Developers of a high-profile high-rise project in Vancouver’s West End have been placed under receivership, as they owe $82.2 million to the Bank of Montreal. The project, called 1045 Haro Street, consists of a 55-storey condo tower and a 15-storey tower with retail space, a childcare facility, and a public plaza. The owners of the property purchased it in 2018 but have been unable to meet the city’s requirements to move forward with the project. They attempted to sell the property but received offers significantly lower than the purchase price. The Bank of Montreal subsequently filed for receivership to arrange a sale of the property. The appointed receiver will not be able to seek approval for sale offers until April 26.

The Information About The 55-storey Tower In Vancouver’s West End Has Been Placed Under Receivership

A big building project in Vancouver called 1045 Haro Street has hit a roadblock. The developers, Haro-Thurlow Street Project Limited Partnership, are in financial trouble and owe $82.2 million. A bank called the Bank of Montreal has taken legal action and asked the court to appoint someone to take over the project and sell the property.

The project was supposed to include a 55-storey condo tower and a 15-storey tower with 450 condos and 66 rental units. The plan also included retail space, a childcare facility, and a public plaza.

The property is owned by Harlow Holdings Ltd., but the partnership that was responsible for the development is the one in financial trouble. The partnership is made up of several companies, including 11044227 BC Ltd., Forseed Haro Holdings Ltd., and Terrapoint Developments Ltd.

Intracorp Homes, a Vancouver developer, was managing the project, but they are not in financial trouble themselves. The architect for the project is Patkau Architects.

The owners of the property bought it in 2018 for $172.75 million, with financing from the Bank of Montreal and the companies in the partnership. They have been unable to meet the requirements set by the City of Vancouver to move forward with the project, and they have not formally applied for a development permit. One of the reasons for this is that the project would block some views, which is currently being reviewed by the city.

The owners have been in talks with the bank to try to extend the deadline to repay their debt, but the bank has refused. The owners then tried to sell the property, but the offers they received were much lower than what they paid for it. This caused tension between the partners in the project.

The owners missed a payment in July 2023, and the bank demanded repayment. When the owners did not comply, the bank filed for receivership. A receiver is someone who takes control of a property and sells it to pay off the debt.

The appointment of the receiver was approved by the court, but they are not allowed to sell the property until after February 23. They also have to get court approval for any offers they receive.

The property has been appraised at $192 million, but it is unclear if any lenders would recognize that value. The value may have also decreased since then due to various factors such as higher interest rates and construction costs.

If the receiver does start a sales process, they will likely hire a real estate brokerage to help. The offers they receive will be narrowed down before being presented to the court for approval.

Wrapping Up

Major high-rise development project in Vancouver, the developers have been placed under receivership due to an outstanding debt of $82.2M owed to the Bank of Montreal. The project planned for 830-850 Thurlow Street and 1045 Haro Street, was set to include a 55-storey strata condo tower, a 15-storey tower with 450 strata condominiums and 66 rental units, as well as retail space, a childcare facility, and a public plaza. The development site is owned by Harlow Holdings Ltd. and beneficially owned by Haro-Thurlow Street Project Limited Partnership (HTLP), which is owned by several parties. Intracorp Homes is serving as the development manager of the project but is not subject to the receivership application. The owners defaulted on their interest payment in July 2023 and BMO subsequently made a demand for payment on August 29, leading to the receivership application.

BMO is seeking the appointment of a receiver to arrange a timely sale of a property owned by CM Group, as they have lost confidence that the owners are working to repay the debt. The property’s value is disputed, with an appraisal valuing it at $192M based on development potential, but the president of Intracorp Homes expects it to be even lower than the $93M offer submitted by Chard Development. The owners have identified three lenders willing to provide loans to repay the debt, but BMO claims no evidence has been provided. Deloitte has been appointed as the receiver, but will not be able to undertake any sales efforts until after February 23 and cannot seek approval of any sale offers until after April 26.

Good news for the Canadian housing market! After a cautious year with rising borrowing costs, economists predict a rebound in 2024. This is largely due to forecasts that the Bank of Canada may begin cutting its key interest rate from the current level of five percent as early as the second quarter of this year. While there have been softer market conditions since the end of last summer, there are indications that the market is starting to turn around. Although price declines have mainly been an Ontario phenomenon, home prices were also starting to soften late in the year in other areas. However, prices were mostly holding firm or continuing to climb in provinces such as Alberta, Saskatchewan, New Brunswick, Prince Edward Island and Newfoundland and Labrador.

The interest rate story is one of many unknowns lingering after the calendar flipped to the new year, but economists are optimistic that a cut in interest rates will bring more activity and small increases in prices over the second half of the year. While there may not be a rapid recovery, any rate cut will spur excitement and activity in the housing market.

The Details Of Economists Foresee A Significant Turning Point In The Housing Market This Year, Coinciding With The Imminent Interest Rate Cuts

After a cautious year with changing expectations due to higher borrowing costs, economists are optimistic that the Canadian housing market will experience a rebound in 2024. This largely depends on the forecast that the Bank of Canada may begin lowering its key interest rate, currently at five percent, as early as the second quarter of this year.

TD Bank economist Rishi Sondhi stated that they are monitoring the market for signs of a turning point. Weak sales and price activity in recent months suggest that the market, at least in terms of demand, is starting to recover.

According to the Canadian Real Estate Association, the housing market has experienced softer conditions since the end of last summer, with both sellers and potential buyers taking a more cautious approach. While price declines have mainly been seen in Ontario, there are indications that prices are also starting to soften in the Fraser Valley, Winnipeg, and Halifax. However, prices in other provinces like Alberta, Saskatchewan, New Brunswick, Prince Edward Island, and Newfoundland and Labrador have either remained stable or continued to rise.

Larry Cerqua, chair of the Canadian Real Estate Association, noted that he does not expect any major headlines in the resale housing market in the next few months. This suggests a positive outcome, as a balanced and stabilizing market is desirable.

Realtor Tim Hill in Vancouver shared his optimism, stating that sentiment among his clients has gradually shifted due to modest price improvements in recent months. He believes consumer confidence will increase, and people will begin considering housing moves again in 2024.

While the Bank of Canada has kept interest rates steady in the face of moderated inflation, there is still a possibility of rate hikes. However, most forecasters expect the next move to be a rate cut. Sondhi mentioned the risk of maintaining high rates if inflation remains elevated.

Nathan Janzen, assistant chief economist at RBC, pointed out that there are many uncertainties as the new year begins. In addition to watching the central bank, he highlighted the weakening labor market as a factor affecting housing activity.

Janzen predicts that housing activity will remain slow in the early stages of 2024, but as inflation slows down, the Bank of Canada can consider interest rate cuts, which will likely lead to more activity and gradual price increases in the second half of the year. He does not anticipate a rapid recovery and expects the rate-cut process to be slow initially.

Real estate agent Anne Marie Lorusso believes that any rate cut will bring excitement and activity to the market. She expects a good spring market, where sellers will hold on to their prices, and buyers will need to carefully consider their options.

However, Hill advises his clients not to wait, even though borrowing costs are still high. He warns that once the market picks up, there will be a rush and increased competition among buyers.

Overall, economists are hopeful for a rebound in the Canadian housing market in 2024, especially if the Bank of Canada lowers interest rates.

Wrapping Up

Economists are predicting a potential rebound in the Canadian housing market in 2024, following a year of caution and shifting expectations due to rising borrowing costs. The optimism is based on forecasts that the Bank of Canada may begin cutting its key interest rate from the current level of five percent in the second quarter of this year. However, softer market conditions have been observed since the end of last summer, with sellers and buyers staying on the sidelines. While price declines have been mainly seen in Ontario, there are also signs of softening prices in other regions.

The Canadian Real Estate Association expects a stable market that leans towards a soft-landing scenario. Some realtors are already seeing increased consumer confidence and modest price improvements. The decision on interest rates remains uncertain, as the central bank has held rates steady but could potentially raise them depending on inflation levels. It is anticipated that interest rate cuts could spur activity and small increases in prices in the later part of the year. Nonetheless, the recovery is expected to be gradual, and potential home buyers are advised not to delay their purchasing decisions.

A man in British Columbia lost his $81,990 deposit on a townhouse despite having a contract option to transfer the deal to another buyer. Sudip Sehgall put down the deposit on the yet-to-be-built property in 2021 but was unable to sell his home in New Delhi to finance the deal due to new regulations and floods. When he tried to find a buyer to take over the Canadian deal, the developers opted to keep his deposit and sell the unit themselves. Sehgall is part of a growing number of Canadians defaulting on deals to buy presale or preconstruction condos or homes due to financial pressures, according to realtors.

A first-time homebuyer in Surrey, British Columbia, is facing the loss of an $81,990 deposit after the developer refused to allow him to assign the contract to another buyer. The Real Estate Development Marketing Act of B.C. allows developers to refuse assignment options and does not require them to deliver exactly what was seen in a showroom. The contracts are one-sided and weighted in favour of developers, according to real estate lawyer Richard Pazder. The average home price in the area is predicted to drop by up to 10% in early 2024, leaving presale buyers vulnerable as their investment depreciates. The buyer has reached out to politicians and business leaders for help but has been advised that the contracts are ironclad.

The Details of Real Estate Lawyers Are Urging Presale Buyers To Exercise Caution Amidst A Wave Of Defaults

One B.C. male lost his $82K deposit, despite an agreement option to transfer to another purchaser.

In 2021, Sudip Sehgall paid $81,990 upfront for a townhouse that hasn’t been built yet in Surrey, B.C. While it was under construction, he sometimes checked out the site to see it grow.

The 52-year-old visualized the offer taking him steps closer to owning his first Canadian home, however, he only had enough for a deposit after a loan from his retired dad.

Sehgall was depending on offering his home in New Delhi to get funding to close the deal. He began to worry when new regulations in India made his home less desirable. After the floods happened, he wasn’t able to sell it anymore.

Making matters worse, when he searched for a purchaser to take over the Canadian deal so he might get a refund, the designers decided to keep his deposit and offer the brand-new unit themselves.

Sehgall, who came to Canada in 2016 as a skilled worker, says he is now broke and back to leasing, this time a cramped $1,700-a-month basement suite with his belongings lined up in suitcases against the walls. He lost his less expensive leasing, thinking he was about to move into his new home.

“I might have to go back to India, and my dreams of living in Canada have been totally ruined,” he told CBC News.

Sehgall belongs to a growing contingent of Canadians who are defaulting on deals to purchase presale or preconstruction apartments or homes due to monetary pressures.

Real estate agents suggest that the boost in defaults can be attributed to the mix of elevated rates of interest and decreasing condominium worths. Nationwide, realtors and real estate legal representatives observe that various purchasers are surrendering their deposits. Although Sehgall’s situation is exceptional, specialists claim that other Canadians are also encountering difficulties and discovering the prospective dangers connected with such deals. This issue is ending up being more prevalent.

In the past 30 years, Barry Lebow, a real estate broker in Toronto, has actually not experienced such a high variety of purchasers defaulting on their purchases.

Lebow specified that a considerable variety of individuals are experiencing this phenomenon, with various accounts emerging of people choosing to leave.

Buying presale or preconstructed homes indicates putting down a deposit and signing a contract that you will pay the balance after the residential or commercial property is built to agreed-upon specifications on a particular date, called the closing date.

Lebow states the decreasing apartment worths and high interest rates are making it difficult for individuals to fund and close deals. Sometimes the system has actually lost so much value they now can’t afford a home loan.

Financial institutions figure out loan quantities based on the existing market value of the residential or commercial property, so if the agreed-upon purchase cost is higher than the home’s present worth, the bank will just provide financing for the lower quantity. The purchaser needs to then create the staying funds separately.

According to Lebow, there was a similar wave like this in the ’90s.

Lebow helps designers in showing to their lending institutions that they have offered units at the greatest possible price, therefore reducing losses and optimizing profits. This is particularly essential when purchasers default and developers are accountable for reselling the systems. The process includes providing proof that the systems were noted at the highest cost and consequently resold at that rate. This helps designers to secure the required financing to total construction and cover closing costs.

Toronto condo legal expert Gerry Miller has observed that people tend to prefer purchasing concrete possessions. He has actually seen customers experience substantial monetary losses, approximately $300,000 in deposits, due to legal commitments that greatly favor the opposite celebration, describing them as elaborately constructed and weighted against the buyer to an extent he thinks about unreasonable.

Sehgall’s effort to offer his home on the borders of New Delhi was not successful due to an unforeseen event – the area got more rain in a single day than it had in the past four years, leading to prevalent flooding.

“It became very difficult,” he said. He says he called the designer and spoke repeatedly to Jennifer Wilson, vice president of sales for StreetSide Developments, requesting a refund of his deposit and looking for consent to have the deal assigned to purchasers he had actually found who were eager to take over the townhouse contract.

Sehgall said that the contract allows for an “assignment,” which means transferring the deal to a different buyer. The agreement specifically states that the builder cannot unreasonably refuse this transfer. Sehgall mentioned that there may be a fee for transferring the deal to another party, but he wouldn’t lose his entire deposit.

The developer was not willing to permit it, according to him.

Sehgall said, “They said no.” They have another presale going on near the area.

Vancouver realty lawyer Kenneth Pazder discusses that re-assignments may be seen as competition that might divert potential purchasers far from other homes the designer is selling.

According to Sehgall, he was allowed to extend his time and search for a co-owner, but despite his efforts, he was unable to discover a suitable solution.

“I pleaded with her, I sent desperate emails, I really didn’t want to stop paying,” said Sehgall. He explained that he begged and requested desperately, trying his best to avoid defaulting on his payments.

Agreements are ‘extremely one-sided’: legal representative

According to Pazder, it is occasionally feasible to get a refund on a deposit, generally including a charge ranging from one to 3 percent; however, the market is slow.

He said that presales are not selling as quickly as they usually do.

He said while the presale market is managed by the provincial federal government, contracts for presales or preconstructed units are not. He also said they can be sticky to work out, and the wording is weighted in favour of developers. Not only can the designer refuse to think about an “assignment” alternative, but it’s also not required to deliver exactly what the buyer saw in a display room.

According to Pazder, all these offers are very biased. Sometimes, you might be able to talk about the price and maybe they will give you an extra parking space or a storage room.

According to TD Bank’s projection in November, there may be a decrease of approximately 10% in typical home costs by early 2024 due to a boost in housing supply. This could leave presale buyers in a susceptible position as the worth of their financial investment possibly reduces.

Pazder stated he believes Sehgall has premises for a legal difficulty, arguing that the designer was “being unreasonable” offered Sehgall’s claim that he had actually found another purchaser for the residential or commercial property.

Business decreases interview

CCBC News contacted the person selling the property in Sehgall’s case, but they declined to be interviewed. A representative from the company stated that their actions adhere to the guidelines stated in the Realty Development Marketing Act of B.C., as mentioned in an email.

Jonathan Meads, the vice-president of StreetSide Developments, which is a division of Qualico—an established company building projects in Western Canada—said, “This is a legal matter, and we have advised Mr. Sehgall to seek appropriate guidance from a lawyer.” He expressed that they would not provide any other comment.

Sehgall has actually contacted political leaders and leaders in the Surrey company community for help.

Sehgall has no experience in buying a house. Ha said, “I’m not someone who invests in properties. I didn’t have any idea, and my real estate agent didn’t advise me either. We just went ahead and signed the papers.”
“The agreements we signed are very strong. It’s extremely difficult if the home builder rejects you. Someone like me, who is buying a house, doesn’t have the legal or financial ability to fight against a big construction company.”
‘We have been messed up’

B.C. Real Estate Minister Ravi Kahlon told CBC News that Sehgall’s scenario was discouraging.

In a statement, Kahlon highlighted the significance of offering homebuyers the essential info to make well-thought-out decisions, as buying a home is often a major monetary choice for people.

“That’s why the Property Advancement Marketing Act makes it mandatory for developers to provide a document called a disclosure statement to buyers. It also gives buyers the right to cancel their purchase agreement within the first seven days. This helps customers get enough time to carefully think about their decision before moving forward with the purchase.”

Consumers can acquire information from the B.C. Financial Provider Authority to much better comprehend the procedure of presale purchases and their associated rights according to the act.

According to him, a waiting period of three days was executed in January 2015 to assist buyers in obtaining funding or arranging home examinations.

Sehgall is sorry for not getting better assistance. The $81,990 that was deposited was money that his family assisted in saving, and its loss had a profound impact, particularly on his elderly moms and dads.

“We have been destroyed,” said Sehgall.

He stated that my parents were really shocked and they still had hope that they would get their money back, even though it was a very slim chance.

Wrapping Up

A man from British Columbia, Canada, lost his $81,990 deposit on a yet-to-be-built townhouse, despite having a contract option to transfer the deal to another buyer. Sudip Sehgall, who had put down the deposit in 2021, was relying on selling his property in New Delhi to finance the purchase. However, new regulations in India and subsequent floods made selling the property impossible. When Sehgall tried to find a buyer to take over the Canadian deal so he could get a refund, the developers opted to keep his deposit and sell the unit themselves. Sehgall’s case is part of a growing trend of Canadians defaulting on presale or preconstruction condo and home purchases due to financial pressures.

Experts attribute this trend to high-interest rates and declining condo values, which make it difficult for buyers to finance and close deals. Many buyers end up losing their deposits. Toronto real estate broker Barry Lebow notes that he hasn’t seen this many buyers defaulting in 30 years. The declining condo values and high-interest rates have made it challenging for buyers to obtain mortgages, as banks only loan money based on the current value of the property.

Sehgall claims that despite finding another buyer for the property, the developer refused to consider the assignment and refused to refund his deposit. The presale market is currently slow, making it difficult for buyers to sell their units. Real estate lawyer Tony Pazder explains that presale contracts heavily favor developers and are often one-sided. While deposits can sometimes be recovered with a penalty, the slow market and the surge in housing stock put presale buyers at risk of losing their investment.

Sehgall has sought help from politicians and business leaders but feels powerless against the developer. B.C. Housing Minister Ravi Kahlon expresses sympathy for Sehgall’s situation and emphasizes the importance of providing homebuyers with the information they need to make informed decisions. He highlights the government regulations in place to protect consumers in presale transactions and suggests seeking advice from the B.C. Financial Services Authority. Sehgall regrets not receiving better advice and describes the loss of his deposit as devastating, particularly for his elderly parents who had contributed to the savings.

Westbank Corp., a well-known Canadian developer with a reputation for ambitious architecture, is currently facing problems with unpaid bills for multiple projects in Toronto and Seattle. Numerous contractors have claimed millions of dollars in unpaid fees, resulting in a rise in lawsuits and liens over the past year.

The construction industry has been particularly affected during this challenging period, as borrowing costs and construction expenses continue to soar. Westbank has found itself entangled in disputes with over two dozen construction and trade businesses regarding unpaid bills. It is important to note that these allegations have yet to be proven in court.

In response, the Vancouver-based developer has refrained from providing detailed comments on the ongoing disputes, as they are still under negotiation or litigation. However, Westbank has expressed its expectations of reaching a resolution for these matters. The company also emphasized that construction delays caused by the global pandemic are not exclusive to its projects, but rather a common challenge faced by the entire industry.

Similar to other developers, Westbank has faced significant increases in the costs of materials and labor, as well as rising borrowing costs. Residential construction expenses have risen by 58% over the past three years. Additionally, the prime interest rate charged by banks has reached its highest level since the beginning of the century, currently standing at 7.2%.

These sharp escalations have resulted in financial difficulties for several other Canadian developers throughout the year. For instance, Sam Mizrahi’s luxury condo project, The One, defaulted on $1.6 billion in debt payments and was put into receivership in October. Vandyk Properties faced similar consequences as lenders placed several of their developments into receivership after defaulting on over $183 million in loan payments. StateView, a residential builder located north of Toronto, also faced receivership after defaulting on $349 million in debt payments.

In Vancouver, Coromandel Properties filed for creditor protection when its lenders demanded repayment of over $200 million in loans. Onni Group, a developer with properties in various North American cities, has also been sued by multiple contractors in British Columbia for unpaid bills.

While other Canadian real estate developers have faced legal actions and creditor challenges, Westbank stands out as one of the largest and most prominent developers experiencing a considerable amount of litigation and claims from unpaid creditors. Though the individual amounts of some liens may not be substantial, the high volume of claims and ongoing litigation suggest developer-facing conflicts with trades on multiple fronts.

Over the past decade, Westbank has expanded its projects across Seattle, Toronto, and Vancouver, leading to a delay in completion dates for skyscraper projects. Westbank and its ex-general contractor, Graham Construction & Management Inc. were accused by >12 construction companies in Seattle, of not providing payment for work conducted at residential complexes called Museum House and WB120.

The issues began to surface in 2022 when Graham was removed as the contractor for Museum House. As the general contractor, Graham was responsible for hiring specialists in various areas such as welding and window installation. When Graham was replaced, subcontractors turned to Westbank for their payment, resulting in a pile-up of bills. Twenty-two subcontractors have since placed liens on the Terry project (Museum House), Graham, and Westbank’s development company, Icon West.

For instance, High Rise Glazing Specialist LLC filed a lawsuit in December 2022, claiming that Graham and Terry failed to pay $1.45 million for work completed between June 202 and June 2022. However, Graham and High Rise Glazing have not responded to requests for comment. There is a tentative trial scheduled for next year.

Furthermore, subcontractors are continually placing liens against the Terry project. Most recently, Zuhause Design LLC filed a lien on November 8, 2022, demanding payment of $231,781.

Situation In Volatile Construction Industry

Overall, Westbank’s current situation reflects the challenges faced by developers in a volatile construction industry. While negotiations and resolutions for unpaid bills are ongoing, the company remains committed to progressing with its projects, despite the difficulties caused by the global pandemic.

According to the law in Washington State, a lien becomes unenforceable after eight months if the person who filed the complaint doesn’t follow up with a lawsuit. However, many contractors choose not to take this step because it can be very expensive. Even if some liens on the Terry project have expired, it doesn’t mean that the contractor’s unpaid bills have been resolved.

When there is an active lien on a property, it lowers its value and prevents the developer from refinancing unless they pay the unpaid bill or obtain a bond to replace the lien.

Even though Westbank has released some liens by posting bonds, it doesn’t mean that the subcontractors have received their payment.

Iris Window Coverings NW Inc. is one of the subcontractors affected. They provided automated draperies for the Terry project and have an outstanding bill of US$123,178. Westbank posted a bond of US$184,000 to release the lien, but Iris Window Coverings has not received any of that money and is now facing financial difficulties.

A similar situation has occurred at WB120, which consists of two skyscrapers with about 1,000 apartments. Several subcontractors filed liens against the project over the past two years, with the latest one filed in December. One of the subcontractors, Zuhause, placed a lien of US$13.5 million due to unpaid work. Zuhause started work on the project in June 2021.

Westbank was also involved in litigation with the general contractor, Graham, over a US$50.1 million lien filed against the WB120 project. The general contractor accused Westbank of not paying for work done from April 2018 to November 2022. Graham countersued when Westbank took Graham to court trying to reduce the amount of the lien. Although the lien was eventually reduced to US$42.5 million and released, the lawsuit remains open.

Having a large number of liens filed against a developer is usually seen as a sign of funding issues and other problems.

In the case of Westbank, the company usually acts as its own general contractor for its projects. However, in Seattle and Toronto, where it is building various properties, Westbank hired EllisDon Corp. as the contractor. The relationship with EllisDon began to deteriorate in 2022, and Westbank took over as its own contractor for both projects.

EllisDon, one of the top construction management companies in the country, filed a legal action against Westbank in June for missed payments at Mirvish Village. They also filed and then dropped a separate claim for $4.4 million owed on another project, Duncan Street.

Westbank is a company that’s involved in building the King Toronto condo project, which is currently being constructed. However, they have faced some legal issues recently. Three other construction companies have sued Westbank for unpaid bills related to the Mirvish site. Westbank’s executive, Ian Duke, acknowledged that these situations can be complex and take time to resolve. He also mentioned that removing EllisDon, one of their contractors, has been a disruptive decision but disputes with trades are a normal part of the business.

However, other industry executives warn that allowing contractor relationships to deteriorate like this can be costly in terms of reputation, time, and money. Bryan Levy, the CEO of Toronto-based DBS Developments, emphasized the seriousness of not paying key trades.

Westbank started in the 199s with the construction of shopping malls and high-end condo buildings in Vancouver. Over the years, they have taken on more high-profile projects, including the Shangri-La Tower, the redevelopment of Woodward’s department store site, and the Fairmont Pacific Rim hotel.

The company expanded to Toronto in 2012 and continued to grow in Vancouver, Toronto, Seattle, and San Jose. They also ventured into Asia, with projects in Tokyo and offices in Taipei, Shanghai, and Hong Kong.

Like many developers, Westbank took advantage of low-interest rates to launch new projects. However, as interest rates have risen, they have faced challenges in completing projects on time. Some of their projects in Seattle and Vancouver have experienced delays, and sales of condo units have been slow.

The rise in interest rates has also impacted Westbank’s construction loans. For example, a loan they took out in 2018 for their Alberni condo project now has a much higher interest rate due to rate increases by the central bank.

Late payments have become more common in the development industry, which puts financial pressure on small suppliers. Craig Macklin (president), of Lumbermens Credit Group Ltd., expressed concerns about the impact of extended cash crises on these suppliers. He also mentioned that delays in payments can lead to further delays in completing building projects.

Iris Window, a drapery supplier in Seattle, is one of the companies waiting to get paid by Westbank. They have struggled with rising inflation and labor costs, making it difficult to make money on contracted jobs.

Overall, while Westbank has faced challenges and legal issues, its major partner Allied REIT has expressed confidence in their ability to meet their obligations. However, it is important to monitor the situation and consider the potential impact on the company’s reputation and relationships with contractors and suppliers.

Summary

Canadian developer Westbank Corp. is facing legal action from several contractors claiming millions of dollars in unpaid bills at projects in Toronto and Seattle. The company, known for its ambitious architecture, has been hit with more than two dozen lawsuits and liens over the past year as borrowing costs and construction expenses soar. Westbank has not commented on the individual disputes, but said it expects to reach a resolution. The Vancouver-based firm has had to contend with a significant spike in costs for materials and labour, along with soaring borrowing costs.

Westbank, a Canadian real estate developer, is facing multiple liens and lawsuits from subcontractors over unpaid bills for its construction projects in Seattle and Toronto. While Westbank has released some liens by posting bonds, subcontractors claim they have not received payment. The situation has led to financial struggles for some of the affected companies. Experts say a large number of liens filed against a developer is seen as a red flag of problems with funding. Westbank has traditionally served as its own general contractor but broke the pattern in Seattle and Toronto, where it is building offices, condos, and rental apartment buildings. However, the relationship with its general contractor began to fray in 2022, and Westbank took over as its own contractor from EllisDon on both projects. Three other construction companies sued Westbank for unpaid bills over the Mirvish site in September and October.

Westbank, a major Canadian real estate developer, is facing financial pressure due to rising interest rates and delays in completing some of its high-profile projects. The company, which has expanded into Vancouver, Toronto, Seattle, San Jose, Tokyo, Taipei, Shanghai and Hong Kong, has taken out construction loans with variable interest rates that have increased significantly as central banks have raised rates. Some of its projects have also been delayed beyond their original completion dates. While Westbank has not disclosed specifics about its project financing or partnerships, it has received support from major partners such as Allied REIT.

The King Toronto condominium project by Westbank has been delayed due to the bankruptcy of its window-wall contractor, Integro Building Systems Inc. This has caused issues for sub-trades like Iris Window, a Seattle drapery supplier, who are waiting to get paid by Westbank. Iris Window has struggled to make money on fixed-price contracts due to rising inflation and labor costs. Westbank recently contacted them to see if their bids for another delayed project were still valid, but Iris Window declined due to their financial situation.

The Canadian government has announced new measures to address the country’s housing crisis, including $15bn in funding for 10-year loans for new rental builds and $1bn for affordable housing construction. The rental funding is expected to spur the construction of 30,000 new homes across Canada, while the affordable housing funding will focus on non-profit, co-op and public housing. The government also proposed new mortgage rules for lenders to help at-risk homeowners, waived fees and costs for relief measures, and plans to discourage short-term rentals like Airbnb’s by preventing owners from making tax deductions on these properties.

The Information About Feds Declare New Mortgage Charter, $15 Billion In Funding For Housing Construction

In the recent financial update, Minister of Finance Chrystia Freeland shared several new plans to address housing issues in Canada. The government will be providing billions of dollars to fund the construction of new affordable housing as many markets in the country are experiencing shortages.

One of the measures announced is the allocation of $15 billion for 10-year loans to support the construction of rental buildings. This funding is expected to lead to the creation of 30,000 new homes across Canada. The loans will be directed towards rental projects with at least five units. Additionally, $1 billion will be allocated to the construction of affordable housing, focusing on non-profit, co-op, and public housing. The funding will be provided directly, rather than in the form of loans, over a three-year period.

The federal government plans to make further changes to the existing Affordable Housing Fund and the Apartment Construction Loan Program in early 2024 to enhance accessibility and approval processes.

A New Mortgage Rules

In addition, the government is proposing new mortgage rules to assist homeowners facing increased interest rates. The Canadian Mortgage Charter outlines new regulations for financial institutions. Under the proposed rules, lenders will be required to contact homeowners four to six months before their mortgage renewal to discuss options. Temporary extensions of the mortgage amortization period will be allowed for homeowners in need. Fees for relief measures will be waived, and homeowners will have the ability to make lump sum payments or sell their residences without penalties. Interest charges on interest during temporary negative amortization will also be prohibited.

For borrowers seeking to switch lenders at the time of renewal, the stress test requirement will be eliminated for those with insured mortgages.

Short-Term Rentals – Airbnb

To address the issue of short-term rentals, such as Airbnbs, the government aims to discourage their operation by disallowing tax deductions for property taxes, repairs, and interest costs in provinces and municipalities where short-term rentals are banned. Funding of $50 million over three years will be provided to municipalities for the enforcement of their short-term rental regulations.

These measures are intended to support the availability of long-term rental properties and affordable housing options in the Canadian housing market.

Wrapping Up

In the fall fiscal update, Minister of Finance Chrystia Freeland announced several housing-related measures aimed at affordable housing construction and addressing the shortage of housing across Canada. The government will allocate billions of dollars towards new housing construction. This includes $15 billion for 10-year loans for new rental builds and $1 billion for the construction of affordable housing. The funding for rental construction is expected to support the creation of 30,000 new homes, while the funding for affordable housing will focus on non-profit, co-op, and public housing.

The government also plans to introduce reforms to make these programs more accessible and to provide faster approvals. Additionally, the government is proposing a new mortgage charter that sets out regulations for lenders when dealing with homeowners who are at risk, including contacting homeowners before mortgage renewal and offering temporary mortgage extensions. Furthermore, the government aims to discourage short-term rentals like Airbnbs by preventing owners from making tax deductions on properties in provinces and municipalities where short-term rentals are prohibited. The fiscal update also includes funding for municipalities to enforce their own short-term rental regulations.

The Government of British Columbia is implementing changes to allow for more low-rise, multi-family residential developments. These changes override municipal government control over zoning and aim to reform review and approval processes. The new policy, termed “small-scale, multi-unit” buildings, will apply to municipal jurisdictions with a population of over 5,000 residents. It allows for up to three units on single-family lots smaller than 280 sq metres and up to four units on larger lots. Lots in close proximity to public transit stops may permit up to six units.

Municipalities must update their zoning bylaws to enable this densification. The provincial government’s policy will catalyze an estimated 130,000 additional homes over the next decade. Public hearings for rezoning applications will be eliminated, and input from the public will be sought during the Official Community Plan public consultation process. The legislation does not apply to the City of Vancouver, which is working on reforming its own public hearing procedures. The government has set aside funds to support municipalities in meeting the new density requirements. Additional legislation to support transit-oriented development and other housing measures will be announced in the future.

The Details of Up To 6 Homes On Single-Family Lots

The Government of British Columbia is making big changes to allow more low-rise, multi-family homes to be built. They call these types of buildings “small-scale, multi-unit” buildings, like townhomes, multiplexes, and laneway homes.

This is part of a plan to give the provincial government more control over zoning and approval processes that cities currently handle. They first proposed this plan earlier this year, and now they are introducing the legislation.

The new policy for small-scale, multi-unit buildings on single-family lots will apply to cities with more than 5,000 residents, which includes most of the province.

For lots that are currently zoned for single-family or duplex homes, if the lot is smaller than 280 square meters (3,014 square feet), it can have up to three units. If the lot is bigger than 280 square meters, it can have up to four units.

For bigger lots that are close to public transit stops with frequent service, up to six units may be allowed.

Municipal governments will need to update their zoning bylaws to allow for this type of development in their single-family neighborhoods. Some cities like Vancouver and Victoria have already made their own rules to allow more units on single-family lots, and those rules will still be valid. However, cities covered by this legislation cannot have rules that allow for fewer units than what the province requires.

Premier David Eby said that the current zoning rules make it hard for people to find a place to live in the communities they love. They are not building enough small-scale, multi-unit homes that fit into existing neighborhoods and give people more housing options. That’s why they are taking action to fix the rules and build more homes for people.

BC Minister of Housing Ravi Kahlon added that this legislation will make communities stronger and help address the housing crisis.

By the end of 2023, the provincial government will release a policy manual with more information about the specific rules and requirements for building these types of homes. This will include things like how far the building needs to be from the property line and how tall it can be. It was also mentioned that there will be no minimum requirements for parking spaces if the property is within 400 meters of frequent public transit.

Municipal governments have until June 30, 2024, to update their rules. In September 2023, the City of Vancouver approved its own policy to allow up to six homes on a single-family lot.

It is estimated that this new policy could lead to the construction of 130,000 additional homes in small-scale, multi-unit buildings across BC over the next 10 years.

The legislation will also eliminate the need for public hearings for some rezoning applications. Instead, there will be more opportunities for the public to give their input during the process of updating the city’s long-term plan for development. This plan will now cover 20 years instead of just five, and it will have to include policies that encourage family-sized homes, rental homes, and affordable homes.

The government has set aside $51 million to help cities make the necessary changes, and $10 million for a program to support local governments with development approvals.

The new directives from the government will also help cities meet their targets for building new homes.

The government will announce more legislation before the end of 2023 to support development near public transit and other housing-related measures. They will also provide funding for infrastructure and amenities to support densification and population growth.

Vancouver Mayor Ken Sim said that the city is excited to support the province’s initiative to build more homes for people who need them. The city has already simplified its zoning rules and reduced the time it takes to approve permits to encourage more housing. This new legislation is another step in the right direction.

Summary

The Government of British Columbia is introducing legislation to enable more low-rise, multi-family residential developments, including townhomes, multiplexes, and laneway homes. The policy will apply to municipal jurisdictions with a population of over 5,000 residents and will require municipal governments to update their zoning bylaws to enable gentle densification in their single-family neighbourhoods. The legislation’s covered municipalities may choose to allow higher densities, but their bylaws cannot have fewer allowed units than what the province mandates. The legislation will also eliminate public hearings for site-by-site rezoning or spot-rezoning that align with the municipality’s Official Community Plan. The policy could catalyze 130,000 additional homes within new small-scale, multi-unit buildings across BC over the next 10 years.

The provincial government of British Columbia in Canada has announced new legislation that will require municipalities to allow for more small-scale, multi-unit housing developments in residential areas. Municipalities will need to update their Official Community Plans and zoning bylaws by the end of 2025 to meet the new density requirements. The government has set aside a $51 million fund to support municipalities with the required changes. The City of Vancouver, which operates under a separate charter, will not be subject to the proposed changes but is working with the provincial government on reforming its public hearing procedures. The government will also announce more legislation to support transit-oriented development and other housing-related measures before the end of 2023.

The Government of British Columbia has introduced new legislation to encourage high-density, transit-oriented development in the areas surrounding major transit hubs, including SkyTrain stations and bus exchanges. This move aims to combat the housing affordability and supply crisis by increasing residential density and ridership on public transit. The legislation requires municipal governments to allow minimum residential building heights of up to 20 storeys within 200 meters of a SkyTrain station, with lower heights permitted at greater distances.

The legislation also establishes minimum floor area ratio (FAR) density requirements, with higher FARs closer to transit hubs. Municipalities must change their policies for transit-oriented development areas by June 30, 2024, and are encouraged to approve higher densities and heights. Additionally, the legislation eliminates minimum vehicle parking requirements within these areas to reduce construction costs, speed up development, and promote public transit ridership. The government expects this legislation to result in around 100,000 new homes near transit hubs over the next decade.

The Details of Up To 20 Storeys Close To Every SkyTrain Station & Up To 12 Storeys Close To Bus Interchanges

New legislation has been introduced in British Columbia to promote high-density, transit-oriented development. The Government of BC aims to increase residential density around major transit hubs, specifically SkyTrain stations and bus exchanges. This move is intended to address the housing affordability and supply crisis, as well as boost ridership on TransLink and BC Transit.

There are exceptions to the new regulations, which will only apply to residential or mixed-use residential land uses. Commercial, agricultural, and industrial land uses, as well as First Nations reserve lands and airports, are not included. The specifics of these policies were previously unknown but have now been clarified.

For SkyTrain stations in Metro Vancouver, municipalities will be required to allow minimum residential building heights of up to 20 storeys within 200 meters of a station, up to 12 storeys between 201 and 400 meters from a station, and up to eight storeys between 401 meters and 800 meters from a station.

The number of new homes that can be built near these transit hubs will also be determined by the floor area ratio (FAR) density, which is the calculation of a building’s total floor area in relation to the land it covers.

The minimum FAR will vary depending on the distance from the SkyTrain station, with a minimum FAR of 5. for distances up to 200 meters, 4. for distances between 201 and 400 meters, and 3. for distances between 401 meters and 800 meters.

Similar rules will apply to areas near bus exchanges in Metro Vancouver, Greater Victoria, and Kelowna, with slightly lower minimum FAR density requirements.

Municipalities will be required to change their policies for these areas by June 30, 2024, but can choose to approve higher densities and building heights if they meet the minimum requirements set by the provincial government. The legislation also eliminates minimum vehicle parking requirements within these transit-oriented development areas to lower construction costs, speed up construction, reduce emissions, and encourage public transit usage.

Municipalities can now determine the amount of residential vehicle parking needed based on demand. The provincial government anticipates that around 100 transit-oriented development areas will be designated by approximately 30 cities across BC in the first year of the new legislation, potentially resulting in the construction of 100,000 new homes near transit hubs over the next decade.

This legislation is seen as a way to make housing projects financially viable for builders and non-profit developers by offsetting high land costs. It will also support TransLink and the provincial government’s plans to develop under-utilized properties and acquired lands near public transit.

The legislation aligns with the provincial government’s efforts to meet new housing supply targets by providing municipalities with specific deadlines to change their policies and streamline the rezoning process. Overall, these measures aim to promote the development of affordable and connected communities while leveraging public lands for housing.

Wrapping Up

New legislation has been introduced by the British Columbian government to permit high-density, transit-oriented development in the vicinity of major transit hubs, including bus exchanges and SkyTrain stations. The minimum residential building heights that local governments permit will be up to 20 storeys for locations that are 200 meters or less from a station, 12 storeys for locations that are 201 to 400 meters from a station, and 8 storeys for locations that are 401 to 800 meters away from a station. With more people using TransLink and BC Transit, the bill seeks to address the affordability and supply issues in housing. Within the first year of the new law’s implementation, the provincial government anticipates that about 100 transit-oriented development areas surrounding transit hubs will be designated in about 30 cities throughout British Columbia.

The provincial government in British Columbia has introduced legislation to encourage transit-oriented development, which could lead to the construction of up to 100,000 new homes near transport hubs over the next 10 years. Municipalities will be required to meet minimum standards set by the government, but will be able to approve higher densities and building heights at their discretion. The legislation is expected to make projects financially viable for builders and non-profit developers, while also supporting TransLink’s real estate development division and the government’s $400m strategy of buying land next to public transport for housing.