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... upstairs neighbour watering her plants, storing hoses on the balcony where they drained into the couple's bedroom. 'No action deemed necessary, the council decided.'

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Whether, whither and what type real estate to buy post-housing bubble?

NEW! Purchase The Owner's Guide to B.C. Condominiums - 2010 - a scathing 21-page review of strata governance in the wild, wild west in the midst of a decades-old leaky condo epidemic. What to know about inspection, maintenance, major repairs and how to interpret gaps in strata records, which often reveal little or nothing about the building's true state of repair PLUS a formula to help buyers negotiate a reasonable offer. Download the report pdf for C$25.


ASK Biblitz Real Estate Summary

Meet the Left Coast locals!

Start with What You Get For $500,000 in the special real estate section of the New York Times Magazine issue Oct. 25/09. The NYT helpfully collated a series of photos and descriptions of properties in that price range in cities throughout the U.S. Even in Seattle, it seems, half a mil nets a lovely single-family dwelling. Not in nearby Vancouver, British Columbia, where the same price will only get you a condo - probably a leaky condo, like this Polygon multi-family complex on W. Fourth Avenue in the upscale Kitsilano neighborhood. Scroll down to the bottom of the page for more on The Delano.
See calculating affordability below.

For those buying a place to live, single-family is probably preferable. Even if it's a fifth-rate owner-built model like the ones described left, you don't have to negotiate with a dubiously-motivated strata council to get the awful thing fixed.

A condo, on the other hand, is no good for anyone but an investor who has no intention of ever living in the miserable place. Vancouver condo investors are people with sufficient resources to wait out major repairs and squabbles like those in the article at right as well as the occasional ebb in the supply of suckers - either prospective tenants willing to gamble their health against toxic mold while the strata corporation raises repair funds and/or prospective owners easily persuaded that equity even in a toxic wet mess where you hear the neighbors having sex is somehow a good thing. When conflicts arise, as they invariably do in such close quarters, you're on your own. Few jurisdictions are set up to resolve condo issues effectively, and few, if any, have adequate legislation to guide owners /strata managers reliably through the quite onerous maintenance required with multi-family construction. No wonder most condos are probably in disrepair. And don't expect the building designer to show any interest in the building's performance. Not surprisingly, perhaps, there is very little, if any, professional pride here.

Residential tenancies where landlord-tenant law requires landlord to maintain the premises in reasonably habitable condition are the preferred course for apartment dwellers. When something breaks, landlord must repair it. When a dispute arises, there is usually a public authority available to advise and adjudicate. Unlike condos where it's easy to conceal defects even from so-called trained observers, the key to success in a tenancy lies in effective inspections by both landlord and tenant and in tenant's commitment to report in a timely manner anything requiring repair.

Co-ops, alas, have the same structural issues associated with multi-family condos and some new ones beside. The most pressing issue in Canada for co-op dwellers, often people with disabilities and/or a fixed income, is the uncertainty regarding a continued federal funding commitment. Without it, residents may be forced to either raise the necessary funds themselves somehow - but how?! - or face homelessness. Shamefully, Banana Canada currently has no national housing program or plans to develop one!

Calculating affordability:

BC Business

Hunted House

Searching for affordability in a real estate market gone mad

By Frances Bula
October, 2008

What does affordable housing for middle-income people really mean? It's both very mathematical (for those who study it) and pretty simple (for those who live it). The mathematically inclined housing wonks define affordability by looking at the median household income for an area: in the Lower Mainland, the median income is $55,000. Experts will tell you that there are two levels of housing problems linked to that number. People who make less than 80 per cent of that $55,000 are typically too poor to buy in any market. They need to find places they can rent that cost no more than about 30 per cent of their gross income. That means rents from $500 for those coffee-shop clerks making $10 an hour, up to $1,125 a month for the police officers just out of training school making about $45,000 a year.

In the next layer up, the people who make 80 to 120 per cent of the median should be starting to buy their first homes, so there needs to be something available in their range. That means they should be spending $1,100 to $1,650 on their mortgage, property tax and house insurance combined, which pretty much caps that group at paying no more than about $235,000 for a place to live. (That assumes a 10 per cent down payment of $23,500 with a mortgage on the rest). In the Lower Mainland, that doesn't get you much - unless you're willing to move to Maple Ridge or cram into a postage stamp in the bad part of Mount Pleasant. A few people will even say that Vancouver's housing problem is so severe that the affordability squeeze extends up to households with 200 per cent of the median income. Even though $110,000 a year seems like a lot, it's not that much when a fixer-upper crack house on Vancouver's eastside starts at $500,000 and the average single-family house price in Vancouver now hovers around $765,000.

It used to be that it was mainly those living in Vancouver proper who fretted about affordability - and historically the problem was solved by moving to the cheaper suburbs or other cities in the province. But then the affordability crisis spread, with Whistler next to feel the pinch. As it developed into the province's first resort town, Whistler found itself, as other resorts around North America had, struggling with the question of housing its service workers and ensuring that regular people who live there year-round have a place to call home. ... (-- p. 64)


Fake landlord takes cash from international students

Convict David Messina sublets condos while not paying rent to owners

By Kathy Tomlinson
Jan. 6/09

More on exciting new tax rules to cool speculation in overheated real estate markets: New rules for rental properties could squeeze first-time homebuyers by Derek Scott, Canadian Press, April 3/10.

A B.C. condo owner is fighting to get her downtown Vancouver property out of the hands of a convicted criminal who posed as a tenant and leased her suite, then turned around and rented it out to several students from Japan and Korea - while not paying rent to her.

"He rents it to like five people at a time," owner Elisabeth Fox said. "He puts two people in the den, two people in the bedroom and one person in the living room. And he's not living there. "It's a terrible situation," she added. "I don't get paid. I have to pay a mortgage out of my pocket, and these young students ... live like rabbits in this place. He keeps on showing it to other people, and he keeps on stuffing people in there."

... Fox said she tried to get the Vancouver police to investigate Messina's operation, but said they told her it is a civil matter, and that she must go through the RTB to evict him. That process has taken four months so far, and he's still not out - and still renting the rooms. ... Vancouver police media liaison Const. Jana McGuinness confirmed police generally don't take on cases like this, because proving (fraudulent) intent is difficult (in B.C., anyway). "It will come down to proving that a fraud occurred, proving that there was intent there to defraud," McGuinness said. "It's fairly complicated. These can be lengthy investigations." When asked by CBC News whether he feared the police would look into what he is doing, Messina answered, "Why would the police get involved? It's a civil matter. They say every block has a dope operation," he added. "I think that sounds like it's a little bit worse than what I'm doing."
Messina later said his biggest concern about publicity is that others will learn how his business operates, and he'll get unwanted competition from copycats.


Vancouver Magazine

Rough Housing

The next big shelter crisis hits the 'burbs. Is it as bad as the Leaky Condo debacle? Or worse?

By Frank O'Brien
March, 2004

More on B.C. buil-ders.

STILL MORE B.C. buil-ders.

More on renting and af-for-dable hou-sing - principles, examples of what works, what doesn't.

All about B.C.'s leaky condos.

Number 3 on the Consumer Federation of America's list of Top Consumer Complaints in 2009: Home Improvement/Construction: Shoddy work; failure to start or complete the job.

From the outside, Cloverdale, B.C. looks like another Vancouver suburb riding the upswing of a robust housing market. Which is true enough, unless you happen to be out for a drive with Gary Friend, a third generation Fraser Valley homebuilder. Friend points out the evidence of a different wave, one he fears could be the ruin of his industry: black-market houses. "Everyone knows what is going on," he says, "but nobody can do anything about it."
He's talking about hundreds of detached houses built in suburban Greater Vancouver this year - and thousands since the leaky condo crisis crested five years ago - that are being erected by non-licensed contractors who offer no warranty protection, no worker compensation, no guarantees at all. Should you buy one of these "owner-built" houses and find that something is wrong with it, your only hope will be an expensive court docket assigned to a sceptical prosecutor. (And that's if your insurance isn't made void and your mortgage isn't called in). Your other option, and a much more popular choice: flip the place to an unsuspecting buyer and flee as far away from the fallout as possible.

What it all adds up to, according to Friend and other observers, is a kind of Leaky Condo II for big suburban houses. If that prediction sounds alarmist, what is certain, says Bob Maling, the top cop in British Columbia's Homeowner Protection Office, is that there's "a gaping loophole" in the provincial legislation. And some builders are taking full advantage.

... What's worse is that Maling admits his office - whose motto is "restoring confidence" - has had near zero success in stopping the abusers. In fact, not a single illegal builder has been convicted in five years even though about 10,000 owner-built houses have been identified. A six-month statute of limitations from when the house is occupied is hamstringing Maling and his 34-member staff. Meanwhile it's easy to see the incentive in exploiting the loophole. The math shows that buying and selling an owner-built house in today's real estate market is like hitting the lotto - again and again... Case study: the HPO tracked one house where the owner-builder dodged a cool $120,000 in [various registration and licensing] fees and taxes. Plus he made money on the sale of the house. And then he walked away.

... In B.C. home builder warranty cases must go to Crown Counsel, which means there has to be a fairly solid case for conviction. This differs from Ontario, where legislation allows the Ontario New Home Warranty Program to lay charges and prosecute cases without Crown Counsel being involved. A Lindsay, Ontario builder caught without warranty coverage was recently sentenced to six months in jail on each of two counts. In B.C. all but one of the cases Mailing and his team have presented to Crown Counsel have quietly died.

... What about the Maple Ridge homebuyers who, upon hiring Ed Witzke - a veteran building inspector among the first to blow the whistle on leaky condos a decade ago - discovered that workers had actually defecated between the wall studs before they put the Gyprock up?... (Says Witzke, "The house stank to high heaven, and it had mechanical and electrical problems as well.") They did what most end up forced to do: look after the repairs and costs themselves. (-- pgs. 25-27)


The Delano under tarps. All summer long, electric drills and saws screamed and whined from dawn to dusk. More photos of the repair nightmare owners had to go to court to obtain. Local construction mo'feshnuls take little or no interest in the performance of their work over time despite a decades-old leaky condo epidemic!


Vancouver Magazine

Strata Hell

Condo owners who threaten murder. Treasurers who steal cash. Welcome to the weird world of strata councils

By Steve Burgess
September, 2006

Dog map-ping (a pro-cedure in which each dog's mar-kings are re-corded by the strata cor-pora-tion to en-sure prohibited but grand-fathered pets are not replaced) is just the beginning. In 2002, Drew and June paid $239,000 for a condo in a small building in Kits near West 8th Avenue and Stevens, with only three neighbours. All three were single, fifty-ish women. First skirmish: the couple's decision to install laminate flooring. "The woman downstairs was weeping on the phone," Drew says. "She said they had a bylaw against hardwood floors because of the noise. Well, they didn't yet - but they were thinking about one."

Meanwhile Drew and June's bedroom wall was ballooning out due to water leakage - "but only on dry days," Drew says. Turns out the upstairs neighbour was watering her plants and storing the hoses on the balcony, where they drained into the couple's bedroom. No action deemed necessary, the council decided. By a vote of 3-1, Drew and June now have a heritage house in New West.
The troubles flow both ways. Good strata councils must also deal with bad owners. Veda lives in Fairview Slopes near Oak and W. 8th Avenue. When the building was assessed for envelope repairs of about $700,000, the lone commercial occupant refused to pay. "She thought she bore no responsibility for the residential part of the building," says Veda. It took two years and lots more money just to get the case to court, incurring more debt to the residents.

Renting (the condo to a tenant) adds another level of complexity, with both sides unsure of their obligations ...

Tony Gioventu is executive director of the Condominium Home Owners Association (CHOA) (a dubious enough outfit itself, it seems, according to the link). He's heard some horror stories that could be served up with popcorn. A condo development in Maple Ridge, for example, where "the treasurer had a gambling addiction and drained the operating and reserve funds." Or a downtown development where "the treasurer and secretary had credit cards and ATM cards in the name of the strata council, which they used for personal stuff." There have been cases of boozy parties and even donations to political campaigns, all made with strata council funds. "If the strata council won't provide you with financial records and bank statements," Gioventu says, "you can almost guarantee there's trouble." (-- pgs. 73-74)

Hey, Vancouver! ... Sound familiar?

More on the controversial Atlantic Yards development proposal in Brooklyn, New York.

More on the condo nightmare at New York's landmark Plaza Hotel.

STILL MORE high-end, unsold New York condos.