May 23, 2015
As the City tries to increase density, rows of for-sale signs mark where land is being assembled for development – but not all those blocks have been rezoned for density
Metro Vancouver is growing... we’re expecting an additional million people to move here over the next 25 years. To prepare, the region’s municipalities are adding density. Neighbourhoods that have traditionally been zoned for single-family detached homes are being transformed into communities with condominiums and townhouses. It’s a trend that has visions of dollar signs dancing in some homeowners’ eyes.
Many neighbours are banding together to sell their properties as land assembled lots. While this is happening throughout the region, it is especially apparent along several major arteries in Vancouver including Cambie, Oak, Granville and 41st where the for-sale signs are lining up, row upon row. The assumption is that when owners sell together, they will receive a higher price for the assembled land than they would individually. But how realistic is it to think that the value of your home could double or even triple because of potential redevelopment?
Seeking Unsuspecting Buyers
Michael Geller is a local architect, planner and property developer who has worked on land-assembly projects since the 1990s.
“The City has an overall plan that will allow some single-family lots to be redeveloped as apartments,” he said. “In some cases, developers tried to quietly assemble these sites themselves. Residents thought they might get better deals if they worked together.
“Now we have a situation up and down Cambie where lots are being assembled, but the current city plan isn’t to rezone all of them. It’s startling to me to see Realtor signs – sometimes five or six in a row – in locations I know the City has no plans to rezone now or in the immediate future. Realtors are hoping to find unsuspecting buyers who think it is logical for these places to be redeveloped.”
While Vancouver’s West Side is the area where most land assembly real estate speculation is taking place, there are pockets in East Vancouver that are also undergoing change. The Norquay Village community is one example. Here the 18-unit Slocan Villa townhouse complex located only a minute’s walk from a SkyTrain station will replace the torn-down detached homes. Further down Slocan Street, closer to Kingsway, another four properties have been assembled. Jackson Ng is the real estate agent who helped put together the latter deal.
“The first four lots north of the lane are zoned for an apartment building,” he said. “The buyers purchased the first house four or five years ago and held onto it as an investment property. I listed the three homes next to it as part of a land assembly. The owners received offers substantially over their assessed value because they worked together.”
Ng cautions that successful land assemblies do not come together overnight. The number of stakeholders makes negotiations significantly more difficult than a single transaction as each family has different needs. Each needs to find a new home to go to, which Ng describes as the hardest part of the transaction.
“It definitely requires teamwork between the owners,” he advised. “You need an agent who is working for you – not the buyers. Some Realtors are over-promising and under-delivering in order to get your business. My advices is to work with someone who’s realistic about what you’ll be able to achieve.”
Not Just the Suburbs
Densification is also happening at a fast pace in the city’s downtown core. In the Hornby Slopes neighbourhood, Grosvenor Americas is taking a rezoning proposal forward to the city for parcels of land at Hornby and Pacific. The site includes the heritage Leslie House, which will be restored and used as a community amenity building. The company’s senior vice-president and general manager, Michael Ward, anticipates the redevelopment will eventually see a residential tower between 30 to 40 storeys plus a handful of townhouses to replace the site’s derelict buildings.
“There’s a renewed sense of interest in Hornby Slopes and we see it as a great place to be involved,” said Ward. “When you buy and develop land you’re taking huge risks. There are a lot of unknowns around construction and marketing costs and there’s also uncertainty about density when you have to rezone a property. The profits are commensurate with the risks but certainly not double or triple what you pay. They’re probably far less than people think.”
Regarding land assemblies, Ward notes they have been happening “forever” and warns that homeowners are taking the chance that the City will “upzone” the properties.
“Speculation is not a great way to run a development business,” he said. “Those can be dangerous games to play.”
- See more at: http://www.rew.ca/news/densification-in-vancouver-some-land-assembly-required-1.1936248#sthash.Ob1MBekE.dpuf