How long before we can expect to see palm trees lining Vancouver boulevards?
It’s expected that shifts in climate will see trees normally associated with warmer climes finding comfort levels farther north. The Vancouver Sun reports here that according to a new study called Climate Projections for Metro Vancouver, “changes in temperature and precipitation will affect everything from sewage pipes to ski hills.” Local trees will be poorly adapted to the rising temperatures and elevated disease pressures.
According to Genome British Columbia, foresters have three options for dealing with climate change: reforest with the same species but with trees that are better adapted to warmer climates; move species further north or to higher elevations; or select and breed trees that can better withstand climatic stresses or disease. This news release from Genone British Columbia is an interesting read. We’re told the CoAdapTree project, which involves revolutionary testing by a genomics research team at UBC led by Dr. Sally Aitken, Forest & Conservation Sciences, will ultimately lead to better reforestation strategies for western Canada’s changing climates.
Climate change isn’t just bad for trees. It’s also bad for the economic and environmental benefits they provide to Canada – benefits like wood, jobs, habitat protection, and carbon sequestration. CoAdapTree: Healthy trees for future climates, will provide recommendations for climate-based seed transfer policy to guide foresters in planting trees that will be healthy in new climates in western Canada. Climate-based seed transfer can result in up to 30% greater timber yields, with a proportional impact on the economy and employment, and will also sustain ecological and environmental benefits of forests.
It’s been said that economics is an imperfect science. So it is that sometimes even lumber market forecasts have been known to be less than perfect. In some aspects related to the woods business, accuracy can be critical – as in when you’re aiming to fall a towering Douglas Fir that’s been growing in your backyard for a century. Unfortunately due to root rot, this giant had to be removed in Langley on Thursday. We can appreciate there was little margin for error. Some days are like that. Thanks to Duke and Tracey for the video!
These days much of what constitutes Vancouver’s crazed real estate scenario is taking shape around the urban False Creek shoreline. Glassed-in condo towers in various stages of completion compete with new, nearby downtown towers, including one named Trump. This week I chanced upon what’s at the bottom of much of what’s going up around False Creek; buried treasure from years gone by. Logs. Huge logs.
In what was the industrial heart of Vancouver, over a dozen sawmills, planing mills, shingle mills and wood preserving plants once operated on this 66 hectare strip of waterfront land called Pacific Place. According to the BC Ministry of Environment, most of this land was created by filling in False Creek with construction debris, industrial waste, and fill from other downtown Vancouver building sites. According to the Pacific Place Remediation Project, studies conducted at Pacific Place show that the volume of fill material is enormous – more than two million cubic metres (enough to fill two BC Place-sized stadiums to the rim). The fill is up to 13 metres deep in some areas along the existing shoreline.
Construction workers and even one pedestrian lumber trader were amazed to note the size of some of the buried logs uncovered during present excavations for The Arc Vancouver condo tower on Expo Boulevard at the foot of the Cambie Street bridge. Interesting stories abound on the history of coastal sawmills and the forest industry that was the early economic engine in these parts.
From early reports, BC’s new tax for foreign buyers effective August 2nd sent a chill through the real estate industry on many levels. Government data this week indicates that from June 30 to July 14, foreign buyers accounted for 15% of all real estate sales in Metro Vancouver. So it makes sense that imposition of the tax would tend to cool the overheated market. Still to be determined though is the extent to which wider ripples might be felt in outlying areas. At the same time concerns are reportedly being expressed over clarification of imposition of the tax on contracts that are works in process.
It is also a natural progression of the underlying asset, in this case real estate, which has become too expensive for the consumer to buy. In a competitive system, people will find creative ways to finance the boom. For it to continue, they must find ways to financially engineer it. All seems good during the boom times, then something, somewhere, comes out of left field, and the balloon gets pricked, never to reinflate in that manner again. Everything that seemed so sane, all of a sudden seems so totally insane. As Warren Buffett says: “You don’t know who’s swimming naked till the tide goes out.” For now, all is good in fairy-tale land, but this level of speculation has the ability to destroy the dreams of people for the next 20 years.
Vancouver real estate recently broke all records for volume. People can’t get enough. This is yet another necessary bubble component. Volumes are always highest at the top, never at the bottom. The panic to get in creates a gaping hole of demand in the future. For instance, let’s say over the next five years 100,000 people would normally buy real estate based on their family needs and other factors. The great euphoria and subsequent price rise, however, sucks that demand into this year, and it can be seen readily with today’s high volumes and skyrocketing prices. Who’s left to buy two years out? There has already been a massive flight of capital out of China of over $1 trillion. Will that continue endlessly? Of course not, the Chinese government will stop that at some point, leaving the locals of Vancouver and eastern Australian cities holding the bag.
– Thompson, Bob The Anatomy of a Housing Bubble. Macleans Magazine. 21 May 2016
My blogpost in early 2013 pointed to a news story about Blackstone, the largest private real estate owner in the United States. It was reported that in 2012 the company had begun spending $100 million a week buying houses. By 2013, those purchases had accelerated to acquire more than $2.5 billion in rental properties. See: Accelerated Purchases and related post All in.. On the U.S. Housing Recovery.
It’s interesting to learn this week Blackstone have in total amassed about 50,000 rental houses in the past four years. Housing as a commodity. But having first developed and adapted strategies as a buyer/landlord, the company is now adapting to changed market circumstances to become a seller. We’re told the company is beginning to sell “properties that have soared in value or no longer fit their business models”. Under a program called “Resident First Look”, renters get first look, enabling Blackstone “to benefit from having its own pool of ready buyers who are constrained by a market starved for affordable homes”.
On a related note, it’s revealing to see this list of price-to-rent ratios for American cities. According to Investopedia, a price-to-rent ratio of 1 to 15 indicates it’s much better to buy than rent, 16-20 suggests it’s typically better to rent than buy, and 21 or more means it’s much better to rent than buy. For example, with ratios below the 19.2 national average, a number of Texas markets are presently very favorable to homebuyers.
Observers of the bewildering real estate picture, in especially hotspots like Toronto and Vancouver (where the price-to-rent ratio is 55 in the east of the city and 72 on the westside), might be wondering how these patterns of housing dynamics could play out down the road in Canada.
Vancouver Forest is a unique 900-unit residential development – in Beijing! We’re told here the site was designed to replicate a mini west-side Vancouver neighborhood complete with west-side Vancouver-style housing, landscaping, trees – and bidding wars, presumably. A Google search reveals the plan was hatched in 2002. By 2006, construction had stalled however, when the Chinese government determined single detached homes were not in the collective interest of the country’s more than one billion people. By 2009, construction had resumed, and it’s reported that 900 homes of approximately 4300 square feet each have been completed. According to Business Vancouver, “North American single-family home subdivisions started emerging in China early this century following successful projects such as Orange County, which created a faux Los Angeles an hour’s drive from Beijing.”
So I read with interest a report today in The New York Times. According to the report, this trend of tacking on foreign names to developments around China could be coming to an end. We’re told concern over the foreign names was raised when a recent survey revealed that since 1986, “60,000 township names and 400,000 village names have fallen from use as a result of development and urbanization” in China. The minister of civil affairs has said names that “damage sovereignty and national dignity” or “violate the socialist core values and conventional morality” would be targeted. Meanwhile, developers argue the “international flavor helps sell houses”.
Vishva Ramlal, Deputy Director, Softwood Lumber Division, Department of Foreign Affairs and International Trade, was the distinguished speaker at the 15th Annual B.C. Wholesale Lumber Association Smoker yesterday afternoon, downtown Vancouver. Having led a team of officers in the implementation and management of the 2006 SLA, Ramlal is responsible for all consultations with provinces, territories, and industry with eye to possible negotiations regarding future softwood lumber trade with the United States. It was an informal talk touching mostly on a diverse array of Ramlal’s experiences in the public, private, and non-governmental sectors.