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Realtor Peter Saito stands in front of a heritage house in Vancouver, B.C., on August 24, 2015. Mr. Saito is against a call for a moratorium on demolishing heritage homes saying it devalues the house. Jimmy Jeong for The Globe and Mail.Jimmy Jeong/The Globe and Mail

Vancouver is one hearing closer to making First Shaughnessy the city's first Heritage Conservation Area, which will make it extremely difficult for a homeowner to demolish their house.

After listening to dozens of speakers, including an exhausting total of 63 people Tuesday night, city council will finally make a decision on whether to designate the oldest area of Shaughnessy on Sept. 29. If the proposal passes, it will help protect one of Canada's most historically important neighbourhoods from the wrecking ball. It's a bold move for the city, and a much-lauded one by heritage experts, because Vancouver's old house stock – in this case a collection of 317 pre-1940 houses – is quickly becoming an endangered species. In response to the decline, the city put a one-year moratorium on demolitions in First Shaughnessy in June, 2014. At the time, there were inquiries to demolish 19 of the remaining 317 homes there.

Real estate agent Joanne Giesbrecht spoke at the hearing and told city council she was in favour of the Heritage Conservation Area (HCA). She said since 2006, a new market was driving prices in Shaughnessy because of its big, central lots. As a result, Shaughnessy properties were in big demand, but for their lot size, not the houses.

Annie Gao said she'd been advised by her real estate agent that she'd be allowed to tear her First Shaughnessy house down, which is why she bought it. And then the city banned demolitions, interfering with her plan.

"This proposal will lower the value on the whole area," said Ms. Gao, echoing a common theme among the "no" side.

"My house smells because it's over 100 years old," she said, explaining why the house had to go.

If the homeowners had done their due diligence prior to buying into First Shaughnessy, they would have discovered there already were land-use guidelines, established years ago, to preserve the pre-1940 homes. First Shaughnessy has been protected by an official development plan since 1982, when specific guidelines were drawn up for the area. Only in recent years have architects and builders found loopholes to bypass those requirements in order to construct houses that are much larger and out of context compared to the rest of the streetscape. The provincially legislated HCA will have teeth.

"My sense is that the city is on pretty firm footing," city historian and author Michael Kluckner, who worked on the Shaughnessy design panel, said. "The official development plan has outlived its usefulness because it was being gamed by people."

The flow of incredible wealth into Vancouver in recent years is to blame for the failure of the old Shaughnessy plan to preserve the neighbourhood. It couldn't stand up to the changing demographic and the demand for newer and bigger houses.

"I think the scale of wealth is unprecedented in Vancouver, and I think the values associated with that wealth are also unprecedented in the city," Mr. Kluckner said. "Clearly to me, the people who have bought in there did not receive really good advice from lawyers, from realtors and in some cases from architects, because they were completely ignoring what the goals were of First Shaughnessy's [original design plan]."

Now that the city might soon acquire the authority to ban demolitions outright – and effectively hold up the original intention of those guidelines – some homeowners are suddenly claiming that their homes aren't worth saving.

At the hearings, the anti-heritage-conservation camp is generally divided into two groups – those who feel the older houses are in disrepair and should be torn down to make way for a new house, and seniors who fear losing equity in their homes if the former group is not allowed to tear the houses down. They sat as a group to one side of the room. Among them sat Loy Leyland, the architect who's done well by the Shaughnessy property boom, as builder of many of the big new houses.

At the beginning of Tuesday night's hearing, city staff responded to a query they'd received from a resident who wanted to know whether HCAs had caused house value declines in other cities. It was an excellent question, especially since the potential of lost property values appears to be top of mind for the "no" side. A group that organized the "no" side sent a letter around to the 317 affected homeowners in First Shaughnessy, and it cited a real estate agent's claim that property values would drop by 30 per cent if the HCA designation passed. That kind of drop in an area as desirable as Shaughnessy is inconceivable.

As well, no one can find evidence of any drop at all where an HCA has been applied.

In fact, where heritage conservation is concerned, Vancouver is an oddball. Other cities see HCA designations as a blessing – not grounds for legal action.

In Victoria, senior heritage planner Murray Miller said HCA designations are considered a source of pride, and a driver of property values.

"We do have current interest from certain communities asking for their neighbourhoods to be designated heritage conservation areas," Mr. Miller said.

Mr. Miller has 29 years experience as a heritage planner, having worked in Victoria, Edmonton, Regina, Winnipeg, Manchester, London, Nova Scotia, Phoenix, Southern California and Christchurch, New Zealand. He has yet to see a heritage designation negatively affect property value.

"I haven't in my experience seen a devaluation of heritage property values as a direct result of designation," Mr. Miller said.

Instead, he's seen the opposite. He compares Vancouver with Phoenix, which is similar in size and age. Like Vancouver, Phoenix is experiencing unprecedented growth and development. But for a city not known for its heritage, it's remarkably invested. Since 2000, Phoenix has created 11 heritage districts and they already had 24. Some of the districts have 600 homes, Mr. Murray said.

"The reality on the ground is that neighbourhoods wanted to have their areas designated so much that it caused a resourcing problem for the city, in trying to cope," he said. "They desire the stability it offers. They know their neighbourhoods are unique, they like the character. And there is value in that reflected in the real estate prices. And they get access to incentives."

First Shaughnessy residents are also being offered incentives, by way of infill, such as coach houses and suites. But residents who oppose the HCA designation say they want privacy instead of rental units. They say it's not an incentive.

Toronto's comprehensive heritage program has 20 HCAs that are considered a boost to property values. "They acknowledge that HCAs are valued and desired," said a Vancouver city staff report.

The city of Los Angeles has 32 historic districts, according to Mr. Miller. The city is currently undergoing a major battle against rampant development of monster homes that threatens its historic stock of houses. Last year, L.A. council member Paul Koretz told me city council had voted unanimously to put an emergency moratorium on demolitions in crisis areas, similar to the one that Vancouver put on First Shaughnessy last year. An ordinance is in the works to tighten up rules to prevent further mansionization.

"It really has become an emergency situation," Mr. Koretz, who found the rampant demolitions of perfectly good houses appalling, said.

"They continue to limit the proliferation of McMansions," Mr. Miller said.

Mr. Miller also worked in Manchester, which, he said, has similarities to Vancouver. That English city has 34 conservation areas, and it is also undergoing extensive development pressure.

In Victoria, Mr. Miller looked up 10 sites that were designated as heritage properties in 2008. He compared their property assessments from 2007, when they had no status, to their values in 2009, a year after they were designated. He found the average increase in values of those 10 properties to be 12.1 per cent.

"It's a very small sample, but does lend some data to this discussion," he said.

He has more. In Victoria's Battery Street Heritage Conservation Area, he looked at seven properties and discovered an increase in property values of 129 per cent between 2002 and 2015.

There's no evidence that the moratorium on demolitions in the last year significantly affected the market. People still purchased the big old mansions in First Shaughnessy and paid handsomely for them. Perhaps the problem isn't that the houses are old, or beyond their best-before date. Maybe the problem is that when a real estate market is driven by speculation, things such as history, culture and architectural merit get crushed in the mad scramble to make a profit. A man named John Lee said he owned two houses in First Shaughnessy and he purchased the pre-1940 house as an investment 10 years ago, with the intention of tearing it down. He complained that rent alone is not going to give him the proper return on his investment. He needs to be able to redevelop the heritage house for his bottom line.

"It will be financially horrific for me," he said.

If the HCA designation does knock down the speculative bubble, it's a moot point, Mr. Kluck-ner said.

"Because you can't make public policy on the basis of speculation."