Business & Economy
June 20, 2018

Rising Housing Costs, Less Migration in British Columbia

Jock Finlayson and Ken Peacock have reported in Business in Vancouver on another startling casualty of rising housing prices.

Late last year, British Columbia started to experience a surprising drop in people moving here from other provinces. While migration across Canada has historically risen and fallen with economic swings and employment potential, this drop in the influx of new residents may be more directly attributable to the increasing cost of housing in British Columbia.

This province has Canada’s lowest unemployment rate, and “by mid-2014, interprovincial migration was adding more than 5,000 people to B.C.’s population every quarter – upwards of 20,000 annually. Over the subsequent three years, net interprovincial migration ranged between 4,000 and 6,000 per quarter. But in the third quarter of 2017, the net inflow plummeted to 500, and it stayed low (at 800) in Q4.”

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For some reason, we’ve come to accept this road violence against pedestrians as part of the wallpaper of urban living – even as “walkable cities” are the holy grail of city planning everywhere.”

 Peter Ladner in his latest editorial in Business in Vancouver calls it for what it is: we have an epidemic of Road Violence in Vancouver. Peter states in his editorial:  “Never mind calling back Mayor Gregor Robertson from Mexico to clear our icy sidewalks. We should be asking him to stay home in January and protect seniors from being killed by cars. Vancouver is the pedestrian death capital of Canada, and January is peak month for pedestrian deaths in B.C. – expect more than seven.

Based on five-year averages, 61% of those killed will be 50 or older. Our pedestrian death rate is twice that of Toronto, where one pedestrian is injured every four hours, and 44 pedestrians were killed in 2016. In last October alone, 10 pedestrians died in five Lower Mainland municipalities. There were as many pedestrians slaughtered by cars in the city of Vancouver (11) last year as there were murder victims.

My son was walking to work across a marked intersection at Pender and Jervis, on a green light, at 7:30 on an October morning two years ago when a car knocked him to the ground. He is still suffering from the concussion he incurred. The driver stopped and leaned out the window to ask if he was all right, then drove off. It turns out his situation is typical: according to a BC Coroners Service report, 40% of pedestrians killed in Greater Vancouver were struck at intersections and in crosswalks and two-thirds were crossing while the light was green. It might also be the case that many of the pedestrians who got hit were, like him, wearing dark clothing. In some Nordic countries the widespread use of reflective clothing has greatly reduced road violence.

But it’s too simple to blame pedestrians. I remember the first time I saw the 30 km/h zone painted boldly on Hastings Street around Main – the most dangerous pedestrian intersection in the Lower Mainland. My first reaction was: “Why should I slow down because impaired people choose to lurch into oncoming cars?” Then I sobered up and reframed the question: “Why should saving a few seconds of driving be more important than killing someone?”

Peter notes that when some European countries adopted laws where vulnerable road users, not road drivers were assumed to be innocent, injury and fatality rates dropped by 70 per cent. HUB cycling recommends a 30 km/h speed limit on non arterial streets-the survival of a pedestrian crashed into at 30 km/h  is 90 per cent at that speed, and only 15 to 20 per cent at 50 km/h. 

Peter points out that it is the Province-Minister of Transportation Todd Stone-who could implement this and who “is not interested. Nor is he interested in photo radar and red-light cameras. Research in Europe found there were 42% fewer serious injuries and fatalities where photo radar and cameras were installed.”  Minister Stone dismissed this as a “tax grab”. Peter suggests this is the same as saying “Seniors are expendable if it gets me votes from car drivers who want the freedom to kill them by breaking the law and letting ICBC pick up the bills.”

Getting to zero pedestrian fatalities needs ” lower speed limits, safer intersection design, better pedestrian signals, tougher enforcement to stop speeding and distracted driving (none of us should be taking calls from people while we’re driving), more reflective clothing, cyclists using lights and more. But mostly it means getting serious about this ongoing car violence against mostly seniors, in every neighbourhood, especially in January. “

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The Vancouver Sun has published Vancouver’s Million Dollar Map .  This series of maps was produced by Acting Director of Simon Fraser University’s  City Program Andy Yan, who wanted to understand when real estate prices for single-family homes started to skyrocket upward.
Andy found that in 2006, only 19 per cent of single-family homes in Vancouver were worth more than one million dollars. By 2016, 91 per cent of single-family homes in Vancouver were worth more than one million. And by the way, that figure includes land and improvement values and is based upon B.C. Assessment figures.
Andy Yan states “It’s a convergence of factors . There is a limited supply, low-interest rates, global capital. You also then have this both in Vancouver and outside of Vancouver, a rippling to places like Victoria and Kelowna. You have a real estate market that isn’t isolated, but that is spurring a (wider) land market.”
The map below shows the spread of million dollar residences eastward from 2010 to 2015. Those residences are in blue. It is interesting to see that residences along the commercial arterials were the last properties under one million dollars on the west side in the 2010 map. By 2015, most westside single-family properties were  worth over one million dollars.
 

 

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The Economist in their June 18th edition has an article describing the changing face of retailing. Price Tags has been exploring the creation of the new Tsawwassen Mills, a mega mall which will also be a “fashion experience”. The mega mall announced they were hiring 1,000 employees in Business in Vancouver, with an expected 3,000 employees to be their full staff.
But something is happening on Britain’s commercial fashion streets that may impact the new Tsawwassen Mills mega mall, and other retailing as well. The example used is the Hard Rock Cafe-Britons like eating at the cafe, but patronage of the clothing side of the business has fallen off.

The Economist describes the retail market as “soggy”. Non-food sales and clothing sales been contracting. And remember the mention of Howard Schultz, the CEO of Starbucks making his coffee shops “experiences” that you will go to the mall for?  Here is what the The Economist surmises:

One profound change is that consumers now want to spend their money on “experiences”, such as eating out, holidays, cinema or going to the gym, rather than products such as clothes or food—hence the differing fortunes of the restaurant and retail businesses at the Hard Rock Café. Figures show a strong rise in spending on recreation and culture in the first nine months of last year, compared, for instance, with the fall in spending on food and drink. ..Online shopping is also transforming the high street. Consumers, especially the young, now expect “omnichannel” retailing, to be able to switch seamlessly between purchasing on their laptops, on their mobiles and in bricks-and-mortar stores. Retailers that are slow to develop a good online offering will struggle, or worse.

So despite disposable household income rising, leisure time is not being spent shopping but rather shopping for items for a leisure experience elsewhere.

In terms of struggling grocery stores, Britain’s online grocery market is worth $12.2 billion USD and is growing. Online retailing looks like a disruptive technology for the typical bricks and mortar commercial stores. A British lobby group, Women in Retail have recently published research showing that even though 85 per cent of all retail purchases are made or influenced by women, only 20 per cent of the executive teams and only 10 per cent of executive boards are female. To adapt to a quickly changing retail market, retail boards must represent who their product purchasers are, and be more inclusive of women decision makers.

The implications of what is happening in Britain are serious for Metro Vancouver retailing. The British studies show that switching between on-line and in-store purchases is valued, and also illustrates how quickly the concept of commercial retailing is changing.  The Starbucks “experience” may be the first morphing of the traditional storefront concept.

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A good topic to chew on this week, 30 years after opening day.  Business in Vancouver has done a good job documenting the backstory and the consequences:

The Expo 86 Effect How Expo 86 changed Vancouver – The legacy of Expo 86, 30 years later.

My quote:

Post-sale zoning

One of Concord Pacific’s early plans for its industrial site was to rezone the land as residential and have a series of condominium towers surrounded by moats with bridges to enable access.

“The city rejected that plan for two reasons,” said former city councillor Gordon Price.

“One is that the plan didn’t extend the downtown grid, so it seemed to be separate. The little islands would effectively turn into gated communities. The second reason was that the hydraulics didn’t work, and it wouldn’t work with the impacts from False Creek.”

City council at the time, however, was ecstatic that the entire site was sold in one piece and that the price was seen to be low, Price said, because it made it easier for city council to comprehensively rezone the site to create a new community. The low price for the site also allowed the city to extract more public benefits and amenities from Concord Pacific.

“It put the city in a very good negotiating position,” Price said, “if you could even call it negotiating.” •

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. Expo 86 Effect: How SkyTrain transported city into next millennium

Gordon Price, who is on leave as director of Simon Fraser University’s City Program, said the SkyTrain fulfilled the intentions of regional planners from the 1970s who wanted compact town centres throughout Metro Vancouver.

“It’s very concentrated density within walking distance of the SkyTrain station,” Price said. “It’s certainly, for many people, given them the option to live with more affordable housing without the transportation costs of having to own two cars if not one. It’s exceeded expectations from a planning utopia point of view.

“It’s taken longer than some thought, but, nonetheless, you want to build these systems for centuries.”

Price, who was elected to Vancouver city council right after Expo 86 ended in the fall of that year, said the region would have had to adopt a rapid transit system even if the world’s fair hadn’t come to Vancouver.

“Without it, it’s just unimaginable that Vancouver could function from a transportation point of view and be dependent upon the car.”

Expo 86 simply hastened SkyTrain’s arrival, he said.

Expo 86 gave city stadium, convention centre and new liquor laws Expo 86 Effect: A Vancouver developing legacy

As condo marketer Bob Rennie has often quipped: “We had Expo 86 and handed out our business card to the world, and they kept it.”

Veteran real estate consultant Michael Geller says Vancouver’s international exposure during the fair, coupled with Li Ka-shing’s deal for the Expo lands, made Vancouver an approved destination for capital from Asia.

“It was both the visits to Vancouver during Expo and the sale of the Expo lands that changed the course of the city,” he said. “As soon as Li Ka-shing bought those lands, a lot of other Asian investors – particularly from Hong Kong, but also from Singapore and Malaysia and Japan – all of a sudden, all of them started to not only look at Vancouver but to buy in Vancouver.”

The influx of capital and newcomers renewed historic connections between Asia and North America.

However, its impact on the city’s real estate market continues to echo through debates today over foreign investment’s role in a city happy to be cosmopolitan, yet unsettled at the cost of an unaffordability ranking second only to Hong Kong’s. But as young families look to surrounding municipalities for cheaper housing, one of Expo’s key legacy projects has come into its own.

SkyTrain stations have become nodes for high-density housing development, anchoring the compact, mixed-use communities considered key to a sustainable region. Thirty years after its development, SkyTrain is carrying the region’s real estate into the 21st century. •

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Vancouver is a young city. While this means we don’t have our own Arc de Triomphe (though some seem to imagine we do), we are lucky that if we let ourselves, we get to stand on the shoulders of giants.
I wrote about Design Thinking the other day, the great thing about this is that, somewhat like the scientific method, it establishes a systematic way of thinking which sometimes demands creativity, and at other times introspection, it involves the sharing of ideas, and the ability to learn from others.
What it does not involve is reinventing the wheel because you didn’t notice that someone else already did.
We get to see the runaway effects of a city growing increasingly unaffordable when we look at London. [see: There are now only 29 (yes, twenty-nine) homes in London deemed ‘affordable’ for first-time buyers]
We get to see how to design bike paths by studying the Dutch or the Danish.
We get to see how the city can build affordable housing by looking at Vienna (or Singapore).
We get to see how to deal with foreign money by looking at Singapore (or Sydney).
We get to see the effects of the conversion of streets to highways by looking at Miami or Pheonix and realize that Vancouver is fundamentally not really all that unique:

THE CASE AGAINST URBAN CORRIDORS THAT ACT LIKE HIGH-SPEED HIGHWAYS

From the beginning of urbanized America, streets functioned to provide mobility in many ways:

People walked to work, trolley, horse-drawn then powered moved workers from factories and offices to home. Trains played a role in commutes. Bicycles incited a pedal power mobility craze for a while.
Then the automobile came along. By the 1950s, roads became the sole domain of automobiles. The automotive industry even created the term “jay walking” and launched a campaign to demonize people on foot. Sidewalks shrunk and beautifully landscaped medians were torn out to create more lanes for automobiles.
Trolley lines were ripped out and replaced with buses. But buses were devalued and branded as last ditch transportation for the unfortunate. Only the sedan was fit for the upwardly mobile middle class American. Crosswalks were diminished. Those brazen enough to move around on two feet were seen as merely an impediment to moving more cars faster.
Government loans encouraged suburban single family homebuilding, giving rise to the super highway, and when highways weren’t enough, surface streets – even the most picturesque and historic – were overhauled to turn them into another layer of de facto highways.

(Anything seem familiar in these? … if not, as Gordon has written, Motordom 2.0 is around the corner)
We get to learn how to install a bike share by looking at New York City (or Paris, or Montreal) … and get to see what happens when you have a combination of bike-share and helmet laws by looking at Melbourne.
We get to see why limits of pollution are a good idea by looking at Beijing’s air quality (or this last week, Salt Lake City), even if we don’t read the Governator Arnold’s words last month, and why putting all our stock in LNG isn’t the best idea:

I, personally, want a plan. I don’t want to be like the last horse and buggy salesman who was holding out as cars took over the roads. I don’t want to be the last investor in Blockbuster as Netflix emerged. That’s exactly what is going to happen to fossil fuels.

And we get to look at things like fare gates in transit, and see if you install them, you have to make provision for the fact that when you put up a barrier, you put up a barrier, and some people won’t be able to deal with this fact. Again, in this we’re not unique, John Graham’s comments yesterday show one solution, but I can’t imagine its a cheap one.
The point of this is that in some ways, Vancouver is exceptional, we have an environment that many people would kill for, mountains that many dream about, and are generally pretty nice people. We are not, however, really that different from anywhere else except for the number of Learners permits on Lamborghinis …

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“Gentrification” is frequently used as a pejorative to oppose new and more costly development in an older neighbourhood attracting more affluent buyers – as though it was the development itself creating the change.  Ipso facto, stop the development, stop the change.  Reality, it appears, is more complicated.

An almost incidental article in Business in Vancouver by long-time real-estate reporter Peter Mitham explores a phenomenon noted in Seattle by a Portland researcher (and referenced here in PT): “Our focus on gentrification is misplaced … since the spread of concentrated poverty is a much larger trend, and has a far more negative impact on the lives of poor people.”

Here’s Peter’s coverage that looks at what Stats Can data says about Vancouver.  It deserves more attention and follow-up research:

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Gentrification? Maybe not

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Portland, Oregon, think-tank City Observatory issued a report last month pointing to persistent poverty rather than gentrification as the key challenge cities face.

City Observatory takes a particular interest in the proliferation of neighbourhoods where more than 30% of the households are living in poverty and the more prosperous precincts where just 15% of households or fewer are below the poverty line (Canada’s closest equivalent are households with low income after tax).

The glare of media attention falls on those places that are gentrifying – previously poor neighbourhoods that have experienced investment and which have gained wealthier new residents,” the report states.

“While such instances of change are striking, this study shows they are rare.”

With some activists critiquing the effect new developments have on property values and affordability, and others lamenting the loss of vintage homes to new mansions, the report raises the question: is a similar phenomenon at play in Metro Vancouver?

Statistics Canada census data from 1999 to 2012 indicates that poverty in the Vancouver census metropolitan area is indeed both persistent and growing.

While gentrification transformed some neighbourhoods between 1999 and 2012, the proportion of census tracts with 30% or more of tax filers living in low-income households increased to 7% from 5%. Moreover, the number of prosperous census tracts – those where 15% of tax filers or fewer are low-income – dropped to 25.5% from 32% over the period.

In addition, three key Metro Vancouver areas remain hubs for low-income tax filers: Vancouver’s Downtown Eastside as far east as Nanaimo Street; downtown New Westminster; and the tracts along Garden City Road in Richmond, from the Fraser River to Westminster Highway.

Yet if poverty is quietly spreading across the region, creating more tracts with high concentrations of low-income households, many tracts that formerly had high rates of low-income households are now faring better.

In fact, 20.8% of families were deemed low-income in 2012, only slightly higher than the 20.2% rate posted in 1999.

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My latest Business in Vancouver column:

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The NPA has lost the last two civic elections. It’s time for a new approach.

In 2011, the strategy was one of ridicule for the Visionista’s green agenda: chickens in the backyard, wheat in the front. In 2014 it had a more presentable candidate and a more subtle approach: dog-whistling key words to base. With bike lanes, for instance, the requirement for “community backing” could be interpreted as “no more of that annoyance” without actually having to say so.

But Kirk LaPointe did one thing well: he restored the NPA’s credibility. He worked with a good slate of candidates, and they worked well together – with leadership and funding by some key business people. Even if he wasn’t likely to beat Gregor Robertson, he might have taken away the Vision majority. But in the end, the NPA came up short on council, sadly losing the 10th spot. (Ian Robertson, who missed by a narrow margin, might have been the NPA’s next best shot at the mayor’s chair.)

So NPA, what now? (Disclosure: I was an NPA councillor from 1986 to 2002, under mayors Gordon Campbell and Philip Owen.)

First, recognition that the NPA base is no longer big enough, even with a fractured political spectrum on the left. The NPA reflects the worldview of those who mostly have it made – homeowners in particular, whether on the Westside or Southeast. But it doesn’t have an aspirational vocabulary for the young and insecure, who have a different view of Vancouver than those from the aging single-family neighbourhoods.

Second, it has to embrace – not just begrudgingly accept – that lifestyles are changing when it comes to how we get around. Those annoying bike lanes are a manifestation of something that’s neither trivial nor temporary.

The NPA failure to get it was articulated by LaPointe in two words: counterflow lanes.

It was a minor promise in the scheme of things – “create counterflow lanes and utilize technology to reduce congestion on major arterial routes” – and the appeal was understandable, particularly for someone like LaPointe, who lives in the University Endowment Lands and works in North Vancouver, and no doubt has to battle traffic on that route. Why wouldn’t people want an easier way to drive through the city?

He clearly did not grasp that those two words meant the reversal of two generations of policy, mostly by NPA councils, with respect to auto capacity in this city. LaPointe would have been the first Vancouver mayor in memory to say to suburban drivers: Come on back. All is forgiven!

It wasn’t a serious proposal. But it was a kind of code, along with more free parking, that was meant to signal a return to the city that Vancouver was in the 20th century, not the city it was in the process of becoming – albeit with some surprising clumsiness on the part of the Vision council. The NPA, if it expects to govern, has to depart from the comfort and convention of that past.

“Transparency,” “consultation” and “conversation” are not substitutes for a real vision of the this city, one that resonates with the way of life being adopted by the people who want to live here but know that it will be under vastly different circumstances than those who have paid off their mortgages and get to cash out.

When it comes to contentiously symbolic issues, the NPA has to embrace not just bike lanes but the entire strategy of active transportation and lifestyles, with actual proposals and policies to expand their reach.

And fortunately, it has the opportunity.

The NPA now has control of the park board, a traditional place for the next generation of municipal leaders. And it’s the place that will have to finally figure out how to design and build bike routes through major parks, primarily Stanley, and connect to the network that surrounds and joins up its entire system. No park board in the last three decades has provided the political will and funding to resolve it.

And of course, there’s the outstanding question of what to do about Hadden Park at Kitsilano Point.

The NPA park board can now provide leadership; it can demonstrate how it more effectively works with the community – the cyclists,

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December 2, 2014

Peter Ladner, in Business in Vancouver, looks at the bigger issues related to the rise of Uber:

Why Vancouver should welcome Uber to city’s streets

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The drama of Uber’s business story is a heady distraction from a much bigger story: the breakthrough it signals in the grossly inefficient way we allocate our automobile resources. …

Uber’s admittedly disruptive technology clearly outperforms our existing regulated model.

By giving consumers more choice, it reduces drunk driving, makes car ownership less necessary, lowers greenhouse gas emissions and generates thousands of part-time jobs. Its drivers complain of being exploited, but so do our taxi drivers. It starts to address the crazy unaffordable inefficiencies of our current car use: 80% of seating space typically wasted; use limited to two hours out of 24; parking mostly dependent on unpriced subsidized public spaces.

Uber, like HitchWhistler.com, car-sharing, autonomous vehicles, road pricing and dynamic parking meter rates, is part of a wave of new technology that is freeing us from today’s car inefficiencies that take such a toll on public health, congestion and infrastructure spending. It can’t happen soon enough.

Full column here.

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