It’s not often that I pick up a copy of the New York Times at the Dallas Fort Worth airport and find myself being quoted. But that’s what happened today, en-route to Orlando for a few days of sightseeing in Central Florida. On a page titled “Square Feet”, the story was about Vancouver’s new effort to sell the Olympic Village condos at prices cut by 30%. The story was written by Linda Baker, an acclaimed Portland, Oregon journalist who I met in Vancouver and who has previously written at least two stories about Vancouver real estate.
This story (which is set out in the previous post) was accompanied by two photos; one from an upper floor suite showing roof terraces and a view of the city; and another of potential customers lined up outside the sales office.
The story features Senator Larry Campbell who lives in a 600 square foot suite he bought in 2007 for $580,000. (I hope it has a good view.) The senator is pleased to be living in a ‘legacy’ project and claims not to be bothered by the development’s financial troubles.
While I was familiar with much of the information contained in the story, there were a few surprises. It appears someone told the journalist that it was the City’s NPA administration that encouraged the developer to build very high end units back in 2006. I have always believed this was a decision made by the developer and Bob Rennie, his marketing advisor. I still believe this.
It is interesting to note that an email from the Mayor says he disagreed with the decisions to guarantee the financing and “prioritize” high-end housing. He doesn’t say whether he would have preferred that the construction on the athletes’ housing stop once the lender claimed that Millennium was in default of its loan due to cost over-runs.
The story includes a quote from Peter Wall who states that cities around the world have encountered difficulties transforming athletes’ villages into permanent housing. I found this surprising since he was one of the final bidders on the site.
The story also quotes Thom Armstrong of the Coop Housing Federation who, not surprisingly, is very complimentary towards the city for filling the gap left by federal and provincial cutbacks. However, I was surprised to read that only 30 residents have moved into the 252 city-owned social housing and rental housing units. If this true, I hope there is an immediate investigation into what continues to go wrong with these buildings. After all, it is now 11 months since the athletes moved out of these units.
What did I have to say? While the City Manager stated that the city’s target is to bring the project in on balance, I am quoted as saying it will be a financial failure, with losses in the “hundreds of millions”. However I do conclude by stating what I have always believed: “One day, all these problems will be distant memories, and people who choose to live there will be glad they did.”
On the bottom half of the same page is a fascinating story about new housing developments in Boston. It appears that another company called Millennium-this time Millennium Partners-Boston is seeking approvals to build out projects that were approved as condominiums, as rental. Yes, that’s right. They prefer to build rental rather than condominiums. And they are not alone. Municipal authorities expect construction to start this year on 21 buildings containing 1,855 units, nearly all rentals. In fact, rental housing is described as one of the few hotspots in a sputtering economy!
The article goes on to say that with rents up to $4 per square foot, and construction costs (I assume development costs) down to $500 a foot, high quality apartments renting for $5,000 a month provide a reasonable mid-single digit yield.
Elsewhere on the same page was a photo of an older brick apartment building with an $8.5 million price tag. While it was an attractive building, I thought this seemed like a lot of money for a suite. But then I realized the price was for 76 suites-13 one bedrooms, 30 two bedrooms, 24 three bedrooms, and 9 four bedrooms. It sold for nine times the rent roll.
Elsewhere in the business section, it was noted that real estate prices slid in just about every part of the country in December, pushing a housing market that once seemed to be rebounding nearly back to its lowest level since the crash began. Analysts are split on whether the market can drop any further.
I suspect I am going to see some spectacular deals in Orlando, especially when compared with the price of housing at the Olympic Village...I mean, the Village on False Creek....even at 30% off the earlier prices.