There was a time a few years ago when the housing crisis was a supply issue. Then it evolved into more of an affordability issue. These days, prices and rents have dropped in most parts of the country and developers are once again becoming concerned about housing supply.

In the final panel of Day One of the Vancouver Real Estate Forum on Tuesday (March 31), a group of development sector leaders — moderated by Omicron CEO Bill Tucker — discussed the various challenges that remain around project viability.

They also offered a warning about the future.

Speakers on the panel included Ashley Willard Bauman of consultancy firm Beyond The Buildings, Lilian Arishenkoff of Wesbild, Tim Grant of PCI Developments, and Russell Zirnhelt of Ledcor Construction and there was recognition that the previous housing crisis cycle was largely the result of federal immigration policy.

The federal government has now lowered immigration targets, housing supply has accumulated, and the developers were in agreeance the supply in the market today is expected to take two or three years to absorb, with Willard Bauman citing a rate of 1,000 units absorbed per quarter. Once that supply is absorbed, however, we could be back where we started and be short on supply once again, panelists said, if development continues to crawl and the federal government ups immigration targets.

Project viability challenges

This was the premise behind the panel’s discussion of viability challenges,

Arishenkoff, SVP of development for Wesbild, which is the real estate arm of Persis Holdings and has a large six-tower master-planned project in Port Moody that has not reached construction, cited high costs, long approval timelines and the abundance of overlapping policies as the main challenges.

Grant, president of PCI Developments, which is known for its sprawling mixed-use transit-oriented developments across Metro Vancouver, was a bit less critical. He said legislation the provincial government introduced a few years ago focused on development of transit-oriented areas was a positive because it made expectations clear for municipal governments.

He also said that a suite of policy tweaks the City of Vancouver made last year aimed at helping project viability was a “good response,” although not a silver bullet.

Zirnhelt, EVP of construction company Ledcor, said new construction is not zero and some towers are still getting to that stage — albeit a small number. He also noted PCI is Ledcor’s largest client in B.C., maintained a witty repartee with Grant throughout the discussion, and said Ledcor was looking at ways to use AI to be more efficient and find savings.

Members of the panel also identified certain types of projects that are more likely to be viable in today’s market. Willard Bauman said she has seen success for projects with under 150 units and thoughtful amenities; Arishenkoff said she and Wesbild have been exploring townhouse projects because well-priced townhouses remain successful; while Grant said that not all density is equal – quality density can still work.

“One magical change”

There’s no silver bullet, but Tucker nonetheless asked the panel to identify the top change they want to see.

Willard Bauman, who specializes in product design, strategy and marketing, said she wants to see demand-side policy changes like raising immigration targets and/or reopening the doors for foreign investment.

Arishenkoff said she wants to see full-scale revisions of the BC Building Code and BC Energy Step Code regulations. Over the years, these regulations have made accessibility and sustainability regulations more stringent and have become another increasing cost developers in B.C. have cited as a challenge.

Grant then said he believes the most obvious and easiest change to make would be government development charges, which developers across the country have cited as increasing far too much. The governments of Canada and Ontario announced an $8.8 billion agreement to reduce development charges this week, which was raised by various speakers on multiple panels throughout the day with calls for something similar in B.C.

Zirnhelt closed the panel by saying he had nothing else to add and agreed with Grant, drawing a laugh from the crowd.

The Cowichan ruling

A dominant topic of conversation in British Columbia since last summer has been the Cowichan Tribes decision issued by the Supreme Court. The decision has been cause for concern across the industry and among the general public because of the possibility that it jeopardizes fee simple ownership and private landowners.

Making matters worse has been the fact that the subject is so complex and the ruling so ambiguous that nobody can say with certainty what it does or does not mean, as evident in a panel on the subject held earlier in the day, moderated by Townline Homes CEO Rick Ilich.

In a rare occurence for industry panels, there was significant disagreement between panelists Thomas Isaac of Cassels’ Aboriginal Law Group and Robert Janes of JFK Law LLP, with each saying they believed the other was wrong on some points (and right on some others), sparking a cordial back-and-forth about their interpretations of the ruling and its implications.

There was no disagreement, however, on the fact that there remains much uncertainty around the subject and that the uncertainty hurts the real estate sector.