This week, the City of Burnaby launched the “visioning” phase of its new Official Community Plan (OCP), which will guide the long-term vision for Burnaby’s transportation, infrastructure, parks, agriculture, arts, and housing all the way through 2050.

Under British Columbia’s Local Government Act, municipalities in BC are required to have an OCP. Burnaby’s current Official Community Plan was adopted in 1998 and revised in 2014, but the City says that a new updated plan is needed in order to “respond to the current an emerging needs of the community” and “articulate how growth will be shaped and managed.”

One of the biggest topics in Burnaby is housing and urban development, and to surmise what the future of housing in Burnaby will look like, it helps to first understand the past and present.

According to insights compiled by the City, there have been some subtle, but not insignificant, changes when it comes to housing trends in Burnaby.

The biggest shift has arguably been in terms of the kinds of housing found in Burnaby. In 1996, about 42% of all housing in Burnaby were single-family or two-family homes — the most common of all housing types. As of 2021, that number has nearly halved to 22%. Homes in low-rise buildings have also decreased during the same period, but only slightly, from about 28% to 25%.

Meanwhile, all remaining types of housing have increased. Row houses have increased slightly from about 7% to 9%, duplexes have more than doubled from about 7% to 16%, and homes in high-rises have increased from 18% to 29% — the highest of all types of housing, as of 2021.

This data is dated to 2021 but will more than likely continue on this trajectory in the near future, as most of the residential development that’s occurring in Burnaby is taking the form of multi-family buildings, many of which are in high-rises.

Just in the past few months, Burnaby has seen two new master plan proposals in Burnaby Lake Heights and Burnaby Lake Village, which would consist of 12 and 14 buildings, respectively. Both of those are located in the Bainbridge area of Burnaby, but other master plan communities are also taking form in Edmonds and Brentwood, all of which include plans for high-rises.

According to the City, the Metrotown and Brentwood areas have seen the largest increases in housing units by far, and there still remains plenty of projects on the way in those areas, many of which are high-rises.

In terms of the people, Burnaby has seen a shift between homeowners and renters that’s fairly rare not only in British Columbia, but all of Canada. While Canada’s renter population is growing at twice the rate of homeowners, according to Statistics Canada, Burnaby has seen the opposite. In 1996, 45% of households rented compared to 55% of households who owned their homes, but those numbers are 38% and 62% as of 2021.

According to the City, Burnaby had an inventory of 13,850 purpose-built rental units. By 2021, that number had decreased to 11,539. Burnaby has had a reputation for demolishing old rental buildings to make way for newer buildings, many of which were for-sale condominiums rather than apartments for rent.

The average household size in Burnaby has also decreased slightly, from 2.6 people in 1996 to 2.4 people in 2021. That change is attributed to a nearly 5% decrease in households with four or more people, from about 26% to 21%. In that same span, households with one person, two people, or three people all increased by about 1% to 3%.

The total number of homes in Burnaby was 68,750 in 1996 and 101,136 as of 2021, and the City is expecting to hit over 150,000 by 2050.

The development of the Burnaby 2050 Official Community Plan is expected to take multiple years and be completed by Summer 2025. In June, the City will be hosting numerous free events where residents are welcome to learn about and contribute to the development of the plan.

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Despite the pressures of inflation and cost of living, more than half of Metro Vancouver real estate investors say they plan to buy another property in the region, according to a survey for a real estate firm.

The Royal LePage survey, conducted by Leger, found 54 per cent of respondents in Greater Vancouver say they intend to purchase an additional residential investment property within the next five years. Of those, just over half will buy a condo.

In Metro Vancouver, 67 per cent of respondents own one residential investment property, while 29 per cent own two or more, according to the survey.

“The appetite for real estate investment is strong in the Greater Vancouver area. Unlike stocks or other investment types, real estate investing offers the convenience of dual utility — you can live in your home or rent it out as a source of income,” said Adil Dinani, a spokesperson for Royal LePage West Real Estate Services, said in a statement.

“There is a positive association between home ownership and the creation of personal wealth in Vancouver.”

Out of the three major urban centres in Canada, a property’s proximity to a post-secondary institution had the greatest influence on Greater Vancouver investors, at 53 per cent, according to the survey.

While higher borrowing and cost of living pressures have caused some Vancouver investors to rein in spending, many have been able to withstand increased expenses, said Dinani.

“In today’s post-pandemic era, despite higher borrowing costs, I expect more people will enter the investor segment as rates hold and eventually ease. Buyers will be looking for opportunities in the market,” said Dinani.

According to the survey, 28 per cent of investors in Greater Vancouver say that increased interest rates have caused them to consider selling one or more of their investment properties. When asked about their plans for the future, 28 per cent of investors in the region say they are likely to sell one or more of their investment properties within the next two years.

Leger says the online survey of 1,003 adult Canadians, who own one or more residential investment properties, was completed between March 2 and March 17 using Leger’s online panel. The company says no margin of error can be associated with a non-probability sample from a web panel.

The Leger poll comes as another survey Thursday by Co-operators, a Canadian financial services provider, found only 31 per cent of British Columbians aged 18 to 44 are confident in their ability to choose investment opportunities that will make money. In that survey, 40 per cent say that recent stock market fluctuations have made them hesitant to invest.

Earlier this week, Statistics Canada reported that investors made up almost 10 per cent of homeowners in B.C. in 2020.

The figures show B.C.’s share of investor-occupants, who own a single property with several units, including their primary residence, sat at 9.6 per cent that year, much higher than in other provinces.

For example, investor-occupants made up 2.5 per cent of New Brunswick’s homeowners, 1.8 per cent in Nova Scotia, 0.8 per cent in Ontario and 0.7 per cent in Manitoba, while other provinces weren’t part of the study.

StatCan attributed the high numbers of investor-occupants in B.C. to incremental forms of density, such as single-detached houses with secondary suites or laneway units, duplexes or triplexes.

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Metro Vancouver’s board of directors has approved a motion to re-work its budget to ease the rising tax burden for the region’s 2.8 million residents – and saddle real estate developers with much higher costs.

The motion, approved April 19, gives staff a mandate to overhaul its 2024 budget and move toward a plan that would lower Metro fees for single households by more than 16 percent between 2022 and 2026. The plan, however, would also increase development cost charges levied to developers when they build new residential or commercial projects.

Development cost charges (DCCs) are collected from developers and applied to the cost of infrastructure related to growth. DCCs are charged either on a per-square-foot basis or, in residential, as a flat fee per housing unit.

On April 28, the Metro board will decide whether developers, including those building new homes, will cover almost 100 per cent of the ballooning cost of water and sewage, the most expensive infrastructure, as part of Metro's 2024-2028 Financial Plan.

Currently there is an 82.5 per cent development fee on sewage infrastructure costs and Metro's new water infrastructure fee will be 50 per cent of related costs.

The change means ”that 99 per cent of the cost of system expansion is covered by development cost charges rather than water sales to water district members or liquid waste services levies to sewerage and drainage district members,” explained Jennifer Saltman, a communication specialist with Metro Vancouver.

The Metro Vancouver DCC rates would be on top of any municipal charges for new real estate developments.

DCC rates already rising

But development cost charges are already increasing, even nearly doubling this year from a year earlier.

Richmond city council, for example, has raised its DCC rates for a new detached house from $41,885 per lot to $61,138, a 47 per cent increase. The per-square-foot development cost charge on a townhouse is up 42 per cent from a year ago, while DCCs on a new condo apartment rose 43 per cent. The higher rates would add from $32,000 to $34,000 to the end price of a 1,000-square-foot strata unit.

Commercial DCC rates are up as much as 51 per cent. The biggest hike is in major new industrial projects in Richmond, where the DCC per acre has increased 99 per cent to more than $206,000.

Richmond has approved all the increases and needs only provincial approval to bring them online.

Dana Westermark, a Richmond developer, called these DCCs “punishing,” saying they will ultimately be passed on to buyers.

“It affects the end price of all housing,” he told Glacier Media. “(It’s) delusional thinking that, somehow, development will absorb the cost and it won’t get passed on.”

Richmond is not alone in jacking up DCC rates, even as the province is encouraging municipalities to reduce barriers to new residential development.

Some municipalities have not updated their fees in years and the new rates can be steep.

After a 33 per cent increase in 2022, compared to 2018, Coquitlam now charges $60,422 in DCCs for a new detached house, $39,664 per unit for a duplex or fourplex; $35,807 for each new townhouse; and $22,694 for every new apartment.  New commercial rates run from $58 to $101 per square metre (approximately $5.50 to $10 per square foot.) 

The City of Vancouver adjusted its DCC rates last September 30, as it does each year. For a high-density residential project, the DCC rate is $343 per square metre, or about $32,000 for every 1,000 square feet of new housing.

Vancouver’s DCCs for new commercial projects is $24.68 per square foot, with light industrial projects paying $18.51 per square foot, both higher than the annual average per-square-foot lease costs achieved by developers.

Vancouver residential DCC rates are low compared to some suburban markets, but the city also levies community amenity contributions (CACs) that add thousands of dollars to the developer’s cost. CACs, which can be a cash payment or the donation of park space, child-care spaces or other amenities, are also now being charged by some suburban municipalities.

In Port Moody, where DCC rates are from $13 to $14 per square foot for new strata units, Edgar Developments recently paid $30 million for a new road, $2.8 million for public art works and donated 5.1 acres to BC Housing to gain approval for a 2,000-home master-planned development, the first, and largest, in the city in 20 years.

Metro Vancouver’s fee increases come amid rising inflation, ongoing debt obligations and billions of dollars in infrastructure planning across a region housing nearly half of B.C.’s population.

Metro is currently building or upgrading three wastewater treatment plants. The largest of those is the Iona Island Wastewater Treatment Plant, a $10.4 billion, 10-year project designed to meet new regulatory requirements and the needs of a growing population.

Other major capital projects include a massive upgrade to the  regional body’s more than 500 kilometres of water mains — a series of projects meant to keep up with population growth and to have a better chance of providing reliable drinking water in the event of a serious earthquake or severe weather event.

Laudable spending. The question now is who should pay for it all.

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(Bloomberg) — The rapid decline in Canadian home values will come to an end in 2023 as a lack of supply reasserts upward pressure on prices, the country’s housing agency said in its annual forecast.

Prices will start to rise by next year as the pace of new home building fails to keep up with high levels of immigration and a quickening economy, Canada Mortgage & Housing Corp. said in its report. There’s already some evidence a recovery in home prices is underway: In March, the national benchmark rose for the first time in a year.

Canadian home prices posted their worst annual drop on record last year as the Bank of Canada enacted an aggressive campaign of interest rate hikes to combat inflation. The central bank paused those efforts in March and the housing market has begun to show signs of life, but buyers are confronting a marked lack of homes for sale. 

The country’s housing agency predicts the annual average price will end 2023 below last year’s levels, but focused its report on the risk of housing becoming increasingly unaffordable for too many Canadians with the prospect of further price declines and a steep recession receding.

“Affordability will continue to deteriorate through 2023, in both the ownership and rental markets,” Bob Dugan, CMHC’s chief economist, said in a press release. “With demand for housing still well outpacing new housing supply, affordability challenges will persist for owners and renters.”

The agency forecasts Canada’s average annual home price will end 2023 at C$643,325 ($472,581) from C$703,875 last year as the economy risks a “mild recession” as a result of the central bank’s interest rate hikes. However, that will also prompt a sharp drop in the pace of new home construction, exacerbating existing housing shortages in cities like Vancouver and Toronto and contributing to a rebound in prices the following two years, the agency said. 

In Toronto and Vancouver, there are already signs of sales and prices picking up. Those cities may be leading a recovery process, which should see prices bottom nationally between April and June, before beginning to rise again in the second part of the year, Dugan said on a conference call with reporters.

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