Office space returning to pricey Vancouver market
Home ownership remains unaffordable for many, mayor acknowledges
Mike Howell
Van. Courier
The same week a study was released saying Vancouver has the second least affordable housing market in the world, Mayor Gregor Robertson was boasting that downtown is experiencing a building boom in office space.
Which begs the question: If developers build the offices and towers, will people searching for a job want to move to such an expensive city?
“It remains a challenge for companies when workers on average wages have a difficult time affording to live in the city,” acknowledged Robertson at a press conference last Thursday to announce the construction of The Exchange tower on Howe Street. “That’s why council’s focus has been on creating more rental housing, ensuring we’re dealing with low to middle income people and that we’re creating space alongside the market that is booming, as well.”
Home ownership, however, is a different matter. Vancouver ranks second to Hong Kong for having the least affordable housing, according to the study released by Demographia, which examined 360 housing markets in nine countries, including Canada, the United States and New Zealand.
The study said homes in Vancouver cost 10.3 times the median income compared with 14.9 times in Hong Kong. Three times the median income or lower is considered affordable. Canada’s most affordable market was Moncton, N.B. at a median of 2.3.
Robertson said the market is driving the cost of home ownership but that council will continue to “look at ways to temper that.” He pointed to Hong Kong government’s decision to slap a 15 per cent tax on property purchases made by foreigners in an effort to slow down the pace of rising housing prices.
But, the mayor cautioned, council doesn’t want to impose or lobby for any initiatives that would deflate the economy, although he recognized Vancouver has become expensive because of immigration and investment in a city with a confined amount of real estate. That investment is literally being seen downtown, with 17 office projects, including six towers, under construction for a total of 2.1 million square feet.
Robertson said his ruling Vision Vancouver council has approved as much new office space in four years as occurred in the previous decade.
“We’ve come along way in the last five years,” he said. “A few years ago, our economy was being held back by a lack of that office space. We had a critical shortage emerging and it’s wonderful to see the market respond.”
Robertson was joined at the press conference by Credit Suisse, one of the top private real estate investors in the world, which is behind the construction of the $200-million, 31-storey Exchange tower.
Mark Renzoni, president and CEO of CBRE Canada, whose company will handle leases for prospective tenants of the Exchange, said downtown is in a building boom because companies are looking for “new product alternatives” such as more control over heating, ventilation and air conditioning systems, better lighting and more amenities. “Vancouver has had probably over 10 to 12 years of a break from new construction,” Renzoni said. “So when you look at older buildings versus new buildings, the demand for new buildings is rising very quickly.”
The development of will include the renovation and restoration of the neighbouring old stock exchange building, which was built in 1929.
The project promises to create 400 construction jobs and have 1,700 permanent job spaces when completed in 2016. The Exchange will be built to achieve LEED Platinum status, the highest sustainability rating from the Canada Green Building Council. Energy consumption will be half the load of traditional office buildings.
© Vancouver Courier