BMG Celebrates 40 Years

Restoration work among the company’s notable accomplishments

It’s not a leap to view Balraj Mann’s personal philosophy as the reason for his professional success as chairman and CEO of BM Group of Companies, whose portfolio includes construction, project management, material supply and land development firms.

Mann’s philosophy that you only have one life and must therefore leave behind a positive contribution dovetails nicely with the activities of BM Group member Polycrete Restorations Ltd, the purpose of which is to restore heritage buildings, commercial facilities and infrastructure.

“The preservation of heritage elements and infrastructure is very important to me,” he says. “We need to preserve the great work of people who came before us and it’s one of several avenues I’ve been fortunate enough to pursue in developing BM Group as not only a multi-service construction resource, but also a business that can provide mentorship for new talent.”

With a 30-year history in consulting, land development, construction and corporate management in B.C., Mann’s BM Group has evolved to include a diverse range of companies: Polycrete, currently celebrating its 40th anniversary; Urban Sawing & Scanning, which provides concrete cutting and structural scanning services; Yard-at-aTime Concrete Ltd., a supplier of quality ready-mix concrete with a specialty of small delivery; plus Contech Services Inc, TEK Roofing Ltd., RMX Logistix, and Dallas Watt Demo Ltd.

BM Group’s real estate development wing consists of Manorlane Homes Inc. (a custom and multi-family home specialist) and Penmat Contracting and Project Management Ltd. (residential and commercial development).

BM Group has earned many achievements, but arguably its restoration work is what the general public would most recognize, examples of which include the recent roof restoration of Christ Church Cathedral in downtown Vancouver and the current restoration of Stanley Park’s seawall. “Many of these projects resonate with me,” says Mann.

“For instance, as an engineering consultant, I inspected and evaluated the seawall over 25 years ago; and as a specialty contractor, I returned to do reparative and restoration work.”

A good deal of Mann’s business values were inherited from his father, a farmer “who worked hard and treated everyone with respect, without exception,” he recalls of his childhood in Punjab, India. Unsurprisingly, this consideration of others has also led to BM Group supporting such causes as BC Children’s Hospital, the Ride to Conquer Cancer and Make a Wish Foundation.

Although Mann is far from approaching retirement, he notes that his son Milan, 22, works for BM Group and “will have the ability to take over the business when the time comes. In the meantime, BM Group will continue to expand, ready to tackle restoration both here and abroad.

“Aging infrastructure is a problem throughout North America and in other parts of the world, and with companies reaching out to us wanting to be a part of BM Group, we’ll expand our ability to provide solutions — as well as provide career opportunities for our employees,” Mann says.

threat to their living situation.

Today in B.C., the possibility that things could get nasty isn’t far-fetched—especially if prices continue to climb steadily. Surging nativism isn’t the only problem on the horizon if housing costs, like some fairy-tale beanstalk, keep growing skyward. But can they?

It’s possible. First, credit remains cheap. Canadians have gorged themselves on debt, and our debt-to- disposable-income ratio now hovers around 170 percent, according to Statistics Canada. Yet ultra-low mortgage rates have meant that in the last quarter of 2017, the national DSR, or household debt service ratio (all mortgage and non-mortgage debt commitments, including principal and interest, also known as the monthly nut), was a little less than 14 percent of average disposable income—holding almost steady since 2007.

(No standalone DSR stats were available for Metro Vancouver. But the inflation-adjusted carrying costs for an average-priced Vancouver home were much less in 2015 than in 1981, when a oneyear mortgage was an incredible 19.75 percent.)

Since July 2017, the Bank of Canada has raised its benchmark interest rate from 0.5 percent to 1.25 percent. Despite those hikes—and a recent warning that more are likely—a cautious, tinkering-at-the- edges approach prevails. That means rates should remain relatively low for the foreseeable future, ensuring that cheap credit and low carrying costs, prime factors in the rise of B.C. house prices, remain in play.

But cheap money isn’t the only driver, as urban planner Andy Yan, director of the City Program at SFU, has been saying for years. Yan’s research into non-resident ownership—notably, his 2015 study found that two thirds of the 172 homes sold over six months in select areas of Vancouver’s West Side had been purchased by people with nonAnglicized Chinese names—kicked the foreign buyer discussion up a notch. It also opened him up to the accusation that his approach flirted with racism, a charge levelled by certain stakeholders who some believed were trying to reframe the conversation, or prevent it from taking place.

Yan, no stranger to racism— his greatgrandfather paid the head tax on Chinese immigrants—uses a computer science analogy to illustrate the ploy. “Basically, it’s looking for an exploit,” he says. “You see a fault in the code which is open, through which you have nefarious players who want to take advantage.”

Today, it’s widely recognized that foreign money, mainly from China, has played a major role in Vancouver’s overheated housing market, and not just at the ultra–high end: according to Yan, non-residents purchased almost 20 percent of condos built in the city since 2016, a torrid pace. But can it continue? An assumption: as demandside measures make things increasingly difficult, global capital will seek out other sandboxes to play in—like booming Montreal, which offers Canadian stability at a discount without the punishing caveats found here.

But Yan says that isn’t happening. The reason? “Networks—bidirectional transnational networks that have historic roots in Vancouver,” he says. Yan pulls up a chart on his computer. It shows that Metro Vancouver is largely a place of immigrants: in 2015-16, they made up 40.7 percent of the population—second in North America to Toronto, with 46.1 percent, but dramatically ahead of other centres like New York (28.6 percent) and San Francisco (30 percent). Vancouver is unique, however, because so many of those immigrants hail from China: almost 20 percent, roughly twice the proportions seen in Toronto and San Francisco, and about five times as many as in New York.

Yan is quick to add that speculative buying affects everyone, regardless of ethnicity:

An assumption:

as demand-side measures make things increasingly difficult, global capital will seek out other sandboxes to play in—like booming Montreal, which offers Canadian stability at a discount without the punishing caveats found here

“People assume that the Chinese community is ‘vaccinated’ from the effects, but they’re just as exposed.” His perspective has been reinforced by appearances on local Chinese-language radio call-in shows. “I may not speak Cantonese, but I do know what pissed-off Cantonese sounds like.”

So, record-low interest rates + huge amounts of speculative capital + local enabling systems for global money = housing prices that could conceivably keep rising, creating a social, class and psychological disconnection between those who own and those who don’t. People just starting to hit their career stride—and those who come after them— will be most affected. If prices continue to climb, many will leave, taking their youthful energy, drive and creativity with them. Others, regardless of age, won’t come; today, recruiting talent for UBC and SFU is very difficult, mainly thanks to cost of living. Business talent shuns us, too. “I don’t think mid-40s executives ever move to Vancouver,” Davidoff says.

The hollowing-out of Vancouver has begun, and if prices continue to skyrocket, the impact will be amplified. The only salvation? Vancouver becomes so expensive that the factors that once made it attractive no longer exist, and property values collapse—belatedly triggering the Homepocalypse and forcing a hard reboot of residential real estate. The light at the end of the tunnel is the proverbial oncoming train.

“Real estate is Vancouver’s true passion, its real blood sport,” writes author and urban planner Lance Berelowitz in his 2005 book Dream City: Vancouver and the Global Imagination. He’s right. From the Canadian Pacific Railway barons who built Shaughnessy Heights to the current crop of carpetbaggers who go door to door pitching the virtues of land assemblies, B.C.’S post-colonial history revolves around trying to sell, resell and squeeze value out of land. This is the economic story of a province where extraction has always trumped production.

Even when we’re engaged in production, the story is complex. Over the past decade, says SFU’S Andy Yan, the real estate industry grew by almost 50 percent; the sector bests fishing, logging and mining as B.C.’S most critical economic engine. (Real estate accounted for 18.36 percent of the province’s gross domestic product in 2016, Statscan reports. In Alberta, oil, gas, mining and quarrying combined for just 16.98 percent of GDP.) Yet over that same period, according to Yan, the number of construction workers only grew by 10 percent. Other industry subsets—real estate agents, for instance— grew disproportionately. The bottom line: when it comes to real estate employment trends, we’re more about transaction than creation.

Still, if prices modestly decrease—or even flatline—it could help. “I think that’s a great scenario,” Davidoff says. “If you have nominal growth, or minus–1 percent a year for five, 10, 15 years—the longer we take a pause, the better.” But can a pause be orchestrated? In a climate where reversion to mean has become old thinking, many agree that something needs to be done to restore sanity to the market.

One way is to build. “We need more supply” has been the longstanding refrain, sung by everyone from social housing activists and urban planners to the development community. The reasoning is ostensibly bulletproof: with the right mix of supply and demand, the twin chakras of housing, balance is attainable. But are we building the right supply? “Yes. We’re building housing and, in fact, we’re building tiny little one-bedrooms, which is exactly what the market wants,” Davidoff asserts.

Others aren’t so sure. “We’ve been relying on supply side as an affordability solution for a decade now, and it’s completely failed,” says Charles Montgomery, who heads a Vancouver-based consulting firm that helps property developers

create happier, healthier places, a practice that grew from his 2013 book Happy City: Transforming Our Lives Through Urban Design. “Simply increasing supply, in some cases, may just be offering more investment opportunities for global capital.”

Part of the supply-sider argument toys with hubris: our province is so supernaturally beautiful, goes this line, that people will always come here in droves. Unless more units are built, newcomers will put even more strain on affordability because demand will continue to outstrip supply. It’s a compelling explanation, but it may not be the whole truth.

A 2017 study by Kwantlen Polytechnic University geographer John Rose found that from 2001 to 2016, while housing prices in Metro Vancouver jumped, the overall population didn’t; for every 100 households who relocated here, 119 units of housing came on the market, pointing to speculative buying, domestic and foreign, as a culprit.

Yan agrees, adding that in the past five years,

Unless more units are built,

newcomers will put even more strain on affordability because demand will continue to outstrip supply. It’s a compelling explanation, but it may not be the whole truth

Vancouver experienced the greatest building period in its history— but. “Vancouver’s population has pretty much chugged along,” he says. “There are many places where the population grew much faster, but the home prices did not.”

The terrifying thing about the “Up, Up and Away!” scenario is that all of the factors necessary for it to occur exist. To address them, we’ve already seen extraordinary measures. Federally, the B-20 financial stress test now makes it likely that lenders will reject almost one in five mortgage applications subject to the test. Vancouver’s Empty Homes Tax is up and running, though initial results indicate far fewer empty homes, or honest disclosures, than expected.

Provincially, raising the existing foreign buyer tax to 20 percent, instituting a so- called speculation tax (that initially cast its net far too wide) and an additional “school tax” levy on homes assessed north of $ 3 million were key moves. The last measure has the furthestreaching implications, signalling the shift from income to wealth taxation. Although loathed by some, this ensures that, say, the affluent suburban homeowner claiming a Downtown Eastside income can no longer escape paying their fair share while at the same time often amassing unheard-of equity gains.

So much in play—all of it designed to give us a breather to create a more equitable, inclusive and, yes, even happier place. But what would that place look like?

Single-family homes would be scarcer— perhaps a necessary shift in a city where for every demolished house, only five housing units get built. (In Toronto and Montreal, the ratios are 20:1 and 30:1, respectively.) In these newly densified areas, what will you build? Purpose-built rental and social housing units are less profitable for developers, so they’d need incentives to take on these projects.

Another problem, less discussed? Those kinds of dwellings are less profitable for cities, too, Uvic economist Elisabeth Gugl notes. Compared to, say, the larger municipal districts of Ontario, which can spread housing policy over a larger tax base, the relatively small Vancouver and Victoria regions compete with nearby municipalities for property tax dollars. They face a stark choice: build rental accommodation and forgo significant tax revenue, or approve condos.

There are alternatives. To address what’s known as the missing middle—the lack of multifamily homes that were once integrated into blocks of predominantly single-family dwellings, like, for example, the walk-up apartments of Vancouver’s Kitsilano and South Granville areas— some have suggested other means of making space within established neighbourhoods.

“Imagine a world where you could take a singlefamily lot, or two, and create not just three dwelling units per lot, but maybe six or seven. And let’s imagine that every third or fourth unit would be part of an affordable housing pool in perpetuity,” Montgomery muses. “Individual property owners could, on a small scale, begin to rebuild the city in a way that made room for more people who want to live and work here, while making profit and creating opportunities for long-term affordability.”

In other words, allow homeowners to monetize their land and assume some of the redevelopment heavy lifting—while creating living spaces that, in their intimacy, theoretically encourage neighbourliness.

It’s pretty to think so. But are we too late? Now that we’re on the international radar, are we just a long play for global investors and domestic speculators? One thing’s certain. The future isn’t what it used to be.

To address the missing middle,

allow homeowners to monetize their land and assume some of the redevelopment heavy lifting—while creating living spaces that, in their intimacy, theoretically encourage neighbourliness