Ho Ho Ho… Vaccines on the Go

The FDA has not only cleared both the Pfizer and Moderna vaccines, but distribution has begun. Although it will take several months to get the vaccines distributed in large enough numbers to create what doctors refer to as herd immunity, the light is clear and bright at the end of this dark tunnel.

Restaurants and pubs all over the Downtown area just need to hold on a bit longer and the raging hordes of the hungry and thirsty shall return. 2021 should also bring an additional 1000-2000 new residents to the Downtown core as several large mid-rise and high-rise residential projects are nearing completion or recently completed. This will provide a extra punch of business for businesses that have struggled under COVID-19 restrictions for nearly a year now.

The following residential projects are likely to have a positive impact on local Downtown business in 2021 and beyond:

  • Prestige Development “Ed Tower” 5 floors, 25 units, Q3 2020
  • Prestige Development “Dollie Tower” 5 floors, 21 units, Q4 2020
  • Holland Partner Group “Coen” 7 floors, 118 units, Q4 2020
  • Cascadia Development Partners “Aria” 7 floors, 127 units, Q1 2021
  • “VW 10”, 2 blgs 4 floors ea, 96 units, Q1 2021
  • Kirkland Development “Kirkland Tower” 12 floors, 40 units, Q1 2021
  • Jackson Square Properties “The Columbia” 7 floors, 248 units,  Q2 2021
  • Al Angelo Co “Mill Plain II” 6 floors, 44 units, Q2 2021
  • VHA “Residences at Arnada” 2 blgs 4 floors ea, 83 units, Q1 2022
  • Ginn Development “WXV” 4 floors, 60 units, Q1 2022
  • “Johnson Mixed Use”, 3 floors, 10 units, Q2 2022
  • Cascadia Development Partners “Hudson West” 3 floors, 50 units, Q3 2022
  • Hurley Development “Bennett Apartments” 3 floors. 74 units, Q3 2022
  • Marathon Development “Aegis” 2 blgs 6 & 5 floors, 140 units, Q4 2022
  • “Jefferson Street Apts” 4 floors, 68 units, Q4 2022
  • Summit Development Group, “The Third” 8 floors, 227 units, Q4, 2022
  • “The Broadstone” 7 floors, 177 units, Q1, 2023
  • Summit Development Group “Aegis II” 2 blgs 6 floors ea, 206 units, Q2 2024
  • Gramor Development “Block 16” 14 floors, 80 units, Q4 2024

I’d expect about 719 units to hit the Downtown/Uptown market by next summer and that alone translates to about 1200-1300 new residents. Another 1175 units are under construction or soon to break ground which will add close to 2000 more residents Downtown over the next couple of years. All these new people will push millions of dollars into the Downtown economy. After a bleak pandemic filled 2020, we are no doubt ready for some good news in 2021.

Holidays Are Here, Real Estate Still Humming Along

People are still buying and selling urban condos in Vancouver as well as just about every other type of housing. The market has been robust and has managed to continue an upward trend despite the high unemployment rate caused by COVID-19 restrictions. Urban condos closed in the last week in every price range from the entry level Academy with small units in a 70 year old development selling at $200k to the luxury units trading in seven figures at Tidewater.

I don’t think the real estate market can survive another year  like 2020, so let’s hope these new vaccines can turn the tide on the pandemic and get everyone back to work.

Governor Inslee has extended the “lockdown” to January 4th. He just got reelected so I’d imagine he will continue extending it if he deems it necessary, without too much political backlash. Washington voters clearly approve of his handling of this or they would have tossed him out last month, right?

One of the concerns I have is that the restaurant, pub, and retail services have taken the biggest hit and those are the services that make urban living so attractive. The ability to walk to a wide variety of shops and restaurants from a Downtown condo or apartment is very attractive. If we run all those businesses into the ground, Downtown may lose some of that appeal. Of course this is not unique to Vancouver, this is true of any urban center subjected to these seemingly draconian measures.

I think we all need to set aside partisan politics and let the legislature know how we feel about all of this. The legislature does act as a check against the executive branch and they are always up for election in those chambers 😉

Vancouver is covered by three legislative districts. The 17th and 49th are divided roughly by I-205 with the 49th covering the west side and the 17th the east. The 18th district wraps around Vancouver and Brush Prairie encompassing Felida part of Salmon Creek and most of the non-Vancouver parts of Clark County including all 6 cities not named Vancouver. Some parts of very rural Clark County are covered by districts mostly outside the county. District 14 covers Skamania County and parts of East Clark County. District 20 is mostly Cowlitz County and parts of Northern Clark County. If you want to contact your local elected officials in and around Vancouver here is a list:

District 17: East Vancouver (east of I-205), Brush Prairie, Mount Vista

  • Senator Lynda Wilson: lynda.wilson@leg.wa.gov
  • Rep Vicki Kraft: vicki.kraft@leg.wa.gov
  • Rep Paul Harris: paul.harris@leg.wa.gov

District 18: Felida, Salmon Creek (W of I-5), most of non-Vancouver Clark County

  • Senator Ann Rivers : ann.rivers@leg.wa.gov
  • Rep Brandon Vick: brandon.vick@leg.wa.gov
  • Rep Larry Hoff: larry.hoff@leg.wa.gov

District 49: Downtown, Port of Vancouver, Hazel Dell, Heights, West of I-205

  • Senator Annette Cleveland: annette.cleveland@leg.wa.gov
  • Rep Sharon Wylie: sharon.wylie@leg.wa.gov
  • Rep Monica Stonier: monica.stonier@leg.wa.gov

What’s The Coolest Urban Residential Project?

Nothing like a totally subjective topic right? There are some really cool urban residential projects recently completed, under construction, or currently in process in Vancouver. Six months ago I would have had little trouble picking the “coolest” urban project in the pipeline.

It would have been the Timberhouse project that was proposed for Block 3 of the Waterfront. That was a 12 story multi wing building made from Cross Laminated Timber. I think CLT is an excellent alternative building process that is better for the environment and less expensive than traditional concrete and steel structures. That is a rare opportunity to actually do the “green thing” and spend less doing it! But it seems that CLT may be suffering some setbacks with regulatory entities or something, because several large CLT projects quietly died both locally in Vancouver and in Portland as well.

Timberhouse Drawings

Timberhouse was recently replaced with a more traditional 5 over 3 eight story project currently named “The Third.” That project is currently under government review. Although it looks like a very nice project it will be similar to Riverwest on Waterfront Block 8 completed in 2019 and The Columbia on Waterfront Block 20 which is almost topped out.

The Columbia Project is right on the river with an open patio area on the second floor looking over the park and river. It is reported that an infinity pool will reside on that patio area giving the illusion of water falling into the Columbia. That’s pretty cool.

No discussion of ‘cool’ residential projects can go without a nod the Kirkland Tower which is nearing completion on the west end of Block 4 at the Waterfront. This condominium tower will feature luxury units that are likely to be well into seven figures. Kirkland has leased office space in The Murdock office tower for a sales office. The 12 story tower will have a lobby and common areas on the ground floor while sharing three levels of underground parking with the Hotel Indigo next door. Floors two through eleven will feature the homes and the twelfth floor will have a common area clubhouse, rec room penthouse with an rooftop patio. The owners in the building will also have access to many of the hotel amenities including the room service from the kitchen.

With Timberhouse replaced I think Kirkland is winner as the coolest project. I look forward to touring units when the project is completed at the end of Q1, 2021.  

Meanwhile the local resale urban condo market continues to produce positive results. New inventory is coming in at about the same rate as sales close so things are steady. 

City Council and Mayor Push the Stupid Button

Rendering of Block Ten, City of Vancouver

According to an article published in the Columbian on November, 28th, the City of Vancouver is considering a change to the tax exemption affordability incentives they have been using for decades to promote urban renewal.

When Holland Partner Group released the information on the Block Ten project, there were some people upset that the city was using the federal FHA, income guidelines based on the broad Portland – Vancouver metro area rather than the specific local incomes which are actually lower than the broad metro area.

The Columbian article says: “The city of Vancouver is planning to revise a tax exemption program designed to incentivize affordable housing, requiring developers to meet a more stringent definition of “affordability” in order to qualify.

The equation used to calculate affordable rents would be linked to Vancouver’s income data alone, where the median income is $64,900 for a family of four. Currently, the program uses income data for the greater Portland metro area, where the median family income is $92,100.

As a result, the so-called affordable units have remained out of reach for the typical Vancouver family, even as the Multifamily Tax Exemption Program granted developers of new apartments an eight-, 10- or 12-year break on their property taxes.”

In fairness, the people protesting the $2000+ rents being called “affordable” are not wrong. It isn’t “affordable.” So don’t call the program “affordable,” call it what it is, “sub market rent.” But Vancouver has a skewed income average. The city has a large inventory of what I call “Kaiser Cottages” These small 1940s homes were built in 1942-43 to house the families of some 39,000 employees working the shipyards during World War II. These homes are very “affordable” today and lure families with lower incomes to the area to either rent these homes or buy them when they are listed. That plays a significant role in affecting the median family income in Vancouver as these 700-900 square foot homes represent a large percentage of the local single family home inventory. There is nothing wrong with that. But Vancouver’s lower median family income masks the fact that some of the wealthiest people in the entire metro area also live here. Basing the entire redevelopment of Downtown on Vancouver’s lower median income will destroy the entire premise of urban renewal. We had low income housing in Downtown in the 1990s along with an Esther Short Park filled with crime, drugs, prostitutes and other undesirable elements. This MFTEP program brought about meaningful change and the subsequent increase in local property values has flooded the tax coffers with money to expand other services designed to help our more vulnerable citizens, including affordable housing on viable transit lines we have seen on the 4th Plain corridor. Yes my friends, it turns out that empty undeveloped or under-developed land doesn’t generate as much tax revenue as dense urban development does; who would of thought?

So the council is considering a plan to reduce the required rents on these tax exemption programs. This will fail and it will fail miserably. If the council doesn’t realize this, they are pushing the “STUPID” button. Rather than come out and explain to these concerned people that mid-rise and high-rise projects are expensive to build and are not generally going to lead to traditional “affordable” housing, they are in full political pandering mode. Pandering to the squeaky wheel will not help solve our city affordable housing issues. Also it should be noted that the land in Downtown and on the new Waterfront is among the most expensive in the county. These building sites typically have land values in the $3-4 million an acre range. The 0.96 acre Block Ten property was sold to Holland for $3,330,000 last spring. This is not the type of property suited for affordable, low income projects. If the city wanted to help low income people why did they charge such a high price for that property? Yes, I went there. They are being hypocritical on this issue. This same MFTEP program is largely responsible for the the beautiful Esther Short Park area and all of the great things we all enjoy regardless of income, like free concerts, festivals, Farmer’s Market, and so on. The Mayor is off her rocker on this and it may cost her job in 2022.

We have to ask ourselves, whether we want to create a nice quality Downtown neighborhood with shops and restaurants, a place where ALL of our citizens can visit and enjoy, or whether we want our downtown to become a Section 8 project zone. I think it is a safe bet that 95% of Vancouver residents do not want Downtown and the Waterfront to become a crap-hole like it was in the mid 1990s.

Grant Street Pier, Vancouver WAMy wife and I make a very good income, well above the metro average used for the current program, but we cannot afford to buy one of the new Kirkland Tower Condos as those will be multi-million dollar properties. That’s fine, I can’t afford the Kirkland Condos, but I can enjoy the neighborhood, that projects like it are creating; the Waterfront Park, the shops and restaurants. We all benefit as a community when our Downtown and Waterfront areas develop even if we can’t afford to live there personally. But according to the council, just because most can’t afford it, it should not be built, seriously Council, that’s your play? Should we ban Bentley, Aston Martin, and Lamborghini cars in Vancouver as well? I get it, the city is offering a tax break and that is what causes the public to take notice. But these projects are taking under-developed or undeveloped property that has been under utilized for DECADES and creating an incentive to build something nice on it. the trade off is a short 8-12 year reduced taxation that will lead to a much higher tax revenue in the future. Collecting full tax rate on a $3 million dollar vacant lot is not as beneficial to the citizens of Vancouver than collecting reduced tax rate on a $50 million urban project. Nor is the vacant undeveloped lot producing income like the developed project does in the form of jobs, new residents and such.

If the city has concerns about providing low income residents housing they can expand the current programs that have been putting higher density housing on our transit lines. The city is planning a second VINE line along the Mill Plain corridor. If they follow what they did on the Fourth Plain line, a fair amount of subsidized affordable housing will follow. They can also provide organizations such as VHA a faster path through the bureaucracy to get their projects approved and built faster. VHA does an excellent job of producing quality affordable housing for lower income citizens. But VHA won’t be building on the expensive lots at the Waterfront, Duh!

The thing this council needs to do is get busy and start luring employers that create higher income jobs. Right now there is a bit of an exodus out of Portland’s Downtown. All of this negative activity over the last several months has led many firms with high paying jobs to start looking elsewhere for real estate. Vancouver and Downtown in particular, could be the IDEAL relocation spot for many disenfranchised businesses in Portland. Rather than drag our downtown into lower income, maybe we should focus on raising Downtown up to the metro median.

Furthermore, a number of Portland’s larger manufacturing firms are facing an ever increasing hostile environment at Portland City Hall. Companies such as Gunderson and Daimler – Freightliner could very well take advantage of opportunities in our manufacturing areas at both Columbia Center or the Port of Vancouver. Bringing high paying jobs here reduces traffic on the two Columbia River bridges, reduces the impact of Oregon’s income tax scheme on Clark County residents, and benefits the community at large. Hey Council, ‘benefitting the community at large’, that’s kind of your job, right?

Progress Continues on Future of Downtown

In the face of the pandemic, lockdowns, and a slower flow of investor cash, the city trudges along with plans for Downtown including several projects in the pipeline on the waterfront. The city has dived deep into the process for the new “Waterfront Gateway” district just south of City Hall and the Convention Center. This area will likely be ready for development proposals within the next few years. By the time it is ready, the 21 blocks of the Waterfront should be 60-70% committed or completed.

The city intends for Gateway to be a more “affordable” area for middle class people rather than the more upscale waterfront properties. This is a good thing and will ultimately lead to a robust and busy Downtown filled with a variety of Vancouver’s residents enjoying the amenities of an increasingly ‘chic’ area.

In addition to the master planned districts on the Waterfront and Gateway, there are a number of quality urban infill projects taking underdeveloped properties and bringing them up to modern urban standards. The following is a partial list of urban infill projects underway or in the pipline:

  • Residences at Arnada – VHA
  • Hudson West – Cascadia Development Partners
  • Bennett Apartments – Hurley Development
  • WXV Apartments – Ginn Development
  • Tinkerton Lofts – VHA

If we can sustain the economic growth we had prior to the outbreak Vancouver’s Greater Downtown area should really blossom into the best urban neighborhood in the entire metro area. Let’s hope the upcoming vaccines for COVID 19 are effective and we can move past this Corona Virus debacle.

Meanwhile activity was pretty typical for urban condos this past week. Inventory remained flat and prices are steady.

New Lockdown Will Test Economic Resiliency

Governor Inslee has dropped the hammer on Washington again as COVID cases surge across the country. These new rules take effect today and they are nearly as draconian as those we had in the spring.

Restaurants and retailers will take one on the chin, again. It appears that construction will continue under the current guidelines so that bodes well for all of our projects underway now all over the city. But these lockdowns will make investors nervous about funding projects. This is potentially dangerous for Vancouver’s ambitious efforts to remake the waterfront and continue years of success on revitalize the Downtown area.

The Governor has indicated a four week period of this heavy lockdown, so hopefully we will see a reduction in caseload an an easing on restrictions as we head into the typically busy holiday season.

There is also a recent report showing mass exodus from many large US cities. Cities like San Francisco, New York, Chicago, Philadelphia, and others are fleeing in larger numbers than at anytime since the post WW-II suburban boom. Back in the 1950s the exodus was to the “new” suburban developments offering the quiet streets, white picket fences, and lovely Sunday strolls down tree lined lanes. But today the exodus is a mixed bag. Yes some are in fact following in their grandparents footsteps and heading to the ‘burbs. This is particularly true in New York City where a recent NY Times article lays out the “insane demand” for suburban property in the greater NYC area. But a recent moving company report shows that many of these big city dwellers are not heading to the suburbs, but rather to other large cities that are not quite AS large. Cities like Denver, CO; Austin, TX; Raleigh, NC; and even Spokane, WA are among the top destinations in the country right now. People are a bit tired of the cities that have become nearly unlivable with lousy quality of life, are overpriced and overtaxed.

In our immediate market, there is a bit of an exodus of locals out of Portland and many are headed to Vancouver. Both the suburbs and the city is seeing pressure on real estate and the only reason Portland isn’t mentioned as a city shedding population is due to the fact Portland is gaining new out of state residents as fast as they are losing natives.

The local urban housing market remains tight with well priced units moving swiftly. Vancouver is a great alternative for Portlanders looking to retain some of the city style without Portland’s “other” issues. Vancouver also offers a satisfying selection of the suburbs from the classic 1950s right on through every decade since.

Sell Off? Perhaps.

This past week saw a sharp rise in new listings that on the surface may look like a sell off. But is it really? Dig a little deeper and one might come to a different conclusion. There were half a dozen condos that showed up as new listings this week which is about double any other week thus far in 2020. But closer inspection reveals that half of those were actually new listings for the same property that was previously listed by another firm. So in reality it seems that we had about a normal week as far as inventory goes with a +2 to net inventory.

Kirkland has set up what appears to be a sales office in the nearby Murdock office tower. I’ll be checking that out this week to see if formal pricing is available yet on the eagerly awaited Luxury condo tower on Block 4.

In other Downtown news, Ryan Hurley’s plans for a second office condo tower are likely cancelled as a recent transaction shows the associated property was sold to the State of Washington. That makes sense as a future bridge project would have been hampered by an office tower at that location. I’m not sure if Hurley is planning the project on another site or whether the project will simply die. I’ll have to keep you posted on that one. Hurley has a number of large projects in development and/or under construction all over the city.

Leasing is now underway at the long awaiting Vancouver Center, Tower 4. Holland Partner Group is calling the apartment building the “Coen” and units should be available for occupancy before the end of this month. That project features 118 apartments in five floors over a 1.5 story podium. The podium is basically one level on the northside and 2 levels on the south side to account for slope in the block.

The Columbia project on Block 20 of the Waterfront is rising up rather quickly now as the crews are installing the wood frame portion of the building. That building may reach its maximum height this month or at least be topped out in December. The 7 story 248 unit building will likely become the largest single structure apartment building in Vancouver by unit count.

Cascadia Development Partners is in the final stretch of their Aria Project on West 6th near the park. The 7 story apartment building is likely to be ready for tenants in Q1, 2021. The building has a rather typical 5 over 2 setup with parking on 2 levels  in the rear and two story townhouse style apartments on the ground level facing W. 6th. Five levels of traditional apartment flats are up top.

Several other large scale projects remain in the process of permitting and more information should flow out soon. COVID-19 has slowed that process down a bit.

Time To Vote Vancouver

It’s election time and 2020 has been one ‘helluva’ a year, hasn’t it? Be sure to vote if you haven’t already. It’s not just about the President, down ballot is equally important. We have county charter positions open as well as all the state legislators that have an impact on us locally more than the President does.

Here in Vancouver the county and city often have to work together and sometimes are at odds, so choosing the best candidate to move us forward is important. We live in a local community and the local issues impact us every day versus national issues that are important but if we are honest about it, they tend to be less invasive on a daily basis than state and local regulations and laws.

Our city and county write the regulations, and planning that will impact us every day. Transportation, development, parks, mass transit, homelessness, drugs, crime, and so much more are determined by the path chosen at the local level. So sure, cast your vote for President, Either Joe Biden or Donald Trump, or a third party candidate like Jo Jorgenson; cast your vote for Governor either Jay Inslee or Loren Culp, but pay close attention to the details in those measures, tax proposals, and local offices, they are every bit as important and in my opinion MORE important than the national office.

A fair bit of activity this past week as a several new urban condo listings went active and a few pending and closed as well. About +2 to inventory. Things are still solid locally let’s just hope the after effects of the election outcome are calm and quiet.

New Urban Condo Inventory

Several new listings for urban condos appeared on the MLS this week. There were enough to offset the pending and closed transactions adding about +4 to inventory. Vancouver USA however remains tight on urban condos and very tight on units in the Downtown area. Pricing seems to be flat across the board and activity is robust in the lower ranges of price, solid in the mid ranges and a little slower at the higher end priced in 7 figures.

Real estate remains one of the bright spots in an economy that has been severely slowed under the conditions mandated by COVID 19 response efforts. Urban condos and suburban homes are flying off the proverbial shelves in absolute defiance of the economic downturn created by the invisible enemy, Corona Virus. This is a strong tale of a stalwart population determined to not only survive the pandemic but to thrive in its wake.

Locally in the Vancouver market there is an amazing level of activity in construction as well as resale real estate sales. The urban core in Vancouver is seeing construction of large projects on a scale not seen at least in the last 20 years perhaps dating all the way to WWII when the ‘Couv’ quadrupled in size in THREE years!

Things are booming in the local real estate market and hopefully in 2021 we can get past the virus and continue this epic quest of completing the waterfront transformation and filling in the urban area in Downtown.

Timberhouse Project Replaced

Timberhouse is no more. A new project, “The Third” is going in instead. Summit Development showed up at last Thursday’s City Center Redevelopment Authority meeting with a very different project for Block 3 on the Waterfront. Timberhouse was to be a 12 story multi-wing CLT building. CLT projects have been having some trouble lately and it seems Timberhouse was no exception. I am not sure what the deal is, the meeting recording has not been released by the city yet. CLT is faster and less expensive than traditional towers that rely on the concrete and steel style design. There have been some issues in the CLT industry recently and complications may have arisen as a result. We shall keep an eye out for more information about the fate of Timberhouse and the rise of ‘The Third’.

This new project appears to be a more traditional mid-rise design, likely to be constructed with a 3-4 floor concrete and steel pedestal with 1-2 floors underground and then 5 more wood frame floors up top for a total of 8 above ground. Although the building is shorter it will have just about as many units as were planned in the Timberhouse project. Of course the name Timberhouse loses its luster when the building isn’t actually a cross laminated timber structure, right? Yes, so now it’s dubbed “The Third.” We’ll see if that name sticks 🙂 But it should have little trouble sailing through the process since the Waterfront is a master-planned site and this structure is above the minimum density and should be well below the FAA height restrictions coming in at only 116 feet tall at the roofline.

This new building is shorter by 4 floors than the previous design, but the number of units is actually higher. The structure will have larger floor plates. I really liked the Timberhouse design and am sad that it isn’t getting built. That said, this new project is going to bring 277 (correction 10/21/2020, city website had some dyslexia, 227 units in this proposal) new units to the downtown / waterfront area. One notable thing is that they described the units as apartments, the original Timberhouse was suggested to be a mix of apartments and condos. The Third will be an apartment building.

The Aegis at the Academy project submitted some minor changes to the design that adds 7 additional units at the expense of some of the retail space. There were also a few minor aesthetic revisions. This project should be under construction soon. 

Urban condos in Vancouver saw similar activity over the last week that has been seen most of this year. There were several new listings that bumped inventory positive a bit, yet several units came online and immediately went pending. We are slightly up on urban condo inventory this week.