News
Views
Government
On campus
This date in history
Noticed
In the harbour
Footnotes
News
1. Downtown vacancies, The Carleton, and the crisis of capitalism
The Turner Drake appraisal firm has conducted its annual survey of office rents in Halifax, and discovered downtown is emptying out fast:
Office vacancy in Halifax’s Central Business District now rivals Calgary… that is the stunning conclusion reached by Turner Drake & Partners Ltd. as part of their Atlantic Canada December 2015 surveys. Overall office vacancy now hovers at around 16%, while Class A is a staggering 26%… and a third of Class C is now vacant!
[…]
Halifax’s woes are self-inflicted; a municipal policy favouring its city-owned industrial parks encourages tenants to abandon the downtown in favour of cheaper space in more accessible locations. Canada Revenue Agency are the latest large space users to abandon the downtown: they are heading to the Bayer’s Lake Industrial Park. Declining demand for office space in the CBD is now writ large in the vacancy rates: 26.29% of Class A space is now vacant, a jump from 18.85% in 2014…and that situation will worsen as new space such as the Nova Centre comes on stream next year. Class C space vacancy is an eye watering 32.66%, nearly double the 2014 rate of 18.30%. The outlier is Class B space, which saw a much lower rate of 9.71%, but likewise increased from 6.58% the previous year.
[…]
What will happen next? CBD Class A buildings will capture Class B occupants to repair their high vacancy rate. Class B buildings will then syphon demand from Class C buildings. Some buildings will be repurposed for residential use, be abandoned or demolished. Halifax CBD will continue to decline as the Atlantic Region’s centre of commerce. None of this should come as any great surprise. In 2009, Turner Drake conducted a study for HRM and concluded that “if present trends persist Downtown Halifax will continue to decline as a business centre…hotel and residential development will increasingly dominate activity in the area.”
This would be the perfect time to open a gigantic 16-storey office building downtown, eh?
I’ve been biased against the thing from the start, but as the Nova Centre begins to take final form, it’s worse than even I thought it would be. It’s a huge hulking presence over downtown, dominating the skyline, the streetscape, the energy of downtown. It’s weird watching the concrete structure, reminiscent of Soviet brutalism, get its glass cladding — we’re getting the very best of 1980s’ architecture. Bold.
It was odd, watching the forces come together to get Nova Centre approved and built. The economic arguments for the convention centre were bullshit, but I think there was more to it than that. There was an attitude among a broad swath of the public that “we’re not a real city if we don’t have lots of glass skyscrapers,” and it held the day. And now we’ve got a 26 per cent vacancy rate for Class A office space downtown and a couple of hundred thousand more feet of Class A office space is about to open up.
There’s nothing wrong with big glass skyscrapers per se, but that’s not what a city is about. As Jen Zoratti put it in the Winnipeg Free Press, “a city’s identity is found in its dive bars, not its shiny new hotels“:
A city’s DNA is in its dive bars and flea-bag hotels and holes-in-the-wall. When people talk about the cities they’ve visited, their impressions aren’t shaped by surface lots or shiny new hotels. No, they breathlessly describe the “great little spot” they “found.” Everyone wants to feel like they’ve stumbled upon something great. Places like the Times Change(d) [a Winnipeg bar] give you that feeling.
And overwhelmingly, it seems as though the “great little spots” that get lost to gentrification and “progress” are small and mid-level music venues.
Which brings us to The Carleton.
Mike Campbell has done a remarkable thing with the Carleton. As popular tastes have moved on to DJs and dance music, Campbell has doubled down on the live music and the Carleton has become the very best venue around. But, he says, the construction of the Nova Centre is “kicking the snot out of our business,” and so he has started a crowd-funding campaign to help the business survive through the construction. Campbell thinks that if he can survive this year, the completed Nova Centre will bring renewed success to his business.
I wish Campbell the very best, but I fear he’s too optimistic. Already Night Magic and Strange Adventures had to move out of their old building as the owner embarked on a renovation in expectation of higher rents, and the Seahorse had to move when its rent was increased. I think landlords in the area are drooling at the prospect of increasing rents. I doubt much of the Argyle Street bar district will survive.
None of this makes much sense. It didn’t make sense to build a million square feet of new office, hotel, and commercial space in struggling market. It doesn’t make sense to build thousands of new condos and apartments when the population growth is flat and residential vacancy rates are soaring. It doesn’t make sense to increase rents so much that your tenants can’t survive. But here we are.
We’re seeing the last gasp of a broken global financial system. Besides the finance system itself, there’s nothing much really left to invest in, except for urban real estate. This is a global phenomena, especially in China — Geographer David Harvey tells us that from 2011 to 2014 China consumed more concrete than the United States did through the entire 20th century, and almost all of that concrete went to build cities. There are now scores of “ghost cities” across China, metropolises built to hold tens of millions of people, but which are nearly vacant.
This urbanization boom has had very little to do with meeting the needs of people. It has been all about absorbing surplus capital, sustaining profit levels, and maximizing the return on exchange values no matter what the use value demands might be. The consequences have often been irrational in the extreme. While there is a chronic shortage of affordable housing in almost every major city, their skylines are littered with empty condominiums for the ultra-rich whose main interest is in speculating in property values rather than constructing a settled life. In New York City, where half of the population has to live on less than $30,000 per year (as contrasted with the top 1 percent, who had an average annual income of $3.57 million per year according to tax records for 2012), there is an affordable housing crisis because nowhere is it possible to find a two-bedroom apartment for the $1,500 per month that a family of four should be spending on housing given an income of $30,000. In almost all the major cities in the U.S. the average expenditure on housing is way over the thirty percent of disposable income that is considered reasonable. The same applies to London, where there are whole streets of unoccupied mansions being held for purely speculative purposes. Meanwhile, the British government attempts to increase the supply of affordable housing by putting a bedroom tax on social housing for the most vulnerable sector of the population, resulting in, for example, the eviction of a widow living alone in a two bedroom council house. The empty bedroom tax has plainly been put on the wrong class, but governments these days appear to be singularly dedicated to feathering the nests of the wealthy at the expense of the poor and the disadvantaged. The same irrationality of empty dwellings in the midst of shortages of affordable housing can be found in Brazil, Turkey, Dubai, and Chile as well all the global cities of high finance such as London and New York. Meanwhile, budget austerities and reluctance to tax the wealthy given the overwhelming power of a now triumphant oligarchy means declining public services for the masses and further astonishing accumulation of wealth for the few.
Halifax is just a bit player in this game, but the same factors with some local twists — I think one interesting but unacknowledged driver of Halifax construction is the need to invest capital accumulated in the Middle East — are at play.
2. Examineradio, episode #44
This week we speak with Dartmouth business owner and amateur historian Joel Plaskett about the fire service debate, the New Scotland Yard Emporium, the future of the Khyber building and his undying love of Billy Joel. Plaskett also dabbles in music, we understand.
Don’t worry about your fire service, Dartmouthians. Everything will work out fine.
[iframe style=”border:none” src=”http://html5-player.libsyn.com/embed/episode/id/4082396/height/100/width/480/thumbnail/no/render-playlist/no/theme/legacy” height=”100″ width=”480″ scrolling=”no” allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen]
(direct download)
(RSS feed)
(Subscribe via iTunes)
3. Climate change
“A new American study suggests that by the end of the century waters off Nova Scotia may be much warmer than predicted,” reports the Chronicle Herald:
“We do think that this is going to be a hot spot for climate change,” said Vincent Saba, a National Oceanic and Atmospheric Administration fisheries scientist and lead author of the study.
[…]
“We looked at the entire northwest Atlantic shelf. Most of the enhanced warming was right off the eastern Scotian Shelf and right off the Gulf of Maine,” Saba said Friday in an interview.
[…]
The study projects warming of about three or four degrees Celsius in the northwest Atlantic Ocean 60 to 100 years from now.
Views
1. Halifax Twitter Outrage Bingo
2. Chronicle Herald
“Downhill fast.” The caption over Wednesday’s Chronicle Herald front-page photo — of skateboarders zipping down Citadel Hill — said it all,” writes Stephen Kimber. “The Herald, which bills itself as Canada’s largest independent newspaper, is hurtling downhill, ever faster toward its own oblivion.”:
My fear is that Herald management — by cutting back on the quality journalism that is its only significant “value proposition” while transforming those who create that value into undervalued enemies — will only make the situation worse.
Meanwhile, on Saturday the Halifax Typographical Union, which represents newsroom staff at the Chronicle Herald, tweeted that “in [a] letter to readers today, CH maintains it will lay off staff photographers. Our quick 21,000-word response.” The tweet contained 21 outstanding photos from staff photographers. A sampling;
It’s just the fact that if you expect reporters to take photos with iPhones, you’re going to end up with worse reporting and worse photography. Photography is a skilled profession; it takes training, a particular kind of artistic sense, experience, the right equipment, and the time and work to get it right.
3. Cranky letter of the day
I am 86. I did 50 years of service in the military (navy), 30 years full time then another 20 years part time. Age, not my physical condition, put an end to that. I now live by myself; my wife of 62 years has moved on.
My mail was always delivered at my mailbox at the end of the driveway. Now it’s in a community box seven kilometres away — it’s close to 15 kilometres there and back for me. My mailbox situation was classified as being unsafe. The ladies who deliver the mail on these country roads — 90 per cent of them are at risk. I offered to change my mailbox, etc. No way.
As a parting shot, the man who delivers your paper to my mailbox for the last three years has only missed one day. He usually puts it in my mailbox between 3 a.m. and 4 a.m. The day he missed, the truck that brings the papers from Halifax to the Windsor area had broken down.
Anyway, it’s time I moved on, too.
Fred Eggleton, Burlington
Government
City
Executive Standing Committee (10am, City Hall) — you’d think the committee would be getting around to hiring a new CAO, but you’d be wrong.
District 7 & 8 Planning Advisory Committee ( 7pm, Halifax Forum) — the committee will be looking at a proposed seven-storey apartment building at 6389 and 6395 North Street.
Province
No public meetings.
On Campus
Racism is Killing Us Softly (6pm, Room 307 Dalhousie Student Union Building) — the event listing:
In Commemoration of the Dr. Martin Luther King’s Day event, the Black Student Advising Centre in collaboration with the School of Social Work, the James Robinson Johnston chair (JRJ) of the Black Canadian Studies and the Association of Black Social Workers present the 3rd lecture series on “Racism is Killing Us Softly”.This topic will aim to engage not only the Dalhousie community but the broader Nova Scotian and Canadian community to explore the concepts of justice in relation to the African Canadian racial identity. The event will not only expose injustices but highlight progressive organizations and ideas within the local justice system. Inclusion is a major goal of this event.
Wrinkles (8pm, QEII Royal Bank Theatre, Halifax Infirmary) — a screening of Ignacio Ferreras’s 2011 Spanish animated film about Alzheimer’s disease. Afterwards, a panel discussion includes:
Melissa Andrew (Geriatrician),
Keri-Leigh Cassidy (Psychiatrist)
Darce Fardy (Journalist & Patient advocate)
Susan Kirkland (Epidemiologist)
This date in history
On January 18, 1994, the Dartmouth City Council passed the following resolution:
WHEREAS the Halifax-Dartmouth municipal structure was the subject of a substantial portion of the recent Metropolitan Economic Summit (Nov. 26-27);
AND WHEREAS the business conununities recognize the existing structure as inefficient and in need of change;
THEREFORE BE IT RESOLVED that Dartmouth City Council demonstrate leadership by asking the Metropolitan Area Planning Commission (MAPC) to reconvene, to deal with Municipal Restructuring;
AND BE IT FURTHER RESOLVED that Dartmouth offer its Water, Fire and Police as initial services for regionalization.
In the harbour
High Sun, oil tanker, Houston to Imperial Oil
Energy Protector, oil tanker, Beaumont, Texas to Imperial Oil
Footnotes
In case you missed, Council has extended Tom Traves temporary CAO appointment for a full year.
What’s the hurry to get a new CAO when any ‘ole lawyer will do.
Would be nice to see what his temporary salary is compared to the dear departed mega bucks of Richard Butts.
That would be John Traves, the HRM lawyer and the person who spoke on January 14 2015 at a Public Information Meeting against a development close to his home on Purcell’s Cove Road as follows
” John Traves, HRM Solicitor and resident of the area – He would be opposed to a conveyance of a piece of the right-of-way. Ownership interests are much stronger than an easement. He believes that it was a condition of the development agreement in the first place that the right-o way be conveyed to the City and those rights should not be eroded. That pathway should be protected for the future. He has some issues in terms of the process where a homeowner enters into a development agreement with the City, breaches it and feels that in some way HRM has an obligation to help fix that. He is opposed to the commercial use. The property has been, and is currently on the market and there would be a huge opposition from himself and the neighbourhood to a change in use to provide for professional offices or otherwise through the future.”
https://www.halifax.ca/council/agendasc/documents/150721ca1121.pdf last page
The application came before council with staff recommending rejection and tyhe item was deferred.
I do not recall in the past 30 years any senior staff member attending a PIM as a resident and speaking for or against an application.
To Fred Eggleton of Burlington: NO! Don’t «check out» get together with other dis-served seniors and FIGHT the ûber-corporatized disaster which is Canada Post. There was NOTHING wrong with Rural Mail Delivery until corporation number-crunchers and ambulance-chasing staff lawyers «decided» that delivering mail to rural mail boxes was «dangerous». There ARE perfectly safe means of delivering mail to rural boxes — it’s just that the CORPORATION doesn’t want to be bothered.
Many of the «Community Mail Boxes» ridiculously, and DANGEROUSLY situated by fiat of some mindless bureaucrat in Toronto have been successfully challenged and moved if not replaced by REAL delivery.
Canada Post CORPORATION is an out of control and out-of-touch self-serving monopoly. Note that in the USA (bastion of capitalism!!!) delivery of mail is by THE U.S. POSTAL S-E-R-V-I-C-E which does a helluva lot better job for substantially lower fees. I rest my case!
The real killer for any downtown would be vacant stores and offices that front on the street level. Residents and visitors do not see the vacancies inside the monolithic structures above ground level; but a vacancy at street level stands out… if one wants to stimulate the appearance of the downtown core…. keep the rents low and those spaces filled at the street level.
Nothing kills the prosperous look of a downtown area more that empty storefront and office space windows at the street level. Appearances and perceptions can often deviate from the realities; but that is also what sells, eh? If one wants Halifax to at least look prosperous, I have said what must be done.
Well, surprise, surprise… municipal politicians have been consistently flying in the face of common sense and kissing the derrières of speculative land-grabbers since I was in diapers. We have an expensive battalion of «planners» whose (hopefully!) expert pronouncements are consistently ignored and the opposite approved by Council. What’s the use of all these high-priced bureaucrats if their expertise is constantly trumped by insider favouritism and brown envelope «reconsideration»?
The remarkably beautiful and vibrant Halifax «downtown» of the 50s has been totally destroyed and will never recover. One after another beautiful historic buildings are abandoned, demolished and replaced with USELESS glass and steel hi-rise SHACKS, designed to be good short-term «investments» and written off just in time for them to become yet another drain on the public purse as the CITY finds itself responsible for a billion-dollar demolition bill.
I strongly urge readers to consider the Herald issue as described by Parker Donham here http://contrarian.ca/2016/01/15/its-not-just-the-herald/ and the canadaland podcast with Jen Gerson explaining the reality of daily print media that other journalists prefer to ignore. http://canadalandshow.com/podcast/short-cuts-53-peacekeeper-arms-dealer
I have to wonder, re: downtown office space if there aren’t a few other reasons.
Why downtown? Usually what I hear is “because downtown” and “there’s better restaurants” and “better shopping”
I should sell my car and move downtown. Well, my car + insurance + rent is less than the equivalent rent downtown. I then lose mobility. This is a car centric city, contrary to what the Coast wants to think. If I move downtown, I have to sell my car, make up another $200 a month, for a smaller apartment and losing the ability to travel and visit family. Not going to happen.
Even worse, I’m technically ‘middle class’ and can’t shop downtown. I can go to dhaba in Bayers Lake and pay the same thing for more, better food since their rent is lower, AND not pay the parking tax. ?But ‘downtown’ is better, because downtown.
I’ve leased office space downtown. I’ve worked downtown. For several years… I noticed a marked decline in tenancy in those few years, I saw convenience stores closing because they had no customers. I saw the rents stay the same, or raise for the same 80 year old units crawling with mice and 28 degrees in the summer.
All the offices are owned by guys out of Ontario, they have no skin in the game. Supply and demand doesn’t even seem to apply. They’re happy to lose money hand over fist because lowering the rent would be crazy! It’s caused massive outmigration.
Now, here’s where I haven’t seen anyone research… Back in the day, being ‘downtown’ and close to other businesses mattered. Now? No. Teleconferencing, remote work, email, technology, email…. You know; all those modern things that mean people can be anywhere and do the same or better work. The burbs are closer to highways, to the airport, etc. Many people even work from home!
Why commute downtown for the sake of downtown when the benefits aren’t easily measured, but the downsides (higher rent, longer commutes, more noise, etc.) are obvious.
The people that want to be downtown are there. Those who get something out of it are there.
To get more people downtown you need to convince me, and the other 100k people that don’t work downtown, and don’t want to, that it’s worth putting up with the commute, and worth paying the extortionate rents, because ‘the restaurants and shopping are better.’ The only way that’s going to happen is rents dropping and a transit overhaul, both of which are pipe dreams.
Until that happens, downtown is going to continue to die off.
Downtown isn’t dying. It’s having a crisis in commercial vacancies, just as Vancouver did in the 90s as it was becoming a more residential area. In recent years downtown office vacancy rates in Ottawa and Montreal have hit 14% and 12%, respectively. Vancouver is now over 10% too. Are those downtowns “dying”? No, and no one is suggesting that either. We have a slowing national economy, too much exuberance in the building industry, and downtowns that are increasingly taking on a residential and retail character.
As well, these numbers are extremely volatile. They’ll go up again in Halifax as the Nova Centre opens, and we can expect another spate of “OMG DOWNTOWN IS DEAD” commentary. And i’ll be just as overblown.
Anyway, we have been overbuilding, and the Nova Centre is definitely not needed on the market right now. Hopefully new development cools down to allow time for things adjust, and hopefully we get smarter about essentially subsidizing business parks. But the whole idea that remote work and telecommuting will create some decentralized workforce and render downtowns obsolete has really turned out to be kind of a pipe dream. There’s really nowhere that it’s happening in a major way, and in fact, the opposite is what’s actually been playing out. North Americans downtowns are more in demand than ever. (Halifax is behind on this trend, largely because we have a uniquely large amount of square footage out in over-subsidized office parks. But we came to the downtown living trend late too, and now we’re making up for lost time in a hurry.)
It’s incredible, observing what downtown Halifax looks like today vs. five years ago (vis-a-vis retail, residential, and people on the street) that the “downtown is dying” meme still has legs in this town. I’m starting to suspect we could have a 100% occupancy rate and thousands of people living downtown, and we’d still hear Haligonians crowing that it’s dead or dying.
Downtown HFX is done for business, just like every other downtown core in every small town in this province. There’s only one hope, and that’s a lot of dirty foreign money that needs a safe spot. Great option if you’d sell your mother for a 1% increase in municipal tax revenue *cough* Gregor Robertson *cough*
Maybe we should launch an outreach program to Asia to try and get some of that action going here? Halifax needs to be ‘world-class’ like Vancouver.
Vancouver has had a world class slum for several decades. I have seen slums, and then I saw DTES. Somehow liberal minded politicians cannot fix it.