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Affordability, Gentrification and Adaptation in Vancouver, Canada

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Vancouver is one of a handful of global cities where real estate values have grown exponentially as investors from within North America and around the world continue to seek safe and attractive investment options. However, as home prices have continued to rise, Vancouver's average income levels have remained stagnant. The local housing market has become de-coupled from the local "real economy". This, along with increasing costs of child care, food and drinks, post secondary tuition, fuel, insurance and other factors have contributed to a crisis of affordability in the city.

The debate in Vancouver has been heated, with many framing the issue in terms of wealthy mainland Chinese often being the assumed cause of the housing price inflation, but at the same time the discourse in Vancouver has cautioned the city to not lay the blame for its un-affordability crisis one any one single group of people, particularly on basis of race or nationality. As this discourse is unfolding there is evidence of adaptation and innovation happening in both the property development sector, in local government, and in the local populations particularly affected by cost of living challenges, mainly younger adults choosing to remain in Vancouver. These are evidenced through such things as innovation in land use and planning, built form, social enterprise and the sharing economy.

Due to the nature of Vancouver's geography and the temporal pattern of development over the past few decades there is speculation, and early evidence, that developers and even the City of Vancouver itself are now focusing on Vancouver's Eastern neighbourhoods to absorb new housing as the downtown core and western neighbourhoods are believed to be nearly fully developed. This has caused concerns about displacement and gentrification and has resulted in numerous forms of activism. This blend of resistance, adaptation, innovation and speculation is examined through a discourse analysis of local media in Vancouver and numerous case studies highlighting examples of innovation, adaptation and resistance in the city. It was shared by Wes Regan, Executive Director of the Hastings Crossing Business Improvement Association and Graduate Student at Simon Fraser University's Urban Studies Program, at the Urban Land Institute Cascadia Young Leaders Conference in Portland Oregon, July 2014.

Published in: Economy & Finance
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Affordability, Gentrification and Adaptation in Vancouver, Canada

  1. 1. Affordability and Livability in Vancouver, BC An analysis of discourse and adaptation Wes Regan Urban Land Institute Cascadia Conference 2014 Portland, Oregon
  2. 2. So…who’s this guy?
  3. 3. Trivia time! Alex asks: Which city consistently ranks as the most livable in North America and occasionally THE WORLD?
  4. 4. That’s right! It’s Vancouver
  5. 5. !Double Jeopardy! Alex asks: “What’s the most expensive city in North America in which to live? New York? Los Angeles? Vancouver? Toronto?
  6. 6. Right again! Vancouver is North America’s most unaffordable city
  7. 7. But we lose to Hong Kong for the global unaffordable housing title
  8. 8. This is usually what happens when we come in 2nd place
  9. 9. Some context…
  10. 10. Some more context…
  11. 11. Rising Home Values - Stagnant Incomes
  12. 12. 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…
  13. 13. Would you like some extra debt with your cappuccino?
  14. 14. So who’s buying? Who’s driving up those prices??
  15. 15. The China Syndrome….
  16. 16. “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
  17. 17. Vancouver’s real estate market has been “Globalized”
  18. 18. So how about “the locals” (who moved from all over the world to live here…)
  19. 19. “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.”
  20. 20. An exodus is perhaps exaggerating…people are still moving here, and staying here.
  21. 21. The ones who have stayed, or moved here, are truly innovative and adaptive Sharing economy also a response to affordability crisis?
  22. 22. COV and Developers are creating various cubby holes and bunkers for these 20 and 30 somethings
  23. 23. City Responding in Innovative Ways Laneway housing (carriage house etc.)
  24. 24. Container housing, drives down costs improves proforma
  25. 25. Some others aren’t taking it so well
  26. 26. 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…
  27. 27. “THE VISION VANCOUVER–CONTROLLED council has tried to mollify residents who've expressed outrage over the community-planning process.”
  28. 28. DTES Local Area Plan
  29. 29. Significant changes to density and heights via “urban villages”
  30. 30. 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”
  31. 31. Thank you
  32. 32. Bonus extra slides…
  33. 33. 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
  34. 34. Drive down costs and improve pro-forma?  Wood frame buildings  Container housing  Relax parking requirements  DLCs and CACs (Value capture tools)  Permit facilitation and permit bundling
  35. 35. 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

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