Property boom in Vancouver’s east side yields calls to rein in speculation

FRANCES BULA (GLOBE & MAIL) – A decade ago, Vancouver planning director Larry Beasley sent out a message to developers: Go east.

It appears they have, along with business owners and home buyers.

An analysis of the change in Vancouver property values between 2013 and 2014 shows assessments have risen in key spots in the east, with Chinatown, the Downtown Eastside, Main Street, Kingsway and lower Commercial Drive showing up as distinct hot spots.

Values in many single-family areas in southeast and southwest Vancouver have declined as prices have dropped from a previous high.

The escalation of east-side property values is raising fears that speculators are buying land at inflated prices.

An industrial part of Mount Pleasant near Main Street and Broadway had the highest increase – about 30 per cent, as calculated by the B.C. Assessment Authority on the basis of recent sales.

“It could be a new demand for light industrial in the city. Or it could be speculation,” said Andy Yan, a planner with Bing Thom Architects who mapped the change in property values across the city.

Vancouver recently rezoned narrow strips of land on either side of lower Main Street and a prominent lot at Kingsway and Broadway to allow greater density, which likely prompted developer interest.

Mr. Yan said the city needs to move aggressively to stop speculation and preserve a part of the city that is an incubator for businesses. The area, which has about 8,000 jobs in it at companies ranging from auto-repair shops to architectural model builders, recently became home to the booming tech firm HootSuite and the brewpub 33 Acres.

“We need to not only save the offices in downtown Vancouver, but safeguard the economic nursery found in these light industrial areas that create firms that could some day fill these offices,” Mr. Yan said.

Former city planner Ray Spaxman, who has been working with communities in the Downtown Eastside and Strathcona, said the signs of price increases in those lower-income areas is worrying.

“We know there is speculation going on,” he said. “The biggest issue is the pressure from all the bulldozers that are running in the area and council policies that are focused on densification.”

He said he hopes a new city plan for the area will help reduce the speculation. The plan, on which council will vote on March 12, spells out height limits and restricts the amount of condo housing that can be built in some parts of the area.

Century 21 realtor Mike Stewart, who advertises condos in the Downtown Eastside and Chinatown on his website, said there is no doubt developers are moving into the area and paying higher prices for land as younger buyers show they are willing to live there.

“It’s been going for a few years now, but it’s reaching critical mass. The developers have run out of land in the western portions of the downtown. They’re buying up the land in the east but being quiet about it so their competitors don’t know.”

The city’s assistant planning director Kevin McNaney said the department is working hard to stop speculation by spelling out new policies that say exactly where new development will – and will not – go.

Mr. McNaney said a new city guideline removed the option for buildings that include a residential component in the Mount Pleasant industrial area.

Although likely some speculative buyers thought the land might be converted, he believes the city’s new policy for Mount Pleasant is encouraging people who want to build commercial space.

“It’s people interested in investing in and intensifying the area. It’s a very cool industrial area and one of the rare ones close to transit.”

Mr. McNaney also said the increase in values in Chinatown and the Downtown Eastside is relatively small but looks large because the prices used to be the lowest in the city.

He says the new city plans will, as in Mount Pleasant, bring clarity about what is allowed and actually reduce speculation.

“We are starting to send some signals about that.”

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