“Vancouver in Danger of Ending Up as a Resort City”: Bob Rennie

At annual UDI address, Vancouver’s “condo king” says city must address supply to ease affordability issues; identifies 19 factors

May 22, 2015

Bob Rennie addresses the Urban development Institute luncheon May 22, 2015
Bob Rennie addresses the Urban development Institute luncheon May 22, 2015

Vancouver’s “worst nightmare could come true – ending up as a resort city” with only wealthy foreigners owning property, if the city doesn’t rezone large tracts of land to boost supply and ultimately reduce house prices, Bob Rennie told more than 1,000 people May 22.

Speaking to a sold-out room at the Hyatt Regency Hotel for his annual Urban Development Institute address, the man known as Vancouver’s “condo king” reiterated his stance that the only way to solve affordability is by increasing supply – on a large scale.

He also identified 19 factors that he says exist in Vancouver and are working against housing affordability:

  1. Zero ability to create new single-family housing lots
  2. Record high land costs
  3. Rising construction costs
  4. Upset community groups (rightfully so) restricting development
  5. Population growth
  6. High consumer expectations
  7. $1m single-family homes on brink of extinction
  8. Aging population
  9. Billions of dollars in existing equity propping up market
  10. Increasing wealth transfer helping with down payments
  11. Overseas investors – not just from China
  12. Zoning that restricts density
  13. Increasingly insular society
  14. Shortage of head offices
  15. Higher taxation but fewer services than other cities
  16. "Nameless, faceless blogosphere" of opinions that are not based in fact
  17. Court involvement in the politics of density
  18. Culture of wanting to live where everyone else does
  19. Less reliance on the car.

However, he strongly criticized the affordability reports carried out by economists and financial institutions (like the one by Vancity issued May 21) that compare high average house prices with average local incomes, saying that only 80 per cent of local housing stock is relevant to local incomes. Within that 80 per cent, there is a lot of inventory that is affordable for those with average local incomes, he said.

Rennie warned local buyers against being put off entering the real estate markets by these kinds of affordability reports, saying that to stay out of the market would exacerbate any existing imbalances.

“[Such reports] are sending local buyers to the sidelines while overseas buyers realize what a great place Vancouver is to buy in,” he said.

Although he identified foreign investment as one of his 19 factors affecting affordability, he downplayed its role in the local condo market, and told the day before his speech that foreign ownership was only a major factor in the single-family home market.

Rennie told the UDI luncheon that he didn’t believe imposing taxes on overseas housing investors was the right move – a stance that echoes that of BC Premier Christy Clark, of whom he is a staunch public supporter.

However he did say he thought that it would be possible to create a tax on vacant homes, which could be used to create some kind of fund to help ease affordability for first-time buyers.

Rennie was speaking the day after he told that if Millennials were upset about affordability, they needed to start becoming part of the solution by stepping up and getting involved in planning and rezoning processes.

Joannah Connolly is editorial director of Glacier Real Estate, Glacier Media's real estate division. Joannah writes and curates real estate news for Glacier Media's local newspaper websites, including the Vancouver Courier, North Shore News, Burnaby Now, Tri-City News and others. She also oversees editorial content in Real Estate Weekly Homes, West Coast Condo, Western Investor and Glacier's special real estate publications. A dual Canadian-British citizen, Joannah has 22 years of journalism and editing experience in Vancouver and London, with a background in construction, architecture, healthcare and business media. Joannah has appeared on major local TV outlets as a real estate commentator, has moderated and spoken on various industry panels, and spent two years hosting the Real Estate Therapist radio show on Roundhouse Radio.
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