InGastown trades cars for condos
Real-estate marketing executive Cam Good has some free advice for millennials who want to get ahead in life.
“If I was speaking to a young person who owned their car and rented their home, I would suggest to them that they’ve got it backwards,” Good, president of Key Marketing, told the Georgia Straight by phone. “Cars are a bad investment, and real estate is a good investment.”
That’s because the moment a motor vehicle is driven off the dealer’s lot, it starts diminishing in value. Housing, on the other hand, often increases in value. “My car has depreciated 15 percent per year on average,” Good stated. “And my home has appreciated five percent per year.”
Last month, Key Marketing announced an innovative approach that enables people to convert their car into home equity at a 61-unit project called InGastown.
They just have to drive their car to a presentation centre at 32 Water Street to have the vehicle’s value assessed. If they’re satisfied with the valuation, they can, for instance, put this amount toward a down payment on a 501-square-foot suite, which My Gastown Development is selling for $269,800.
According to Good, it’s the first time a company has marketed a condo in this way in Vancouver. And by early February, Key Marketing had fielded 238 applications from prospective buyers. “The average perceived car value [of the applicants] is $5,000,” he said.
Good mentioned that at the presentation centre, there were only three visitors per day on average before the car-for-condo program was announced. Afterward, this rose to 13 visitors per day. He described many of the applicants as “very switched-on 20-somethings” whose iPhones were more important to them than a motor vehicle.
“They’re mostly involved in high-tech start-ups,” he said. “They could be living car-free, because Gastown is a very walkable neighbourhood. And because this building has no parking, it’s a perfect fit for them.”
Of those who filed applications, Good revealed that 31 percent were already living rent-free. This meant they were likely living under the same roof as their parents. Among those saying they were tenants, their average monthly rent was $1,241. Another statistic: renters who expressed interest in the building said they could currently save, on average, about $500 per month above their rent.
However, many hadn’t set aside funds for a down payment, which is why the car-for-condo concept resonated with them. To reach the required five-percent down payment, 61 percent of applicants would have to turn over their cars.
According to Good, here’s how the math works: if someone has a car worth $5,700, Vancity will offer a mortgage, provided the buyer can pay $500 per month over the next 16 months. With a total of $13,700, the purchaser meets the required five-percent down payment.
Good noted that Vancity recognizes that if people get rid of their car, their monthly living expenses will go down. This makes it more likely that they’ll be able to pay down a home mortgage.
The car-for-condo marketing plan comes at a time when young people are driving far less than previous generations did at their age. Toronto-based architect and urban designer Ken Greenberg, author of Walking Home: The Life and Lessons of a City Builder, has tracked this phenomenon.
Last year in an interview with the Straight, Greenberg said that across North America, 26 percent of those between 16 and 34 years old haven’t bothered getting a driver’s licence. He said that many of them want to live in walkable neighbourhoods built before the Second World War.
In 2011, 31 percent of B.C. residents between the ages of 18 and 24 did not have a driver’s licence—up from 21 percent 15 years earlier—according to ICBC statistics. Meanwhile, Mark Betteridge, executive director and CEO of Discovery Parks (which leases space to tech companies) said in a January speech to the Urban Development Institute that many high-tech workers are incredibly resistant to commuting.
“We had an individual recently who defined commuting as going from Yaletown to Great Northern Way—and would not accept a job—even on a bike,” Betteridge said.
This is who Key Marketing is chasing—young people intent on walking rather than driving. And their numbers appear to be growing.