Affordability, Gentrification and Adaptation in Vancouver, Canada

Affordability and Livability in Vancouver, BC An analysis of discourse and adaptationWes ReganUrban Land Institute Cascadia Conference 2014 Portland, Oregon

So…who’s this guy?

Trivia time!

Alex asks: Which city consistently ranks as the most livable in North America and occasionally THE WORLD?

That’s right! It’s Vancouver

!Double Jeopardy!

Alex asks: “What’s the most expensive city in North America in which to live? New York? Los Angeles? Vancouver? Toronto?

Right again! Vancouver is North America’s most unaffordable city

But we lose to Hong Kong for the global unaffordable housing title

This is usually what happens when we come in 2nd place

Some context…

Some more context…

Rising Home Values - Stagnant Incomes

Rising Home Values - Stagnant Incomes

“The average income in Metro Vancouver in 2009, was only $41,176, according to Canada Revenue Agency statistics. In Vancouver proper, we are getting by on $43,911. However, Richmond residents are barely scraping by at $33,350 a year — the lowest average income in the region, followed by Burnaby, with an average of $34,961…With the average selling price of a detached house in Vancouver at $1.116-million, the incomes do not.”

- For Vancouver, housing and income don’t add up, Kerry Gold, Globe and Mail, June 7th 2013

But it’s not just our housing that’s expensive…

Would you like some extra debt with your cappuccino?

So who’s buying? Who’s driving up those prices??

The China Syndrome….

“Nowadays, I tell you, when you open the door selling a house, 99% it’s Chinese,” she said, doing her best to summarize the situation between calls on her cellphone.

“That’s why I have to talk fast – my schedule is so busy!”

Business In Vancouver

Vancouver’s real estate market has been “Globalized”

So how about “the locals” (who moved from all over the world to live here…)

“There are so many people with great skill sets, really the emerging leaders of this city, who are leaving because they can’t have kids and live here,” says Tremain. “They can’t afford the accommodation.

It’s partly a generation gap, where all these people came of purchasing age at a point when the market took off. It’s just bad luck, bad timing.”

An exodus is perhaps exaggerating…people are still moving here, and staying here.

The ones who have stayed, or moved here, are truly innovative and adaptive

Sharing economy also a response to affordability crisis?

COV and Developers are creating various cubby holes and bunkers for these 20 and 30 somethings

City Responding in Innovative Ways

Laneway housing (carriage house etc.)

Container housing, drives down costs improves proforma

Some others aren’t taking it so well

The downward (or Eastward) pressures of high livability and low affordability

The overall housing and affordability crisis is putting pressure on low-income areas (EastVan) where the gentrification debate has been raging for the past few years as development creeps eastward…

“THE VISION VANCOUVER–CONTROLLED council has tried to mollify residents who've expressed outrage over the community-planning process.”

DTES Local Area Plan

Significant changes to density and heights via “urban villages”

Summary…Local income levels and rising house values are out of

synch – but there are several other influencers of affordability (child care, tuition, $15 glass of wine etc)

Qualitatively we feel China, or wealthy Chinese, have something to do with our never-ending rising house values – but that’s a bit of a touchy issue and has been reframed to some degree as “Globalization” of our real estate market

Global pressures are creating local innovations in both housing and built form, zoning and land use, and local use of resources (sharing economy)

Also creating a class based narrative of gentrification as development moves East and residents resist change or are priced out

“Nowhere else to build”

Thank you

Bonus extra slides…

What are our options?Diversify housing (more co-op

housing, co-housing, laneway housing, micro lofts etc.)

Senior levels of government pitch in more for social housing

Increase incomes (Econ Dev? Welfare?)

Foreign ownership tax, luxury tax, flipping tax, raised fees

Vancouver Housing Authority just formed

Drive down costs and improve pro-forma?Wood frame buildings Container housingRelax parking requirements DLCs and CACs (Value capture

tools)Permit facilitation and permit

bundling

Drive up incomes?Firm attraction (VEC)Increase Minimum Wage? Living Wage?Reduce barriers to local SMEs

◦Split assessments◦Mitigate “hot spots” (Tax Commission)◦Floor plate size for retail requirements in

Dev.◦Permit facilitation◦Reduction of permit trigger thresholds