A victim of its own success

by Neil Sharma on 08 Dec 2017
Vancouver real estate has become so desirable—and expensive—that, in many areas, the cost of rezoning isn’t worth it, and that’s impeding the city’s ability to densify.

According to Rob Zwick, a sales agent with REMAX Crest Realty whose background is in urban geography, developers are rezoning areas that don’t make sense, financially or otherwise.

“If a house in an area is worth $3.5mln, imagine having to buy three of those to make a rezoning application,” he said. “Single-family houses have a certain value, and even if you add densification to that area, the land cost of what you’d have to pay that person to make it worth their while to sell is so astronomical that the numbers don’t make sense.”

But builders do rezone those areas with the intention of turning a profit. Cambie and Granville, an historically expensive part of Vancouver, has had a lot of redevelopment lately, and the price points are high.

“Where they should rezone is in more affordable areas so developers can go in there and purchase land at a lower cost, and not have to build such a high-end product for the area,” said Zwick. “Therefore, the consumer, at the end of the day, is getting something more affordable as well.”

Affordability is an essential part of densification, and leaps are being made, albeit belatedly.

The Grandview-Woodland Community Plan is one positive growth plan. Over the next 30 years, 10,000 people are estimated to move there. However, Zwick says this project should have been launched years ago.

“That’s something that should have been done six, seven years ago, but instead they did it 12 months ago,” he said.

Another issue, although one that certainly isn’t unique to Vancouver, is the lengthy rezoning process, and it’s often exacerbated by hostile neighbours.

“There is a lot of NIMBYism—complaining whenever densification is happening, but if 100 people grow up in an area and they all have kids, the next generation is adding 200 or 300 people to the area, so you have to densify or your kids have to look elsewhere for homes,” said Zwick.

Mike Buonassisi, a sales agent with Royal LePage West, concurs and says bureaucratic roadblocks need to disappear.

“Rezoning, I’ve heard, can take up to five years in some cases,” he said. “It’s a lengthy process and I think we need to step into the 21st century and come up with some new out-of-the-box thinking.”


Related stories:
Housing strategy offers no help for prospective home owners – academic
Are recent Canadian market corrections really false positives?
 

Post a Comment

Most Trending News

How much do real estate agents make in Toronto?
News

Commission isn't everything. You should also take other things into consideration such as the cost of marketing, licensing, renting an office, and splitting commissions with the brokerage.

Read More
Can I use the word 'realtor' in advertising?
News

As a member of CREA, you can use REALTOR® in your advertisements but there are a few basic rules that you should follow in order to use the trademark correctly.

Read More
Personal real estate corporation Ontario
News

A personal real estate corporation (PREC) belongs to an individual agent or a broker. There can be many benefits to starting your own PREC in Ontario.

Read More