Boomtown Reston

Whaddya know .. CTV had a story about Reston Manitoba on the news today, about selling plots of land for $10. As chance would have it, I happened to be in that very same hamlet this past weekend.

CTV is certainly correct that Reston is experiencing a boom. A "boom" in Reston terms involves two duplexes being built as we speak, in addition to several other houses that were recently constructed or moved in as pre-fab units. This may not sound like much, but in relative terms, Reston's recent growth would be equivalent to 45,000 people moving into Winnipeg in one year.

With growth comes opportunity.

$10 in Reston might not get you as much as it does in Maricopa County Arizona, but it's still a pretty good deal. There may be potential for some big real estate gains there for an enterprising real estate speculator if the oil keeps flowing in that corner of the province. Be sure to read the fine print before pulling the trigger. You will need to actually build a house, and you might even have to live in it too.

If building a new house doesn't appeal to you, there are some other potential opportunities:

The Panda: Reston's requisite Chinese food restaurant The Panda is up for sale. If you want a captive market and don't mind a little cooking, this is for you. Your only competition is the Dennis County restaurant up the street. By the way, if you eat at Dennis County I recommend the hamburger steak. Avoid the chicken filet.

Beverage Room: Reston did have a bar, much like every other small town bar, but it burned down. The owner has not yet begun to rebuild due to an insurance dispute, and this leaves a wide opening for YOU. Oil workers pulling in 200 Gs need places to drink too, and right now Reston is not providing that. If you blow into town and build a new bar, you can capture some of that small town binge down magic.

Hotel: Since you're building a bar, you might as well build a decent place to stay while you're at it. There were a few rooms at what used to be the bar, but even if they're technically still open (and I'm not sure they are), you probably don't want to actually sleep there unless the spot under the bridge on the golf course is already occupied. Neighboring Pipestone doesn't have a hotel anymore. For visitors to the area, there's not much choice but to stay in Virden half an hour away.

Tim Hortons: Reston lies on highway 2 at that magical three hour mark from Winnipeg -- the point at which everybody in the car needs to take a whiz and refuel on coffee -- yet there is no coffee to be had along the highway. In fact from the Perimeter highway to the Saskatchewan border and beyond, you will not find a Timmy's anywhere. True, this highway is nowhere near as busy as the TransCanada, but there is also nowhere near as many places to stop. Thanks to a new card lock Co-op gas station, many more truckers are pulling off the highway at Reston than ever before. This, combined with passenger cars filled with under-caffeinated people filled pee, combined with locals who want a change of scenery, spells success!

****** UPDATE ******

The message is spreading. Yahoo! is now covering the story, so you had better hurry! I should also warn you that I'm getting quite a few google hits about this story.

See also Slurpees and Murder.

Derelict Properties Bylaw?

The news that the City of Winnipeg seized an apartment building under their vacant building bylaw stoked up a little idea that was smoldering amongst the moss and twigs in my mind: Perhaps this bylaw could be expanded to include empty lots as well.

I am thinking of a couple in particular. One is on Portage avenue between Edmonton and Kennedy St. It used to be a small park with giant jelly beans that you can sit on, and apparently had a name other than "Jelly Bean Park" which is what I called it, but I don't recall what that name was. It was purchased by a fellow named Ray Rybachuk, fellow developer Russ Knight and his lawyer friend Ken Carroll who came forward with a plan to build a 12-story office and parkade there. That plan was probably a ruse from the beginning, as nothing ever happened there and it doesn't appear as though anything ever will. Instead, the park was turned into a make-shift gravel parking lot that violates every rule the city has about surface parking lots, which are an eye sore at the best of times. (See the bottom of this post for more dirt on Raymond J Rybachuk.)

If only the city had some sort of way to reclaim emply lots by law that are being willfully misused by derelict owners. We could call it a "bylaw" or something. Yeah, a "derelict property bylaw". That sounds catchy!

Honesty though, the city should have the ability to reclaim this land, as the owner is clearly not going to develop it as intended and is blatantly flouting city rules. It is also an ugly "missing tooth" on a high visibity street, and thus has greater negative impact than just any old vacant lot. Perhaps if the rules had more teeth, like the ability of the city to secure this property, then owners like Rybachuk might be more inclined to get their act together.

Another property that I fear may befall the same fate is the old Fat Angel lot on Main Street. Yes, I know what I said:

There are certain buildings that are just so ugly -- so disfiguring to the urban streetscape -- that they must be destroyed, even if it means replacing them with a gravel parking lot.

but to be fair, one of my staffers wrote that piece because I was busy smoking pot and counting ceiling tiles. I am slightly worried though: cars are starting to appear on the site of the old Fat Angel on Main -- another high visibility area -- although they may only be on what used to be the paved area behind the old building. However this may creep into becoming a full blown contraband gravel parking lot as well.

We need a carrot and stick policy. There should be incentives or encouragement for developing crucial areas like this, possibly including access to Tax Increment Financing. The city also needs to get out of the way of progress. There are numerous stories of costly red tape, most recently Basil's fight for a simple liquor license to reopen an establishment in Osborne Village. But there also needs to be a stick to move things along and prevent abuse.

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Ray Rybachuk does not have a good track record. For example, after scrapping his plan to develop the building adjacent to Jelly Bean Park, he put up a large lighted sign on the historic Boyd Building without permission, and only asked for permission after the fact when people started to complain. The city ordered him to take it down, or they would do it for him and charge him for it ... which did not happen. The sign remains, although he did grudgingly turn it off.

The name "Ray Rybachuk" comes up in another unseemly story as well, about stealing proprty. And then there's this: one guy on a website called scaminformer.com writes:

Keep in mind Raymond Rybachuk is a convicted cocaine dealer, so how much credibility should you extend to someone with that kind of history?

And more importantly, why is a lawyer Ken Carroll or a real estate professional Russ Knight associated with a known cocaine dealer? Or are they anymore, considering Raymond Rybachuk was evicted from his office on the 8th floor of the Boyd Medical Centre, and is now continuing his slumlord business from Lead Management on Notre Dame St in Winnipeg.

If you are a business professional, be very wary of dealing with anyone associated with Raymond J Rybachuk, including Lead Management, Ken Carroll, Russ Knight, Boyd Medical Centre or any investments offered using the phone numbers 204-951-6750 or 204-989-0635 these are the main numbers used by Raymond J Rybachuk in perpertrating his investment scams, including his most recent attempt at selling property in Belize that he doesn't even own.

Probably the same guy goes on another rant about "big fat guy Raymond Rybachuk" on a web site called ripoffreport.com.

More bizaarly, the website rayrybachuk.com advertises oceanfront property while accusing Rybachuk of being a scam artist and "convicted cocaine dealer". I don't know if this web site was hacked or what, but it is very strange.

Only $50k for a convicted cocaine dealer? And I can finance? I'd be crazy not to buy!

I didn't link to these web sites on purpose because they are kind of icky, but you can find them easily enough. Sombody certainly has it in for this guy though.

** Update **
Thanks to a certain person with access to the Free Press archives, I can confirm that Rybachuk was in fact arrested in relation to a drug smuggling operation.

Updates: film fest and rent controls

Once again my spongee game has been post-poned, this time because of blowing snow, so I have a chance to follow-up on a couple of subjects:

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Reminder, the 2nd Annual Afghan Film Festival & Mini Market is this Saturday.

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I really wasn't planning on writing anything more about rent controls, because it's really not a subject I'm all that passionate about. I haven't rented for over 5 years, and the last time I rented I had the laziest landlord in the city who never bothered to increase my rent by any amount.

But, alas, I am compelled to give an update on the rent control issue because fellow blogger and media insider Miss Martin made me aware of a new position paper released by the Winnipeg Realtors org. You can find the paper here.

I do not have time to go into the kind of detail that I did with my previous posts, but you probably won't be surprised to find out that it arrives at different conclusions than the government comissioned paper by Prof. Hugh Grant did. In fact, it points to rent controls and what it calls a "cumbersome and unbalanced Residential Tenancies Act" as the main culprits behind the low vacancy rate.

What became abundantly clear in meeting a number of the REIN (Real Estate Investment Network) members was how reluctant they are to consider Winnipeg as an investment opportunity, knowing that their private capital will fall under a rent control regime.

There's an idea. Want to know why developers aren't building apartments? Talk to the people holding the chequebooks!

The paper does not recommend getting rid of rent controls entirely (perhaps knowing it would be politically unfeasible) but it does recommend implementing "softer" rent controls, as can be found in some other provinces.

The Ontario experience of softening rent controls in 1998 has resulted in steadily growing new rental construction. ... CMHC has reported that Toronto vacancy rates went from .8 per cent under a system of rent controls similar to Manitoba’s in 1997 to 3.8 per cent in 2003. They still remain much higher than Winnipeg’s at 3.1 per cent in 2009 and 2.1 per cent in 2010.

It also recommends reforming the Residential Tenancies Act and other regulations, implemeting portable shelter allowances to assist low income renters, and jump-starting construction with development incentives.

Keeping in mind that Winnipeg Realtors may not be an unbiased organization, there is a lot of common sense in there. Not much in the way of number crunching though. I still wouldn't mind finding something unbiased with more statistical analysis, but for now I might just put this puppy hibernation.

Rent controls and graphs. Lots of graphs ...

My spongee game tonight was cancelled due to melting ice, so I guess I'll blog. Lucky you.

I had bought into the idea that the lack of apartments in Winnipeg are an unintended consequence of rent controls. Artificial restrictions on profitability will prevent people from building units, right? Makes sense to me. If you take away the upside then all you're left with is the risk.

Now the Free Press is telling me I'm wrong. My beliefs have been shattered into a million pieces, like the mold spores on the ceiling of my last apartment. Apparently some guy did some report for the government that say that rents controls have nothing to do with it:

The 39-page study, authored by University of Winnipeg economics professor Hugh Grant, also concludes "there is no evidence" that caps on rent have slowed the pace of new apartment construction or spurred a recent spike in condo conversions. Furthermore, the provincial government-commissioned report says there is no proof rent regulations have "unduly restricted" rent rises in Manitoba.

Damn you, Hugh Grant! As if all those boring chick flicks weren't painful enough. Now this!!

What do we know about Hugh? Well, he's an economics prof for the U of W. He has written about immigration, he seems to be a well liked teacher, and much like the other Hugh Grant, he gets a chili pepper for hotness:



That's something, I guess.

But still .. should we believe him? The article says that rent controls came into place permanently in 1982. Our vacancy rate looks like this:

Our vacancy rate actually sky-rocketed after rent controls came in. The problems really seemed to begin around 2000. Conclusion: it's all Doer's fault!! There, that was easy.

Or ... we could look into it a little more ...

One of the things that Hugh concludes is that "the rental shortage is largely due to a rapid increase in demand sparked by an aggressive immigration policy". Okay, let's look at immigration:

Manitoba was still losing people to other provinces (pink line), but there was indeed an increase in immigration (deep thought of the day: why do they call it "immigration" instead of "inmigration?") around 2000. I suppose that when people move out of the province, they are generally moving out of their parents' basements, but when people immigrate in, they generally move into apartments instead of parents' basements. Unfortunately I couldn't find any CANSIM data on parents' basements vacancy rates to confirm.

So it looks like immigration may be the culprit, but maybe we should do some statistical analysis just to make sure. Okay .. let's see if I can remember how to do this. Open the crunch-o-matic number cruncher ... put the data here ... feed the thread around the post ... put the bobbin in the hole ... ah, screw it. Here's another graph:

Looks like a smiley face. See, what happened was that vacancy rates actually dropped in the 1990s as immigration dropped. Maybe there is something else at work. What we do know is that apartment construction dropped off the map in the 90s:

... possibly because they began to realize that more often than not rent increases were not keeping up with inflation:


... and eventually our lack of apartments caught up with us as immigration picked up and now we have a vacancy rate of nothing.

If rent controls weren't a factor, then why would the government implement a 20 year exemption on rent controls to encourage new development? I remain unconvinced that rent controls are not the problem. The exemption should help, but as per usual when government regulations meddle in the functioning of a market, the market gets all fucked up and can't reach equilibrium. Hugh Grant should know something about equilibrium. He's an economics prof.

Spring cleaning, gonzo twins, privacy

Spring Clean-up

If you live in the St.Vital or south St.Boniface area of Winnipeg, here's something for you to do this weekend: Bishop Grandin Greenway is having it's annual spring clean-up, Saturday from 10:00 am to noon. Get outside, meet some people, and help clean up your neighbourhood.

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Separated at birth?

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Hey everybody! Don't look at me!

Whether you're a homeless person, or a multi-millionaire, if you value your privacy, stay the hell away from Gordon Sinclair. Gordon almost gave me a migraine this morning with his column about the couple who is listing a house for $7.4m:

the wife and mother of two -- who considers me a friend -- phoned Thursday ... she was fearful their otherwise private lives were about to become public.

... he writes, while dropping hints about who exactly the couple is (He owns a local business, recently expanded into the U.S., they have two daughters, one of whom moved to San Diego; they are well know for their local philanthropic and volunteer work; etc..), helpfully suggesting that people check it out on Google Steetview, and succeeded in getting a leader for the column on the front page of the Saturday Paper. Ya ... that's gonna help with the whole privacy situation.

Though one might suggest that by listing a, perhaps, $2m house for $7.4m, they were intentionally trying to generate buzz in media. I don't know ... you tell me:

Though it looks quite nice from the back. A nod to Modern Houses of Winnipeg blog for noticing this a week before the press picked up on it (not that it is necessarily newsworthy). See also New Winnipeg.