A backward Vancouver city hall is blocking young workers from owning homes because bureaucrats are afraid that allowing tiny apartments could turn new buildings into “stock splits” dominated by investors, influential developer Jon Stovell says.
Stovell, speaking to a crowd of Millennials at an Urban Development Institute event in Vancouver Friday, said he understands the growing backlash from young workers priced out of Vancouver’s obscenely unaffordable real estate market. He said it is stunning that most baby boomers in Vancouver will make more lifetime income by selling homes they bought decades ago than they ever made working.
Some lucky Millennials — defined as the generation born between 1981 and 1997 — will get housing windfall inheritances from their parents and be able to buy condos in Vancouver. But Stovell believes even that standard 600-square-foot rung on Vancouver’s property ladder will be too high for most in the city. He said Vancouver developers must be permitted to create a new step for Millennials — about 290-square-feet worth of “micro-loft” living space. Stovell says he could offer micro-units of this size for about $175,000, well within the budget of young single workers willing to live in tight confines. But the city’s regulations state a market condo unit must be at least 400 square feet.
“Why does the city know more than you, that you can’t live in a micro-suite?” Stovell told the crowd. “It’s paternalistic. They’re standing in the way of innovation. If we don’t do this soon, we’re flirting with having this whole generation of import-export workers that have to take transit in from the suburbs to their job at the coffee shop.”
Stovell said he understands there are concerns in Vancouver city hall that creating half-sized living spaces in condo towers will just make the city more easily digestible for investors. That is what has happened in cities like Hong Kong, where investors have driven prices for 180-square-feet “Mosquito Apartments” to about $640,000.
“The city has said we are afraid that micro-lofts will become like a stock split,” Stovell said. He acknowledged “there is some truth” to the concern that tiny units will be very attractive to investors. But he believes many investors would rent their micro-units out to local workers.
The discussion on the expected impact of Millennials on Vancouver real estate took place against the backdrop of Vision Mayor Gregor Robertson’s abrupt recent call for a luxury home speculation tax. Housing affordability protests among angry young workers have moved from social media campaigns to at least one street rally, and many analysts saw Robertson’s move as a nervous gesture aimed at Millennials, a key voting demographic for his party.
Stovell, who is a supporter of Vision, seemed to reference Robertson’s move with a jab at the party.
“It is interesting that there are no Vision councillors here,” he told the crowd. “They are the party of Millennials.”
Asked by The Province whether investor-purchases of his proposed stock of micro-lofts should be limited, Stovell said the city needs to allow developers to create innovative housing options and then monitor the market impact before considering whether controls are needed.
“It would be good to have some supply to govern before we talk about governing it,” Stovell said.
Brian Jackson, Vancouver’s senior planner, told The Province Friday he understands that Stovell is frustrated, but city planners are currently studying how to accommodate micro-lofts. The issue planners need to get a handle on, Jackson said, is that if the number of units in a tower are doubled compared to standard apartments, the infrastructure needs of surrounding neighbourhoods will change because of increased population.
Of course, that wouldn’t be the case if large numbers of micro-units were built and remained vacant.
Jackson said he will not comment on whether he fears micro-suite towers could turn into “stock splits” for investors before the city finishes its current study on absentee condo ownership.