information about beneficial ownership on the PTT form.
Administered by the LTSA, the information will be publicly available and shared with federal and provincial tax and law enforcement authorities.
Legislation will be introduced to require BC corporations to hold accurate and up to date information on beneficial owners in their own record offices and make it available to law enforcement, tax and other authorities.
Task force on money laundering and tax evasion
The province will work with the federal government to formalize a multi-agency working group on tax evasion, money laundering and housing.
Railtown might not be the next Yaletown, but the thin strip of gritty industrial on the lower Downtown Eastside is catching its share of trendy developers.
FRANK O'BRIAN (BUSINESS IN VANCOUVER) Railtown is north of Alexander Street, south of the rail tracks and bordered by Gore Street to the west and Princess Street to the east.
Once known as Japantown, it was first established as a heavy manufacturing zone linked to Vancouver rail and port access.
However, a May 2017 City of Vancouver zoning change has increased the area’s density and expanded the industrial definition to include a range of high-tech, creative manufacturing and other light-industrial uses.
As in Mount Pleasant, which has similar but less generous density, the zoning change has attracted commercial developers to Railtown.
Mount Pleasant is zoned for a floor space ratio (FSR) density of 3 while Railtown has been granted a 5 FSR density, explained Boe Iravani, a real estate broker with Cushman & Wakefield.
Railtown developers are also allowed to include light industrial in an entire project; zoning in Mount Pleasant requires that 80% of new space be offices.
Land values are lower in Railtown than in Mount Pleasant, and Iravani added that the higher zoning density translates into a less expensive cost per buildable square foot of commercial space.
Currently, Railtown would be around $200 to $250 per square foot buildable, while Iravani said Mount Pleasant would be north of $300. “Basically you can build four storeys in Mount Pleasant, but developers can go to five floors in Railtown in new builds [depending on the lot size].”
An example is Maker Exchange, the largest of three new projects now underway in Railtown. The five-storey, 152,000-square-foot Omicron and Rendition Developments industrial complex is designed for creative, digital and other light industry.
Being built at 488 Railway Street on the site of an old boiler factory, it received city permit approval December 17, subject to conditions.
It has some of the largest floor plates (25,000 square feet) of any new commercial building in the city and is the largest industrial project being built in East Vancouver, Iravani said.
Maker Exchange is expected to be completed by 2020.
New Class A space in Railtown is expected to lease in the $30 to $35 per square foot range, similar to Mount Pleasant or False Creek Flats Class A, but less than the downtown office average, which is north of $45.
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