Deane Strongitharm of CitySpaces Consulting discusses the south Island's real-estate development industry from a historic perspective, and provides an outlook to the future. Citified.ca
Q&A on Victoria's housing market history and an outlook with Deane Strongitharm of CitySpaces Consulting
Ten on the 10th
Published July 10, 2023
Citified's Ten on the 10th is a monthly question-and-answer segment connecting our readers with the insight and knowledge of Victoria's top real-estate and business professionals.
Ten on the Tenth's July, 2023 segment features Deane Strongitharm, Senior Associate, CitySpaces Consulting, a real-estate planning and consulting company with offices in Vancouver and Victoria, BC.
Asking the questions is Ross Marshall, Senior Vice President of the Victoria offices of commercial real-estate brokerage CBRE. As a leader in facilitating large-scale commercial real-estate transactions throughout the Capital Region – which include apartment complexes, industrial retail and office properties, and land/development opportunities – Ross and his team are at the forefront of market-leading real-estate transactions on Vancouver Island.
Would you like to be featured as part of a future Ten on the 10th Q&A? We'd like to hear from you.
Can you tell us about CitySpaces, and the services your company provides to the development industry?
CitySpaces Consulting Ltd and Strongitharm Consulting Ltd provide a range of planning and development management services. A large percentage of the work relates to all aspects of housing including housing needs analyses and housing policy, applied research, and community. The three core services of CitySpaces are (1) community planning, (2) engagement and consultation, and (3) development consulting.
As for the writing, I do a lot of real-estate analysis and private sector land-use applications along with marine and foreshore applications.
You’ve had a front row seat in Victoria’s development industry for decades. What has changed, since, the 1990s, in terms of the municipal planning process?
My first job was as a planner with the City of Victoria in the mid to late 1970s. And things have changed a lot. There was still a lot going on back then, but the application process was enormously simplified. A planning report to council (which met at 2:30 in the afternoons on a Thursday) would maybe be three pages long. There was no Design Panel meeting, no CALUC meetings, no COTW: no Housing Agreements, very few covenants, and there was no Development Permit approvals required. Decisions were made quickly. For a rezoning application to take more than six months would be unusual. So one should ask if all of the additional layers of process, approvals and bureaucracy has made the commensurate improvements to the neighbourhoods or public realm of the community!
And what has remained the same?
There still was a process that had to be followed under what was then the Municipal Act, but the extent of process, neighbourhood engagement and the timeline are extraordinarily different.
Can you speak to how they are extraordinarily different? Would that relate to more engagement layers, and the CALUC process?
The changes from when I first started as a career in planning to now is enormous. The layers of process have at least quadrupled, the expectation for public engagement today was unheard of an unexpected back then and the level of political discourse at the Council table was much less acerbic that what can be experienced now.
As we await more information on the Province’s municipal housing quota agenda, what do you think the plans will entail?
This is a fascinating question. There are so many individual situations. Both municipally and contextually in a neighbourhood. It will be hard to apply universally and yet if you don’t are you being discriminatory?
How will the Province entice municipalities resistant to change their housing stock, to permit more housing?
First is the question of how to measure the change, and as stated above, how would you possibly apply it universally across the Province. That's very hard to do. As municipalities are creatures of the Province, the Province certainly does yield the big stick to basically do anything it wants, from withholding transfers, (or perhaps more appropriately) to incentivizing municipalities through transfers of money to those who support increased housing.
We’ve heard rumours of the Province potentially absolving certain municipalities of their planning roles, and instead putting land use approvals into the hands of the Province, or sharing the planning process with the Province. Is that something you have also heard?
If a municipality and its citizens are dead-set against removing, say, single detached zoning from their land use bylaws (which has been some of the rumour we have heard, that the Province could do away with the single detached dwelling zone within urban containment boundaries of a region) in my view, that should be the local government's choice.
But the Province, through dollar transfers, could support those municipalities who are “densifying” and not give transfers to a municipality that may choose not to. The penalty will be that the municipality which doesn’t change, gets less provincial transfer dollars and then has to pay more by way of property tax to pay for services within its local jurisdiction. And if the citizens of the municipality are prepared to have potentially significantly higher property taxes then c’est la vie! Financial incentives almost always have a way of winning out.
If you had to choose the top three municipalities in the CRD for their practical and pro-housing planning processes, what would they be?
Victoria, Langford and Esquimalt.
Where do you see the price of development land going? Do you see it stabilizing, do you see it going up or going down?
The price of land is a function of two pretty well known things, supply and demand. If supply is curtailed prices will rise. What has occurred though is the cost of approvals, the servicing requirements and development charges imposed by local government has risen exponentially.
I always thought, that as the post-war baby boomers (myself included) reach an age where they are not placing the same demands on housing, that it would moderate prices, relatively. The one thing that has thrown a wrench into this theory is the level of immigration and the demands of new families needing housing. It is interesting that even with rising interest rates with the Bank of Canada trying to moderate inflation, there is still new employment being generated, needing immigration to 'fill in the holes' in pretty well all sectors of the economy, caused by COVID and the abrupt retirement of many post-war baby boomers.
How about a prediction? What’s one prediction on the market or the industry, that may not be an unexpected turn of events?
I think that real estate will stabilize and there may even be a modest reduction in prices but it is temporary and the cost of land and restriction on supply will continue to put upward pressure on pricing.
The one thing that has always fascinated me is real-estate in communities in the dessert, like Palm Springs or Phoenix. You might wonder how that relates locally. The one commodity above everything else that keeps land values up is water. If the wells of Palm Springs went dry, I can assure you the value of real-estate would plummet. In Greater Victoria, one of the very clairvoyant things that the CRD did and the Regional Water District before it, is develop a large reservoir and collection system, albeit reliant on fall, winter and spring rains. The lack of rain we have been experiencing is concerning but will not put us in a situation like people all over the world now experience. But we should thank our lucky stars for what we have and for the foresight that was provided.
Bonus question: With the development industry always striving for ideas to help deliver more housing, faster, how can developers be part of the solution when it comes to planning timelines and the backlog developers face at the municipal level, as opposed to being at the mercy of the process? Is there an opportunity for more incentives for municipalities from the development industry?
That is an interesting question. I have always said that you need to look at a situation from "both sides." While there are some people who believe that housing should be 100% delivered by the public sector or non-profits, that is completely unrealistic and not doable. But I have always thought that every public planner or engineer or administrator should work in the private sector and get a perspective from the "other side," and vice-versa. I think there should be (desirably) required sabbaticals in order that there is a mutual understanding of each others’ issues and frustrations. The issue is that it really would only practically work with larger private sector firms and that is not characteristic of the Victoria market although it is changing. It should apply to politicians, too, but that may be a bit of a stretch. C
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