By Brad Richert. There is no shortage of hubbub in the urban planning world regarding the phenomenon that has become known as “Vancouverism.” While commentators have struggled with defining what Vancouverism really is, there is certainly a consensus that it has to do with a particular method of densification and it’s international proselytization.
Whether you consider Vancouver’s message to the world as superficial and a failed glorification of real estate, or an international success and a beacon of urban hope in a suburban sprawl nation, the effect Vancouver has on it’s immediate outlying communities is immense and as concrete as a James Hancock highrise.
In 2006, attached homes comprised of approximately 25% of new home starts the Township of Langley, (not to be confused with the City of Langley, but I won’t blame you if you do – the RCMP gets confused too). By 2010, this had radically increased to 77% – with the majority of this development concentrated in the Willoughby neighbhourhood. In 2011, this number rose to 82%.
This is in line with the Township’s obsession with urbanizing the remnants of Langley that allows for urbanization – the approximately 18% of Langley that is not in the Agricultural Land Reserve (or 17% if you ask Mr. Peter Wall – hahaha, funny, no? – geez, tough crowd). You know what? I agree – in order to save Langley’s precious ALR lands, while maintaining the infrastructure demanded by residents and reducing sprawl and the dependence on the almighty single-occupant car, we do need to increase density throughout the Township (although maybe I’ve just been drinking the Vancouverism Kool-Aid too).
The problem is that the Township of Langley, in its blind race to develop anything the ALC will allow them to as quickly as they can, has not stopped to realize they’re building a house of cards. Quite honestly, I don’t know what many of the developers in Langley are thinking, but their business plan is theirs. My primary concern is for the lives that are being ruined and the many more that will be ruined if the Township of Langley doesn’t wake up to the cold hard facts.
No one wants to buy your damn condos.
Sure, the developers might think they have all the time in the world right now to sell their pre-sales and eventually sell units one-by-one, but then what? Since 2008, the apartment condo sales-to-listing ratio has averaged around 8%, barely making it over 10% a couple of months last year, before coming crashing back down to 6%. Oh yea, in Aldergrove, all of attached homes, including townhouses, we’re floating under 3%.
What does an 6% sales-to-listing ratio mean? It means that for every 100 properties on the market, 6 sold that month. It means that if we were to stop listing properties, we would have enough inventory for 16.7 months. What it means is that if you are trying to sell your resale condo – whether it is a 3-year-old 700 sq.ft. box or a 20-year-old 1200 sq.ft. unit that escaped the leaky condo crisis, you probably won’t be able to sell it unless you cut cut cut that price.
It means that if you purchased one of those shiny new condos in 2008 for $300,000, you might get lucky if you sell it for $240,000 in 2013. Except that I would probably save a bit and buy a 1300 sq.ft. townhouse in the same area for $270,000. This isn’t speculation folks, this the dirty little secret that the Vancouver-centric news media doesn’t care about, and the local media and politicians either don’t know (ignorance not an excuse) or don’t care. Oh yea, did I mention that detached home sales have maintained or even increased in price in that same period?
Your itty bitty living space is depreciating while your potential “stepping stone” is appreciating out of proportion because in their infinite wisdom of making “affordable housing” (the politically correct term for substandard living spaces that no one advocating for would actually live in), our city planners (whoever you may classify that to be) are raising property values. Did I mention the ruined lives?
Are you awake yet?
The developers in Abbotsford and Chilliwack got their nasty wake up call several years ago as their situation was, and still is, somewhat the same as where we are right now. They still aren’t anywhere close to recovery – they also have little in the way of condo starts. The plan backfired. Wake up Langley. Vancouver and Surrey developers are, but it took giving away Fiats in order to sell properties before doing so.
The powers that be in Township of Langley are patting their backs for this new “Housing Action Plan” which really only puts into paper what they’ve been doing for the past 7 years – good for you! It talks about creating “affordability” without even mentioning the real estate market nor with any understanding of the consequences. It assumes that everyone, apparently, has the right to own a $600,000 Willoughby special – and that we must counter that with more 500-800 sq.ft. units that no one is buying.
Now Mayor Froese insists that all this development will help keep the tax increase tempered. Cue the mantra. Build more, build more, build more. Maybe if we could fill all the units we’re building, we’d have enough tax revenue to refrain from increasing the rate at all, but I don’t know, I’m not an economist. I simply ask you this: What happens when the demand does not meet the supply? I may not be an economist, but I do understand basic market principles. It isn’t up to individual developers to see the big picture nor is it up to developers to look out for the community. They can, and will, pack up and run when it suits them. They aren’t the bad guy – that’s just business and I’d do the same.
I’m not against building more… when people are buying. This is completely 100% preventable. It might take some guts and even some vision, on part of the Mayor and Council. They might have to start saying no to some of their friends. Perhaps not a “no” – just a “not yet.” Can we hold off? Is it possible? Can we temper the “yes’s” to let the market get back on its feet?
Or are you determined to keep all the poor folks that bought a Langley condo in their square box for the rest of their lives? Because with 25% equity vanishing into thin air, we’re going to expect to see a lot of families of 3, 4 or 5 living in square boxes without a chance to get out. This isn’t a doomsday speculation about the real estate market. This is a straight-forward observation of the current situation by someone who works in this market every single day. This is real. Homes aren’t being foreclosed on because the wise people of Langley can afford their payments. But they have no capital. And now, thanks to a complete lack of foresight by their government, they have extreme minus equity rivaling the travesty of many American homeowners.
I see nothing wrong with a little moderation to help development meet its goals. We must adapt to the conditions of the market place. I plead with our city planners to educate themselves on the reality of what is going on in the Township of Langley and turn the tide before it gets hopeless. Real estate is going to see some tough times in the next few years as it is – let’s not exasperate the problem.
*Disclosure – the preceding represents the views of Brad Richert, REALTOR, and not of Macdonald Realty and/or any of its subsidiaries
Brad Richert can be found selling real estate throughout the Fraser Valley. He moderates the talklangley.com community forum & his articles can be found at theredtie.ca and on the Today Media Network. If you would like to contact Brad, you can reach him at firstname.lastname@example.org
Brad Richert | Fraser Valley Real Estate Team
Macdonald Realty Ltd. (Langley)
22424 Fraser Hwy ■ Langley, BC V3A 8N3
t: 604.530.4111 ■ bradrhomes.com