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Without affordable housing, Vancouver risks becoming an economic ghost town

business.financialpost.com

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Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#181

Post by jonknee »

eigenvector wrote: post #172
jonknee wrote: post #57

Earlier quoted context omitted.

I used to live in Florida and amazingly enough the homestead exemption works pretty well. I'm sure there are some people abusing it, but it's effective overall. You can only have it on one home and it doesn't apply to businesses so the only real fraud angle would be to live out of state and take the exemption on a single Florida property. You have to be a citizen or permanent alien resident which weeds out foreign bu…

You can purchase Canadian permanent residency for $800,000 through Quebec's Immigrant Investor Program. This has a big impact on Canadian tax policy because there is no way you can discriminate between foreign and domestic ownership - foreign investors can simply buy a PR card and avoid punitive taxation of foreigners. There are still foreigners in the normative sense of the word, as in they don't and have never live…

You can require presence in the country to a homestead exemption. If you aren't in the country for a large amount of time (say, 180 days) you don't get your exemption. Between that and having it only apply to a single property the incentives to park cash in an empty Vancouver apartment are diminished.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#183

Post by skewart »

msvan wrote: post #143
skewart wrote: post #136

Earlier quoted context omitted.

"1. Build really tall. Hasn't worked out all that great in Hong Kong, though." What do you mean when you say it hasn't worked out great in Hong Kong? Is it because prices are still high in a lot of neighborhoods there? I'd say the build-really-tall strategy has worked out quite well in HK. There is a range of affordability in close proximity with good transit, and lots of parks and open space. It's a remarkably livab…

I'm basing my judgment on hearsay. I was under the impression that HK property prices were through the roof, so I stand corrected.

They certainly are in plenty of neighborhoods - especially compared to other cities in China. The thing is that despite the tall buildings there isn't actually that much supply on HK island itself because it's so tiny. Still, I think there's a much bigger range relative to overall quality of urban life compared to, say, SF. And things get a lot more affordable across the harbor in Kowloon and in the New Territories. Though, even there it's probably not cheap compared to most cities in mainland China.

I'm far from an expert on this though, and maybe I'm off base here. I've just spent time there and looked at real estate and been struck by how not impossible it was to find reasonable places at reasonable prices compared to the Bay Area.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#184

Post by sandworm101 »

vvanders wrote: post #179
sandworm101 wrote: post #175

Vancouver's problem isn't the house prices. The problem is to a large extent caused by the author of this piece, the Hootsuite CEO. The few tech companies in vancouver don't pay. They expect the city to provide them a steady flow of over-educated 20-somethings willing to work long hours for only slightly more than rent. For the last 15 years the city has provided just that. The complaints now are that those 20-someth…

Man, lots of parallels to game-dev here. You see an almost similar problem, albiet that it means the average career is ~3 years instead of being a geographical migration.

I used to work in the Vancouver film industry. I remember an interview with some of the Stargate people where they laughed at the fact that most of the CG guys working on the shows final years (SG Atlantis) were in diapers when SG1 started. As soon as the novelty wore off and they wanted pay, everyone left. Anyone who thinks actresses age quickly in Hollywood, look at the teenagers who work in CG.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#185

Post by pfarnsworth »

jessewmc wrote: post #152
lazzlazzlazz wrote: post #150

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 comm…

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.

Except it's been this way for 30 years. Vancouver house prices have always been higher than Ontario, even back in the 80s when I lived there. So speculation is one thing, but 30 years isn't speculation. And back then they were saying it was foreigners too, especially from Hong Kong. But it's 30 years later, and the house prices haven't abated at all. That isn't speculation, that's a permanently high prices.

When my parents bought their house there it was $275,000 it was almost 75% higher than our house in Toronto. And they sold it for $1,300,000 a few years ago. Crazy, but it's only annualized 6% over 25 years, less than the stock market (but higher than normal real estate I'm assuming). However it's prime Vancouver real estate with fantastic schools, a case could be made that it's worth it if you compare to San Francisco.

The only difference is that no one knows where the money is coming from for the last 30 years. There is no industry in Vancouver, except tourism and the average salary is ~60k.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#186

Post by lewisl9029 »

sandworm101 wrote: post #175

Vancouver's problem isn't the house prices. The problem is to a large extent caused by the author of this piece, the Hootsuite CEO. The few tech companies in vancouver don't pay. They expect the city to provide them a steady flow of over-educated 20-somethings willing to work long hours for only slightly more than rent. For the last 15 years the city has provided just that. The complaints now are that those 20-someth…

This goes for Canadian employers in general, not just those in Vancouver. I'm not sure how they expect to retain talent when they offer on average about half the salary of similar positions in the US when adjusted for currency (and I'm not even talking about SF... Seattle is a 3 hour drive from Vancouver and moving there can easily double your salary with a comparable cost of living), especially since the barrier to entry into the US is practically non-existent for citizens.

Understandably, employers in Canada want to save money by competing only with their Canadian neighbors in terms of salaries, but this attitude seems extremely shortsighted to me, and results in a vicious negative feedback loop: companies offer lower salaries -> low availability of higher tier talent -> companies under-compete -> companies can now only afford lower salaries -> rinse and repeat. I believe this has been having a profound effect on competitiveness of the Canadian tech industry as a whole (see Blackberry/RIM as a prime example of this phenomenon).

As a recent Waterloo grad, I've witnessed the brain-drain first hand. Everyone I know from school who's any good has left for lucrative US positions, and I'll probably be joining them soon.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#187

Post by jonknee »

BurningFrog wrote: post #173
jessewmc wrote: post #152

Earlier quoted context omitted.

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.

So why do speculators choose Vancouver of all places to speculate in?

There's a large existing Chinese population and Canada has a stable legal system (e.g. no worry for property rights). Seattle has a similar phenomenon, though not as extensive because there is more local competition. NYC has one with Russia (though that is diminishing thanks to cheap oil).

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#188

Post by beachstartup »

BurningFrog wrote: post #173
jessewmc wrote: post #152

Earlier quoted context omitted.

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.

So why do speculators choose Vancouver of all places to speculate in?

because most of them are from china, and vancouver is on the west coast, has a large ethnic chinese population, and is for all social and economic intents and purposes the same as the US.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#189

Post by vkou »

vvanders wrote: post #179
sandworm101 wrote: post #175

Vancouver's problem isn't the house prices. The problem is to a large extent caused by the author of this piece, the Hootsuite CEO. The few tech companies in vancouver don't pay. They expect the city to provide them a steady flow of over-educated 20-somethings willing to work long hours for only slightly more than rent. For the last 15 years the city has provided just that. The complaints now are that those 20-someth…

Man, lots of parallels to game-dev here. You see an almost similar problem, albiet that it means the average career is ~3 years instead of being a geographical migration.

Incidentally, there is also a lot of game dev in Vancouver.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#190

Post by [deleted] »

throwaway2048 wrote: post #180
[deleted] wrote: post #170

[deleted]

The key point you are missing is that housing is being bought almost entirely by people who do not live there and never will, either as investment vehicles, or a way to safely move money out of china (real estate is one of the few things china allows Chinese citizens to invest in outside of china). They have no incentive to even rent, because of both frozen value property taxes, and the house generally forming a smal…

[deleted]
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