Daniel Greenhalgh Construction Mangement News

How Rental Zoning Decreases Property Values

Fri, 05 Apr 2019 17:23:08 GMT

In our last post , we wrote about the city of New Westminster’s decision to utilize the province’s new tool by rezoning six privately-owned stratified buildings as rental-only. The decision was taken to curb the growing number of ‘renovictions’ in the city, where units that had been rentals for decades are put up for sale, causing tenants to be evicted.

There are lots of concerns about this kind of rezoning decision. For one thing, the ‘rental-only rezoning tool’ is the first of its kind anywhere in North America, and the city of New Westminster is the first to use it. So we’re really the guinea pigs of this tool, and I think it’s a problem that its first use is to take away property rights from private landowners.

These owners have been paying property taxes on the highest and best use of their land for decades. They’ve chosen to rent out their units, but they’ve always been free to sell units or the whole building if they saw fit. To have the city come in and suddenly decide for them how they can use their primary investment is definitely a shock to them. It’s also a scary precedent that sends fear up the spines of all property owners in New West and all of B.C. The values of their properties will plummet with this decision, and the targets seem arbitrary.

These owners, I feel, should be entitled to the tax differential they’ve paid for, a stratified building over a purpose-built rental building. They deserve a refund on the property taxes for at least the last three or four years, if not for the entirety of their ownership. This would amount to tens of thousands of dollars.

It’s the pure prerogative of any municipality to set development standards. They can determine that this land will be used for a school, this land for a railroad, etc. This is always a pain for some, and a boon for others. But the time to discuss these issues is during the community involvement period. However, the B.C. Supreme Court has acknowledged that while municipalities have the responsibility to provide a forum for the pubic, they’re under no obligation to actually listen.

About three years ago, there was an injunction against a project in Vancouver. The council passed a permit, but there was never a consultation period. The judge ordered a halt to construction because they didn’t follow the proper process. They were required to have a consultation – they can’t skip any steps in the process.

These owners were never notified of first or second readings about the decision to rezone their property. They learned about the decision through others in their industry, and they did manage to attend the final public hearing, two weeks after the bylaw had been introduced. Despite their protests, the law was passed. I feel that much more time should have been given to the ramifications of the decision – especially since, as I’ve stated, this is the first time this kind of tool has ever been used in North America.

The owners are taking the city to the B.C. Supreme Court over the decision, and I wish them well in their attempts to walk back the rights that have been taken from them.

I believe the only involvement from government should be to make land available for development. They should be actively looking for ways to reduce the cost of land so that our drastic shortage of housing supply can be remedied. The primary target for this, as we’ve written about, is ALR land. If our government, at all three levels, focused on easing the path of development, instead of looking for more and better scapegoats for an out-of-control affordability crisis, I think we’d all be better served.

New Westminster Pushes Limits of New Rental-Only Zoning Law

Wed, 03 Apr 2019 18:09:22 GMT

Last year, the provincial government passed legislation allowing municipalities to zone for rental-only developments. The new tool gives cities the power to mandate a certain percentage of units to be rentals or to protect existing rental properties from redevelopment.

In January, New Westminster became the first B.C. city to use the new tool when it approved a bylaw to rezone 18 existing properties as rental-only. Twelve of the properties are city-owned, while the remaining six are privately owned stratified buildings that have been operating as rentals for many years.

The decision undeniably devalues these properties. The owners claim that the city passed the bylaw as hastily as possible to prevent them from attempting to sell off the units first. The city didn’t inform the owners of readings on the proposal, and within two weeks of being introduced, it was passed. The council claimed there was an “urgent need” to pass it, presumably because renovictions were deemed imminent.

“Renovictions” is maybe the most emotionally loaded word in New West at the moment. The current mayor and council all realize what a potent political issue it is, and they’ve been elected under promises to put a stop to them. Mayor Jonathan Cote claims that tenants of 315 units have been forced out in the last couple of years in his city, and he’s vowed to do what it takes to preserve existing rentals.

LEGAL CHALLENGES

But the first wielding of the rental-only zoning tool may turn out to be an overreach. The six property owners are taking the city of New Westminster to the B.C. Supreme Court. They claim that lack of consultation, combined with inaccurate and false statements in public notices, should force the bylaw to be delayed or reversed. There’s also a section of the provincial legislation that prevents the tool from overriding existing strata laws.

The downzoning and devaluing of their properties particularly stings because they’ve been paying higher property taxes for stratified units. None of them had plans to sell, and all had been reputable landlords for decades. Instead of a pat on the back for keeping their units on the rental market, they were seemingly arbitrarily chosen as the first owners to have their property downzoned by the city.

Developers argue that the bylaw will scare any company or bank away from taking on projects in New West. Right now, the city is among the leaders in the Lower Mainland in adding new rental stock. This law may cause that growth to slow to a trickle.

Council members have complained that they were tired of telling constituents they couldn’t do much to stop renovictions. When the province gave them this new tool, they immediately tried to use it to preserve existing rentals, even though that’s arguably not it’s best use. I think it should be deployed to encourage new rental supply, not as a penalty or preservation tool that devalues people’s property.

This municipal tool is the first and still only one of its kind in North America. It’s a scary precedent to see it being used to take away property rights without compensation.

Making Homes Affordable for Millennials

Mon, 01 Apr 2019 17:59:22 GMT

On March 19th, PM Trudeau’s Liberal government released its 2019 budget. This being an election year, the budget includes several olive branches to their target demographic – including an anticipated measure to help first-time home buyers, i.e. millennials, to break into the market.

The measure, the First Time Home Buyer Incentive, proposes an interest-free shared mortgage with the Canada Mortgage and Housing Corporation. So if you can put up the down payment, you can share ownership of your home with not only the bank, but with the government.

The CMHC would front 10% of the purchase price of new-build homes, and 5% of the price of resales. This would apply only to buyers with an income of less than $120,000/yr. The hope is to boost the supply of new homes with the larger loan amount, which is something we of course support.

This kind of measure won’t have much of an effect in the high-priced market of Vancouver. In fact, if this idea seems familiar, it’s because it’s almost identical to a 2017 measure introduced by B.C. Liberals in THEIR election year, and which was widely described as a failure before being axed by the NDPs as soon as they took power. It was deemed difficult to understand, and people weren’t thrilled about sharing ownership of their home with the government.

So why is the federal version different? Well, for one thing, the incentive amount will be capped at four times the income of the prospective buyer. This means that homes must be priced below $480,000 to qualify – eliminating pretty much all detached homes and townhomes in the Lower Mainland.

The federal program will also allow a buyer to wait until they sell their home to repay the loan. The B.C. version required buyers to start repaying after five years. This would keep high-risk buyers from getting in over their heads with mortgage debt. The CMHC, in fact, were against the B.C. version because they predicted it would exacerbate family debt (their pick for the biggest societal ill) while driving up demand for homes in a supply-starved market, thus worsening the affordability crisis.

But the CMHC is firmly behind the federal version. The program is expected to attract over 100,000 home buyers over the next three years. (The B.C. program forecast 42,000 applicants but only got 3,000 in the first year.)

The Liberals are lagging pretty considerably in current polls, and this courting of the millennial vote is clearly a political strategy. The policy will only go into effect if they’re elected in October, after all. But the dream of homeownership still looms large for most Canadians, and any attempt to ease that path will likely be eagerly welcomed by our young electorate.

A Case for Geothermal Heating

Thu, 28 Mar 2019 17:30:42 GMT

As developers continue to adapt to the building code requirements of the STEP code , we’re increasingly exploring the most efficient and cost-effective means of reaching full compliance. The province’s goal is to make every building net-zero energy ready by 2032. They’re doing this in five steps incrementally over the next few years, and we’re still at step 1 right now. But as we ramp up to steps 3, 4 and 5, the sticker shock is going to be extreme for home buyers. Even if we see no additional cost increases for supplies or development fees, we expect construction costs to more than double. Those costs will be inevitably be passed on to homebuyers.

One of the primary ways in which we waste energy, and money, is by heating spaces. There are lots of recommendations from the province about how best to go about reducing our environmental impact in this area. But in my experience, I believe it should be mandatory for developers to install geothermal heating systems in every new home and high rise.

A typical home heating system involves insulation near the studs. The STEP code allows for this kind of standard system to continue, with certain efficiency evolutions. I think this standard system, and this kind of thinking about heating, is fundamentally wrong.

Geothermal heating systems require installing a heat pump below the ground to harness the consistent ground temperatures of the earth. They can both heat spaces in the winter and cool them in the summer. This method is much more efficient than relying on outside air temperatures to regulate your interior climate.

The system involves running two pipes beneath the ground and into the home - one intake, one exhaust. It uses heat from interior air being exhausted to heat the exterior air coming in.

The cost to install such a system is about $80,000. This is a huge addition to the cost of building a home, obviously. But this would essentially eliminate your heating bill. With standard monthly heating bills at about $250/month, it would take about 22 years to break even. Since a typical home structure is good for at least 40 years, the up-front capital outlay is definitely worth it, economically and environmentally.

These systems are capable of very high efficiency rates. They’re 48% more efficient than the most efficient gas furnaces and 75% more efficient than oil furnaces.

For industrial and high-rise buildings, it’s mind-blowing how effective these systems can be. They have the added benefit of giving an architect design flexibility – boiler rooms can be eliminated, mechanical rooms can be reduced, and the roof and landscape can be free of outdoor heating equipment.

I believe all new homes and buildings should incorporate this system into their plans. The current code allows developers and individual home-builders to reach compliance through various methods. Regulators are interested in checking boxes, and they have no interest in how they get there. We end up with the cheapest way, not the smartest way, to meet requirements. We find ways to game the system. Geo-exchange systems leave no wiggle room – we’ll actually reach our environmental and economic targets via the most efficient method of creating comfortable living spaces.

Willoughby Walk is at Final Occupancy

Mon, 18 Mar 2019 15:49:23 GMT

We’re proud to announce that our 191-unit purpose-built rental project, Willoughby Walk, has reached the final occupancy stage. Every unit is ready for tenants, and right now they’re being occupied at a rate of a unit per day.

We’re still accepting applications and there are still over a hundred units available for rent. We encourage any interested tenants to apply immediately, as we expect the property to fill up very quickly.

Over the last month, we finished up the flooring, cabinets, doors and windows for every unit. The hallway flooring was the last thing to go in, and that was late last week.

The state-of-the-art gym will be completed by April 1st, and the remainder of the landscaping will be done by the end of April.

With Phase 1, we opened up 72 units, and about 70% of those are rented. The one bedrooms went very quickly, so we started moving people in to Phase 2, which were the remaining 119 units. We think the whole property will be filled up by May.

We designed the property to be a trendsetter in terms of quality of construction and access to amenities for purpose-built rental projects in the Lower Mainland. From the choice of materials, to the plethora of on-site amenities, to the professionalism and attention to detail of the property managers, the project is designed to feel like the best of strata living. You can check out what that looks like in our photo gallery .

The location of Willoughby Walk provides the kind of walkable lifestyle that a lot of families are looking for. There’s easy access to shopping, schools and commercial spaces in the Willoughby neighbourhood. We also worked with the Township to make sure they put a new bus stop right outside the building, so public transit is literally at the doorstep.

The many amenities include storage lockers for each unit, a parking space with an option to secure a second one, a bike storage room, a wifi-equipped common room and tempered, cool air throughout the building. We’re also happy to say we’ll be accepting pets.

We know home prices are through the roof and more and more people are committed to long-term rentals. We’ve introduced a stringent screening process and we think we’ve ensured a community of people who want to put down roots in the property and the Township.

It’s a great sense of accomplishment for all of us involved. It’s been a long process and we’re very proud of what we’ve built. We hope that the property will help to set a standard for purpose-built rentals throughout the region.

A Crossroads for Electric Cars

Fri, 15 Mar 2019 20:53:37 GMT

When automobiles first hit the market in the early 20th century, we had a choice of two paths: we could manufacture and buy gas-powered cars or electric cars. For many regrettable reasons, we got stuck with the former.

Today, we’ve committed ourselves to correcting that mistake. Our province has pledged to reduce greenhouse gas emissions from 60,000 tonnes per year to 35 million tonnes per year by 2030. A big part of this pledge is providing incentives for people to replace their gas-powered cars with electric ones.

But we’re facing a similar crossroads. We have a choice between two power sources – batteries or hydrogen. Where a hundred years ago, Big Oil won the battle, today, it may be Big Battery that forces us down the wrong path.

The carbon footprint for producing an electric car with lithium ion batteries is currently greater than the carbon footprint for a fuel-efficient car. The break-even point comes at about 400,000 km, which most cars will never reach. Until we create smaller, more efficient batteries, driving electric vehicles will have a minimal impact on the overall health of the environment.

But there’s a clear alternative that unfortunately, like a hundred years ago, will make a lot less money for investors. We can run our cars on hydrogen energy, supplemented by a small amount of gas. These vehicles are clean and do not rely on heavy, environmentally damaging lithium batteries. The break-even point comes way down to 80,000 km.

This idea of comparing the lifetime carbon output of fuel-efficient, hybrid, battery-powered and hydrogen-powered vehicles is starting to gain traction amongst consumers and government regulators. It’s very important to understand the total carbon costs of all stages of a vehicle’s life, from mining materials to recycling components – especially if we plan to cut our emissions in half in the next ten years.

I don’t think we can do this by choosing the battery-powered path. Companies like Tesla exist to produce lithium-ion batteries. They only produce cars to create a market for them. If he could, I believe Elon Musk would give Teslas away for free. But a transition to Teslas will never have the impact we need to reach our emission goals.

Our provincial government has created two incentive programs for purchasers of electric cars. It’s possible to qualify for both and receive a rebate of $11,000 if you give up your gas-powered car and purchase a new electric one.

I’d encourage our leaders to look at further incentives for choosing hydrogen power over battery power. There’s nowhere close to the amount of infrastructure needed to make these cars a reliable option for consumers, but that’s where we need the powerful push that government can provide.

We can still easily choose one future over another – but batteries already have a huge head start. We need to act quickly and decisively to tip the scales towards hydrogen. If we don’t, we’ll likely look back in 100 years and wonder what we could possibly have been thinking.

2019 Home Sales Aren’t Very Reassuring

Wed, 13 Mar 2019 16:26:40 GMT

We’re currently in the midst of a good run of scary articles and projections about the impending crash of the Vancouver housing market. It’s becoming a first of the month ritual to read fresh stats about dreary sales numbers compared to this time last month, or last year. Here’s the latest:

February home sales were 42.5% below the 10-year sales average for the month. There were 1,484 home sales last month, which is a 32.8% decrease from February 2018 – but, for the optimists, a 34.5% increase from January.

January’s home sales were the lowest level in that month in 10 years. The Real Estate Board of Greater Vancouver blames the slump on the strict mortgage stress tests that were enacted last year by the federal government. They claim that, combined with the increase in mortgage rates, the tests took away about a quarter of the purchasing power from potential home buyers.

This is all pretty dire – but we still live in a region that’s valued for a very good reason. We can’t do sprawl here like in most other metro regions. People live here for the weather, the mountains and the ocean - and once you get too far east, you may as well live in Toronto.

I don’t think we need to fear any kind of traumatic housing crash here. Housing values can only fall so much. Look at the costs – you just can’t build houses for much cheaper. It’s still going to cost between $500,000 to $600,000 to build a detached home of about 2,000 square feet. The kind of home I grew up in. It’s at about $250/square foot right now. So existing homes here have a base-line, intrinsic value, just based on the replacement costs. You may see single digit percentage points of value loss over the next year or several years, but that’s not a crash. Double digits are crash level, and we’re not going to see that, I don’t believe.

I would point out that In the U.S., the housing crash came from a market where the cost to build was around $100/square foot, and homes were retailing for $250/square foot. We’re not seeing that here, and thus we can rein in our fears of a similar crash.

We did have a crash here in Vancouver in the 80’s, where people were just walking away from their mortgages because the interest levels were so high. Construction stopped almost completely for a few years there in the early 80’s. But the population growth alone here will negate that. There’s like a thousand people a month moving in to Surrey alone. You can measure supply in terms of months of inventory. Right now, there’s about five months of housing supply in Surrey. So in five months, if you’ve sold every home, you’re back to the same problem, and housing prices will spike again. You’ve got to keep up with the demand by adding new homes, or people will stop moving in. There’ll just be nowhere to go.

Adding Housing Supply Really Does Work

Mon, 11 Mar 2019 16:11:01 GMT

There’s a nagging persistence to the idea that the crisis of affordability in the Vancouver housing market cannot be adequately addressed through building more homes. The ‘supply skeptics’ claim that demand for housing is and will remain insatiable, and any attempt to flood the market with new homes will not make it easier for low-to-middle income families to afford to buy.

These skeptics influence our policies on things like land-use regulations, which restrict supply. They effect rezoning efforts to allow for more density, making it easier and more credible for NIMBYs to claim that their swath of single-family homes are just fine the way they are, despite being in some of the most constricted and valuable land masses in the country.

It may be true that the market alone cannot provide all the solutions we need. But it’s absurd to suggest that the housing crisis does not demand that we build as many new homes as we can. There are dozens, maybe hundreds of journal articles, research papers and economic analyses which prove over and over that adding new homes moderates price increases.

I believe that adding supply may be the most potent weapon in addressing the crisis, but we can never measure a problem by just one metric.

Too often with the housing crisis, we hear people say it’s all this fault, or that fault – it’s all the foreign investors, or it’s all a density problem. It’s always going to be a collective aggregate of several things. That includes the supply problem, it includes land-use restrictions like the ALR, it includes changes to the Step code which are going to send prices through the roof. We need to approach the problem from a holistic viewpoint.

One report suggests that our supply problem is more dire than we realize, claiming that by next year the Metro Vancouver market will be short by close to 50,000 homes. This assumes a population growth of 65,000 people a year and a market where 10% of new homes are purchased and left empty or used for short-term rentals. This report urges government intervention to assist developers with adding more units to existing projects.

It’s true that government intervention is required to ensure that supply is added both at the scale we need and at prices affordable to a range of incomes. We’ve seen commitments from municipal, provincial and federal governments to work with developers in kickstarting affordable housing projects, and we at ENM are also committed to be a part of that effort when called upon.

We’re always open to partnerships with governments or non-profits to take on affordable housing projects. We want to build, and we want to work with officials who are elected on the mandate to get these kinds of projects off the ground.

The Darryl Plecas Question

Fri, 08 Mar 2019 17:36:59 GMT

Last month, the increasingly famous Speaker of the B.C. Legislature, Abbotsford South MLA Daryl Plecas, released a 76-page report backing up the claims he’d made of financial malfeasance within the provincial government. Those claims led to the suspension of long-time Clerk of the House Craig James and Sergeant at Arms Gary Lenz in November, highlighted by a humiliating police escort out of the building for the two men.

After two months of assurances from Plecas that he had the data to back all this up, the report now lays bare the details he’s been promising. And there’s no doubt they’re damning.

Plecas cast himself in the role as a sort of undercover agent over the last 18 months, accompanying James and Lenz on government-expensed trips to London and Scotland and documenting every luxurious whim they charged to the taxpayers. Tailored suits, tours of St. Andrews Golf Club and, bizarrely, a high-end wood splitter jumped out as headlines, while the most egregious item may be the $300,000 ‘retirement allowance’ James asked Plecas to approve, even though he has no plans to retire.

These claims - which James and Lenz adamantly deny – would certainly justify their suspension and will most likely trigger court-ordered repayments of the illegitimate expenses. The claims have also shored up Plecas’ hero status among progressives, secured when he broke with the Liberal Party in 2017 to accept the position as Speaker. The Liberals couldn’t be more outraged with their former star candidate, kicking him out of the caucus for essentially handing the NDP-Green coalition an unchallenged hold on the legislature and the provincial government.

Wherever you side on judgments of his actions, Plecas, a former tenured professor of criminal justice and part-time prison judge, has shaken up Victoria like a snow globe over the last two years by refusing to play by any set of traditional political rules.

The public is fascinated by him - is he a maverick, a man of integrity who sees the right choice and makes it despite the political consequences? Or is he a “self-serving opportunist” who’s just betrayed the trust of his party and his colleagues to secure an ever-increasing hold on power and prominence?

I am convinced he’s the former. I first met Plecas when he was a student of criminology and Plecas was a dean. It’s always been clear to me that Darryl lives to be a principled person. First of all, any notion that he’s motivated by money is absurd. He was offered the Speaker position three times before finally seeing that it was the right thing for him to do. The extra ten grand a year or whatever it is has nothing to do with the decision. He’s already a wealthy man, and he’s leaving his money to charity. He’s an enigma to politicians and political reporters because I think he genuinely wants to do what’s best for the people of B.C. He was asked to compromise his principles over and over again by the Liberal leadership and he kept refusing. He’s not going to be a guy that does whatever his party tells him, and that makes him scary to people.

I believe Plecas’ situation is a perfect example of how our party system at both the provincial and federal levels doesn’t work. You can’t have your own opinion. You get kicked out if you differ. And that’s what happened to Darryl. I know plenty of people who are frothing at the mouth with anger at him for enabling the NDP. He’s become the most powerful person in the province. He controls the legislature building, he controls the docket, how long a topic can be held. He’s the judge for parliament. But he’s in that position because he refused to compromise his ethics. He’s a one in a hundred guy, and we should all be standing up for him. But instead, he’s getting lambasted because people are too cynical to believe in his true motives.

The now-independent MLA may be back home in Abbotsford soon. There’s a good chance that a recall campaign, organized by voters in his riding, may actually work. No MLA has ever been recalled, but with Plecas, the unprecedented is starting to seem normal.

Daniel Greenhalgh Responds to Struggles with Speculation Tax Roll-Out

Wed, 06 Mar 2019 20:26:19 GMT

Recently, the provincial government announced its plans to implement its new speculation tax. The new tax will ask any property owner who doesn’t pay B.C. income tax to pay 2% of their property value annually starting this year, provided they don’t live in or rent out the home.

Although the tax will only apply to a small percentage of B.C. homeowners, every homeowner will have to prove they are exempt by filling out an online form each year. If the form is not filled out, the tax will automatically be levied, vastly increasing the chances that exempt homeowners will unwillingly pay the extra tax.

Notices have already been sent out, and forms must be filled out by March 31st.

I find the NDP’s rollout of the new tax to be clumsy and unnecessarily expensive.

I think it’s a little absurd that they’re planning to identify the 1% of homeowners through forcing everyone , all 1.6 million homeowners, to spend twenty minutes providing information to prove that they’re exempt. First of all, I believe this information is already provided to the government through the homeowner grant application on property tax notices. They could easily spare us the headache with a few extra lines of code, but they’re spending untold thousands on these mailers and the staff time to process them. The tax is so unpopular to begin with, and then this rollout just adds to the frustration.

The tax is designed to curb foreign speculators who are blamed for artificially inflating our housing market. But I would argue that the fear is overblown.

Very few large investors do property speculation, especially in Langley or anywhere outside of Vancouver. But this tax applies all over the province. The better approach to bringing housing costs down is to reduce the cost to build. These experimental taxes, which have so many unintended consequences and hurt so many honest people, are seriously misguided.

The tax has been called a “non-resident owner tax” that will do little to deter actual foreign speculators. Those who are attempting to game our market will only pay this tax once, while non-resident owners will have to pay every year.

For any questions about the rollout or the terms of the new tax, you can email the provincial government at spectaxinfo@gov.bc.ca .

UDI President Releases Five-Point Plan to Fix Housing

Mon, 04 Mar 2019 21:17:57 GMT

Our industry often relies on the policy expertise of the Urban Development Institute , and its president, Anne McMullin, is an eloquent conveyer of our point of view.

In January, she published a five-point plan to address the many housing issues facing British Columbians.

Speeding up the homebuilding process through increased capacity for permit approvals at the municipal levels. Delays in building add to the costs of housing, and they’re inevitably passed on to the buyer.
The construction of more rental units, like our recently opened 191-unit purpose-built rental project Willoughby Walk in Langley. She recommends an innovative policy to promote these projects: a provincial sales tax exemption for building materials on rental projects.
Modernize neighbourhood design through adapting zoning standards, allowing for housing beyond just single-family homes.
Incentivized construction near transit lines in order to maximize the capital we pour into public transportation.
Eliminating the tax grab on new housing. She argues that every new tax levied by the government on homes and rental units are passed on to resident buyers and renters and cripple any effort to bring costs down to manageable levels.

I think these kinds of creative incentives are exactly what we need from government to push the construction of more rental units. An exemption on tax for materials, for example, would be a good step in that direction. It's foolish to try and tax our way out of the housing crisis.

The new taxes introduced by the NPD in the last two years are, in my opinion, misguided efforts to bring down housing costs by scapegoating foreign buyers and punishing homeowners. You can’t tax your way to affordability – this has been proven over and over. Right now, taxes and fees account for up to 26% of the cost of an average house or unit. How can we justify that while doing so little to incentivize the development of purpose built rentals? The only way to fix housing is through increasing supply, and government has a big responsibility to facilitate that process.

We commend McMullin and the UDI for their continued efforts to keep the affordability argument focused on supply.

Daniel Greenhalgh Responds to Review of Development Approvals Process

Thu, 28 Feb 2019 22:33:03 GMT

BC Government reviewing development approvals process to assess how local government development approval processes are working.

Last fall, B.C.’s Minister of Municipal Affairs and Housing, Selina Robinson, announced that the province is undertaking a Development Approvals Process Review to assess how local government development approval processes are working in B.C.

The review was spurred largely by advocacy from the Urban Development Institute . In an April 17th, 2018 meeting, Robinson met with representatives from UDI and ensured her commitment to addressing the massive delays in processing permits for new developments.

The review, according to UDI’s newsletter, “will consider all stages from concept to occupancy, including subdivision, rezoning, development and building permits and key aspects of those stages, including submission requirements, public hearings and education.”

UDI’s president, Anne McMullin, stresses that delays mean less inventory, less choice, and ultimately higher prices for buyers. Those higher prices are further driven up by permitting fees and taxes, which account for up to 30% of the cost of an average unit in Vancouver.

Robinson organized a Development Approvals Review Working Group made up of a diverse committee of housing, local government and planning experts. One of the members, the Canadian Home Builders’ Association , welcomes any input from our industry. They can be reached here.

Daniel Greenhalgh , ENM's co-founder, commends Robinson and UDI for working together to address these delays.

“Right now, permits for purpose-built rentals take about the same time to process as market-rate condos. That has to change. We know that the biggest priority for both renters and developers is an increase in the supply of rental housing. There has to be a streamlined permit review process for rental housing and affordable housing projects, along with further incentives for developers to take them on.”

UDI has had success in working with the City of Vancouver to implement improvements in the development process. Over the last two years, the city reports a 50% reduction in development permit timelines as part of an affordable housing pilot, with initial approval now under 13 weeks. We hope that their efforts can provide similar results province-wide.

Daniel Greenhalgh Outlines a Path to More Purpose-Built Rentals

Mon, 25 Feb 2019 20:00:28 GMT

Recently our posts have focused on related aspects of purpose-built rental developments: there’s a huge market for them among investors at the moment, as they watch their peers double their money with savvy multi-family purchases; and there’s a desperate demand for more of them among, it seems, virtually everyone.

But we still live in a city that’s added less than 4,000 new units of purpose-built rental housing in three full decades.

While the numbers inch up each year, we’re very far away from where we need to be. So what’s the path to adding PBRP’s on the scale that’s needed?

First, we should look at the obstacles. Right now, there are some major ones:

High cost of construction materials
High cost and growing shortage of qualified labor
Big delays in processing permits
The ever-growing taxes and fees

Our new provincial government was seated because they won confidence in their plan to bring stability to the housing market. But they also know they risk their ridings when they make deals with developers, even for non-market housing.

They’ve introduced tools like rental-only zoning, implemented on the discretion of municipalities – but this is capable of nothing near the scale of supply we need. It’s piecemeal, and most developers will shy away because of the density restrictions.

The taxes they’ve added, intended mostly to shoo away foreign speculators, will likely drive up prices for residents while spurring clever work-arounds by obsessive people who charge premiums to find them.

Based on the findings of their own task force, the most effective weapon in the affordability battle is adding more rental stock . So paving the path for more purpose-built rental developments should be a primary focus for our MPs. It’s always tough for politicians to hold their noses and do the right thing, but real crises demand results. We need to see courageous and needle-moving measures enacted to flood the market with more PBRPs before the confidence they’ve won is lost.

The city of Vancouver has taken real steps to add more affordable housing, pledging 20,000 new units of purpose-built rental housing in the next 10 years. Two years into the pledge, they’ve added 1,900 new units. The province should do whatever it can to smooth the city’s path towards completing this pledge.

We hope our newly opened PBRP, Willoughby Walk in Langley, will help serve as a standard for quality and convenience for future developments in the Lower Mainland.

There are easy choices that could be made to get more of these projects off the ground, and to help ensure that they make economic sense for companies like ours to take them on. You start with fast-tracking the applications and waiving certain taxes and fees. You give discounts on materials and you help with labor costs. You stop adding arbitrary taxes that drive up rents for tenants. The path is easy to see - it’s just hard to survive politically if you’re seen making things easier for developers. But who else is going to build them?

Willoughby Walk Scheduled for Full Occupancy by April

Wed, 20 Feb 2019 00:00:00 GMT

ENM Construction Management’s flagship project, Willoughby Walk, is in the final stages of completion.

ENM Construction Management’s flagship project, Willoughby Walk in Langley, is nearing the final stages of completion. The 191- unit purpose-built rental building is scheduled for full occupancy by April.

Daniel Greenhalgh , project manager, has overseen all aspects of construction since the development began over three years ago. He says the company’s first foray into purpose-built rental development has been successful.

“As a company, we want to specialize in purpose-built rentals and take them from development to construction. I don’t think any other company is doing that in the Lower Mainland,” says Greenhalgh. “We hope to help meet the huge need for high-quality rental properties. There’s a big demand, a tiny vacancy rate, and that makes rents much higher across the board. We hope that by focusing on purpose -built rentals, we can be a part of making housing more affordable across the Lower Mainland.”

FIRST TENANTS ARE IN

The first tenants moved into Willoughby Walk on February 1st. They were welcomed by our professional property management team from Transpacific Realty . Owner Rod Fram felt a strong kinship with ENM’s goals for the property.

“Offering a high level of service is really important to us,” says Rod. “That’s why we’ve invested in everything from an online Tenant Services System that makes it easy for tenants to communicate with us from any device, to ongoing training for our staff in tenancy law, communication, organizational culture, and conflict resolution. As property managers, establishing responsive, professional relationships with our tenants isn’t just good business, it’s who we are.”

Transpacific also provides a thorough tenant screening process, which helps to ensure a safe, stable, family-friendly community. “We want our families to feel like they’re settling down into their home and their future here,” says Greenhalgh. “The philosophy behind purpose-built rental properties like ours is to give people who’ve been priced out of homeownership the same kind of security and amenities that they’d get from a strata. Every decision about the project was made with that long-term security and comfort in mind.

Applications are still being accepted for the Phase 2 portion of the property. You can register on our website and become pre-approved for a lease. You can also view floor plans and a gallery of photos from finished units.

About ENM Construction Management

ENM Construction Management is the brainchild of Daniel Greenhalgh and Colin Lacey. The firm specializes in construction and development management since 2008. It is a recognized member of the Vancouver Regional Construction Association (VCRA), serving communities in Greater Vancouver Area , including Langley, Surrey, Abbotsford, Coquitlam, and Fraser Valley . Subscribe to their newsletter to stay up-to-date with their latest projects and construction developments .

ENM Construction Management
#302 - 19950-88 Ave East
Langley, BC V1M 0A5
Canada
604-371-3663
info@enmconstruction.ca
http://enmconstruction.ca

Willoughby Walk is Opening its Doors

Fri, 08 Feb 2019 00:00:00 GMT

ENM Construction Management’s flagship project, Willoughby Walk is opening its doors to tenants in February

ENM Construction Management is proud to announce that our 191-unit purpose-built rental project Willoughby Walk will open its doors to its first new tenants on February 1.

The six-story, wood-framed development is one of the first purpose-built rental properties to be constructed in Langley in over 40 years. We’re thrilled to welcome our new tenants to what we hope will become their home for years to come.

Daniel Greenhalgh , Willoughby Walk’s project manager, has overseen all aspects of construction. Every decision, from choice of amenities to choice of materials, was made in hopes of raising the bar for quality in rental properties across the Lower Mainland.

“We designed this property to be a trendsetter for purpose-built rentals. We feel these kinds of projects are essential for addressing the housing affordability crisis, and we want to be part of raising standards for tenant expectations. We used high-quality materials, we included a huge number of amenities and we hired the best property management company we could find to oversee the day-to-day logistics. We want this to feel like the best of strata living.”

The high-end development provides easy access to shopping, schools and commercial spaces in the Willoughby neighborhood. It’s designed for families and professionals who foresee a long-term commitment to the community. The stringent screening process for tenants ensures a community of people who plan to invest and put down roots in the Township.

In the first weekend of walk-throughs, 20% of Phase 1 units were rented. But we’re still accepting applications for prospective tenants for the next phase. Applicants can apply for one, two and three bedroom rental units.

You can check out what high-end rental living looks like in our photo gallery .

About ENM Construction Management

ENM Construction Management
#302 - 19950-88 Ave East
Langley, BC V1M 0A5
Canada
604-371-3663
info@enmconstruction.ca
http://enmconstruction.ca

An Embarrassing Shortage of Purpose-Built Rentals

Wed, 06 Feb 2019 00:00:00 GMT

Last week, we wrote about the booming market for existing purpose-built rental projects among investors, with over $3 billion of PBRPs changing hands in Metro Vancouver alone.

The reason for the demand is clear if you use your high school economics – there’s essentially no new supply.

Here are some of the numbers, which are staggering in a city facing a crisis of rental supply: the volume of purpose built rental housing stock within the city of Vancouver has grown by just 7.3% since 1990. That adds up to only 3,960 additional rental units added to the supply in three full decades – from 54,170 in 1990 to 58,130 by 2018.

It’s no secret why there haven’t been more purpose-built rental projects in the city: it’s been far more profitable for developers to build condos. They can sell the units in advance or right away, walking away with huge profits instantly rather than waiting years to collect their profit in rents. Since laws were changed allowing for condo developments in the late 1960s, the city has never stopped adding them, with the vast majority of the more than 1,300 highrise residential towers in the Metro area being condos.

The surge grows every year, fueled largely by investors. A recent report found that 35 percent of condo units in the city are owned by investors. That means that about 300,000 apartments are not lived in by those who bought them, with the majority being rented out. That trend has grown since 2010, when B.C. Liberals changed the law allowing most new units to be designated as rentable.

But the terms of these rentals are exactly why more PBRPs are needed. The rents are higher, the lease is nowhere near as secure, and the screening process is unpredictable. Add to that the growing numbers of short-term Airbnb rentals, and you have towers full of rootless, overcharged renters with no security.

With the PBRP market booming, we can hope that developers will begin to take more risks in building them. Most Metro municipalities allow for higher density for PBRPs than for strata buildings, and there are increasing numbers of incentives for these projects. But there clearly needs to be many more friendly pushes from government if we’re to make a real dent in the supply.

Daniel Greenhalgh , ENM’s co-founder, hopes to position our company as a trendsetter for developing high-end purpose-built rental projects. Our recently opened 191-unit project, Willoughby Walk , is designed to look and feel like a luxury strata property.

“We want our tenants to have all the amenities and security they’d have as strata owners. We understand that most middle-class families have been priced out of the market as buyers, and we want to be part of creating affordable, stable rental housing for them.”

Revisiting Mortgage Stress Tests

Mon, 04 Feb 2019 00:00:00 GMT

In 2018, the federal government introduced a new, stricter mortgage stress test that requires all applicants to prove that they can qualify for a mortgage at a higher rate than they will actually pay.

This shift was the latest of seven regulatory tweaks since July 2008 intended to limit the amount of debt that Canadians and banks take on. But this one is proving to have the widest impact.

The prediction was that it would result in mortgage rejections for about 100,000 potential homebuyers , forcing them to either settle for a cheaper home or giving up the homeowner dream altogether.

But with the calendar turning, many in the real estate industry are asking Ottawa to revisit these tight regulations, saying the policy has negatively impacted the economy and cooled housing markets in Canada’s major cities.

John DiMichele, chief executive of the Toronto Real Estate Board , released a statement last week claiming that the stress tests are having unintended consequences across all sectors of the economy. “We have to have an honest discussion on whether or not today’s homebuyers are being stress tested against rates that are realistic.”

DiMichele claims that homebuyers are being asked to qualify for payments nearly $700 more than what they would actually pay. The new rules, overseen by the Office of the Superintendent of Financial Institutions, are meant to cushion against rising interest rates that would eventually raise the payments to that higher level.

But that anticipation is keeping about 100,000 Canadian homebuyers from qualifying for a mortgage that they could afford right now – and causing untold damage to the economy as a result.

While lower fixed rate mortgages this year should help the market rebound, the growth in mortgages will likely remain at it’s slowest rate in almost two decades. Nationwide sales saw an 11.2% drop last year, and sales are predicted to continue falling in 2019, although at a lower rate.

Vancouver is predicted to suffer the most significant effects, according to real estate portal Zoocasa. Last year, B.C. reported a 23% decline in housing dollar volumes and a 23.6% shrinkage in end-of-year sales. Some credit unions are predicted a housing recession in B.C. over the next three years.

Daniel Greenhalgh , ENM co-founder, believes that this kind of continued regulatory meddling will eventually cause chaos in the market.

“We’re already seeing that these high-bar stress tests are dragging our economy down across the country. I’m sure it looks wise on paper, but when you’re keeping hundreds of thousands of people from buying homes that they’ve worked hard to afford, and are able to afford, I think the rules need to be revisited.”

Greenhalgh, like TREB president DiMichele, argues that mortgage applications should always be tested against rates that are realistic in the current economy.

“These rules can create a self-fulfilling prophecy, where you artificially cause a slowdown in a market and then are forced to raise interest rates to keep up. But if you hadn’t clamped down so forcefully, homebuyers would likely have been able to qualify and maintain their payments. It feels like a panic move, and I commend the TREB for pushing Ottawa to soften these stress tests.”

Purpose-Built Rental Market is Booming

Fri, 01 Feb 2019 00:00:00 GMT

For the last 40 years or so, investors in the housing market have routinely shied away from purpose-built rental projects in Vancouver. It just made so much more economic sense to purchase condos.

It still does, of course. But the ever-increasing demand for high-end purpose-built rentals among Metro Vancouver’s priced out populace is finally shifting that equation.

A recent report by the Goodman team at HQ Commercial gives us some data to back this up. In 2018, over $3 billion of purpose-built rental properties exchanged hands in Metro Vancouver.

While the actual number of properties sold is only five more than the previous year – a total of 155 in 2018 – the valuation of the properties represents a 37% increase over 2017. The average price per suite has increased 23%, to $530,401.

The short supply of rental units, which is exasperated by the hurdles and delays presented in the approvals process, is driving this shift in investor thinking. The huge demand outweighs the uncertainty of the political climate, at least for now.

Meanwhile, construction of new market and non-market rental housing is the highest in 30 years in Vancouver. There were 3,433 units of market and non-market rental housing started last year in the city. The total for the whole of the Metro region was 6,425 starts.

Daniel Greenhalgh , ENM’s co-founder, is proud that Willoughby Walk, our flagship 191- unit purpose-built rental project, is adding to the much-needed supply in the region.

“We’re seeing our first tenants move in next week, and we’re excited to watch the whole property fill up with couples and families over the next few months. We’re hoping every one of them makes Willoughby Walk their home for the next twenty years.”

Statistics Canada reports that over the last decade, the amount of rental property under construction has tripled across the country, and is now roughly equal to the construction of housing stock built for ownership. Percentage wise, the largest increases are right here in Vancouver, where increasingly, families are planning for a life of long-term renting. The high home prices are the main factor, of course, but the tougher stress tests on residential mortgages are also driving people to the rental market.

“It’s getting harder and harder to get approved for a mortgage in Vancouver,” says Daniel Greenhalgh. “The rental market is going to continue to spike here, and we’re hoping that we can help raise the standard of what people expect from a rental unit and rental property.”

CFIB Celebrates Red Tape Awareness Week

Wed, 30 Jan 2019 00:00:00 GMT

This year marked the 10th Anniversary of the Canadian Federation of Business’ Red Tape Awareness Week. The goal of the week, which was celebrated from January 21 – 27, is to highlight what is frequently listed as the number one concern for CFIB’s members: too many unnecessary regulations.

Laura Jones, CFIB’s executive vice-president, says the week is necessary because the issue too often goes ignored by governments. “Like a bad weed, red tape will multiply the moment you turn your back on it. Out-of-control red tape leads to a host of bad outcomes, from higher prices and reduced entrepreneurship to some less expected ones like increased poverty and income inequality. It’s an issue affecting every Canadian.”

ENM was proud to join the CFIB last summer. Daniel Greenhalgh , ENM co-founder, believes strongly in the organization’s mission to be a voice for the over 110,000 member businesses in Canada. “The CFIB is very active in soliciting the views and suggestions of their members, and they’re effective in presenting these to policy makers as the unified voice of Canadian small businesses. The Red Tape Awareness Week is just an entertaining way to help amplify our concerns.”

One of the highlights every year is the Paperweight Award, given to the most over-the-top red tape offenders in Canada. The award is voted on by CFIB members. This year’s ignominious winner is… drumroll please…. “ the federal government’s web of confusion!"

Beating out eight other nominees - including B.C.’s new legislation requiring construction firms to join a union when working on provincial infrastructure projects - the “dozens of user-unfriendly websites from the Government of Canada make it difficult for small business owners to find the information they need on programs, services and rules… one third of business users say the sites are pointlessly complex.” So congratulations to the maze of government websites – may those who work in good faith to decode your secrets stay strong and maybe have a free weekend or two in the coming year.

The week also gives us the chance to recognize politicians, public servants or other citizens who have shown leadership in cutting red tape via the presentation of the Golden Scissors Award.

This year, the municipal winner is Nova Scotia Premier Stephen McNeil and Halifax Mayor Mike Savage for teaming up to create the Joint Project for Regulatory Modernization . Service BC and the BC Ministry of Jobs, Trade and Technology received an honourable mention for creating a new, easy-to-use guide for people dealing with the loss of a loved one.

Maybe the most meaningful result of the Red Tape Weeks has been securing commitments from three provinces, including B.C., to adopt “1-for-1” rules, meaning that every new regulation is offset by scrapping an old one. CFIB has also pushed provinces to make domestic trade easier by making national building codes available for free.

So let’s hope the glare of the spotlight will push some of the more egregious offenders to smooth out the kinks in the application of their well-meaning rules. Thanks, CFIB, for a week well spent.

The Speculation Tax Roll-Out

Mon, 28 Jan 2019 00:00:00 GMT

It’s the new year, so all those new provincial taxes that were pushed through the NDP-controlled legislature last year are now coming to life. One of the most controversial of these is the speculation tax, which requires anyone who owns a home that is left vacant for all or most of a year to pay an extra several thousand dollars in taxes. The idea is to curb foreign speculators who dump their money into our real estate market, causing our neighborhoods to lose character and our housing prices to shoot through the stratosphere.

As we’ve pointed out before, the tax that was actually passed and is now on the books isn’t really a “speculation tax” per se – it’s a “non-resident owner tax” that will most likely do little to keep those greedy foreign speculators away. Any property owner that doesn’t pay B.C. income tax will pay 2% of the property value annually starting this year, provided they don’t live in or rent out the home. So long-term, non-resident owners, of which there are many, will have to pay this tax year in and year out, whereas actual speculators, who want to flip properties quickly, will only have to pay it once.

Daniel Greenhalgh , ENM co-founder, believes that of the 5-7% of B.C. homes that sit empty, a big portion of them are owned by permanent residents who need to maintain their status. This may be an exploitation of the immigration system, but it’s not a distortion of the housing market.

“I think the notion of foreign buyers destroying our housing market is greatly overblown,” says Greenhalgh. “Very few large investors do property speculation, especially in Langley or anywhere outside of Vancouver. But this tax applies all over the province. The better approach to bringing housing costs down is to reduce the cost to build. These experimental taxes, which have so many unintended consequences and hurt so many honest people, are just seriously misguided.”

And with the rollout in progress, we’re learning that the province’s method of collecting this tax may cause even more problems for those honest people. It turns out that, unless you prove you’re exempt, you’re going to be hit with the tax. You’re going to need to spend some time and effort filling out an online form proving you’re not a speculator. This means that EVERYONE, all 1.6 million homeowners, will get a tax notice to winnow out the roughly 32,000 who will need to pay up.

The NDP calmed a lot of fears with their claim that 99% of B.C. homeowners wouldn’t have to pay this tax. But with this expensive, very inefficient method of tax collecting, which will inevitably cause some honest but clueless homeowners to accidentally send in a check, that support is dwindling a bit.

So if you got one of these notices, be sure and send it back by March 31. Be sure your spouse does too, or anyone else on the deed, because every owner has to file a separate declaration. Yes, you’ve already provided this information to the province through the homeowner grant application on your property tax notice, and with a few extra lines of code, they could probably spare us all this headache – but don’t let it slip your mind. It could cost you a few thousand dollars.

The Tenants are Coming

Sat, 26 Jan 2019 00:00:00 GMT

After years of planning and construction, on February 1st, ENM’s flagship project, the 191-unit purpose-built rental property Willoughby Walk, will be opening its doors to its first new tenants.

Daniel Greenhalgh , ENM’s project manager, is looking forward to seeing the company’s hard work finally pay off.

“We’ve been living and breathing this project for so long, envisioning every aspect of the design, construction, and amenities – it’ll be immensely satisfying to see the property come to life with the first new tenants in Phase 1.”

The six-story, wood-framed development is one of the first purpose-built rental properties to be constructed in Langley in over 40 years.

Greenhalgh has overseen all aspects of construction. Every decision, from choice of amenities to choice of materials, was made in hopes of raising the bar for quality in rental properties across the Lower Mainland.

In the first weekend of walk-throughs, 20% of Phase 1 units were snatched up. But we’re still accepting applications for prospective tenants for the next phase. Applicants can apply for one, two and three bedroom rental units.

“We’ve made it through about 20% of the waiting list we have, so we encourage anyone who’s interested to go ahead and apply.”

The criteria for tenant selection is intentionally rigorous in hopes of ensuring a community of people who intend to put down long-term roots in the Willoughby community.

“The whole idea behind purpose-built rental projects like this is to give families the security to make long-term plans in their home, to raise their kids here and contribute to the community. Middle-class families are being priced out of buying homes here, and rentals are scarce and unpredictable. We tried to recreate the best of strata living here while still keeping it affordable and accessible to average income earners.”

You can check out what high-end rental living looks like in our photo gallery .

Vancouver City Council Stands Up to Provincial Taxes

Thu, 24 Jan 2019 00:00:00 GMT

In the October 2018 municipal election, Vancouver not only elected a new mayor – they elected an entirely new council and new approach to governing the city. After ten years of a secure hold on power, Vision Vancouver no longer has a presence in the current government. We’re being led by an independent mayor for the first time in thirty years, and the new council seems poised to protect Vancouver’s interests more strongly than before.

Case in point: the NDP’s controversial new school tax hike. Starting in 2019, high value homes will pay an additional 0.2% tax rate on the residential portion assessed between $3 million and $4 million, and an additional 0.4% of the residential portion assessed over $4 million. Although the tax is set by the province, it’s collected by the municipality, leading to fears that Vancouver residents will see it as part of their property tax bill and revolt against the property tax increase of 4.9% for 2019.

Whatever the motivation, the new council is to be commended for approving a motion to oppose the new surcharge. Introduced by new NPA councillor Rebecca Bligh, the motion points out that the surcharge is not based on the ability to pay, does not allow for deferrals for people with rentals or certain levels of debt financing, and that the same amount of expected revenue could be raised by a 0.25% increase applied to the top income tax bracket in the province.

New mayor Kennedy Stewart, who voted against the motion, nevertheless sent the letter opposing the surcharge to the provincial government as directed by council.

Finance Minister Carole James counters the opposition to the bill by saying that if you are on a fixed income, you have the ability to defer your taxes until you sell your home. But that didn’t stop furious Point Grey residents from forcing Attorney General and MLA David Eby from shutting down a proposed town hall about the school tax over ‘security concerns’.

Daniel Greenhalgh , ENM’s co-founder, believes the perception that high-value homeowners are a justifiable target for tax increases is misguided. “Just because you own a home doesn’t mean you have the liquidity to subsidize the province’s every need. These kinds of tax increases, which are piling up year after year, are forcing a people to sell their homes because they can’t keep up with them. It’s one thing to increase taxes on high-income brackets, but this applies to all homeowners, many of whom are on fixed incomes and can’t afford this. To ask people to sell their homes to cover taxes is absurd.”

It’s encouraging that our council members from the Non-Partisan Association are working with Green Party councilors to stand up to unsustainable burdens on Vancouver’s tax base.

What Vancouver’s New Mayor Has Planned for Us

Mon, 21 Jan 2019 00:00:00 GMT

Last fall, the city of Vancouver elected Kennedy Stewart as mayor, making him the first independent candidate to hold that office in more than thirty years. In a field of 21 candidates, Stewart narrowly – by less than 1,000 votes – beat out the Non-Partisan Association candidate Ken Sim. The NPAs are historically the most dominant party in Vancouver politics, winning support over the years for their pro-business policies. ( Sim, when asked by the CBC about his priorities, somewhat bewilderingly said, “I don’t think there is necessarily anything wrong.” With any sense of political savvy, Sim might have made up those 1,000 votes.)

But now we have Kennedy Stewart, the man who was famously arrested last March for protesting the Trans Mountain Pipeline . The dominant issue of the campaign was, of course, the housing crisis, and Stewart won based on his plans and promises. So what, exactly, did he promise?

First, he’s pledged to build 25,000 non-profit affordable homes over the next decade, available to anyone with up to an $80,000 income. He also pledged to help first time buyers enter the market through the construction of 35,000 condo units, coach houses and townhomes , as well as to renew leases on 6,000 co-op units.

At an affordable housing conference in November, he elaborated on these plans. In a speech to over 1,400 housing advocates, providers and policy analysts, Stewart said that we can’t allow the market to provide our housing any longer if we want to remain a strong and stable city. He plans to focus on boosting co-operative and other non-profit housing in the city to keep it affordable and to stop the exodus of the middle class.

And like a lot of Vancouver mayors before him, he not only wants to serve our citizens – he hopes to become a “global model” of clever governance. But any policy that’s made to please Denmark and not Dunbar is probably doomed to fail.

We at ENM would love the chance to work with Stewart and the city on building some of their proposed 25,000 affordable homes. And Stewart, to his credit, hasn’t completely disavowed working with developers, saying that it would be foolish to attack those you’ll have to work with later.

Our co-founder, Daniel Greenhalgh , wants ENM to be part of the solution to the housing crisis through building purpose-built rental projects , as well as working with non-profits to construct affordable homes.

“We’re certainly open to those kinds of partnerships, with the city acting as a facilitator. We believe that the best way out of the affordability crisis is to build more homes that are designed and priced for the working class, and that the city and provincial governments have the means and the mandate to help make those projects and those relationships happen. It’s a lot better than trying to tax our way out of the crisis. It’s productive, and as builders, we want to produce.”

Vancouver Home Sales are Cratering

Fri, 18 Jan 2019 00:00:00 GMT

It’s the new year, and new stats are here to alarm us. We’ve gotten used to the new year’s housing stats saying that metro Vancouver and its lucky homeowners remain on the gravy train with double-digit increases in home prices and sales. This year, it’s a little different.

In 2018, Metro Vancouver saw 24,619 home sales. This marks the fewest sales in the region since 2000, according to the Real Estate Board of Greater Vancouver . The sales are down a full 31.6% from the year before. The worst month was December, in which sales were down 46.8% from December 2017. So it’s getting worse.

The benchmark price of all homes in the region is also down. It’s at $1,032,400, 2.7% less than last year. The hardest hit were detached single family homes, which declined 7.8% in value from last year.

So what’s the reason for this downturn? Is it the new taxes from the NDP that are designed to discourage house flipping and speculation? Is it everyone sensing a downturn and trying to cash out all at once?

The taxes may be a factor, but the cashing out theory doesn’t hold up. Home listings are actually down from the previous two years, at 53,614 for 2018. That’s a 6.9 decrease from 2016. So it’s not a flooded market that’s causing sluggish sales.

Could it be the start of a long-overdue market correction brought on by effective restrictions on market-distorting factors like foreign speculators and money launderers? That’s certainly the hope of the NDP and those that voted them in to bring that very thing to pass.

And owners of luxury homes will certainly give them credit – or blame – for bringing their home values down. Attorney General David Eby’s much-maligned luxury property tax on homes valued at over $3 million has caused such outrage in those nicer neighborhoods that the residents are organizing a recall campaign this year. Their home values have seen double-digit drops, and when you hit the wallets of the rich and well connected, you’ll see some blowback .

But our co-founder, Daniel Greenhalgh , thinks any attempt from government to tame the market through taxes is doomed to fail.

“There are just too many factors that you can’t foresee when you throw new taxes into the mix. And with this new government, it’s not just one or two new taxes, it’s a whole slew of them. It’s clearly an overcorrection , and I think it’s going to cause chaos in our economy very soon.”

Greenhalgh also cautions against predictions of a housing market collapse. “It’s about land value here, and that’s never going to go away. We may see a dip of 2 or 3% in overall home values, but I think that’s as dire as it will get.”

ENM Works with RDB Management to Widen Willoughby Roads

Wed, 16 Jan 2019 00:00:00 GMT

ENM Construction Management worked together with fellow developer RDB Management to improve 208th Street.

ENM recently welcomed its first tenants into its 191 unit , 6-story purpose-built rental project Willoughby Walk in Langley. As part of its development deal with the Township, project manager Daniel Greenhalgh and RDG Management’s John Rempel worked together to widen a section of 208th Street that passes by the projects of both developers.

“This section has been a thorn in the side of drivers in the Willoughby community,” says Greenhalgh. “We worked together with John to widen it and put in a right hand turn lane there. It’s already made a huge difference with traffic. Before this, there was always a backlog of cars. Now it’s moving great. I check on it everyday when we’re on site at Willoughby Walk, and it’s flowing smoothly.”

Greenhalgh says the collaboration with John and his team went very well.

“Our engineers worked together to nail down the logistics of things like curb heights, street lights and things like that. We were both happy to be directly involved with improvements to the neighborhood. This will benefit not only our tenants, but all the people in the neighborhood who had to deal with the pains of construction. I’m glad they can benefit from improvements associated with our projects.”

For the Township, asking developers to help improve the neighborhood is a big part of securing public support for their projects. One of the most consistent complaints with new residential developments is an expected increase in traffic, and widening roads along the project site goes a long way towards alleviating those concerns.

Willoughby Walk’s first tenants moved in a few weeks ago, and the remaining units will be occupied in the next month or two. The neighborhood is flourishing with new businesses and amenities, and we’re thrilled that our tenants are settling into their new homes.

About ENM Construction Management Ltd.

Contact Information
ENM Construction Management Ltd.
604-371-3663
info@enmconstruction.ca

ENM Co-Sponsors LAPS Gala

Tue, 15 Jan 2019 00:00:00 GMT

Langley Animal Protection Society raises over $152,000 at 11th annual Furry Tail Endings Fundraising Gala.

On November 3rd, the Langley Animal Protection Society hosted its 11th Annual Furry Tail Endings Gala at the Cascades Casino. The event had a “Nighttime in Gotham” theme, with many guests decked out in Gotham or Batman-inspired costumes.

ENM was one of several sponsors of the event, donating $3500 that went towards providing the interior décor for the Gala.

“This event means a lot to us,” says Daniel Greenhalgh , ENM’s co-founder. “We’ve worked with LAPS extensively over the last couple of years in constructing their ISOasis for sick and injured cats. The cause is important for Colin and me and for most of our staff at ENM.”

The Gala was attended by over 450 guests, including many local dignitaries. Both the Langley City and Township mayors were in attendance, as well as the majority of council from the Township. Most of the firefighters from the Township were there as well. It was hosted by radio DJs Matt and Drew from 103.5 FM.

More than $152,000 was raised, up from $137,000 in 2017. The amount was the second highest total in the Gala’s history. After expenses, the event netted $91,000 for the shelter, which will go directly to caring for the more than 1,400 stray, lost and unwanted animals that will come into LAPS’ care in the coming year.

A big portion of the night’s donations came from one surprise source: Township Councillor and Fort Langley developer Eric Woodward, who pledged $100,000 through his newly formed foundation towards the operating costs of ENM’s ISOasis facility .

More than $53,000 was raised through silent and live auctions of items such as a Victoria getaway, a weekend at Sun Peaks and a sturgeon fishing excursion.

LAPS executive director Jayne Nelson was thrilled with the night’s results. “It’s fitting that we had a superhero theme, because we have so many real-life heroes who help us out each year. I am always so inspired by the people we meet.”

About ENM Construction Management Ltd.

Contact Information
ENM Construction Management Ltd.
604-371-3663
info@enmconstruction.ca

ENM Assists with Rotary Club Fundraiser for Starfish Pack Program

Mon, 14 Jan 2019 00:00:00 GMT

Aldergrove Rotary Club holds Pasta Party for Starfish Pack Program to help end hunger among students in B.C.’s school system.

On November 24th, the Aldergrove Chapter of the Rotary Club held its third annual Pasta Party to raise funds for its Starfish Pack Program.

ENM’s Colin Lacey and Daniel Greenhalgh are members of Aldergrove’s Rotary Club , and both have supported the Club’s successful initiative to help end hunger among students in B.C.’s school system.

“The Starfish program was begun in Abbotsford and has since spread to other communities throughout BC and Canada,” says Greenhalgh. “It’s in over 100 schools now.”

The idea came from teachers who noticed that some of their students were coming in on Monday morning having not had a proper meal for the entire weekend. So a few years ago, the Rotary Club met with these teachers and with the school district and they designed a program to fill backpacks with food and send them home with kids over the weekend.

“We meet every Thursday and we work together to pack hundreds of backpacks with two breakfasts, two lunches and two dinners and a bunch of healthy snacks. These packs are delivered to schools on Friday and the kids who need them take them home.”

The program is funded entirely by donations and staffed by volunteers from Rotary and other organizations. Teachers report huge improvements in their students’ reading and math skills and their ability to focus.

The Pasta Party was $20 per ticket and included with gourmet pasta, meatballs and homemade sauce from Bonetti Meats . The event included a silent auction of donated items like meat baskets, cheese trays, and weekends at timeshares.

“100% of the money raised goes towards funding the Starfish program,” says Greenhalgh.

To donate to Starfish directly, please visit their website .

About ENM Construction Management Ltd.

Contact Information
ENM Construction Management Ltd.
604-371-3663
info@enmconstruction.ca

The Great Vancouver Brain Drain

Fri, 11 Jan 2019 00:00:00 GMT

We have a pretty simple problem here. We have a region with the highest home prices in Canada . And in that same region, we have a median household income that is the lowest in Canada among metro regions.

Extend that out to all of North America, and we’re 3rd in high-priced homes and 50th in low-paid workers. Out of 51 metro areas covered.

So, predictably, Metro Vancouver is increasingly losing top young talent to other provinces where families can hope to find some housing stability.

A December survey by Statistics Canada shows that while B.C’s population crossed the five million mark for the first time, mostly due to international migration, the province also lost 1,200 people to other provinces in the third quarter of 2018. This is after 21 straight quarters of gains.

At some point, it will just stop making any economic sense for young professionals to try to survive and thrive in this sickeningly overpriced city. And no amount of livability surveys can change that.

Finance minister Carole James is aware of the problem, saying there’s no doubt that Vancouver is facing a brain drain brought on primarily by the housing crisis. Particularly in the tech industry, the opportunities and the salaries are so much better in other cities that Vancouver has little hope of staying competitive for top talent.

According to the latest numbers from BC Assessment, the housing market is beginning to level off, with some homes dropping in value by as much as 10%. But until we either halve housing prices or double salaries, the brain drain will most likely continue.

In the meantime, the best solution, as we’ve said before, is increasing the supply of modern, affordable purpose-built rental properties like Willoughby Walk , which recently opened its doors to its first tenants. Families can have the housing stability they desire in properties like this, which are under no danger of being flipped for renovations or seeing absurd rent hikes.

Our co-founder, Daniel Greenhalgh , plans for ENM to be part of this solution. “It’s clear that young professionals and couples looking to start a family don’t have many options for buying a home in Metro Vancouver. So we want to be part of setting a high standard for rental properties that will attract those that are priced out of buying but who still want to put down roots in a home and a community. We think Willoughby Walk can help set that standard.”

The city and provincial governments, who have enjoyed quite a windfall of profits from property taxes and development fees, need to start prioritizing and incentivizing these purpose-built rental projects if they hope to stop the brain drain. These homes provide the security and affordability that Metro Vancouver sorely needs.

“I think most families are willing to rent in a desirable city with good job opportunities, as long as they’re signing up for a predictable, affordable future in a well-managed property. It’s about security, and properties like Willoughby Walk provide that.”

Vancouver to Review Development Approvals Process

Wed, 09 Jan 2019 00:00:00 GMT

A recurring theme in our posts is the need for faster permit approval processes for housing developments – especially for much needed purpose-built rental properties like Willoughby Walk . Our industry continuously lobbies municipal and provincial governments for increased capacity for permit processing. The backlog adds thousands of dollars to the cost to build, which is already astronomical in B.C. These costs are passed on to homebuyers and renters, adding fuel to the dumpster fire that is the housing affordability crisis.

Our industry often turns to the Urban Development Institute to help us voice issues of concern. And in this case, the UDI delivered. After extensive lobbying, B.C.’s Minister of Municipal Affairs and Housing, Selina Robinson, announced that the province is undertaking a Development Approvals Process Review to assess how the local government development approval processes are working in B.C. The UDI’s newsletter claims that the review “will consider all stages from concept to occupancy, including subdivision, rezoning, development and building permits and key aspects of those stages, including submission requirements, public hearings and education.”

UDI President Anne McMullin claims that rezoning approvals for multifamily housing projects can take five to seven years in the city of Vancouver. There are so many different departments within the city’s bureaucracy, each with their own pet nit-picks , that it’s absurdly difficult to meet all of their requirements on the first few go-rounds.

These delays mean less inventory, less choice, and ultimately higher prices for buyers. The prices are further driven up by the permitting fees and taxes, which account for fully 30-40% of the cost of an average unit in Vancouver.

Daniel Greenhalgh , ENM’s co-founder, commends Minister Robinson for starting the review process. “Right now, permits for purpose-built rentals are about the same as market-rate condos. That has to change. We know that the biggest priority for both renters and developers is an increase in the supply of rental housing. There has to be a streamlined permit review process for rental housing and affordable housing projects, along with further incentives for developers to take them on.”

McMullin believes the city could double or triple the number of rentals being built, and hopes they can reach that goal after Robinson’s review. This increase in supply is crucial with a projected annual growth rate of 30,000 people per year in Metro Vancouver.

The Development Approvals Review Working Group held its first meeting on December 7th and will continue to meet in the first six months of 2019. The Canadian Home Builders’ Association is represented in the group and welcomes any input on suggestions for improvement. You can email them here .

Surging Property Taxes Mean Surging Rents

Mon, 07 Jan 2019 00:00:00 GMT

Each January, B.C. property owners receive an updated assessment of the value of their properties. Spoiler alert: the values mostly go up.

These letters can make a lot of people giddy – but for rental property owners and managers, they usually mean a big increase in property taxes.

And this year, that situation is even more frustrating. Last fall, the province cut by two per cent the annual rent increase that landlords can charge. The maximum increase is 2.5 per cent. David Hutniak, the head of LandlordBC , says this will fall far short of what most landlords will need to keep up with increased costs.

The result, Hutniak says, will be a slide in maintenance of rental properties and an increase in renovictions . When rental properties see an increase of up to 13 percent in property taxes year over year, something has to give.

“The challenge is, B.C. Assessment bases the value on landlords being able to charge market rent. But with rent control, that’s just not the case.”

Daniel Greenhalgh , ENM’s co-founder, thinks the assessments ultimately hurt the ability of developers like us to take on the risks of building purpose-built rental properties.

“These assessments, and the increase in property taxes that come with them, mean that over time, the returns may no longer keep up with the costs. When your only source of income is rent, and there are restrictions put on that, eventually, it’s not going to make economic sense.”

Meanwhile, the most pressing need for addressing the province’s housing crisis is an increase in rental housing. But when politicians who advocate for affordable housing do nothing to address inflated assessment increases, that need will be harder and harder to meet.

“We want to work with the provincial government to help them meet their goal of building 114,000 new affordable homes over the next ten years,” says Greenhalgh. “But when we’re hit with so many new taxes and fees, new DCCs, on top of this unprecedented annual increase in property taxes – it’s a dire situation for developers of rental properties. Unfortunately, the cost will ultimately be paid by tenants through annual maximum rent increases and a reduction in investments in maintenance and repairs.”

LandlordBC has reached out to the province to address their concern about assessments.

ENM Co-Sponsors LAPS Annual Gala

Sat, 05 Jan 2019 00:00:00 GMT

ENM was one of several sponsors of the event, donating $3500 that went towards providing the interior décor for the Gala.

“This event means a lot to us,” says Daniel Greenhalgh , ENM’s co-founder. “We’ve worked with LAPS extensively over the last few years in constructing their ISOasis for sick and injured cats. The cause is important for Colin and myself and for most of our staff at ENM.”

Dan Greenhalgh attended with his girlfriend, while ENM President Colin Lacey attended with his wife and Business Development Manager Karin Lacey. Several other ENM staff were also in attendance.

“It’s a very positive, very fun event,” says Greenhalgh. “It’s one of the more significant social events in Langley, second only to the Mayor’s Ball.”

More than $53,000 was raised through silent and live auctions of items such as a Victoria getaway, a weekend at Sun Peaks and a sturgeon fishing excursion.

ENM Assists with Rotary Club’s Pasta Party to Benefit Starfish Pack Program

Fri, 04 Jan 2019 00:00:00 GMT

On November 24th, the Aldergrove Chapter of the Rotary Club held its third annual Pasta Party to raise funds for its Starfish Pack Program.

“The Starfish program began in Abbotsford and has since spread to other communities throughout BC and Canada,” says Dan. “I think it’s in over 100 schools now.”

“It’s just a great idea, a great way for Rotary members like us to directly assist the neediest people in our community,” says Colin. ““We meet every Thursday and we work together to pack hundreds of backpacks with two breakfasts, two lunches and two dinners and a bunch of healthy snacks. These packs are delivered to schools on Friday and the kids who need them take them home.”

These kinds of fundraisers are essential to keeping the project going. It’s funded entirely by donations and staffed by volunteers from Rotary and other organizations. Teachers report huge improvements in their students’ reading and math skills and their ability to focus.

“There’s not a lot of learning going on when you’re hungry,” says Dan.

The Pasta Party was $20 per ticket and included with gourmet pasta, meatballs and homemade sauce from Bonetti Meats .

“The previous year, Colin was a cook. The food was great, but I think there might have been a slight improvement this year with Bonetti helping out.”

The event included a silent auction of donated items like meat baskets, cheese trays, and weekends at timeshares.

“100% of the money raised goes towards funding the Starfish program,” says Dan. “The cost of this program is pretty low, and it’s organized by local business people who are skilled at implementing projects of this scale. It’s very efficient. If this was done through a government program, I guarantee you it’d be ten times the cost and a whole lot less streamlined. It’s great to be able to be involved in this kind of thing through Rotary.”

To donate to Starfish directly, please visit their website .

Daniel Greenhalgh, ENM, Works With Fellow Developer to Improve Willoughby Roads

Wed, 02 Jan 2019 00:00:00 GMT

As Willoughby Walk begins to welcome its new residents, ENM continues to work to improve the property and the infrastructure of the Willoughby neighborhood.

Daniel Greenhalgh , ENM co-founder, recently worked with fellow developer John Rempel to modify and improve a section of 208th Street.

These kinds of community improvements are part of the deal when developing in the Township of Langley. The Township has a unique relationship with developers, requiring them to provide things like roads, streetlights, sewer systems, and parks – things that most other municipalities provide themselves.

“It’s part of the cost of doing business here, for sure,” says Greenhalgh. “We pay for things like this up front, which can be a challenge. We do get it back with latecomer fees from other developers who build in the neighborhood. It just takes quite a few years.”

But for the Township, asking developers to improve the neighborhood is a big part of securing public support for their projects. One of the most consistent complaints with new residential developments is an expected increase in traffic, and widening roads along the project site goes a long way towards alleviating those concerns.

“We’re happy to be directly involved with the improvements to the neighborhood,” says Greenhalgh. “It’s great that the people who have to deal with the pains of all the construction can benefit from improvements associated with it.

Dan Greenhalgh says he enjoyed the collaboration with John Rempel and his company, RDG Management.

“It’s a small industry, so we know John pretty well and we think very highly of him. He has a history of developing great projects, and he’s straightforward and honest and puts together a good team. Our engineers and his worked together to make this happen, and I think it went very well.”

Canada Pension Plan Premiums Going Up

Fri, 28 Dec 2018 00:00:00 GMT

On January 1st, the federal government will begin taking more money out of small businesses like ENM’s pockets to fund a Canada Pension Plan money pool that doesn’t really need any shoring up.

The CPP rate will rise from 4.95% to 5.1% for employers – the biggest increase in more than a decade. By 2025, the rate will be 5.95%. There will also be a higher ceiling on annual income subject to contributions.

But the Canadian Federation of Business, which lobbied heavily against such increases, points out that the CPP is sustainable at the current rates for the next 75 years.

Monique Moreau, the CFIB’s Vice President for National Affairs, says that the increases seem manageable when taken in isolation – but when added to the range of other ‘manageable’ cost increases for small businesses, they create a huge burden for struggling business owners.

The CPP rate increase is on top of so many other things, like a new federal carbon tax that will go into effect next year. The government thinks it needs to increase benefits because of the decline of defined benefit pensions, where employees get payments for life once they retire. But the reality is, there are other types of retirement savings options, like tax-free savings accounts or registered retirement savings plans, which are preferred by both employees and employers – and these rate increases reduce the amount of disposable income available for those plans.

Daniel Greenhalgh , ENM co-founder, agrees with the CFIB’s assessment. “These rate increases are another example of government making our financial planning decisions for us. The other retirement planning options are much more flexible – they can be passed on fully to spouses and children, for example, where the CPP plans have restrictions on that, and the payouts are lower. But now we’re being forced to put more money into the government’s plan, which survey after survey shows is a lower quality plan. It also means a lot of businesses will have to freeze or cut wages to pay for this.”

Greenhalgh commends the CFIB for their intensive lobbying efforts against these increases, which were effective in reducing the originally proposed increases and delaying the rate hikes. They were also effective in reducing EI rates, which will help to offset the new CPP rates.

But, as we’ve pointed out , those EI rates have a lot more room for improvement.

“We need to remain diligent and work with the CFIB to continue pushing for more EI rate reductions. The surplus they’re maintaining is obscene, and they need to drastically reduce the burden on employers.”

Highlights from the Rental Housing Task Force’sReport

Thu, 27 Dec 2018 00:00:00 GMT

On December 12th, the B.C. government’s Rental Housing Task Force released its much-anticipated report with twenty-three recommendations for potential new or amended legislation. The Task Force was appointed by Premier Horgan in April 2018 with a mission to speak to people throughout the province about their suggestions for making rental laws better and fairer for all citizens.

Since virtually every BCer considers themselves qualified to fix the housing crisis, the Task Force was given plenty of recommendations to choose from. If nothing else, the three members are to be commended for whittling all of these down to just twenty-three. Some of the more seriously considered suggestions, as we’ve written about , were potentially catastrophic for future rental housing developments. Thankfully, most of these, like ‘vacancy control’, were passed over for this round. Daniel Greenhalgh , ENM co-founder, reminds us diligence is still needed to keep them from rearing their heads again in the future.

“Just because this report failed to recommend the scariest of the proposals, vacancy control, that doesn’t mean we’re forever clear of that idea, or other ideas that are designed to artificially freeze the value of rental units,” says Greenhalgh.

So here are some of the things they did suggest:

Enhancing the existing provincial Shelter Aid for Elderly Renters (SAFER) program and Rental Assistance Program (RAP), providing greater benefits to low-income seniors and family households renting in the private market;
closing the fixed-term lease loophole and eliminating the geographic rent increase clause;
strengthening protections for manufactured home park tenants;
introducing stronger protection for tenants from renovations or demolitions
increasing strata fines to discourage unwanted short-term rental activity;
providing $6.8 million over three years to the Residential Tenancy Branch to improve services.
Introducing rental zoning legislation to give local governments the ability to preserve and increase the overall rental supply

While many of these suggestions may improve the financial security and quality of life for both tenants and landlords, we believe that any attempt to fund these measures through levying more taxes or fees on developers or homeowners will undercut the best weapon we have for addressing the affordability crisis – that of increasing the rental supply.

“We’ve already seen so many new fees with this government,” says Greenhalgh. “It’s just a death by a thousand cuts. In this one or two year window, there have been so many new market shifts. It’s a new challenge everyday. The whole market is getting squeezed, investors in rental properties are being scared away - and I think further shifts in the regulatory framework, no matter how small, will ultimately result in less and less people being able to afford their own homes.”

We’ll continue to monitor the efforts by the Horgan government to implement these recommendations and the effect this will have on our goals of building more purpose-built rental projects.

ENM Responds to Rental Housing Task Force’s Recommendations

Thu, 27 Dec 2018 00:00:00 GMT

Last week, the B.C. government’s Rental Housing Task Force released its report on the province’s housing crisis, the result of months of panels and consultations with citizens and politicians. The report includes twenty-three recommendations to the province’s legislators for addressing various issues in the housing market.

Daniel Greenhalgh , ENM co-founder, joins the Urban Development Institute in commending the Task Force on passing on the policy of vacancy control, an idea that’s recently gained traction amongst tenant advocates in the Lower Mainland. The policy would tie rents to units themselves - a more radical extension of rent control, which ties rents to tenants and their leases.

“If vacancy control were ever passed, I strongly believe it would be the end of our industry as we know it,” says Greenhalgh. “Developers would no longer pursue purpose-built rental projects and the crisis of supply would be made much worse.”

Recommendation 10 of the report states, “Maintain rent tied to the renter, NOT THE UNIT.” We’re pleased that the Task Force heeded our warnings against vacancy control. However, the policy of rent control, which has repeatedly failed the most vulnerable populations of cities where it’s been enacted, needs to be abandoned in B.C. if we hope to address the shortage of rental units.

Dan also joins the UDI in expressing concern that the Task Force failed to recommend incentives for the development of purpose-built rental projects. “This issue was consistently among the most urgent of those discussed with the Task Force throughout the summer and fall,” says Greenhalgh. “We’re disappointed that they ignored the pressing need for incentives or tax exemptions for developers like us at ENM who want to increase the supply of purpose-built rental units.”

The UDI sent clear recommendations to the government for incentivizing purpose-built rental projects. These include exemptions on property transfer and property taxes, as well as rebates on PST, for these projects. We at ENM believe that these proposals, if enacted, would have a dramatic effect on the crisis of rental supply in the Lower Mainland.

About ENM Construction Management

ENM Construction Management

#302 - 19950-88 Ave East
Langley, BC V1M 0A5
Canada
604-371-3663
info@enmconstruction.ca
http://enmconstruction.ca

Renters Agree – The Number One Priority is Creating New Rental Stock

Wed, 26 Dec 2018 00:00:00 GMT

When the B.C. government’s Rental Housing Task Force released its report on December 12th with twenty-three recommendations for new or amended legislation, many observers expected to see the usual vitriol directed at our industry – especially from renters.

The Task Force visited 11 communities in BC from April to December of 2018, collecting suggestions from all sectors of society. They also received 430 written submissions and more than 1400 responses to its online survey.

“Throughout our engagement process, we discovered that people throughout B.C., whether in bigger centres like Vancouver or Kelowna, or rural communities like Revelstoke or Salt Spring Island, have been facing challenges with the current system for too long,” said Ronna Rae-Leonard, member of the Rental Housing Task Force and MLA for Courtenay-Comox. “There are unique concerns in each community, but we feel that our recommendations will make life better for everyone.”

With all the responses tallied, it turns out that the number one suggestion from renters to address the housing crisis is to increase the rental supply.

Amazingly, renters and developers agree on the first priority identified in the report.

We also agree on the methods for the government to achieve it – through supporting purpose-built rental housing via incentives for builders.

The flip side to increasing the rental supply is protecting existing rental stock. Here, we may disagree on the best direction. Daniel Greenhalgh , ENM co-founder, believes that maintaining or expanding rent control measures – especially via the ill-advised ‘vacancy control’ proposal – will handcuff landlords in their attempts to maintain or modernize their properties.

“If you artificially freeze the values of rental properties, you’re going to see those properties decay very quickly,” says Greenhalgh. “Landlords won’t have the means to properly maintain them. And since most of our rental stock in B.C. is over forty years old, this will have a significant impact on the quality of life of tenants.”

But for now, let’s focus on our common points of interest. As new Vancouver mayor Kennedy Stewart pointed out during the campaign, government and developers will have to work together if the housing crisis is ever going to be solved.

“Why attack people we’ll have to work with later?” said Stewart. “Even if we do a massive investment in non-market housing, we’ll still be working with them.”

There are over 20,000 privately-built purpose-built rental units currently in development. If our government is serious about addressing the number one concern amongst renters in their province, they will do everything they can to ensure that these developments are protected.

Urban Development Institute Responds to Rental Housing Task Force’s Recommendations

Mon, 24 Dec 2018 00:00:00 GMT

Over the course of 2018, the B.C. government’s Rental Housing Task Force has been listening to suggestions from its citizens and their politicians on fixing the housing crisis. The three-member task force has dutifully recorded every idea, no matter how outlandish, and last week, they finally presented their report, which includes 23 recommendations to government.

Prior to last week, many in the construction industry, including us, were in a mild-to-severe panic over the possibility of our government introducing a policy of ‘vacancy control’, which had been suggested to the Task Force by a Vancouver COPE councilwoman. This idea, which would tie rent increases to rental units themselves (a more radical version of rent control, which ties increases to tenants), would have almost certainly made the shortage of rental units in the Lower Mainland dramatically worse.

“If vacancy control were ever passed, I think it would be the end of our industry as we know it,” says Daniel Greenhalgh , ENM co-founder . “Developers were surveyed about this by the Urban Development Institute (UDI), and they responded emphatically – about two thirds of rental units currently in development would be delayed or cancelled if vacancy control were introduced. It would destroy any attempt to solve the crisis of supply.”

Greenhalgh believes that landlords would simply let older units decay, since there would be no money or incentive to maintain or update them.

But luckily for us, Recommendation 10 of the Task Force’s report specifically states, “Maintain rent tied to the renter, NOT THE UNIT. ’ It seems that vacancy control, for now, is being put to the side.

The UDI released a preliminary response to the report that expressed relief at this development. However, rent control, despite being a lesser evil, is still chock-full of thorny unintended consequences. This old idea is seeing resurgence in markets like Vancouver with surging rent prices and governments elected to do something about them. But it’s still a bad idea , and in market after market, it’s been shown to do more harm than good to the most vulnerable populations.

The UDI points out that of all the topics discussed with the Task Force, one of the most urgent was the lack of supply of rental units in urban areas. However, the Task Force’s report recommends nothing to incentivize construction of new rental homes.

The UDI urges the government to consider its policy proposals – including exemptions on property transfer and property taxes for purpose-built rental units, as well as rebates on PST – which are designed to spur developers, like us at ENM , to pursue more purpose-built rental projects.

The Future of Purpose-Built Rental Projects

Fri, 21 Dec 2018 00:00:00 GMT

On November 29th, during a panel at the Toronto Real Estate Forum, five top real estate executives from across Canada took the measure of the state of purpose-built rental construction.

While no one doubts the demand for them, these executives mostly agreed that the costs still outweigh the achievable rents for purpose-built rentals in the majority of cases.

We at ENM have dedicated ourselves to building purpose-built rental units in the Lower Mainland to help meet the overwhelming need for more rental supply. Our co-founder, Daniel Greenhalgh , has a good grasp on the risks and razor-thin profit margins for these kinds of projects. But he sees a future for the company in specializing in high-quality properties in which tenants can reliably plan for their future.

“I think families in the Lower Mainland who are priced out of buying a home are becoming more and more comfortable with being renters for the foreseeable future,” says Greenhalgh. “These people want to live in modern, stylish homes with lots of amenities, like 24 hour doormen, shared common spaces, gyms and parcel delivery services. They want to be located in desirable, walkable communities close to parks and green spaces. So we at ENM are hoping to be at the forefront of meeting this demand and providing high-quality purpose-built rental properties.”

Greenhalgh has seen first-hand the many barriers to building rental properties. He believes that the provincial government could be doing a lot more to help developers like ENM meet the urgent need for rentals. “Right now, the approval process for purpose-built rentals is the same for market-rate condos. We need a lot more capacity at the municipal level to handle permits and applications, and funding for that capacity needs to come from the provincial government.”

The federal government has earmarked $40 billion to affordable housing, and B.C. has earmarked $6.9 billion. Greenhalgh believes that addressing the backlog of application approvals should be a priority for these funds.

“We desperately need new, modern rental units, and these projects need to be streamlined and given priority approvals. So many tenants here are stuck with year to year, or month to month, rentals in shoddy, unmanaged properties that are way past their prime. I think Vancouver can follow Toronto’s lead and create incentive programs for building purpose-built rental units. We’ve got to not only turn over but increase the supply of modern units with reliable lease terms.”

Vancouver is seeing a massive influx of new immigrants, and 80% of these become renters. Our policy makers need to work in good faith with developers like us at ENM to help get new purpose-built rental properties off the application pile and into construction.

Know Any Skilled Workers?

Wed, 19 Dec 2018 00:00:00 GMT

We’ve already written about the acute shortage of skilled labourers in British Columbia, an issue that has a huge detrimental effect on our industry. The looming retirement of a generation of tradespeople combined with the lack of young people being trained to replace them will give B.C. a shortage of about 15,000 skilled workers by 2025.

The situation is getting so dire that a local construction company has taken to offering bounties – literal bounties – for connecting them with trained workers.

TQ Construction, a home renovation firm in Burnaby, recently offered a $500 reward for anyone who can send them a Red Seal carpenter and a site supervisor with extensive retail experience. So, if you know anyone… go ahead and cash in.

Daniel Greenhalgh , ENM co-founder, sees this bounty offer as a great way to bring attention to the problem facing our industry. “I think for young people, it’s a matter of awareness that, if they do pursue this training, there’s a very solid, well-paid career there waiting for them. Plus, many of the training programs are subsidized by the provincial government to help attract more people. There are thousands of good jobs available, and I think if more kids in high school and college knew about these opportunities, the shortage would be less acute.”

Right now, 94% of B.C. construction companies are hiring, and the average salary is $56,170. There is fierce competition for labourers, especially for project managers. Greenhalgh believes that a major issue in addressing these needs is the stigma of pursuing blue-collar professions.

“If you’re a parent or teacher of an ambitious high school kid, you’re pushing them towards prestigious careers in computer programming, law, medicine, things like this. I think most kids see careers in skilled labours as a kind of failure to measure up. But to me, it’s a very savvy direction to take. It’s a lot tougher to find secure work as an IT guy or programmer – the market is flooded with qualified applicants. But if you’re qualified for a Red Seal trade, you can work anywhere, anytime and have a stable profession with good benefits and a decently early retirement. And you’re doing honest work that serves the public. There’s a lot to take pride in with these kinds of careers. But that stigma is tough to overcome, and it’s compounded by schools and parents who, well intentioned as they may be, make these careers seem like something you settle for.”

Right now, 41% of Canadian employers report difficulty with filling jobs, and skilled trades are toughest sector in the country. If you want to push some kids towards pursuing these careers, they can check out the Employment Program of B.C ., the B.C. Access Grant for Labour Market Priorities through Student Aid B.C. – they have grants or programs to funnel people into the trades. There are plenty of six-figure jobs out there waiting for the right candidates.

ENM Responds to ‘Vacancy Control’ Proposal

Tue, 18 Dec 2018 00:00:00 GMT

Daniel Greenhalgh , ENM Construction Management co-founder, joins UDI in condemning ‘vacancy control’ proposal.

As part of its mission to assess affordability issues in the housing market, the provincial government’s Rental Housing Task Force received many suggestions on its summer tour across B.C. But one of the most concerning came from Vancouver COPE councilor Jean Swanson. Swanson believes vacancy control, or tying rental units themselves to restrictions on rent increases, is the most effective way to prevent renovictions and major rent hikes between tenants.

But an Urban Development Institute survey of thirty of B.C.’s major rental home builders found that if vacancy control ever got on the books, fully two-thirds of purpose-built rentals currently in development would be delayed or cancelled.

ENM’s co-founder, Daniel Greenhalgh , believes the policy would spell the end of the purpose-built rental industry as we know it. “No one would build rental units. It would make no sense financially. One of the biggest causes of our housing crisis is the lack of rental supply, and this would destroy any attempt to solve that.”

Dan points out another issue with the proposed policy: if enacted, there would be no incentive for landlords to update or properly maintain the unit. Not only would there be no resources for it, there would be nothing to gain from renovating the units to keep them modern, stylish and desirable. Swaths of buildings would see rapid decay.

Developers like us at ENM are encouraged by the campaign statements of new Vancouver mayor Kennedy Stewart in which he stressed the importance of working in good faith with our industry to address the housing crisis and increase the supply of rental properties. But we can’t let a crisis push us to take such extreme measures as this, measures that would cripple one of the major industries in B.C.

Vacancy control, if it’s ever enacted, would quickly become the poster child for horrible unintended consequences of well-meaning legislation. We urge the Rental Housing Task Force to pursue other measures to address affordability issues in the rental housing market.

About ENM Construction Management Ltd.
ENM Construction Management is the brainchild of Daniel Greenhalgh and Colin Lacey. The firm specializes in construction and development management since 2008. It is a recognized member of the Vancouver Regional Construction Association (VCRA), serving communities in Greater Vancouver Area, including Langley, Surrey, Abbotsford, Coquitlam, and Fraser Valley. Subscribe to their newsletter to stay up-to-date with their latest projects and construction developments.

Contact Information
ENM Construction Management Ltd.
604-371-3663
info@enmconstruction.ca

Source: http://newswire.net/newsroom/pr/00106560-enm-responds-to-vacancy-control-proposal.html

The Vagaries of Vacancy Control

Thu, 06 Dec 2018 00:00:00 GMT

As part of their attempts to legislate fairness into the housing market, the B.C. government created the Rental Housing Task Force in April 2018. The three-person task force, led by Vancouver-West End MLA Spencer Chandra Herbert, has been touring the province since then, hearing suggestions for addressing the housing crisis about which, of course, every BCer has a firm opinion.

One of the more concerning ideas that seemed to be gaining traction over the summer is the implementation of ‘vacancy control’ for rental units. I’ll explain.

You may have heard of rent control – the idea that when a tenant occupies a unit, the rent can’t be raised by a meaningful amount for the length of their occupancy. This policy is in practice in several major North American cities that are dealing with an arguably more acute housing crisis than even us real estate obsessives in the Lower Mainland – places like San Francisco and New York. There have been many in depth dives into the benefits and downfalls of rent control, but it’s an active policy that at least has a few defensible results.

‘Vacancy control’, however, is one of these ideas that gets a cheer on first read from the tenants’ advocates among us, but that bears no weight under scrutiny.

It takes rent control a step further and ties the unit itself to restrictions on meaningful rent increases. This is in practice almost nowhere and, if implemented here, would certainly become the poster child for unintended consequences of well-meaning legislation.

Our co-founder, Daniel Greenhalgh , joins the dozens of developers in the Lower Mainland in putting the kibosh on this idea before it gains any more traction. “If this ever got passed, it would be the end of our industry as we know it. No one would build rental units. It would make zero sense financially. It’s easy to extrapolate out from that – one of the biggest causes of the housing crisis here is a lack of rental supply. This would destroy any attempt to solve that.”

Dan’s concerns mirror that of a group of thirty builders surveyed by the Urban Development Institute about what would happen if vacancy control ever went on the books. They said that of the nearly 20,000 purpose-built rental units that are currently in some stage of development in the Lower Mainland, about two-thirds would be delayed or cancelled.

That seems like a conservative estimate.

Dan points out another glaring problem with this idea: if enacted, there would be no incentive for the owner or landlord to properly maintain the unit. Not only would there be no resources for it, there would be nothing to gain from keeping the units modern, stylish and desirable. Swaths of buildings would see rapid decay.

Dan helps us make the concept even more concrete. “For my first two-bedroom apartment in 1993 in Abbotsford, I paid $450. It was a little under 1000 square feet. Today the rent there is $1350. So, let’s say this law was in place in ’93. The rent would increase at the rate of inflation – which is to say, about an average of $10 a year. Today, that unit would go for about $700 - just about half of what the market decided. And today, that unit would still look like it did in 1993.”

When we see these kinds of proposals get some momentum, it’s a little terrifying, but also galvanizing for the industry. There will inevitably be many similar attempts to harness and harass the developer boogeymen of the Lower Mainland, and these attempts will be given some extra fuel by being vocalized by an official ‘task force’. But it’s heartening to see that when truly poisonous ideas like this get floated, the response by our industry is swift, clear and unified. Vacancy control can never happen here.

WorkSafeBC Owes You Money

Thu, 22 Nov 2018 00:00:00 GMT

As a small business owner, one of our most important obligations is to help ensure the safety of our employees . This is especially true in our industry, where the risk of injury is ever-present and safety is always on the minds of everyone on our sites.

If one of our workers is injured, our obligation extends to covering the costs of their recovery through our payments into B.C.’s workers compensation program, administered through WorkSafeBC . We want to help to make sure their compensation comes quickly and with little hassle, and that the recovery programs they put in place are effective and adequately funded.

But through our membership in the Canadian Federation of Independent Business , we’ve become part of lobbying efforts to encourage WorkSafeBC to refund the billions of dollars in surplus funds they currently enjoy to the employers who’ve paid into it.

Right now, WorkSafeBC has assets of about $18.5 billion – a full $6.4 billion more than their liabilities. This puts them at a staggering 153% funding level. The CFIB has recommended for years that the program aim for a funding level of 110%, giving them plenty of resources to both meet the needs of B.C.’s injured workers and to improve their programs and services.

But year after year, their coffers continue to swell with B.C. employers’ money. Only last year, they were at a 142% funding level, meaning there has been substantial growth in the past year. We’re going in the wrong direction, while thousands of small businesses in B.C. are struggling to keep up with ever-increasing wages and taxes. They could use a refund when it’s available – and there’s no denying it’s there for them right now.

If WorkSafeBC refunded employers to a position of 110% funded, they would return $5.2 billion to B.C. businesses. This comes out to $2,167 per employee. Other provinces have done this very thing, including Alberta, who in 2016 returned $467 million to its employers. B.C. employers deserve the same treatment.

Our co-founder, Daniel Greenhalgh , says ENM will do everything they can to help the CFIB lobby for this change. “Just last year, the Liberal government was prepared to pass legislation requiring WorkSafeBC to issue this kind of refund. There was massive support for it, but when they lost the provincial election to the NDP’s, that measure of course disappeared. Labor lobbyists claim to be appalled at the idea because of the need for service improvements. But you can address those with the extra 10%. Meanwhile, they’ve had this surplus for years and where are the service improvements? To me, it’s indefensible to hoard our money so blatantly.”

WorkSafeBC did lower their base rate for employers from 1.65% to 1.55% in 2018. But even with this reduction, 26% of industries still saw an increase in their rates. It’s past time to bring these rates down by meaningful percentages across the board, and to trigger an automatic refund when a fair funding ratio is reached.

ENM Announces Willoughby Walk Occupancy Dates

Wed, 14 Nov 2018 00:00:00 GMT

ENM Construction Management updates the occupancy dates for its purpose-built rental property Willoughby Walk in Langley.

ENM Construction Management’s flagship project, the 191-unit purpose-built rental Willoughby Walk in Langley, B.C., is nearing the final stages of construction. Project manager Daniel Greenhalgh says the first move-ins are planned for January 1st, with the possibility of earlier, mid-December move-ins for some units.

“We’re scheduled for occupancy approval in the next two weeks, and we can begin signing leases then,” says Dan.

By January, 60% of Willoughby Walk’s units will welcome new tenants, with the remaining 40% ready for occupancy by the end of February.

Interested tenants can register on our website, the first step in the application process.

MORE ABOUT THE PROJECT

Willoughby Walk is one of the first purpose-built rental properties to be constructed in Langley in over forty years. ENM Construction Management hopes that it will be the first of many such projects for the company. Founders Daniel Greenhalgh and Colin Lacey hope the project will help set a new standard for quality in purpose-built rental projects.

Willoughby Walk will be a professionally owned and operated, fully managed rental apartment building with a full time, on-site manager to handle the day-to-day details and maintenance. The property is designed with the working professional couple and family in mind. The six-story building is wood-frame construction with a two-story parkade and individual storage lockers. It is located in Willoughby Town Centre on a transit commuter route and is less than a block from two elementary schools. 70% of the units are 2 bedrooms and the rest are a mix of 1 and 3 bedroom layouts.

For more information on this and other ENM projects, please subscribe to our newsletter.

About ENM Construction Management

ENM Construction Management is the brainchild of Daniel Greenhalgh and Colin Lacey. The firm specializes in construction and development management since 2008. It is a recognized member of the Vancouver Regional Construction Association (VCRA), serving communities in Greater Vancouver Area, including Langley, Surrey, Abbotsford, Coquitlam, and Fraser Valley. Subscribe to their newsletter to stay up-to-date with their latest projects and construction developments.

ENM Construction Management
#302 - 19950-88 Ave East
Langley, BC V1M 0A5
Canada
604-371-3663
info@enmconstruction.ca
https://www.enmconstruction.ca/

An Update on Willoughby Walk’s Occupancy Dates

Mon, 12 Nov 2018 20:27:42 GMT

Our 191-unit purpose-built rental project, Willoughby Walk, is nearing completion. Our project manager Daniel Greenhalgh has overseen the development and construction of the project since the beginning, and he’s very proud of the final results.

“We wanted to do everything a little bit better than usual,” says Dan. “From the choice of building materials, to the landscaping , to the amenities we’ve chosen for the property, we tried to make the upgrade choice in every situation. We want Willoughby Walk to help set a new standard for quality in purpose-built rentals.”

Dan expects the project to have occupancy approval in the next couple of weeks, with the first move-ins planned for mid December. “We’ll begin signing leases after occupancy, which should come in mid-November. We can’t guarantee anyone moving in before January 1st, but we hope to have the first move-ins in December.”

That will complete Phase 1 of the project, which includes about 60% of the property. Phase 2 will complete the rest, and is scheduled for completion in mid-to-late February.

For interested tenants, we encourage you to register on our site. Applications are now being accepted, and registering is the first step in that process.

We’ve added some very nifty 3-D and Virtual Reality tours of some of our suites on our website , which, whether or not you’re an interested tenet, we’d encourage you to check out. There are also hundreds of photos of the property and the community of Willoughby on the site.

“We’re very excited to be building in Willoughby Town Center,” says Dan. “Right across the street, there are a whole bunch of new businesses moving in. It’s getting to be a very bustling shopping and entertainment district.”

Dan has lobbied the city to place a new bus stop right outside the front doors of Willoughby Walk. He’s also worked with the Township of Langley to incorporate Willoughby Walk into its extensive path system.

“This is a walk-able area with a lot of greenways and bike paths, and we wanted to be a part of that, and to maximize our access to it.”

So register now – and bring your pets !

The Red Seal Trades

Fri, 09 Nov 2018 00:00:00 GMT

In our last post , we laid out the crisis facing British Columbia in the coming years related to a shortage of skilled tradespeople. This crisis will effect not only the development and construction industry, but practically all sectors of the economy.

So for young people considering a lucrative career choice – why not the trades?

For a solid career as a tradesperson, it’s highly recommended to obtain a Red Seal endorsement through the British Columbia Industry Training Authority. Here’s a list of all the trades programs managed through ITA – 49 of which are Red Seal. There are lots of choices within lots of disciplines - everything from bricklayers to bakers.

Our co-founder, Daniel Greenhalgh , points out that at ENM and other construction companies, most supervisors are nearing retiring age. “We’re going to see a real drop-off in terms of numbers of qualified supervisors and qualified tradespeople as the boomers start to retire. In their generation, there wasn’t the same stigma around a blue-collar career. It was considered an honorable path, and it was tougher to get into. Now, young people think a trades career is like they’re settling for something less. Meanwhile, supervisors are making about $140,000 a year, and IT guys and programmers are desperate for work.”

Dan laid out the path to a Red Seal trade career. “The first step is an apprenticeship, which lasts about four years. It’s a combination of on the job training and classroom learning and it leads to a trade credential, or ticket.”

For the last two years of this apprenticeship, you’re considered a journeyman, which involves a different amount of work hours. Every year brings a wage increase. “A lot of small businesses who need workers hire these apprentices and train them up. It’s good for them, but then after it’s over, most of them get poached by larger organizations, and the small businesses can’t afford to keep them on. So it’s kind of a mixed blessing for them, to put in all that time training someone and then see them move on. They can’t afford to pay $40/hour for a certified tradesperson.”

Dan feels there should be subsidies for small businesses that put in this time to train the country’s new generation of tradespeople. “There is clearly that benefit of short-term labor, but I think the service they’re performing for society should earn them more benefits. All of that training comes right out of a small business’s pocket. So I think there should be subsidy programs for businesses and organizations that hire apprentices. They get these workers on their feet and then have to start again from scratch with a new batch of apprentices.”

Rent vs Mortgage

Wed, 07 Nov 2018 00:00:00 GMT

It’s an increasingly common calculation for British Columbians, especially in the Lower Mainland: is it more cost-effective to rent or take on a mortgage?

The conclusion that most people are coming to these days is: it doesn’t make much difference.

For years, the popular wisdom has been that to rent is to pay someone else’s mortgage. Why be the sucker when you can be the landlord?

But with home prices skyrocketing and investments in the housing market becoming both more inaccessible and dubious, the wisdom is shifting. Maybe it’s better to rent and invest your honeypot somewhere else – like the stock market.

In the short term, as in the next fifteen years, the numbers come out virtually even. But after fifteen years, in the case of townhomes and detached homes, buying does usually win out.

But the risk, and the minimum investment, is still so huge.

Our co-founder, Daniel Greenhalgh , endorses a kind of hybrid approach – own where you can afford to, and rent where you work. “My personal opinion is that you should own a house outside of the city, in the suburbs or even farther. And then rent near where you work and where you want to spend your time. It gives you more freedom to move around, to live a little more streamlined, and you can still have that nice investment. Basically, don’t live in the house you own.”

Dan broke down the numbers involving renting or owning units in ENM’s soon-to-open purpose-built rental project Willoughby Walk . “If you were to own them, the average unit prices are about $380,000. They’re between $330,000 and $450,000 at the top. A mortgage on those would come out to about $1828 per month. Then you look at our average rental price, which is $1845. That’s with no strata fees, no property taxes, no maintenance fees. So of course, in the short term, renting looks pretty good. Obviously, buying is an investment, but you’re not seeing anything back until you own about 50% of the unit or the property. Before that, it’s kind of like renting – that money is just going away.”

There’s a lot of panic rhetoric involving the housing market in Vancouver and the possibility of a looming crash. It’s tough to imagine a scenario where the market stays where it is or keeps rising over the next 15-25 years. It’s already at such an unsustainable level.

But Dan points out that while sales numbers may be dropping off, land prices haven’t and most likely never will. “It’s still a great investment, if you can afford it, to own a home here. And that means owning the land the home is on. As long as the land values are steady, the investment in owning a home is not too big of a risk.”

The Shortage of Skilled Tradespeople

Mon, 05 Nov 2018 00:00:00 GMT

When it comes down to it, it’s really about the stigma.

For high schoolers with any ambition, a career as a blue-collar worker seems like settling for something less. It seems like selling yourself short, or giving up on your dreams – or, to be honest, it seems like admitting you’re not smart enough for an office job.

But if the true measure of success in a career is financial stability, not to mention job stability, then training in the trades is becoming a nearly surefire path to that success for young Canadians.

With the retirement of thousands of baby boomers who make up a majority of tradespeople, Canada, and the construction industry in particular, is facing a looming crisis. The industry is becoming more and more desperate for skilled tradespeople.

Rory Kulmala, chief executive of the Vancouver Island Construction Association, expects B.C. to be short about 15,000 skilled tradespeople by 2025.

So how do we fix this? How can we encourage more young people to pursue the plethora of well-subsidized training programs designed to funnel them into stable, well-paid trades that will always be in demand?

Daniel Greenhalgh , ENM’s co-founder, says the problem is simple – these are jobs that not many people want to do.

“There’s no doubt that these jobs are hard, dirty work. You’re carrying 105 pound batteries, you’re covered in grease, you’ve got to start from the bottom and really work your way up. But the fact is, in a lot of trades, you can get a six-figure job right out of college or a training program in a career that’ll last you for the rest of your life. You can set yourself up for an early retirement, have plenty of savings and raise a family fairly comfortably as a worker in one of the Red Seal trades.”

Daniel says it’s hard to believe that at ENM, he can pay someone who’s essentially a broom pusher a higher salary than most sociologists with Master’s degrees can get in their careers. “It’s a lot harder to make six figures as, say, an IT guy than it is as a mechanic or a plumber. But it’s about supply and demand – there’ll never be a shortage of IT guys, or lawyers, or programmers that want to make video games. But there’s a huge need for Red Seal Tradespeople. And there are tons of programs and grants that make it financially and logistically easy to get the training you’d need. You can check out the Employment Program of B.C ., the B.C. Access Grant for Labour Market Priorities through Student Aid B.C. – they have grants or programs to funnel people into the trades. But until that stigma is lifted, the shortage is going to continue. And it’s going to hurt the quality of worksmanship for the entire construction industry, not to mention other skilled trades, for the coming generation.”

Simplifying Employment Insurance

Thu, 01 Nov 2018 00:00:00 GMT

For a small business like ENM, employment insurance is an expense that’s great in principle and maddening in execution. We pay a percentage of our employees’ premiums and are more than happy to help provide a safety net for them when our contracts come to an end.

But our employment model – hiring workers for development and construction projects with definite end dates - is one of many “unconventional” models in the modern economy to which traditional financial and government systems have a lot of trouble adapting.

Daniel Greenhalgh , our co-founder and project manager for the soon-to-be-opened purpose-built rental project Willoughby Walk, says that unless an EI claim is cut and dry, it’s tough to get it approved.

“The Canada Employment Insurance Commission , the agency that oversees the EI program, expects EI claims to be from traditional full-time employees who are laid off for whatever reason. If you’re a worker with a temporary contract, like our workers, or you’re working two part-time jobs, the system gets glitchy really fast. You almost have to have a lawyer to get EI these days. It’s a ton of hassle and it’s a big problem for our employees.”

ENM, and the construction industry in general, are the grizzled vets of the rapidly growing “gig economy” model that is transforming Canadian society. According to staffing company Randstad Canada , already, about 20-30% of Canadians are “non-traditional workers”, and that number is predicted to balloon in the near future. 85% of companies say they expect to move to an “agile workforce” very soon.

The social insurance systems that worked for the previous century do not fit the realities of the new economy. Technology will continue to break up big, traditional firms with hundreds of in-house employees, and workers will move from gig to gig, project to project, across every sector of the economy – like they’ve done for years in the construction industry.

“In our parent’s generation, you could work for thirty years, get a great pension, and if you got laid off, you could count on EI. But we’re way past that era. Most people change their career paths four or five times in their life. So our social programs need to adapt to that.”

What’s more frustrating, Dan says, is that while it’s getting harder and harder to access EI, the program is getting more and more bloated with surpluses. “I think they have about a $5 billion surplus right now. They chip away at the premiums we pay each year, which is positive, but if you’re running that kind of surplus, you need to have a significant reduction in the annual contributions of small businesses. Especially if you’re going to hang on to it and make it a huge hassle for non-traditional workers to access it.”