Shopping - Real Estate: Living On The Edge

Vancouver, if you haven’t already figured it out, is a lovely and eminently livable city. But vancouverites, when it comes to real estate, are a bit like teenagers: quick to fall in love with “the latest thing” and supremely confident in our market’s immortality. By the time you read this, the Vancouver real estate market will be well into its sixth straight year of growth. Housing cycles typically last five years. Yet with the olympics coming in 2010, few expect the good times to end anytime soon.

And perhaps they won’t. The fundamentals, as the friendly real estate agents remind us, are very strong: increasing migration to Vancouver, increasing demand for homes, limited space for further development and an even more limited number of skilled trades to build those homes. Still, if you need a cautionary tale about how neighbourhood fortunes can shift — and shift dramatically — one need look no further than the latest “it” neighbourhood: what avant-garde condo marketers call “the Woodward’s District,” but what the City considers part of the Downtown Eastside.

The big red “W” that looms over the intersection of Abbott and Hastings marks the abandoned site of the Woodward’s department store. Woodward’s was once the preeminent retailer in western Canada, with over 30 locations, and the Hastings store, built in 1903, was its flagship. For the first 50 years, the Woodward’s building stood in the bustling heart of Vancouver’s civic life — just steps away from the original City Hall and smack-dab in the middle of the shopping district and theatre row. But gradually activity shifted out of the area: City Hall moved to 12th and Cambie, the theatres relocated to Granville, and shopping dispersed to Granville and the burgeoning ’burbs. When Woodward’s went bankrupt in 1993 and the big red “W” dimmed, the Downtown Eastside — now commonly tagged “Canada’s poorest postal code” — had long gone to pot.

But since Woodward’s passing, the notion of “downtown living” has become a Vancouver mantra. Commuting in a city with no freeways is no fun, so increasingly people have chosen to give it up and downsize into downtown, bringing them closer to both work and the amenities of urban life. First to develop, in the early ’90s, were the former industrial lands of Yaletown and Coal Harbour, now colonized by glistening point towers, trendy restaurants and even trendier people. Next was Gastown, immediately north of Woodward’s; long a favourite with tourists, the historic district has picked up steam only in the past five years as a vibrant mixed-use neighbourhood. Now, with almost every available square foot of downtown land bought up and built out, condo developers are glancing cautiously eastward.

The development of Woodward’s is the linchpin in the anticipated Downtown Eastside transformation. And the preferred word is transformation not gentrification: unlike in some North American cities, where woebegone neighbourhoods are given a yuppie makeover and the undesirables forced out, the Woodward’s project seeks to accommodate some of the area’s low-income residents with 200 units of nonmarket housing. Simon Fraser University’s School for the Contemporary Arts will inhabit an adjoining building, injecting some intellectual capital into the project. Add in some varied retailing spaces, a daycare facility and a public park and you’ve got what developers consider an attractive proposition. Buyers evidently agreed: in April 2006, all 536 market units at Woodward’s — ranging in price from $200,000 to $800,000 — sold out in less than 48 hours. Over $200 million changed hands.

Whether spurred by the announcement three years ago of the Woodward’s redevelopment or not, other developers have since followed suit. One has taken over the historic Pantages Theatre on Hastings and committed to restoring it as a community theatre; as part of the plan, a rental tower will be built just to its west. The historic Merchants Bank building at Carrall and Hastings is slated to become a “media arts centre,” while just north of Main and Hastings — the longtime epicentre of Vancouver’s drug and prostitution market — William Vince, the producer of Capote, will be renovating space for his new company offices. With a few respected art galleries already in place, people are talking about a “cultural hub” emerging in that three-block stretch.

Or re-emerging, as the case may be. If you’re speaking to that infatuated teenager eager to buy, this renewed faith in the Downtown Eastside is a sure sign of Vancouver’s evolution into a sophisticated, cosmopolitan city. If, on the other hand, you’re speaking to that teenager’s curmudgeonly grandfather, the push into uncharted territory is a sign that a six-year bubble is about to burst. Gramps might have a point: Vancouver, according to a recent RBC Financial report, sports the least affordable housing in Canada — almost 70 percent of pretax income goes to paying the mortgage, taxes and utilities on a standard two-storey home, compared to the Canadian average of 44 percent. But all the growth in new development — Yaletown, Coal Harbour and now Woodward’s — is in condos, and there at least the affordability number is better: 33 percent versus a national average of 27 percent. Only time will tell whether the kids, betting the house on that box in the sky, are all right.

How they compare: 2006

GASTOWN - Apartment: $361,385
YALETOWN - Apartment: $637,416
COAL HARBOUR - Apartment: $562,962
KITSILANO - Detached: $1,022,151 / Attached: $575,232 / Apartment: $359,853
KERRISDALE - Detached: $1,189,110 / Apartment: $402,240
SOUTH MAIN - Detached: $599,424 / Apartment: $265,893
WEST VAN - Detached: $1,200,220 / Apartment: $540,928
NORTH VAN - Detached: $733,405 / Attached: $479,688 / Apartment: $322,092
RICHMOND - Detached: $614,631 / Attached: $379,891 / Apartment: $259,163
COQUITLAM - Detached: $535,957 / Attached: $384,892 / Apartment: $235,967