Vancouver's West End: A sanctuary for status quo?

Post by Gord Price in

35 comments

westendbeach.JPG
A lot of people want the West End to stay exactly the way it is - thank you very much

Further to the lessons I learned after living in Downtown South for a month in the early 1990s:

I eventually realized that Downtown South was taking the pressure off my neighbourhood. As more units became available, they provided an outlet for newcomers who would other otherwise compete with existing tenants. And that’s what happened for two decades: the hundreds of new condos that were picked up by investors and rented out in Downtown South (and Triangle West, north of Robson) was giving an outlet for newcomers who could afford the higher rents. Middle-income earners left the 50s walk-ups and the 60s highrises for lower-middle-income renters.

Downtown South and Triangle West also provided an alternative to West Enders who were willing to pay a bit more for something new (lots of electrical outlets and less dubious plumbing) – and that in turn kept a ceiling on rents, since landlords couldn’t raise rents on the ’old’ beyond something that was ‘new.’ It even resulted in the West End uncrowding a bit in the 1990s, as those sharing units migrated east and north on the peninsula. The population of the West End grew hardly at all.downtownmap.jpg

West Enders got very used to the idea that the neighbourhood could stay very much the same, regardless of the pressures of growth elsewhere in the city. Indeed, City Council had a big political stake in keeping it that way. As the NPA learned when three-storey walk-ups were being demolished in Kerrisdale, the price of change could be high. Jim Green, running for Mayor as the COPE candidate, came surprisingly close to beating Gordon Campbell in the 1990 election, taking advantage of public discontent with demolitions and rising housing costs.

And it didn’t make much sense for any party to allow the developers into those neighbourhoods that still had a large stock of 1940s and ’50s boxes. Demolition and condo construction actually resulted in a loss of population density, a complete elimination of affordability and lots of upset neighbours unhappy with the loss of view and the eviction of grandma, who had been living happily in her stucco box for years.

And so the Council I sat on brought in rate-of-change constraints and, in 1989, even more complicated requirements for the West End that essentially limited to a handful the number of lots that would allow new development. The rate of change slowed to practically zero in the West End; the number of new buildings since then could be counted on your fingers. And with outlets for growth on the other sides of Burrard and Robson, everyone was happy enough.

Until, of course, the pressure returned. Rents may have remained more or less stable, constrained by provincial legislation and market forces, but they continued to notch up. And one thing about the ‘affordability’ issue: no one thinks we have it, not compared to what they remember in decades past. So candidates in the last civic election, appealing to what they heard from their supporters, ran on the platform that they would address the lack of affordable rental housing.

And then they made mistake of actually trying to do something about it.

More on that to come.

Editor's Note: What follows is the census data for West End that Gord Price was referring to in his column:

  • 1971 - 37,515
  • 1976 - 36,450
  • 1981 - 36, 950
  • 1986 - 37,050
  • 1991 - 38,408
  • 1996 - 40,940
  • 2001 - 42.103
  • 2006 - 44,556

 - Post by Gordon Price. He is Director of the City Program at Simon Fraser University. He also writes, teaches and consults on urban development and planning. He served six terms as Councillor for the City of Vancouver, from 1986 to 2002, as well as on the board of the Greater Vancouver Regional District (now Metro) and TransLink, the regional transportation authority.This column was originally posted on pricetags.com.

Follow us on Twitter @CityCaucus. Follow Gordon on Twitter @pricetags.

35 Comments

'Middle-income earners left the 50s walk-ups and the 60s highrises for lower-middle-income renters'. Really?

Gordon, will await your next post with interest. I dare say that in a Metro area that "boasts" COMBINED average household incomes of $68K per year (versus $90K per households in supposedly lesser cities like Saskatoon, Regina, Calgary + Edmonton) that the "middle income" earner is also an endangered species in a "revitalized" West End.

Any "new" one bedrooms bought byinvestors that would be built in the West End would go for current "market rents" (perhaps $1500-$1600 p/m) and especially in such a pretty locale. So, pushing out more middle and lower income earners who are now renting in less tony digs, at more affordable monthly rates at say $900-$1000 per month, would help affordability, how? Oh yes, they can move to Surrey!

So, you knock down all the old timers and fill the area with new, taller buildings with smaller suites, and filled with more wealthy people? That's diversity!There goes another neighbourhood...and that's what we call progress here in Vancouver.

Let's keep some true affordabilty, some charm, perhaps even heritage---and the mixed income level character of at least one Vancouver neighbourhood, shall we?

I have to laugh.

When I first moved to Vancouver, I was looking to purchase. Even though I had made some $$ on my previous apartment, what I could afford out here was far and few between.

One of the places I looked at was located in what is now Yaletown.

It was a loft unit on Mainland - $118K.

My dad came out to look at it - inspect the electrical etc. and quite loudly voiced his opinion about me moving there. At that time the area was mostly warehouses, and it was rough area - the 'chicken walk', male prostitutes.

So I took a pass. And to this day I kick myself. That unit would be worth over $1M now.

I love where I live (most of the time, anyways) but the rate of return on investment will never touch what that Yaletown unit will pay out.


As I posted on Gordon Price's blog,is "The population of the West End grew hardly at all." Gordon Price's way of saying that was the period in which the West End saw the highest population increase?

The funny part is that when you compare population increases from the census numbers above, it went up the highest in the 90s.

Neither did we see rental rates stabilize with the availability of more and newer housing supply in Yaletown / Coal Harbour. Neither would newer towers in the West End lower rental rates in the community due to the Province’s geographic rental increase loophole that MLA Spencer Herbert has been trying to do something about, which could actually cause an increase in rents in the immediate surrounding area.

It’s also interesting to note that in the recent CMHC report, vacancy in Vancouver edged higher, as did rents, which undermines the supply and demand argument.

I would sooner track unemployment rates in Vancouver to get a handle on affordability than I would housing supply. But no one seems to want to talk about the local lackluster economy and our high unemployment instead opting to distract us with easily refuted bogus claims and unfounded supply and demand arguments that pander to the fringe, paid activists, and the self-anointed urbanist bourgeois experts.

Peaches - Please say more about "tracking unemployment rates in Vancouver to get a handle on affordability" as more relevant than housing supply. What steps would you take to bring down unemployment in Vancouver?

I'd be curious to know who many units sit empty in Vancouver due to offshore ownership/speculation.

@ Max

In my opinion, a lot.

I would imagine that raw information which could be correlated must be available to City Hall. Would any candidates be interested in putting this on their 'to do' list? Would any then be interested in pursuing a bylaw similar to those that exist in some European cities forbidding the speculative holding empty of residential property? If that wasn't possible would they then consider punitive property tax levies on such property, proportionate to the social cost they represent, which might help give the rest of us a break at the same time?

Answers, please, before consulting with real estate / developer money men.

we throw around the term offshore really quickly - does anyone here have a summer home somewhere?

ever thought that vacant properties pay property taxes (without a homeowners grant) but basically consume zero services?

I really don't think this offshore diversion is going to fly.

I recall the late 80s/early 90s too, as a resident of the West End, when rents skyrocketed; 30 - 40% increases for some, and recall speaking to NPA Councillor Gordon Price at the time, whose response was a shrug of the shoulders, and "well, what do you want us to do, build more highrises up and down Nelson Street?" Typical NPA response in the face of a crisis: do nothing !! Even though he lived in the community, the guy was so out of touch with the West End, he could only be elected to council with an at large system that rewarded NPA bloc voting on the west side.

@ Julia

If you have a summer home in an area where there is no affordability / availability crisis then fine. If you have one where there is, or if you have an entirely unused property as speculation, then you are part of the problem.

As to not not using services, this is a red herring. You own part of the city and must expect to pay your proportionate share of its running costs in full, however much or little you use the property. If there is an associated social cost consequent on its not being available for occupation, in the form of homelessness or high rents, you shouldn't complain if society demands compensatory payment.

We've had a hiccup with our comment system. Sorry for the lapse. Should work fine now.

Mr Price has it wrong.....in fact 12,000 people are asking for a new Comprehensive community plan. It is clear that many people want a change to the way the City is currently doing things - "spot rezonings" with no consultation of the community is wrong.

The STIR program giving public benefits = reduced CAC's, reduced DCL's, reduced parking, allowing tiny suites, reduced taxes, higher denser towers - to developers, for their private benefit is unacceptable policy for most taxpayers living in the West End and should be in fact, a huge concern for Vancouver as a whole.

West End schools, libraries and the one community center (WECC) are over-crowded. STIR has to go as do Spot rezonings.

David, you may consider my comments as a red herring but quite frankly, offshore ownership is too easy to use as a excuse for not wanting things to change, never wanting to pay $1 more for anything and an 'us four but no more' mentality.

Max and David, the issue of vacant "investor-held" units becomes far less important in a neighbourhood where less than 20% of the dwelling units are condominiums. Given the types of buildings in the West End, I think it's unlikely that there are many vacant condominium units - they are either owner-occupied are actively rented to create income.
It's unclear to my why Mr. Price is making a "status quo" argument in this article - for a high density area to have added the number of dwelling units (about 5,000 in the last 25 years) and people (almost 10,000 in the the same period) is an impressive display of "gentle intensification" without a public outcry. Why not provide some ideas on how to allow change in the neighbourhood while still preserving the elements of the neighbourhood that people cherish? That's not "status quo" it's just good planning.

I think David and I had this discussion in a previous article.

I don’t think you can dismiss the tax issue as a “red herring” because it presupposes that all the costs covered by property taxes are fixed and none are variable. One can argue what proportion are what but common sense says a vacant property has to consume fewer services from the City after fixed costs are covered.

I don’t think the volume of unoccupied suites is as great as you think. For most of our buildings, investor purchased suites are rented pretty consistently and in some cases help to bolster a rather sad local rental stock. Part of the issue of affordability can be laid at the feet of the tariffs on new housing – all levels of government take a disproportionate bite out of the new home apple (relative to used stock). The result of higher priced new homes is an increase in the price of the used stock. To be clear, I am not saying it is the only reason housing in Vancouver has increased dramatically – that is shared by off shore money, low interest rates, fixed land based, nimby density solutions, etc. – however, it does play a significant part.

For pay for use services such as Hydro empty properties consume less but obviously also pay less. As far as other civic costs are concerned, yes there will be some differential, but do you then say that property tax should take account of the number of people in households? If you take long holidays should you get a discount compared to someone who is here all the time? Then if you go down that route, why not have a poll tax for all citizens irrespective of ownership status? The simplicity and, to me, fairness of just paying for your share of the city is obvious.

Anyway even if it's not a red herring it is a side issue to the question of housing affordability.

Westend Villager mentioned the 'status quo'. Usually it's used dismissively, something of interest only to the type of old fogey who probably can't quite handle the internets. Well, I rather liked the status quo ten or fifteen years ago when my house may not have made me into an illusory millionaire but when my son and his friends had some reasonable hope of being able to afford a home in their home town. I certainly don't want to be still living here when the unholy trinity of the real estate, construction and immigration industries turn Metro Vancouver into a ghettoised megalopolis.

Now I'll be accused of being a nimby, hypocritical, racist, and apart from the last perhaps I am but truthfully I'd need to be an idiot not to be.

I see young people paying rents that I would find difficult to handle, for rooms in ridiculously small apartments, deferring having children, unable to save, entirely unable to even dream of the opportunities my generation took for granted and why?

Well in large part, for Vancouver, because we have governments that think it appropriate to sell our country's citizenship to so called investors. That ask no questions about the origins of money pouring in to our property market from highly dubious sources. That encourage ever growing social division. That are entirely bought and paid for by interests that profit from this. Add to that promotion of intolerable levels of debt for those who don't have a suitcase full of cash.

I usually try to be optimistic but I just really depressed myself because, when you think about it this way, it's clear that the forces at work simply can't be stopped!

There are 2 sides to the affordability question. Cost, and salaries. Are we creating the jobs that pay enough to even afford rent/or a mortgage in Vancouver? Are we creating jobs in Vancouver that can afford rent or a mortgage in Downtown Calgary?

It's a year to the day since City Council created the West End Mayor's Advisory Council, renamed because originally it was WEAC, so happy f***ing anniversary Gregor.

http://www.youtube.com/watch?v=eZDVGipZwdQ

I disagree Julia;

Offshore ownership has been an issue since 1990 when speculation on how the China/Hong Kong merger would play out.

A lot of property was bought up at that time and held as a safety card. After things didn't pan out as 'anticipated', units sat empty in the downtown core and surrounding areas.

And this practice has continued on since then.

On one of the recent CC blogs, I posted a video link to a Dateline story on the 64 Million Apartments Sitting Empty in China.

If you watch that video, you will see the parallels between Mainland China and Vancouver when it comes to affordable housing vs. investment.

I pulled this from a recent Van Mag article: (March 28, 2011)

What's driving investment this time around? Sheer numbers, for a start: a new class of wealthy entrepreneur is emerging as China increasingly embraces a market system and generates formidable economic power. Canada's immigration system, for another: for wealthy Chinese, our country is one of the easiest places to emigrate to, and within it Vancouver is by far the preferred place to land. Throw in recent laws that prevent Chinese citizens from owning more than two condos in China and greater ease in getting money out of that country, and you have the formula for another influx of Chinese money to Vancouver-and, many market analysts tell us, another real-estate bubble.

***
Julia, owning a summer property somewhere is far from owning property in the downtown core of a metro city.

And even then, 'summer or vacation' properties sit empty for periods of time.

Although you have an investment into your housing, you typically don't have an investment into the day-to-day workings of the community you reside in.

Oh and there is always this:

http://www.straight.com/article-402344/vancouver/tenants-decry-energy-bills?utm_source=twitterfeed&utm_medium=twitter


Seems 'Green Solomon and Robertson have helped out another 'friend' on the backs of the 'poor'.

See, it is easy being green...money green....

Yes Max,
No wonder they spent so much money three years ago...
This is how it works. After they cleaned up the City's coffers by firing competent staff and hiring all their friends...the crooks in charge of City Hall hires COHO to manage their dead beat Olympic operation, and COHO in return hires Enerpro to do the Hydro billing. Sounds familiar? Tides Canada gives generously, Renewal Invests ONe and Two gives generously, Vision and Riotson invests the loot by giving back to Renewal through Coho, Enerpro...and what was the name of that tricycle delivery operation in downtown...food delivery? LMAO

Hey Andrea:

Gregor PROMISED green jobs......:)

Paper pushing and handing out untendered contracts is very green, incestuous and well, profitable for all those 'Solomon/Ronertson' involved.

Be happy, go green.....

Max, are we talking about offshore investors, or are we talking about immigrants moving here?

Do we actually know what the offshore investment numbers look like? And do we really believe they sit empty... or do they form part of our rental stock. Most people want a ROI.

http://www.cbc.ca/fp/story/2011/07/07/5065907.html

@Julia:

This is cut from a F. Bula aticle surrounding the sales at the Oly Village, Nov. 2010:

..."Other sources say that buyers from Belgium to Singapore have expressed interest in acquiring blocks of condos ranging from 40 units to 200..."
****


So, lived in, or held for specualtion?

Regardless, this is a practice the government, on all levels, needs to put a halt to and insitute a Canadian first policy,

Allow the citizen/workers and supporters here first dibs, at affordable prices, to new units before they sell them off to foreign ownership.

If people can nicpic at offshore ownership of companies in their whole and the government is expected to protect that/them ...why not individual property???

Here is a MacDonald Realty Market Update, from November 2010 which I find very succinct.

"Macdonald Realty president & CEO Lynn Hsu showed a Macdonald Realty analysis of Chinese buying trends which showed that 78% of homes in Vancouver valued over $2 million were bought by this demographic *. This trend is expected to continue as there is a 10-year backlog of investor category Chinese immigrants waiting to come to Canada, the vast majority of which are planning on settling in Vancouver. Sellers of these properties tend to pocket the appreciation in their homes and move to other asset classes in the city or to other municipalities in the province, which results in an upward push in prices."

* This I presume to be resident and investor combined, if only investors it is even more astonishing.

As Max notes there are other external investment sources pressurizing the market. We are talking gigantic sums of money, much of dubious provenance such as the widely reported missing $120 billion, in the face of which the long term interests of the existing population will certainly be ignored

they neglect to say how many sales were over 2 million. 120 billion at 2 million each is 60 homes.

There was a total of 15,953 listings in Greater Vancouver on June 19th according to the Real Estate Board.

from the CIC website

The Immigrant Investor Program seeks experienced business people to invest C$800,000 into Canada’s economy and become permanent residents. Investors must:

show that they have business experience
have a minimum net worth of C$1,600,000 that was obtained legally and
make a C$800,000 investment.
Your investment is managed by Citizenship and Immigration Canada (CIC) and is guaranteed by the Canadian provinces that use it to create jobs and help their economies grow.

CIC will return your C$800,000 investment, without interest, about five years and two months after payment.

Okay Juia;

And you don't see a negative to the Canadian peoples that have built/supported the country with this?

Julia, 120 billion divided by 2 million is 60,000 not 60. Your mistake just goes to show that these are quantities of money that most of us have difficulty comprehending It didn't all come here, of course, but on the other hand there are certainly other similarly huge sums that have not come to light. To imagine that this is not a primary cause of the distortion of our property market is about as delusional as imagining that the people bringing in the cash are model citizens.

math is not my long suit! LOL.

Max, I am 3rd generation Canadian. I am as patriotic and protective of my nieces and nephews ability to live in this community as you are. I cannot afford to live in Vancouver on my salary (and it is significantly above average). I live in Delta in 1/2 the size of house my parents owned.

You suggest a Canadian first policy. How do we write that policy and how do we enforce it given that Canada is a country of immigrants.

We invite 250,000 immigrants to Canada to stimulate the economy every year. Some come and give existing Canadians 2 million dollars of new money for a piece of dirt in Kerrisdale. That Canadian seller takes that 2 million and buys something else, or retires or?

I really believe there is more to housing affordability than curtailing offshore buyers. I think getting real in our expectations, (do we really need granite counters) development costs, property transfer taxes, all feed in to the affordability crisis.

The Thought of The Day

"If only the math I know, would work like this... we would all be so happy, in Vancouver."

But no, they actually 'bedazzled' $ 12o Billions in Paper ready to be negotiated in exchange for Canadian and other North American land/ homes. Or, in other words how the West was re-conquered...

Could this be the old Native Indians curse?
(remember the glass marbles, blankets, trinkets and booze used in exchange for pristine pieces of British Columbia?)

This is by far the best Communist export/ fire sale to date! And the smartest!

When I read that the Chinese officials played the 'we didn't know what was going on...', it made me laugh, because you see, IMHO they are the Executive Producers...
In movie talk, in the grand scheme of things, I would say this would be their screenplay for a porn... if you catch my drift, in the end someone gets screwed. Guess who?

Your new neighbors from UBC to Shaughnessy are not one of those hardworking Chinese nationals, nope, they are one of the high echelon 'Nouveau riche' commie apparatchik...the ones behind the sweatshops of China, the "businessmen" in need of a place to hide their loot.
We apparently...obliged!

BTW, they don"t even bother to speak your language, nope, they want you, according to the new VSB pressure points map, to provide Cantonese and Mandarin immersion programs to the rest of the kids.

Who cares, right?

Well, if you ask the ilks of local developers or realtors or marketers if this bothers them a bit, they will say... of course not...as I said earlier, every porn needs adult movie actors. And they are the best!

Anyway...
$ 120,000,000,000 : $ 2,000,000/ Home = 60,000 Homes
This is a big number!

Soooo...

We live in Vancouver and this keeps us busy.

Glissando...

for a very interesting read go to AGT's site. I'd be very interested to hear your ideas about his most recent post...

incoming...

The West End has scores of three story walk-ups that could and should be replaced with new housing stock. Why not allow developers to rebuild highrises on those sites, as long as they promise to incorporate an equivalent amount of rental units in the new towers?

As to the offshore debate, all I can say is that there is nothing in Vancouver's economic development over teh last 10 years that compares to or justifies the vast increase in housing prices. Something has thrown the equation out of whack, but it is not better job prospects or salaries for those working here.

BobH, you are exactly right. Look at the jobs we are creating in Vancouver. Can those wages support a mortgage in any major Canadian city?

Without a job it is all moot.

Hi George,

Yes I read Alex's commentary on the Chinese Bubble... I didn't want to comment though because I didn't want to yet again... perpetuate a pissing match like the one with 'mezzanine'. If you want to see my take on this go here, bring cookies and milk...it's going to be a loooong read:

http://www.francesbula.com/uncategorized/is-our-city-good-to-live-in-or-good-to-visit-only/#comments

Comments #7; 26; 37; 67.
At intermission check out #44 :-)

Cheers.

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