All the while easing the Canadian city’s chronic housing crisis and appealing to Asian buyers
After the Squamish gave up all claims to a key piece of land in Vancouver back in 1947, hope they might one day develop the site into a multi-billion-dollar high-rise development seemed far-fetched.
This indigenous tribe from Canada’s western coast had witnessed their villages being razed to the ground and later occupied by the Canadian railway.
Then, in November last year, following decades of legal battles and disagreement over how to use the prime 11.7-acre plot, the Squamish overwhelmingly voted among themselves to develop the site.
The result: detailed architectural plans for 11 futuristic-looking residential towers featuring indigenous art and cascading plants. Named Senakw, the ambitious development could transform Vancouver’s notoriously lacking—and expensive—housing rental market.
Squamish Nation, the organisation representing the group, says as many as 5,400 units could be made available to renters—nearly double the net gain in rental properties coming on the market during the eight years up to 2018.
“This becomes a prototype, an example of what’s possible when we think bold and design big,” points out the single-monikered Squamish councillor Khelsilem, also known by his non-indigenous name Dustin Rivers. “Maybe it starts to break the glass ceiling on the conversation around what should be done around housing and density.”
Indeed, the future sustainable, mixed-use development set to rise on Squamish reserved land beneath Vancouver’s Burrard Street Bridge will not only be unique but could potentially draw foreign investment attention to Vancouver.
With its indigenous land classification, the plot is considered federal rather than municipal, thereby avoiding a host of city rules that regulate everything from the number of required parking spaces—one per unit—to the taxes which will apply once the apartments are sold.
Recent years have seen Vancouver pass a foreign-buyer tax of 20%, as well as speculation and vacancy taxes—all aimed at curbing the growing number of foreign homeowners in the city who leave their properties empty amid an enduring rental market supply drought.
Senakw—pronounced “snock”—therefore offers tantalising prospects for the Squamish and their chosen developer, luxury residential firm Westbank Corporation. Both forecast total earnings of up to CAD10 bn (USD7.12 bn) each from the project. The Squamish are earmarking as many as 200 homes at below-market rates for their own indigenous people, as well as renting out between 70% and 90% of units, which would help ease market supply.
The Squamish and Westbank would likewise be free to sell the properties to wealthy Asian buyers who would not incur the new punitive foreign-purchase taxes imposed on almost every other property in sought-after Vancouver.
“The foreign-buyer taxes are a major challenge for offshore buyers and are in part responsible for the shift of some demand [from Vancouver] to Montreal,” says George Chmiel, executive chairman of Juwai IQI which operates Juwai.com, the main portal for Chinese buyers seeking property overseas. “Most foreign buyers don’t have to pay the foreign-buyer tax because they are purchasing for their own use and are already residents or have permission to become such.”
Westbank has been instrumental in targeting buyers from China and Hong Kong in the past, particularly in Vancouver, and conducts extensive marketing in Chinese. As of press time, neither Westbank nor the Squamish have commented on whether they will seek or even allow foreign buyers to take advantage of the unique tax breaks at Senakw.
With the negative impact of the coronavirus pandemic reverberating across the globe, the project may have hit a snag. For one, it remains to be seen whether the project will begin construction in early 2021, as previously announced, given British Columbia’s economy is expected to shrink by a record 7.3% this year, according to Central 1 Credit Union which manages and tracks liquidity and payments in the province.
A lack of plans on how road links and schools will be made available for the site has also created questions around Senakw. Despite receiving praise from city Mayor Kennedy Stewart who called the project “a gift to the city”, Senakw remains controversial a sizeable contingent of non-Squamish Vancouver residents. A poll by the Vancouver Sun newspaper found 37% of readers opposed the project.
Attitudes may shift in a more positive direction if and when Senakw realises its rental potential—a key facet of the project. Although city authorities in Vancouver have taken steps to encourage developers to build low-cost rental properties in recent years, supply remains inadequate and prices too often prohibitive. According to Rentboard Canada, Inc., the average monthly rent on a one-bedroom apartment in Vancouver comes in at just under CAD1,900 (USD1,637)—a significant decrease on 2018 but still the second-highest rental price in Canada after Toronto.
As well as being an excellent economic development opportunity for the Squamish Nation, it (Senakw) is a first step in adding much needed density in a part of the city that has long resisted it
At the end of April, municipal authorities in Vancouver announced a speeding up of the city’s housing strategy in response to economic challenges posed by Covid-19, with an emphasis on low-cost housing and increased supply of rental properties. Applications for such housing will be fast-tracked and a new “C2 bonus” will be given to developers offering low-cost rental properties. These measures mean the number of low-cost rental units in the city pipeline stands at 12,500 units, a dramatic increase on the volume in recent years.
Still, Senakw will add between 4,200 and 5,400 additional rental units alone, according to Squamish plans, a significant contribution to the easing of Vancouver’s low-cost rental supply problem.
The project, free from city regulations, also shows what can be done in Vancouver as developable space dwindles, says Brendon Ogmundson, chief economist at the British Columbia Real Estate Association: “I think the most important thing about the Senakw development, other than being an excellent economic development opportunity for the Squamish Nation, is that it’s a first step in adding much needed density in a part of the city that has long resisted it.”
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