Do you believe Vaughan is being over-developed?

(As featured in the Vaughan Citizen, March 11, 2010)

"Do you believe Vaughan is being over-developed?" 

This was the question posed in Caroline Grech's March 3rd post entitled "Vaughan greenlights changes to official plan ".  While it sounds like a straightforward question, the answer may appear to be a paradox.

To understand why, one has to understand the quantum leap in the Provinicial policy framework for development.  Through the legislation of various policy documents such as the Places to Grow Act, the stage has now been set for long term growth management by establishing the rules that municipalities such as Vaughan must follow in respect of land development and sustainable community building.  

Prior to the enactment of this legislation, the focus on development tended to ignore existing built up communities in favour of newer Greenfields. During the 25 years up to the last census data of 2006, Vaughan experienced over growth of over 200,000 people and almost 150,000 jobs.  That short period of intense growth was accommodated mostly via unsustainable Greenfield development and has created a number of issues which require immediate attention including:

• Extreme dependence upon personal vehicles and growing gridlock
• Erosion of countryside, agricultural lands and green space
• Predominance of disconnected, limited access single-use areas
• Limited range of housing types and inventory
• Inadequate health and cultural and identity building facilities
• Greater capital and operating infrastructure costs per capita
• Greater concentration of low skilled versus high skilled employment

Regional forecasts now suggest that Vaughan will grow by 170,000 new people and 113,700 new jobs during the 25 year period of 2006 and 2031.  The aim of the Places to Grow program is to manage this next wave in order to avoid and/or reverse some of the impacts of past growth.  Accordingly, the legislation will attempt to:

• Create a vibrant and multi-dimensional downtown core (Vaughan Metropolitan Centre)
•  Create integrated communities that offer more live, work and play options
• Provide housing options to meet the needs of people at any age
• Curb sprawl and protect farmland and green spaces
• Reduce traffic gridlock by improving access to a greater range of transportation options

One of the key elements of the program is the established target for development that must occur through intensification within the already built areas.  Some of the arguments for intensification are that the cost of infrastructure in low-density, sprawling development is expensive because there are fewer properties among which to allocate such costs.  Furthermore, it prohibits the efficient and cost-effective provision of public transit solutions.

The irony with intensification however is that while many people tend to agree with the concept in principle, it often is the subject of great debate and opposition when it comes to local neighbourhood impact, a phenomenon otherwise known as NIMBY (Not in My Back Yard).  This, I would argue, is more so the case in suburban settings such as Vaughan where many residents have chosen to live based on an overwhelming preference towards lower-density developments.  The common belief is that among other things, the suburban setting offers improved privacy, slower lifestyle and less crime than the urban alternative.

The fact of the matter is that we can no longer subscribe to this way of life as it fails to ignore the long term impacts.  Even if we accept the premise that the suburban lifestyle offers a higher quality of life, it simply cannot be accommodated indefinitely.  While it may seem like over-development, the principle of intensification is in fact a necessary source of sustainable long term growth that will minimize urban sprawl.

GTA Feb 2010 MLS data released: Vaughan sales continue brisk pace

Greater Toronto REALTORS® reported 7,291 sales through the Multiple Listing Service® (MLS®) in February, representing a 77 per cent increase over February 2009. The average price for these transactions was up 19 per cent year-over-year to $431,509.

Sales and average price increases represent both increased demand for ownership housing and the base year effect, which involves a comparison of economic recovery this year to a period of economic decline last year.

“Increases in existing home sales and average price were noted across the GTA in low-rise and high-rise home types. Similar rates of growth were experienced in the City of Toronto and surrounding 905 regions,” said TREB President Tom Lebour. “This suggests that first time, move-up and down sizing buyers are all active in the existing home marketplace.”

New listings also increased in February, climbing 24 per cent compared to the same month last year.
“Annual growth in new listings is expected to continue. New listings growth will start to outstrip sales growth as we move through 2010,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “As the market becomes better supplied, we will see more sustainable single-digit rates of price growth.”

In Vaughan (District N08) REALTORS® reported 243 sales through the Multiple Listing Service® (MLS®) in February, representing a 141 per cent increase over February 2009. The average price for these transactions was up 14 per cent year-over-year to $499,543

New listings also increased in Vaughan in February, climbing 36 per cent compared to the same month last year.   While this is a favourable trend for buyers looking for more available options in the market, the pace of new listings is still well below the pace of sales resulting in further market imbalance.

This fact is punctuated when we take a look at the active listings to real estate sales ratio for the month in Vaughan.  In Feb 2010 that ratio was 1.7 compared to 6.7 in Feb 2009. 

At the risk of being stigmatized as "just another one of those self serving REALTORS®", now may very well be a good time...well, you know the rest.

It would seem, I'm not the only one who believe this based on this latest Real Estate market opinion from the CHMC

If you have any questions about the latest data release or any other real estate matters, please feel free to contact me.  I'm always here to help.

Bullying your way through Multiple Offers

A recent article was published in the YourHome section of the The Toronto Star entitled  House sellers, buyers balk at bidding wars

The article describes the frustration among prospective home buyers who take part (often unsuccessfully) in a multiple offer situation.  As the article correct points out, there is often a proliferation of multiple offer activity in markets subject to limited inventory.

The frustration though is the result of the marketing methods often utilized and recommended by agents and adopted by their sellers in setting a listing price for the property. Specifically, the prices are set artificially below prevailing market prices along with a delayed offer date in order to encourage greater buyer interest and buying frenzy.

The article does a good job of discussing the growing negative reaction to underpriced listings in the market by knowledgeable buyers who are now beginning to avoid competing offer situations.

What the article doesn't mention is one of the strategies used by savvy REALTORS® in the multiple offer situations known as the "Bully Offer".

Simply stated, the Bully Offer is one which includes an aggressive offer price with good terms and includes a short irrevocable date (24hrs or less) which clearly expires well before the delayed offer date noted in the listing.  In such a case, the listing REALTOR® is legally bound to "convey the offer to the seller at the earliest practical opportunity".

Assuming the REALTOR® does so, the seller can very well choose to accept the offer which leads to a happy seller and a purchaser who has avoided the multiple offer frenzy and associated stress that comes with it.

The problem in this case are the purchasers and their agents who chose to play by the rules and wait until the requested offer date to convey their offers,  They are all left fuming once they realize the house has already been sold.

In case you're wondering, no, there are no specific guidelines within the Provincial Real Estate & Business Brokers Act legislation (REBBA) that addresses this specific Bully Offer situation.  Aside from the seller and agent's own moral and ethical dispositions, there is nothing guiding the appropriate conduct of an agent in this case.

The only recourse for the disgruntled purchasers/agents in this situation is to pursue legal damages.  In that respect, by accepting the "early offer" the seller and his agent may be leaving themselves open to a potential lawsuit.

How the Courts would rule on on this or determine the basis for damages is anyone's guess.

Vaughan Metropolitan Centre Secondary Plan Meeting

On Monday March 8, 2010, the City of Vaughan Policy Planning Department and the consulting team of Urban Strategies Inc. will host a public information meeting for the Vaughan Metropolitan Centre Secondary Plan.



EVENT DETAILS:

MONDAY, MARCH 8, 2010
7:00 p.m. to 9:00 p.m.
Hilton Garden Inn – Toscana Room B
3201 Highway 7 (at Interchange Way), Vaughan


PROJECT OVERVIEW:

The City of Vaughan is in the midst of creating a new Official Plan to guide the City’s growth over the next twenty-five years. The emerging vision for the City includes a “vibrant and thriving downtown” in the area known as the Vaughan Metropolitan Centre (VMC) – formerly the Vaughan Corporate Centre (VCC), and is being planned near the intersection of Highway 7 and Jane Street. The extension of the Spadina Subway to Vaughan and the need to accommodate new residents and jobs in the VMC sets the stage for building a downtown - a distinctive place and centre for business, culture, commerce and living. A study of the VMC is now underway and will result in a new Official Plan, zoning by-law and design guidelines for the area. To ensure the new plan reflects the needs and aspirations of Vaughan citizens, public participation in the Study is vital.

MEETING PURPOSE:

The purpose of this Public Information Meeting is to present an overview of the Draft Vaughan Metropolitan Centre Secondary Plan for information and feedback. The goal of the plan is to create a vibrant and sustainable downtown that serves all Vaughan citizens. The Draft Plan sets out a framework of streets, open spaces and land uses for the VMC and contains policies to guide infrastructure planning, built form and public realm improvements.

Members of the public are encouraged to attend this meeting to provide their insight, and to continue to play an important role in the planning process for the City of Vaughan.

East Woodbridge Community assembles to discuss Liberty Development

The East Woodbridge Community Association (EWCA) hosted a public meeting this evening at the Chancellor Community Centre to discuss questions and concerns regarding the development proposal of 7777 Weston Road; northeast corner of Highway #7 and Weston Rd. (I wrote about the Liberty Development proposal in a prior post.)

The EWCA invited all members of the Vaughan Council along with representatives from the Liberty Development Group to attend.

I was glad to see Mayor Linda Jackson, Regional Councillor Gino Rosati and Regional Councillor Mario Ferri were on hand to field questions from concerned residents.

Notably absent were Regional Councillor Joyce Frustaglio, Councillor Bernie Di Vona and representatives from the Liberty Group.

I will be the first to submit that the decision to hold a public meeting at 5:00 pm on a Saturday evening was perhaps not the best way to encourage overall attendance.  Nothwitstanding this, I think this particular proposal will represent a landmark development case in the local Woodbridge community and Vaughan in general and accordingly, I would have expected Regional Councillor Frustaglio and Councillor Di Vona to make an appearance.

I actually was impressed with some of the comments and questions raised by the local community.

Unfortunately due to the lack of time and the number of deputations, I did not have an opportunity to convey some of my intial concerns with the development which are as follows:

1. The Places to Grow Act guidelines suggest a target level of 200 combined jobs and people per hectare by the year 2031 in designated "Growth Centres".  In Vaughan, the defined Growth Centre includes the Vaughan Corporate Centre (recently renamed "The Vaughan Metropolitan Centre").  This proposed development lies outside the boundaries of this Growth Centre so why is this higher density target being used as the basis of consideration for the application?   Even at this target, the roughly 2 hectares that the site represents would translate into 400 combined jobs and people.  This proposal calls for 792 residential units and 10 storeys of office space.  This is a major variance by any reasonable standard. 
   
2. The application relies on the prospective improvements in transportation (which includes the Viva rapid transit systems and the eventual Spadina subway extension) in respect of addressing the traffic conjestion concerns for the nearby intersections.  There are two issues here.  One, what are the assurances that the Subway and rapid transit sytems will be in place by the time this development is completed? Two, what are the plans for addressing pedestrian safety for residents who are expected to
    utilize the rapid transit routes.  Presumably the rapid transit stops would be situated kitty-corner to this development.  Expecting pedestrians to cross both Highway 7 and Weston Road during daily rush hours would be nothing short of suicide missions.

This meeting represented one of the first few steps in a very long process.  While it is important to invite and involve the entire community, I think it is also important to create a smaller circle of representatives to synthesize and assert the views of the community in an organized and meaningful format

I believe this is the best way in which to have the City of Vaughan Council and applicants such as the Liberty Group can carefully hear, understand and be accountable to the Community.

GTA REALTORS® report mid-February resale housing market figures

Greater Toronto REALTORS reported 3,555 sales through the Multiple Listing Service during the first two weeks of February.

This represented a 74 per cent increase compared to the 2,044 sales recorded during the same period in 2009 when resale transactions had dipped due to the recession. The February mid-month sales total was also 7.7 per cent above the previous high set in 2006. "Home ownership demand remains strong in the GTA, as households remain confident that economic recovery is at hand and that ownership housing will continue to be a quality long-term investment," said Toronto Real Estate Board President Tom Lebour. The average price for February mid-month transactions was $429,997 - an 18 per cent increase over 2009. New Listings within the Toronto Real Estate Board boundaries were up 15 per cent to 6,212.

"Double-digit price increases will persist through the first quarter of the year," said Jason
Mercer, TREB's Senior Manager of Market Analysis. "However, as new listings continue
to increase creating a better supplied market, we will see the annual rate of price growth
moderate into the single digits."

Mortgage Rules change will detonate Real Estate market fireworks

The federal government has announced changes to the rules for government-backed insured mortgages (less than 20 percent down payment) as follows:

• All borrowers will be required to meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter terms.
• Reduced maximum amount that can be withdrawn in refinancing a government-backed insured mortgage to 90 per cent from 95 per cent of the value of the home.
• Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner occupied properties purchased for speculation. Borrowers purchasing owner-occupied residential properties will still be able to access government-backed mortgage insurance with a 5 per cent down payment.

By many accounts (including my own), the undertones of announcement seem to foreshadow inevitable interest rate hikes. When you consider these together and add them to the pending HST introduction, the current blazing real estate market will become pyrotechnic.

Backgrounder

Canada's Housing Market Remains Strong

Canada's housing market remains healthy and stable. According to the International Monetary Fund, our housing market is fully supported by sound economic factors, such as low interest rates, rising incomes and a growing population. Moreover, mortgage arrears—overdue mortgage payments—have also remained low.
Today's announcement is part of the Government's policy of proactively adjusting to developments in the housing market that could take root and cause instability. These steps are timely, targeted and measured, and will reinforce the importance of Canadians borrowing responsibly and using home ownership as a savings mechanism.

Mortgage Insurance

Mortgage insurance (which is sometimes called mortgage default insurance) is a credit risk management tool that protects lenders from losses on mortgage loans. If a borrower defaults on a mortgage, and the proceeds from the foreclosure of the property are insufficient to cover the resulting loss, the lender submits a claim to the mortgage insurer to recover its losses.
The law requires federally regulated lenders to obtain mortgage insurance on loans in which the homebuyer has made a down payment of less than 20 per cent of the purchase price (also called high loan-to-value ratio loans). The homebuyer pays the premium for this insurance, which protects the lender if the homebuyer defaults.
The Government ultimately backs most insured mortgages in Canada. It is responsible for the obligations of Canada Mortgage and Housing Corporation (CMHC) as it is an agent Crown corporation. In order for private mortgage insurers to compete with CMHC, the Government backs private mortgage insurers' obligations to lenders, subject to a deductible equal to 10 per cent of the original principal amount of the loan.
In October 2008, the Government adjusted its minimum standards for government-backed, high-ratio mortgages, including:

• Fixing the maximum amortization period for new government-backed mortgages to 35 years.
• Requiring a minimum down payment of five per cent for new government-backed mortgages.
• Establishing a consistent minimum credit score requirement.
• Requiring the lender to make a reasonable effort to verify that the borrower can afford the loan payment.
• Introducing new loan documentation standards to ensure that there is evidence of reasonableness of property value and of the borrower's sources and level of income.

Measures Announced Today

Today, the Government announced three changes to the standards governing government-backed mortgages.

Qualifying at a Five-Year Rate

Current interest rates are at record low levels, which has improved the affordability of housing for Canadians. It is important that Canadians borrow prudently and are able to manage their debt loads when interest rates rise.
Lender and mortgage insurers look at two key ratios when assessing the ability of a borrower to make payments on a mortgage loan:

• Gross Debt Service (GDS) ratio—the ratio of the carrying costs of the home, including the mortgage payment, taxes and heating costs, to the borrower's income.
• Total Debt Service (TDS) ratio—the ratio of the carrying costs of the home and all other debt payments to the borrower's total income.

Currently, the interest rate used to determine the mortgage payment for these calculations is either the rate fixed for the term of the mortgage or, in the case of a variable-rate mortgage and mortgages with terms of less than three years, the greater of the contract rate and the prevailing three-year fixed rate.
The adjustments to the mortgage framework will require mortgage insurers to ensure that borrowers qualify for their mortgage amount using the greater of the contract rate or the interest rate for a five-year fixed rate mortgage when calculating the GDS and TDS ratios.
This measure is intended to protect Canadians by providing them with additional flexibility to support mortgage payments at higher interest rates in the future.

Limit the Maximum Refinancing Amount to 90 per cent of the Loan-to-Value Ratio

Borrowers seeking financial flexibility can currently refinance their mortgage and increase the amount they are borrowing on the security of their home up to a limit of 95 per cent of the value of the property. This type of refinancing lowers the borrower's equity in their home. The adjustments today will lower the maximum amount of the mortgage loan in a refinancing of a government-backed high ratio mortgage loan to 90 per cent of the value of the property, consistent with the principle that home ownership is a tool for savings.

Discouraging Speculation by Requiring a Minimum Down Payment of 20 per cent for non-owner-occupied properties

This measure will require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. Currently, borrowers may purchase a residential property with a 5 per cent down payment. Today's change will require a 20 per cent down payment for small (i.e., 1- to 4-unit) non-owner-occupied residential rental properties. Borrowers purchasing owner-occupied residential properties which also include some rental units (e.g., borrowers purchasing a duplex to live in one unit and rent out the other) will still be able to access government-backed mortgage insurance with a 5 per cent down payment.

Moving to the New Framework

These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010. Exceptions would be allowed after April 19 where they are needed to satisfy a binding purchase and sale, financing, or refinancing agreement entered into before April 19, 2010.

Source: Department of Finance Canada

The push for video streaming of Vaughan City Council public meetings

This past week, I had the opportunity to tune into a live audio broadcast of the public Committee of the Whole meeting, which among other agenda items, included a public consultation on the proposed development application by the Liberty Development Corporation in respect of 7777 Weston Road (former Al Palladini dealership)

Although the broadcast audio quality was fairly decent, the fact that the video element was missing, left much to be desired especially given the nature of this particular agenda item which showcased much passion among residents packed in the Council chamber.

Naturally, video streaming brings an entirely different dynamic and dimension to the process.  The phenomenon and popularity of websites like YouTube and Vimeo are obvious testimony to this, not to mention the proliferation of video in all our cool handheld devices.  I really look forward to the Ipad offering...sorry, I digress.  Back to the issue...

Less than a week ago, the Toronto Star published an article which lauded the City of Vaughan for becoming a leader in transparency and accountability.  Unfortunately, when it comes to the full transparency of public Council meetings, the City of Vaughan gets a marginal passing grade at best.

I have been told by some that there are those wonderful Privacy laws that limit what the City can and cannot do in respect of video simulcast, but I simply don't buy it.  One only need look to our neighbouring municipalities to see that this is and has been going on for many years.

Below for example, are samples of RogersTV broadcast schedules for various surrounding municipal Council meetings.

http://www.rogerstv.com/option.asp?lid=12&rid=28&sid=1126&cdate=1/27/2010

http://www.rogerstv.com/option.asp?rid=16&lid=12&sid=1030

http://www.mississauga.ca/portal/cityhall/mississaugatv

http://www.rogerstv.com/option.asp?lid=12&rid=70&sid=3183

Clearly, Privacy laws are not the issue at hand here.

In the Toronto Star article above, when asked about what was driving the change in Integrity and Accountability policy reforms at the City, Councillor Alan Shefman responded by saying "it was driven by the will of Council and the clear recognition by some of us who felt that you need these sorts of policies and codes in place to give councillors a guide for good behaviour."

That being said, I for one would like to see the "will of Council" proceed further in their bid to be transparency role models and work to begin the live video streaming of public Council meetings.

If you're a resident of Vaughan, I'd love your opinion on this.

If for no other reason, we might be able to prevent situations like the following:

Notice of Public Meeting re: Weston/Highway 7 Proposed Condo Development

A public meeting of the residents of Vaughan (and in particular Ward 3 in Woodbridge) is being held to discuss questions and concerns pertaining to the proposed Condominium and Office Tower development of 7777 Weston Road (formerly the Al Palladini Dealership)

The first Committee of the Whole public meeting regarding this application took place on February 2, at the City of Vaughan Council Chambers and saw a significant turnout of residents.


The date, time and location of this community meeting is scheduled for:

Saturday February 20, 2010 at 5:00 p.m.
Chancellor Community Centre in Woodbridge
350 Ansley Grove Road, gymnasium

All residents are encouraged to attend with friends and neighbours.

This meeting is being held by the East Woodbridge Community Association

Please contact Rosanna DeFrancesca, (President) with any questions by email at info@ewca.ca or by phone at 416-678-1486

GTA REALTORS® report January resale housing market figures

Greater Toronto REALTORS® reported 4,986 transactions through the Multiple Listing Service (MLS®) in January 2010. This result represented a large increase over the 2,670 sales in January 2009 when the home sales were in a recessionary trough. Last month’s sales were slightly higher than the January average in the five years preceding 2009. “The GTA housing market has rebounded well from the lows in sales experienced at the beginning of 2009. Sales climbed back to healthy levels across the GTA because the cost of home ownership remained affordable in the Toronto area,” said TREB President Tom Lebour.

“Increasingly confident consumers moved to take advantage of affordable home ownership.” The average home selling price in January 2010 climbed 19 per cent to $409,058, compared to 343,632 in the same month last year. “Expect strong annual growth rates for existing home sales and average price through the first quarter as we continue to make comparisons to the weak market conditions at the beginning of 2009,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The rate of sales and price growth will be lower in the second half of 2010.”

In Vaughan (District N08), the number of resale housing real estate transactions in January 2010 totalled 146 versus 69 a year earlier. This represented a 116% increase, compared to the overall GTA change of 76%. The average home selling price in Vaughan climbed 12 per cent to $484,680 compared to $430,071 in January 2009.