It would serve us well to take note of what’s happening with our neighbours.
Vancouver’s soaring real estate market is only part of a West Coast phenomenon. The wealthy elite is going bonkers in its demand for new and bigger houses. Los Angeles is seeing its luxury housing market go into a supersize mode never seen before. Always an enclave for the rich, the neighbourhood of Bel-Air is seeing good houses that are 15,000 to 20,000 square feet in area torn down and replaced with houses that are a whopping 60,000 to 70,000 square feet.
L.A. Councilman Paul Koretz’s district includes Bel-Air and Hollywood. He says in all his years on council, it never would have occurred to him that people would need homes three times bigger than the original.
“It’s being driven by a lot of international wealth,” he says. “A lot of different economies are coming up, and they all think they should have a home in the U.S., and if they can have one, it’s going to be Bel-Air.
“Things are just going crazy,” he says.
It’s so crazy that a unanimous city council voted last month to put an emergency moratorium on demolitions in crisis areas.
“After that, it will take about 18 months for an ordinance to cover the whole city to tighten up the mansionization rules,” Mr. Koretz says. “It really has become an emergency situation.”
Mr. Koretz’s district includes middle-class areas that are under siege from an influx of wealthy property investors. Vancouver’s west side will relate. In L.A., developers are razing charming old Spanish-style bungalows in favour of giant boxes. Angelinos refer to the practice as “mansionization.” The issue has driven anti-monster house activists to protest at real estate open houses. There are reports of residents that have tossed full doggy waste bags onto the lawns of offending big house homeowners.
Los Angeles and San Francisco are also grappling with new density and wealth at a rate that seems, at times, impossible to manage.
In Vancouver, we have our backlash against bulky new arts-and-crafts-style houses that are replacing smaller character homes. In L.A., it’s the faux Tuscans that are raising eyebrows.
The building of massive new homes right up to the property line has caused major blowouts in some L.A. neighbourhoods. Residents have lost privacy, sunlight and views as a result. Vancouver has restrictions against that sort of thing. But in West Vancouver there is the case of a little house currently under siege because of a massive land clearing all the way up to its property line. We covered that story a few weeks ago.
In San Francisco, residents say they’re losing their community as real estate investors evict tenants in favour of more lucrative Airbnb guests. Why deal with long-term tenants when you can make more money from transient out-of-towners?
I was walking around San Francisco a few weeks ago, and as always, I envied the picturesque, intact old neighbourhoods. But then I talked with Mike Buhler, the executive director of San Francisco Architectural Heritage. He says the city’s enviable stock of Victorian houses is under threat of that bête noir known as façadism. Façadism is when a builder guts the house and only leaves the front wall standing, often the only part protected by heritage laws.
New homeowners are stripping away the old architectural interior details, such as wainscoting and coffered ceilings. They are refinishing their homes with the contemporary white-on-white look instead.
“Even if you have a completely intact interior with woodwork and wood panelling from the early 20th century, there is no regulatory protection,” Mr. Buhler says. “It is an increasingly common occurrence to see façadism, especially when there is an influx of wealthy new residents.”
Vancouver is feeling the pressure of new wealth, both domestic and foreign. California’s cities are feeling the pressure of a rebounded economy after the 2008 downturn. Also, there’s that tech-industry megaboom, a powerful group. In San Francisco, there’s an emerging class of wealthy young people who work for local companies such as Twitter. Developers are responding by providing double sinks, walk-in closets and app-controlled alarm systems.
“It sounds like Vancouver, in the respect that they want all the modern amenities of a contemporary home,” Mr. Buhler says. “But they also want to live in an established urban neighbourhood with historic character.”
Vancouver civic historian John Atkin says all desirable cities are facing an influx of wealth. The situation is testing heritage preservation, as well as affordability. In London, there is a bizarre trend toward subterranean living, nicknamed “iceberg houses.”
Developers are building three or four stories below ground level. It means they can add square footage while following height restrictions, Mr. Atkin says.
“You are seeing the phenomenon now of that desire to live in the central city. But cities are forcing homeowners to have to deal with heritage laws and they are not thrilled with it.
“They want to bend that poor old house into something it was never meant to be.”
For San Francisco, it isn’t its first go-round with sweeping change. Mr. Buhler’s organization formed in 1971 in response to the demolition of a swath of important Victorian houses. San Francisco has a long history of heritage activism that is still strong today, he says. But his job description has broadened over the years to include affordability and density. San Francisco Mayor Ed Lee has set up a task force devoted to creating affordable housing in the form of tens of thousands of new units, for all income levels, Mr. Buhler says.
“It’s a hot topic of discussion – we’re seeing in certain parts of the city lots of new Vancouver-style, tall, slender residential towers.
“Of course, the concern among many is that the new housing units will be market rate. And they won’t impact affordability and provide housing for middle-class residents, like teachers and firemen,” he adds.
He could be talking about Vancouver.
San Francisco and Vancouver have many parallels, but drastic differences, too. Houses aren’t coming down to the tune of three or four a day, like they are in Vancouver.
“I think that’s because we have a pretty highly evolved preservation protection. The planning department in the city has many staff dedicated to just preservation issues. Five years ago, through voter initiative, we created a historic preservation commission that has new powers. Before, it was just an advisory board hat had no regulatory authority.”
San Francisco Heritage is also taking a pro-active approach by including the tech sector in the discussion. Community leaders are attempting to get a conversation going with the wealthy new demographic. For example, Mr. Buhler’s group held an event with Twitter co-founder Jack Dorsey.
“There is resentment aimed at tech for being the cause of the increase in property values. That’s the perception,” he says. “And Jack Dorsey acknowledged that is the key challenge. How do you provide more density without sacrificing the San Francisco we know and love?”
Then there are the tax breaks, another difference.
San Francisco already benefits from the locally administered Mills Act, which offers a major tax incentive to protect old buildings. In exchange, historic property owners commit to maintaining and improving their property for 10 years.
“The Mills Act adjusts the property tax assessment to reflect the actual use of the site, rather than the market value based on comparable sales. For just improved or recently purchased properties, this alternative assessment method will often result in a property tax reduction of 50 per cent or more,” Mr. Buhler says.
A 50-per-cent tax break is a big carrot for any homeowner. And a task force set up to address issues such as affordable housing and density is a pro-active measure – as opposed to pushing through with more development, no matter the social cost.