Pierre Poilievre did a campaign video about this Vancouver house. Here’s the story of how its price climbed from $265,000 to $4.9 million

VANCOUVER—A roof with spotty collections of black gunk and moss tops this house, which was built nearly 100 years ago. Paint is flaking off the window frames, while the front gate, part of a fence surely longing for its youth, sits ajar and half resting on the front lawn.

Almost all generations of housing are represented on this block in East Vancouver. A brand-new complex with several small, two-storey units, on lots that once held only one house, sits across the avenue from 1990s-style “monster homes.”

“Vancouver specials” — a boxy and pragmatic house design, both detested and beloved by locals, that was hugely popular in the city during the 1960s — take up a number of lots, with the odd postwar bungalow wedged in between.

But on this street, now lined with pink cherry blossoms strutting their April best, it’s the little house with the dirty roof, depressed gate and mismatched mud room that’s suddenly in the spotlight.

That’s because Conservative Party of Canada leadership candidate Pierre Poilievre wants you to know this place could be yours for nearly $5 million.

On Monday morning, Poilievre released a campaign video using the home to illustrate the housing crisis Vancouver is facing. Referring to it as a house that was once a “piece of heaven” for a working-class family, he stresses that those days are gone — and he blames governments.

“My message to City Hall here in Vancouver is: ‘Remove the gatekeepers,’” he says in the campaign video, blaming municipal fees and permits for delay and expense in building homes. “Stop blocking the poor, the working class and our immigrants from the privilege of owning a home here in this country.”

He calculates the cost per unit if small, multiple units were put on the property, estimating the average person would need a $950,000 mortgage to afford one, even if it were broken up into six units.

Rachel Choi lives next to the property. When she moved in more than a year ago, she says, she was told it would be developed but no work has started and there’s renters living in it now.

No one answered the door Monday and the Star was unable to reach the listed owners of the property, who live at another Vancouver address.

Poilievre used the house as a symbol for affordability issues in the country, pointing the finger at local governments and federal monetary policy working for the wealthy. He promised to fix the issue should he become prime minister.

But there is more to the story of this particular house than a white-hot market with easy-to-identify villains. Whatever its future, the sales history of the property tells the story of the remarkable transformation it and the rest of the city have undergone.

According to property records, the house was originally built in 1930 as a single-family home of 1,805 square feet with four bedrooms on a large double lot. There’s a wide, flat lawn, a couple of fruit trees, a small laneway house and a pergola in the backyard: An example, it would seem, of a modest family home in a middle-class neighborhood.

Records show two previous sales for the property. In 2020, it sold for $2.75 million. The most recent sale before that was in 2006 — when it sold for $275,000.

Patrick Condon, a professor at the University of British Columbia in urban design, said it’s the land this house was built on, rather than the house itself, that has increased so much in value.

“Urban land globally has attracted investors in the same way that bitcoin, gold, stocks and bonds and so forth — asset classes — have attracted investors, particularly in the last in the period since the 2008 crash,” Condon said. “Urban land has become considered a very valuable investment opportunity, with very little risk of it losing value.”

A complicating factor in the price of that land, Condon said, is that the value is not based solely on how much land is available.

“Land is not sold at some out-of-control market price per acre,” he said, “but at a price based on how much new density the city will allow.”

In other words: Zoning plays a major role. One double lot that’s only allowed to have one house on it will be worth less than one double lot that’s allowed to have six.

And six is ​​the number of homes that may be permitted to be built on the East 40th Avenue property, according to recent planning changes.

Tsur Somerville, a professor in real estate finance at UBC, said that while housing prices have risen astronomically in BC, the hot housing market in Vancouver only goes so far to explain how this house went from a price of $265,000 in 2006 to $4.9 million this week.

BC Assessment, an independent Crown organization that assesses property values, said the house has a value of $3,089,500 — almost $2 million less than its list price.

That, Somerville said, is because its value was assessed based on the house’s current state as a single-family home with one laneway suite in the backyard, whereas it’s selling on the market as a place to build a lot more homes.

“The $4.9-million price is an anomaly because of the interaction of the lot size, the age of the existing property, and the RT-11 zoning,” he said. “It’s a lot that now you could put four units on (in addition to its existing two), which you know, five years ago you would not have been able to do.”

The house falls under Vancouver’s Norquay Village Neighborhood Center Plan, which eliminated almost all single-family zoning in an attempt to densify a community. The property is now under RT-11 zoning, which lets multiple stand-alone units be built on what were previously single-family lots. Lots with older homes were allowed to build even more new units if the original home was preserved.

Condon said there’s a wide perception that allowing this kind of densified zoning in cities such as Vancouver will allow for more affordable homes to be built. But, he said, that’s not what happens because the value of the land goes up when zoning allows more homes to be built on the same amount of land, as is the case with the East 40th Avenue property.

In order to get affordable homes in these spots, Condon said, municipalities would have to put conditions in the zoning rules requiring a certain percentage of new homes built on the land to be in an affordable range — either to rent or to buy.

“If the city can increase land price, which it does all the time through allowing new density, it can also reduce land price, by placing demands for affordable housing on it as a condition of new zoning allowance,” he said.

Andrey Pavlov, a professor of finance and real estate at Simon Fraser University, said that the zoning changes may help explain the price increase on this particular property, but that in the big picture Poilievre has a point — there is not enough housing supply.

“We basically need to double the size of Vancouver in 10 to 15 years,” he said. “The bottom line is we don’t build enough and because of that anybody who builds anything — it still sells for an incredible amount.”

Pavlov said if we built much more housing in Vancouver, the value of properties like the East 40th Avenue house would increase if they allowed more density — but not by nearly the same scale.

Condon said the federal government could play a role to control house prices, including by funding construction of affordable homes. But, he said, unless that funding is tied to affordable building projects, it’s likely just to end up in the hands of land speculators and investors.

In last week’s federal budget the Liberal government committed $10 billion for housing initiatives including $9 billion it said was earmarked for affordable housing projects, aiming to fund the construction of 100,000 homes by 2027.


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