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If having essentially no affordable housing rendered a city an economic ghost town, then much of the Bay area and Manhattan would be "ghost towns" - which, in t

If having essentially no affordable housing rendered a city an economic ghost town, then much of the Bay area and Manhattan would be "ghost towns" - which, in turn, would lower housing prices radically. What might happen to Vancouver is probably similar to other major cities with housing crunches but an otherwise desirable economic climate: lower wage workers will be displaced further from the city and forced to commute, housing prices will remain astronomical and suck much of the gains from the area.

eigenvector 11y ago
The article's gist is that Vancouver lacks the "otherwise desirable economic climate" that makes the SFBA, Manhattan and London housing markets at least tolerable. Rather than being a side-effect of explosive economic growth as in SF, the housing prices are totally out-of-step with the local economy.
- yelnatz 11y ago
  It's really painful. Having average home price of $1.8m while the median salary is at $60k. Something really needs to be done to help out Vancouverites.
  - mjmahone17 11y ago
    Would it be as big a problem if people had a strong incentive to rent their property? I know most people like owning property, but renting often makes more economic sense. Especially when the cost to rent is significantly below a monthly mortgage. As a city, Vancouver has the ability to vote for significant property tax increases. Which would encourage investors and speculators to rent out more of their (currently empty) property in order to offset the yearly cost of ownership. Right now, it probably is more expensive to sell property that currently has renters living in it, because evicting people is a messy, expensive and difficult process. But higher property taxes make it more expensive to own: a tax of 3% per year completely eats up a 3% yearly increase in property value. Unless you offset the tax through other income.
  - throwaway23333 11y ago
    I don't understand why everybody keeps talking about the "average home price" and comparing it to salaries. Homes in good neighborhoods in Vancouver are nowhere near that price unless you want to live in a little mansion. And I'm fairly certain that the median salary is largely comprised of the service industry. The other thing I keep seeing is "in Quebec it's much more affordable..." Yes, and your salary would be much lower and your taxes higher. Apple and oranges?
    - CountSessine 11y ago
      Are you on MLS? Base house price west of Cambie is $2M (and it goes soooo much higher). Base house price in the rest of Vancouver is $1.5M. Base house price in Burnaby is now $1M. In Poco/Coquitlam/Port Moody you can find a few 'gems' for about $800k. I think the person you were responding to was pretty much spot-on. I make about 100k. I've had job offers for Quebec that are 100k. Seriously - there's absolutely no payscale advantage or allowance for living in Vancouver. And provincial taxes in Quebec aren't much different at that tax bracket either.
    - switchbak 11y ago
      Given that 91% of homes are now valued at > 1 million, I think you're quite wrong on this point. Mansions do throw off the average, no doubt, but there's no denying that the typical house price for a typical Vancouverite is now north of a million dollars: http://www.vancitybuzz.com/2016/01/vancouver-homes-valued-1-million-2016/ http://www.vancitybuzz.com/2016/01/vancouver-homes-valued-1-...
jessewmc 11y ago
The problem in Vancouver is the house prices are not driven by economic activity in the city itself. Bay area and Manhattan prices are a product of the local economies. Vancouver prices are a product of speculation and wealthy people who live/have property there but don't work there.
- vonnik 11y ago
  You should look more closely at Manhattan and SF. There is a ton of speculation, luxury highrises, and out-of-town wealthy buying second-, third- or fifth homes.
  - acchow 11y ago
    You really don't see any empty homes in SF...
    - jonsmit 11y ago
      Anecdotally I see a lot of empty apartments here in SF. Not as bad as London though. I basicslly had an entire massive luxury apartment complex to myself. I would walk around the halls drinking with friends carrying a prop ax pretending we were in the shining. Good times.
    - vonnik 11y ago
      I don't think we have a lot of transparency on the how often the tenants and owners of luxury apartments are actually inhabiting them.
- stanmancan 11y ago
  Exactly this. A significant portion of the housing is being bought by foreign investors who don't even live here. Not only is it raising the pricing of the housing, but you don't get the economic benefit of said wealthy individuals living in the city. I recall reading an article about a local coffee shop. A number of new buildings were built around it, all residential condo's. The condo's in the buildings were completely sold out, hundreds of units, yet it was a ghost town around there. The coffee shop, and I believe a local pub as well, ended up going out of business because despite all the units being purchased, nobody actually lived in them. Similar experience, my office is in the heart of downtown, right on the water. A beautiful building went up beside us, all condo's for sale, starting at $1.5 million. They got bought up instantly. However, once the building opened, I looked out my window and into a building where 90% of the units remained completely empty (no curtains) for well over a year until I switched desks. Foreign investors buy up all this property and it just sits there...empty. Meanwhile everyone that lives and works here is being priced out.
prostoalex 11y ago
I have an anecdotal example of a friend living in SF complaining about high price of garbage disposal installation. To me it made sense, as anybody making living as a plumber is likely to be priced out of SF (unless they bought back in the 70s), so you're paying for guy's commute from Union City or Hayward or Fremont + garbage disposal installation + commute back.
mahyarm 11y ago
As someone who moved from Vancouver to SF 4-5 years ago: 1. You can drive across a bridge to the east bay and find housing that is half price in semi decent neighborhoods. You can drive out for 2 hours and find housing that is the standard american price. In vancouver, driving for an hour just gives you a 100-200k discount on housing that is already over $1 million, there are no real affordable places to escape to unlike the USA. 2. Nobody in vancouver makes an income over six figures unless you're in the standard professions that make that much, such as doctors, high level managers and successful business owners. Only a very small amount of people are in those professions, and those jobs are not concentrated in any specific area. You could go be a doctor in quebec, alberta or some other small town and still make a similar income but have a far lower housing cost. There is nothing unique or high powered economically about Vancouver, it's not the center of anything. Vancouver's economic climate is NOT desirable. 3. This affordability issue has been a problem for almost a decade, and the provincial & federal governments show no real signs of having any desire to fix it. The only thing that makes it pseudo-affordable is the fact that rent is usually half price to a current mortgage. Housing has increased in vancouver 1:1 with the GDP of the city last year, which is freaking insane. People who have owned houses have gained more than their incomes for years! For comparison, the crazy SF Bay Area is something around 1:6 with (house value increases):GDP. 4. If you're stuck in canada, then there are better places to go to as far as money:price ratios go. I could go on and on about this, but you get the general idea. Vancouver is pretty much dead to me economically and it saddens me that it will never be a good idea to move back at this rate.
- analyst74 11y ago
  "The only thing that makes it pseudo-affordable is the fact that rent is usually half price to a current mortgage." That is an important point, and why some of my friends moved there despite knowing they won't be able to buy their own place. This also seems quite unique to Vancouver, in most other places, like SF, high housing prices implies high rental prices.
- edwinnathaniel 11y ago
  > 2. Nobody in vancouver makes an income over six figures unless you're in the standard professions that make that much, such as doctors, high level managers and successful business owners Intermediate Software Developers these days made that much for a select few companies (thankfully large ones that hire more and more people).
beatpanda 11y ago
Plot twist: most of the Bay Area is a ghost town, culturally.

eigenvector 11y ago

The article's gist is that Vancouver lacks the "otherwise desirable economic climate" that makes the SFBA, Manhattan and London housing markets at least tolerable. Rather than being a side-effect of explosive economic growth as in SF, the housing prices are totally out-of-step with the local economy.

yelnatz 11y ago
It's really painful. Having average home price of $1.8m while the median salary is at $60k. Something really needs to be done to help out Vancouverites.
- mjmahone17 11y ago
  Would it be as big a problem if people had a strong incentive to rent their property? I know most people like owning property, but renting often makes more economic sense. Especially when the cost to rent is significantly below a monthly mortgage. As a city, Vancouver has the ability to vote for significant property tax increases. Which would encourage investors and speculators to rent out more of their (currently empty) property in order to offset the yearly cost of ownership. Right now, it probably is more expensive to sell property that currently has renters living in it, because evicting people is a messy, expensive and difficult process. But higher property taxes make it more expensive to own: a tax of 3% per year completely eats up a 3% yearly increase in property value. Unless you offset the tax through other income.
- throwaway23333 11y ago
  I don't understand why everybody keeps talking about the "average home price" and comparing it to salaries. Homes in good neighborhoods in Vancouver are nowhere near that price unless you want to live in a little mansion. And I'm fairly certain that the median salary is largely comprised of the service industry. The other thing I keep seeing is "in Quebec it's much more affordable..." Yes, and your salary would be much lower and your taxes higher. Apple and oranges?
  - CountSessine 11y ago
    Are you on MLS? Base house price west of Cambie is $2M (and it goes soooo much higher). Base house price in the rest of Vancouver is $1.5M. Base house price in Burnaby is now $1M. In Poco/Coquitlam/Port Moody you can find a few 'gems' for about $800k. I think the person you were responding to was pretty much spot-on. I make about 100k. I've had job offers for Quebec that are 100k. Seriously - there's absolutely no payscale advantage or allowance for living in Vancouver. And provincial taxes in Quebec aren't much different at that tax bracket either.
  - switchbak 11y ago
    Given that 91% of homes are now valued at > 1 million, I think you're quite wrong on this point. Mansions do throw off the average, no doubt, but there's no denying that the typical house price for a typical Vancouverite is now north of a million dollars: http://www.vancitybuzz.com/2016/01/vancouver-homes-valued-1-million-2016/ http://www.vancitybuzz.com/2016/01/vancouver-homes-valued-1-...

jessewmc 11y ago

The problem in Vancouver is the house prices are not driven by economic activity in the city itself. Bay area and Manhattan prices are a product of the local economies. Vancouver prices are a product of speculation and wealthy people who live/have property there but don't work there.

vonnik 11y ago
You should look more closely at Manhattan and SF. There is a ton of speculation, luxury highrises, and out-of-town wealthy buying second-, third- or fifth homes.
- acchow 11y ago
  You really don't see any empty homes in SF...
  - jonsmit 11y ago
    Anecdotally I see a lot of empty apartments here in SF. Not as bad as London though. I basicslly had an entire massive luxury apartment complex to myself. I would walk around the halls drinking with friends carrying a prop ax pretending we were in the shining. Good times.
  - vonnik 11y ago
    I don't think we have a lot of transparency on the how often the tenants and owners of luxury apartments are actually inhabiting them.
stanmancan 11y ago
Exactly this. A significant portion of the housing is being bought by foreign investors who don't even live here. Not only is it raising the pricing of the housing, but you don't get the economic benefit of said wealthy individuals living in the city. I recall reading an article about a local coffee shop. A number of new buildings were built around it, all residential condo's. The condo's in the buildings were completely sold out, hundreds of units, yet it was a ghost town around there. The coffee shop, and I believe a local pub as well, ended up going out of business because despite all the units being purchased, nobody actually lived in them. Similar experience, my office is in the heart of downtown, right on the water. A beautiful building went up beside us, all condo's for sale, starting at $1.5 million. They got bought up instantly. However, once the building opened, I looked out my window and into a building where 90% of the units remained completely empty (no curtains) for well over a year until I switched desks. Foreign investors buy up all this property and it just sits there...empty. Meanwhile everyone that lives and works here is being priced out.

prostoalex 11y ago

I have an anecdotal example of a friend living in SF complaining about high price of garbage disposal installation. To me it made sense, as anybody making living as a plumber is likely to be priced out of SF (unless they bought back in the 70s), so you're paying for guy's commute from Union City or Hayward or Fremont + garbage disposal installation + commute back.

mahyarm 11y ago

As someone who moved from Vancouver to SF 4-5 years ago: 1. You can drive across a bridge to the east bay and find housing that is half price in semi decent neighborhoods. You can drive out for 2 hours and find housing that is the standard american price. In vancouver, driving for an hour just gives you a 100-200k discount on housing that is already over $1 million, there are no real affordable places to escape to unlike the USA. 2. Nobody in vancouver makes an income over six figures unless you're in the standard professions that make that much, such as doctors, high level managers and successful business owners. Only a very small amount of people are in those professions, and those jobs are not concentrated in any specific area. You could go be a doctor in quebec, alberta or some other small town and still make a similar income but have a far lower housing cost. There is nothing unique or high powered economically about Vancouver, it's not the center of anything. Vancouver's economic climate is NOT desirable. 3. This affordability issue has been a problem for almost a decade, and the provincial & federal governments show no real signs of having any desire to fix it. The only thing that makes it pseudo-affordable is the fact that rent is usually half price to a current mortgage. Housing has increased in vancouver 1:1 with the GDP of the city last year, which is freaking insane. People who have owned houses have gained more than their incomes for years! For comparison, the crazy SF Bay Area is something around 1:6 with (house value increases):GDP. 4. If you're stuck in canada, then there are better places to go to as far as money:price ratios go. I could go on and on about this, but you get the general idea. Vancouver is pretty much dead to me economically and it saddens me that it will never be a good idea to move back at this rate.

analyst74 11y ago
"The only thing that makes it pseudo-affordable is the fact that rent is usually half price to a current mortgage." That is an important point, and why some of my friends moved there despite knowing they won't be able to buy their own place. This also seems quite unique to Vancouver, in most other places, like SF, high housing prices implies high rental prices.
edwinnathaniel 11y ago
> 2. Nobody in vancouver makes an income over six figures unless you're in the standard professions that make that much, such as doctors, high level managers and successful business owners Intermediate Software Developers these days made that much for a select few companies (thankfully large ones that hire more and more people).

beatpanda 11y ago

Plot twist: most of the Bay Area is a ghost town, culturally.