Renderings of the mothballed PoCo Place project in Port Coquitlam, B.C. Developer Wesbild was to have built 2,000 homes and significant retail space and amenities.Wesbuild
A major master-planned community project in Port Coquitlam, B.C., has been mothballed, developer Wesbild Holdings Ltd. announced last week.
With 2,000 homes and significant retail space and amenities, the scale of the project would have been unprecedented for Port Coquitlam, one of Metro Vancouver’s smaller suburban municipalities. Wesbild had announced plans for a six-tower community where a shopping mall currently exists at the corner of Lougheed Highway and Westwood Street, called PoCo Place. Phase 1 was to consist of a 37-storey rental tower and a 35-storey condo tower, with construction to begin next year.
“That was obviously an important project for us,” said Bruce Irvine, the city’s director of community planning and development. “It was actually the largest single project that this city had ever received by quite a long way.
“I think this project represented almost double our 10-year average growth rate.”
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President and chief executive officer Kevin Layden said a big reason for halting construction of PoCo Place was current the drop in rents, making it financially impossible.
“Rents are down, which is a good news story. But when the rents fall, your revenue falls, and when revenue falls, if costs don’t fall, then it doesn’t work. So you end up not going forward. I mean, it’s a very common problem across the industry right now. I don’t think we’re alone,” said Mr. Layden.
He said rents have dropped due to lower immigration numbers and the popularity of the Canada Mortgage and Housing Corporation’s program to help finance the construction of purpose-built rental housing.
“We like rents where they are,” he added. “We just want everyone else to reset their expectations as well, which is not happening.”
Wesbild, which had long been active in neighbouring Coquitlam, is one of the more fortunate developers. The PoCo Place shopping centre has 100 tenants, which means the company still earns revenue on the property as it waits for the market to shift. Those developers who have vacant sites may have no choice but to proceed, said Mr. Layden.
Mr. Irvine sees the pause on the massive project as emblematic of a greater shift toward placemaking in general, and a refocus on jobs and industrial spaces. Mr. Irvine, co-author of the book Urban Magnets, said the downturn offers an opportunity for cities to get back to city building, with amenities and livable spaces, and less focus on counting housing units. He emphasized that the Wesbild project included amenities and would have been a valuable contribution to the city.
The scale of the PoCo Place project would have been unprecedented for Port Coquitlam.Wesbuild
“When building cities, we really have to be resilient. It can’t just be about building more housing,” Mr. Irvine said.
“I don’t want to sugar-coat it. It is difficult times,” he said. “But, it’s almost like you took off the second layer of icing. We still have a lot to work with, and I think as a whole, we as cities need to think about how we build resilient cities that aren’t just about housing. How can we improve manufacturing? Our growth areas in this city are probably health, education, and small business.
“Look, the more people who are employed can afford the houses here, not just paid for by equity growth that your parents had. We can rightsize the housing for our buyers here.”
He envisions a shift toward more townhouse projects and four- and five-storey wood-frame walk-ups designed for home ownership. Amenities will become more important for young people and families.
“What makes communities attractive to put your money into and what creates the lift, the value that so many homeowners have experienced? It’s got a lot to do with: Are these great neighbourhoods? Are these safe neighbourhoods? Do they have rec centres, good sidewalks and good parks that make an area in demand? And if you can, then find a product that fits what people are looking to buy, I think that the market will come back, but I think it will come back different than it was.”
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Mr. Irvine said developers can pivot faster toward this shifting demand than government.
In this new climate, Port Coquitlam is a bit of a model community for future development. Unlike other Metro Vancouver cities, such as Burnaby – which saw a proliferation of tower developments in recent years – Port Coquitlam only saw a couple of towers go up, said Mr. Irvine. The emphasis in the city with a population of 52,000 has been on ground-oriented housing such as duplexes and townhouses. That type of housing is currently enjoying strong sales. But “tower mania” largely bypassed Port Coquitlam, which means they aren’t stuck with unoccupied condos.
“They just don’t want those tiny little studios and one bedrooms that we got so good at building for so many years.”
The frenzy was driven by the investor market, and also, he says, by the province. Through a series of bills, the province sought to dramatically increase density by overriding municipal authority. The province mandated changes to zoning bylaws to allow multiplex units on single-family lots and eliminate public hearings, and required high-rise towers around transit hubs, prohibiting the usual off-street parking requirements. Municipalities were given orders to deliver specific numbers of housing units within a five-year window. The reach was unprecedented, and, says Mr. Irvine, it was disruptive. He said his city is more worried about building community than meeting a housing target order.
“The rollout was deeply disruptive. They changed the development rules very suddenly, without warning, and most dramatically, without community engagement. And that created confusion.”
As for Wesbild, they are seeking opportunities further afield because of economic uncertainty in B.C.
“There’s just too much uncertainty,” said Mr. Layden. “And then you can’t get the economics to work. So, what happens is, companies like ours, we’re looking at Alberta, we’re looking at Saskatchewan, we’re looking at other properties in Ontario. That’s what happens. Investment dollars will go elsewhere.
“We just made a large acquisition in Ontario because it didn’t make sense to do it in B.C.”