Commercial First Blog

New Vancouver policies curb speculation along Broadway corridor

September 19, 2018
Real Estate Board of Greater Vancouver - Government Relations

Extending SkyTrain along the Broadway Corridor – the Millennium Line Broadway Extension – is a major priority for the City of Vancouver and TransLink’s Mayor’s Council on Regional Transportation.

But, Vancouver council is determined to avoid the type of price escalation speculators created by buying up land near proposed SkyTrain stations when the Cambie corridor expansion was announced.

Limiting speculation
While the city has begun drafting a Broadway plan, Vancouver council has adopted a new policy to curb speculation along the corridor which establishes development contribution expectations (DCEs).

In a letter to Phil Moore, Real Estate Board of Greater Vancouver president, Gil Kelley, Vancouver’s general manager of planning said: “This measure will ensure land owners, REALTORS® and developers are made aware of the city’s intention to achieve affordable housing and community benefits as part of the community plan for the area.”

Kelley explained in this letter that Vancouver has brought in DCEs to enable buyers to factor in the potential costs of providing amenities when rezoning or density bonusing occurs.

The new Broadway Plan
Broadway is a regionally important area that connects the largest university, University of British Columbia (UBC), and the largest hospital, Vancouver General Hospital, in Western Canada.

There are more than 125,000 residents within the corridor (including UBC) with a further 70,000 expected by 2045. With more than 105,000 jobs along the corridor (including UBC), Broadway is the second largest job centre in BC, and a major source of employment for residents throughout Metro Vancouver.

The new Broadway Plan is being drafted by city staff for the Broadway corridor which stretches from Commercial Drive to UBC.

The plan, expected to be completed in 2020 will focus on neighbourhoods along the Millennium Line expansion located in the area from Clark Drive west to Vine Street in Kitsilano (two blocks west of Arbutus) and from 1st Avenue to 16th Avenue.

The plan will address the need for:
  • expanded affordable housing options, including social housing, market and below market rental close to transit and jobs;
  • retention of existing rental stock;
  • increased market residential strata units (this will be limited);
  • increased commercial (job) space and enhance commercial shopping streets and local business opportunities;
  • improved transportation;
  • new and improved parks and public spaces; and
  • additional public amenities such as childcare and community facilities to serve a growing population.

  • There’s an interim rezoning policy while the planning process is underway.

    Opportunities to have your say
    There was a consultation session in May 2018 and there will be a consultation process beginning in early 2019. Realtors will be able to provide input including ideas and recommendations.

    Read the staff report to Council (Opens 50-page pdf).

    DCEs


    Areas specific DCE targets


    Community planning area

    DCE Target Area

    DCE Targets

    Broadway Area Planning

    C-2 Market residential strata

    $3,552.09/ sq. m.

    ($330/sq. ft.)

    Broadway Area Planning

    C-3A East of Main St. (Market residential strata)

    $3,552.09/sq. m.

    ($330/sq. ft.)

    Broadway Area Planning

    C-3A West of Main St. (Market residential strata)

    $4,574.66/sq. m.

    ($425/sq. ft.)


    The DCE of $425 per square foot would add almost $297,500 to the cost of a 700-square-foot condo west of Main Street.

    DCEs won’t be collected when land is bought or sold. The DCE is the amount expected for future redevelopments.

    When the Broadway Plan is completed, DCEs will be reviewed and may be revised to reflect the densities, mix of uses and amenity needs in the planning area.

    The DCEs will be updated and incorporated into the community amenity contribution (CACs) policy for the planning area.

    Under the Rental Housing Stock Official Development Plan, there’s a requirement for a one for one replacement of rental units for new developments of three units or more.

    Vancouver prioritizes job space along Broadway between Yukon and Oak, and no additional residential density will be considered in this area.

    Read the:
    Development Contribution Expectations Policy (Opens a 6-page pdf)

    The Broadway extension is expected to be completed in 2025.

    Commercial real estate sales down from robust 2017 activity

    Commercial real estate sales in the Lower Mainland declined in the first quarter (Q1) of 2018 compared to the active market experienced in the region last year.

    There were 523 commercial real estate sales in the Lower Mainland in Q1 2018, a 10.8 per cent decrease over the 586 sales in Q1 2017, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).

    The total dollar value of commercial real estate sales in the Lower Mainland was $3.031 billion in Q1 2018, a 38.5 per cent decrease from the $4.927 billion in Q1 2017.

    “Our commercial market returned to more historically normal levels in the first quarter of the year compared to the heightened activity we experienced in 2017,” Phil Moore, REBGV president said. “This shift to more typical activity is mirroring the overall economic trends we’re seeing in our province today.”

    Q1 2018 activity by category:

    Land: There were 221 commercial land sales in Q1 2018, which is a 3.9 per cent decrease from the 230 land sales in Q1 2017. The dollar value of land sales was $1.594 billion in Q1 2018, a 20.5 per cent decrease from $2.005 billion in Q1 2017.

    Office and Retail: There were 173 office and retail sales in the Lower Mainland in Q1 2018, which is down 15.6 per cent from the 205 sales in Q1 2017. The dollar value of office and retail sales was $1.076 billion in Q1 2018, a 51.8 per cent decrease from $2.232 billion in Q1 2017.

    Industrial: There were 113 industrial land sales in the Lower Mainland in Q1 2018, which is down 7.4 per cent from the 122 sales in Q1 2017. The dollar value of industrial sales was $0.280 billion in Q1 2018, a 12.2 per cent increase over $0.250 billion in Q1 2017.

    Multi-Family: There were 16 multi-family land sales in the Lower Mainland in Q1 2018, which is down 44.8 per cent over the 29 sales in Q1 2017. The dollar value of multi-family sales was $0.081 billion in Q1 2018, an 81.5 per cent decrease from $0.441 billion in Q1 2017.

    Download the Complete Report.

    In the News - May 24, 2018

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    Urbanized - Kenneth Chan shares photos and information regarding the construction of Grosvenor Ambleside mixed use building in West Vancouver.

    B.C. Residential Tenancy Act changes give more rights to tenants.
    Business in Vancouver - Landlords must now give tenants four months' notice for eviction in order to renovate. Informative article by Glen Korstorm.

    Designs revealed for 52-storey towner at 'Granville Gateway'
    Vancouver Courier - High-rise on east side of Granville Bridge designed to balance and echo Vancouver House. Article by Joannah Connolly.

    BCREA Market Intelligence Report: The Economic Fallout of Housing Price Shocks.

    Read the latest from BC Real Estate Association's Market Intelligence Report on the potential economic fallout of a relatively modest negative price shock to housing market.

    Additional economic information is available on BCREA's Website.

    For more information or to send questions or comments about the Market Intelligence Report, please contact:
    Cameron Muir
    Chief Economist
    Direct: 604-742-2780
    cmuir@bcrea.bc.ca

    Brendon Ogmundson
    Economist
    Direct: 604-742-2796
    bogmundson@bcrea.bc.ca

    Source: BC Real Estate Association

    Commercial Real Estate Sales Down, values up in 2017

    Commercial real estate sales activity in the Lower Mainland declined from the record highs of one year ago and remained above the region’s long-term historical sales average in 2017.

    There were 2,591 commercial real estate sales in the Lower Mainland in 2017, a 10.4 per cent decrease from the record 2,891 sales in 2016, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).

    Commercial real estate sales in 2017 were 11.1 per cent above the region’s five-year sales average.
    The total dollar value of commercial real estate sales in the Lower Mainland was $15.733 billion in 2017, a 14.5 per cent increase from $13.746 billion in 2016.

    “While commercial sales declined from the record pace of 2016, the total dollar value of the activity continued to rise,” said Jill Oudil, REBGV president. “The strong economic and employment growth in our province last year helped drive our commercial real estate market in 2017.”

    Activity by category in 2017
    Land:
    There were 1,061 commercial land sales in 2017, which is an 11.3 per cent decrease from the 1,196 land sales in 2016. The dollar value of land sales was $8.708 billion in 2017, a 15.5 per cent increase from $7.537 billion in 2016.

    Office and Retail: There were 888 office and retail sales in the Lower Mainland in 2017, which is down 3.8 per cent from the 923 sales in 2016. The dollar value of office and retail sales was $4.464 billion in 2017, a 15 per cent increase from $3.883 billion in 2016.

    Industrial: There were 527 industrial land sales in the Lower Mainland in 2017, which is down 15.8 per cent from the 626 sales in 2016. The dollar value of industrial sales was $1.238 billion in 2017, a three per cent increase from $1.202 billion in 2016.

    Multi-Family: There were 115 multi-family land sales in the Lower Mainland in 2017, which is down 21.2 per cent over the 146 sales in 2016. The dollar value of multi-family sales was $1.324 billion in 2017, a 17.8 per cent increase from $1.124 billion in 2016.

    Download the Commercial Edge Detailed Report.

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