Property Values Decline, but not in Vancouver
During this “Great Recession,” property values and employment rates have been declining across North America, with my hometown having one of the worst unemployment rates in the US.
Nevertheless, Wall Street Journal reported that Vancouver’s property market is remarkably robust.
“[Vancouver's] office market has logged seven building transactions this year capped off by Germany-based Deka Immobilien’s recent $263 million purchase of Bentall V, a 33-story tower in the heart of the city’s district. Just as impressive, prices have held up well. By contrast, only five office properties valued at $5 million or more have sold in Manhattan in the first two quarters of this year, and average prices paid are off 32%, according to Real Capital Analytics, a New York-based real-estate research firm.”
Vancouverites might have mixed feelings about this in terms of residential property values. Although declining property values have caused people to lose equity in their homes, or even lose their homes as mortgages rates reset, the declining property market is a boon for future homeowners in overinflated markets, with people waiting until the market bottoms out. In places like Vancouver where average home prices are, say, half a million dollars (Canadian Real Estate Association 2008), many people cannot afford to own homes. Unaffordable homes are often a topic in Vancouver’s local news (and international news!).
This may explain why Vancouver has so much lane housing, especially to people in the Southeast of North America, where lanes are few, if nonexistent. Lane housing, basement suites, and other kinds of secondary suites on a property allow homeowners to rent out part of their home, which helps pay for these expensive houses. Luckily, Vancouver’s land use regulation allows secondary suites.
Good Magazine has an article about lane housing and how pre-fabricated buildings can help homeowners install secondary suites. About 70,000 or more lots in Vancouver are eligible for lane housing. It is interesting to note, however, that the pre-fab homes described in Good Magazine could cost about $130,000. This means homeowners would need at least 13 years to break even at typical rental rates. So, although lane housing can improve walkability, density, and other New Urbanist/ Smart Growth ideals, it might not help make housing more affordable.