Today Patrick Condon (a friend and colleague whose passion I admire) wrote a column in the Tyee. A media outlet I admire. He writes about a book by John Gray, a local writer I also admire.
In his column, Patrick criticizes the expensive condos that are going to be built along the Broadway Corridor.
“The one thing we know with certainty is that these potential 15 million square feet of new condos will not sell for less than $1,200 a square foot.
You can just barely get a tiny two-bedroom unit into 700 square feet. That means it will cost you $840,000 to get into that baby”
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Why does new housing so often costs $1200 psf. Or more. Let’s analyze what it costs to build a condominium.
What do you think is the current construction cost for a new concrete building meeting Vancouver’s Building code? (Yes, Vancouver has its own Building Code which makes it more expensive to build here than say Burnaby or Richmond).
Is it $200 a foot? $250? $300? $350?
Based on my recent experience, it costs more than $400 a foot for a fairly standard product. Rental or condo. The estimated cost for a 6-storey concrete building on the West Side of Vancouver with which I am familiar is closer to $500 psf.
Now, what do you think the ‘soft costs’ are? These include consultant fees (on most projects there will be 15 different consultants), permits, DCLs, Metro DCLs, other municipal fees, taxes, Homeowner Protection Office fees, legal, insurance, development management. Guess! Did you say 10% of the construction costs? You’re low.