Category: Vancouver

• Is Hongcouver better off than Vancouver?

  

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  It’s raining this morning in Toronto. The sun really hasn’t come up and out yet. And I’m spending the morning drinking coffee and reading a City Journal article from this past summer called “Hongcouver.”

  The article talks about how the Chinese – first from Hong Kong and then from mainland China (PRC) – have dramatically reshaped the economic and cultural landscape of Vancouver.

  I, unfortunately (it’s a great city), don’t spend a lot of time in Vancouver and so I don’t have an accurate sense of the local sentiment towards all of this change. But there’s no question the city has changed. 

  Here’s a snippet from the above City Journal article:

  As for the notion that Chinese money tended to be ill-gotten, Yu pointed out that the property boom was propelled by the structural disparity between prosperous Hong Kong, a dynamic economy, and the comparative backwater of Vancouver, still “living on the fumes of empire.” For the price of a Hong Kong flat, a Chinese immigrant—even, say, an accountant—could buy a splendid home on Vancouver’s West Side. “The Hong Kong Chinese who came could buy their way into any neighborhood. [They] knew that money was a tool,” Yu told me. “They weren’t going to accept a second-class citizenship in Vancouver. They could say, ‘I don’t care about your British Imperial manners, I am going to buy your house.’ ” The irony was that the Hong Kong arrivals—“more sophisticated than the people they were displacing,” with “better schooling, better English accents,” Yu said—were themselves the products of a system of law and finance instituted by the British with the establishment of their Hong Kong colony in the 1840s, after Britain thrashed China in the First Opium War.

  A lot of this was fuelled by the now defunct Immigrant Investor Program. The intent of the program was to allow “experienced business people” into the country in order to contribute to economic growth. If you had business experience, a net worth of at least C$1.6 million (that was gained legally, of course), and were able to invest C$800,000, then you could get permanent residency.

  Between the mid-1980s and the end of the 1990s, approximately 30,000 Chinese came to Vancouver via this investor-class visa. And between 1987 and 1997, it is estimated that this group of Chinese possessed about $35 to 40 billion in disposable income. No wonder they bought real estate.

  But the interesting question is whether or not Vancouver is better off now than it was in the 1970s before all of this migration really took hold. 

  There many who would argue that it is not. Vancouver now has the most expensive real estate in Canada and prices have completely detached themselves from local income levels – as they have in many international cities.

  But there’s also a strong argument to be made that this influx of money has made the Vancouver economy more dynamic. Unemployment in the city was cut almost in half between the early 1980s and 1991 during the first wave of migration. It went from 13.6% to 7.7%.

  In a way, it’s not all that different than what’s currently happening in San Francisco with tech and housing. I’m not saying there aren’t problems to be solved. But I think many of us can agree that the answer is not to eradicate the tech sector.

  That’s throwing the baby out with the bathwater.

  2015.09.28

• Vancouver never plays itself

  There’s something powerful about seeing/hearing cities being depicted in film, TV, and other kinds of pop culture. It creates familiarity and does a lot to drive the brand of that place.

  But how often are you just seeing one city disguised to look like another? Actually quite often.

  Here’s an interesting video that talks about how the 3rd largest film production city in North America never actually plays itself.

  [youtube https://www.youtube.com/watch?v=ojm74VGsZBU?rel=0&w=560&h=315]

  I know that there are real economic benefits to being a cheap place to film movies, but I would love to see Canadian cities play themselves. There are also big benefits to that.

  Thanks to Scott Bonjukian at The Urbanist for sharing the above video this morning.

  2015.09.20

• The impact of laneway housing in Vancouver

  In 2009, Vancouver created policy and legalized laneway homes. (If you’re not up on laneway housing, click here. I’ve written too much about this topic.)

  Since then, the number of laneway homes built in Vancouver has steadily increased to the point where roughly 350 new homes are built every year. 

  Here’s a chart I found showing the number of laneway home building permits issued in Vancouver since 2009 (the year to date number for 2015 is up to and including June):

  

  This is pretty interesting in its own right.

  But as soon as I saw this chart I started wondering how these numbers fit into the overall new home construction landscape. So I decided to dig up the City of Vancouver’s Statement of Building Permits Issued for June 2015.

  As the chart above shows, the number of laneway dwelling units built (well, permits issued) was 221 as of June 2015. But what’s really fascinating is that this numbers exceeds the number of building permits issued for single family dwellings, which was only 192!

  Also super interesting is the significant spread in building permit value. 

  For single family dwellings, the total value was $156,086,861 (or $812,952 per dwelling unit). On the other hand, for laneway dwellings the total value was $36,478,785 (or $165,062 per unit).

  Now to be fair, if you add single family dwellings with a secondary suite into the mix, you get a total count of 608 new dwelling units (as of June 2015). But at 221 new units, laneway dwellings still make up a meaningful portion of the new construction market.

  So while laneway houses might seem fringe for Toronto and other cities right now, they’re really not that fringe. In fact the numbers above start to show that they can be a viable source of new and relatively affordable single family housing.

  Eventually other cities will realize this too.

  2015.08.12

• Vancouver isn’t immune to the urban-suburban divide

  

  Vancouver BC City Skyline and Stanley Park by Jit Lim on 500px

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  In the comment section of my post about Vancouver’s transit referendum, a reader suggested I take a look at an article by Peter McMartin called, The real Vancouver emerges (from the ruins of the plebiscite). 

  McMartin’s argument is basically that Vancouverism – the name given to the city’s progressive architecture and planning approach – isn’t as widespread as it might seem. The reality is that Vancouver, much like Toronto and other cities, is divided.

  “Vancouverism might be a reality for two or three neighbourhoods huddling in the downtown, and that greener, more progressive ethos might hold sway in one or two more.

  But Vancouver — and I speak of it in the metro sense — is the sum of its parts, and most of its parts are suburban in their sensibilities, and that includes not just all of the suburbs but most of the neighbourhoods in the City of Vancouver proper.

  They’re resistant to change. They abhor densification. They’re conventional in their sensibilities and they’re highly dependent on the automobile. More importantly, they’re not just dependent on the automobile, they prefer it.”

  Here in Toronto, we know our city is divided. And many people see it as evidence that amalgamating the city in 1998 was a big mistake. The inner suburbs are holding back old Toronto and elitist old Toronto just doesn’t understand the priorities of the inner suburbs.

  But I’m not convinced that amalgamation is to blame.

  Most cities have long histories of amalgamating adjacent towns, villages, and cities, and I suspect that there was opposition all along the way. At what point is amalgamation acceptable and and what point is it problematic?

  The anti-amalgamation camp here in Toronto seems to believe that it would have allowed old Toronto to continue doing what it wants to do and allowed the inner suburbs to do what they want to do.

  But this to me feels parochial.

  Our cities need to think bigger than that. We need to think as cohesive urban regions. And as Vancouver demonstrated this past week, that’s not always easy. But I don’t think the answer is to just think smaller and ignore the people whose views don’t match our own.

  Interestingly enough, what a lot of this comes down to, I think, is built form. 

  Because different kinds of built form will encourage and often mandate different kinds of transportation choices. And how you get around a city will inform a big part of what you value and what you vote for.

  Over time though, I believe that we will see built form start to level out across our city regions through continued intensification. Many people won’t be happy about this change. But it is likely that it will end up creating more cohesive cities. 

  Built form is no small thing.

  2015.07.05

• With Vancouver voting “no” to transit tax, could Hong Kong now serve as inspiration?

  

  Hong kong subway ( central station ) by Renaud Maurouard on 500px

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  Earlier today it was announced that Metro Vancouver voted “no” to a 0.5% sales tax increase that would have been used to fund a $7.5 billion regional transportation plan. 

  Roughly 62% of respondents said “no”. And not surprisingly, the percentage of people who voted “no” increased as you moved outward towards the suburbs. But even the City of Vancouver itself sided slightly with “no” at 50.81%.

  Since I’m not that plugged into the Vancouver scene, I’m not going to comment on this issue. But hopefully you all will in the comments below. I know that a lot of you are incredibly passionate about this.

  Instead, I’d like to pose two questions. 

  Firstly, why is it that Asian transit operators seem to be so much better than North American transit operators at recovering their costs through fares? (Urban density and car ownership likely have something to do with it). And secondly, why hasn’t Hong Kong’s famous “rail plus property” transit model been exported to North America?

  For those of you unfamiliar with Hong Kong’s Mass Transit Railway Corporation, here’s how much money they make (via The Atlantic from 2013):

  The Mass Transit Railway (MTR) Corporation, which manages the subway and bus systems on Hong Kong Island and, since 2006, in the northern part of Kowloon, is considered the gold standard for transit management worldwide. In 2012, the MTR produced revenue of 36 billion Hong Kong Dollars (about U.S $5 billion)—turning a profit of $2 billion in the process. Most impressively, the farebox recovery ratio (the percentage of operational costs covered by fares) for the system was 185 percent, the world’s highest. Worldwide, these numbers are practically unheard of—the next highest urban ratio, Singapore, is a mere 125 percent.

  In addition to Hong Kong, the MTR Corporation runs individual subway lines in Beijing, Hangzhou, and Shenzhen in China, two lines in the London Underground, and the entire Melbourne and Stockholm systems. 
  

  And here’s how they do it (also via The Atlantic):

  Like no other system in the world, the MTR understands the monetary value of urban density—in other words, what economists call “agglomeration.” Hong Kong is one of the world’s densest cities, and businesses depend on the metro to ferry customers from one side of the territory to another. As a result, the MTR strikes a bargain with shop owners: In exchange for transporting customers, the transit agency receives a cut of the mall’s profit, signs a co-ownership agreement, or accepts a percentage of property development fees. In many cases, the MTR owns the entire mall itself. The Hong Kong metro essentially functions as part of a vertically integrated business that, through a "rail plus property” model,  controls both the means of transit and the places passengers visit upon departure.  Two of the tallest skyscrapers in Hong Kong are MTR properties, as are many of the offices, malls, and residences next to every transit station (some of which even have direct underground connections to the train). Not to mention, all of the retail within subway stations, which themselves double as large shopping complexes, is leased from MTR.

  I believe that we could do this too. So hopefully we can have a great discussion about it in the comment section below.

  2015.07.02

• Why Vancouver’s housing market hinges on China’s economy

  Last week a friend of mine sent me a really fascinating article from The Economist talking about the role of foreign investors in Vancouver’s housing market. If you subscribe to The Economist, you can click here to read the article. If you don’t subscribe, you’ll have to rely solely on what I’m about to say.

  In case you weren’t aware, Vancouver is an incredibly expensive city when it comes to real estate. The average price for a single-family detached house is now around C$1 million. By some measures, that makes it the most expensive housing market in North America. Here’s a chart that looks at house prices as they relate to household income:

  

  According to The Economist, the median household income in Vancouver is $68,970. This places them 23rd out of 28 in terms of Canada’s major cities. So how is it that homes are, on average, selling for $1 million? The locals don’t seem to be able to afford them.

  Well, it’s a well known fact that Chinese buyers continue to be an integral part of Vancouver’s housing market. In fact, up until this year, Canada offered a fast track option for citizenship applications if you brought at least $800,000 into the country.

  So we know that foreign buyers are having an impact. It’s a phenomenon we’re seeing in many other cities around the world, such as London. But to what extent is hard to measure–which has forced analysts to get creative.

  To try and figure out what percentage of homes are going to foreign buyers, analysts have been looking at macro data, filing through sales records, and even monitoring utility bills to see which homes might be sitting empty.

  What they found is that there’s a fairly significant correlation between economic activity in China, and Vancouver’s housing market. When the Chinese economy does well, so do Vancouver homes. Interesting. Still, that doesn’t quantify impact.

  When analysts looked for utility bills that would suggest an empty home, they found that only about 8% of high end downtown condos were likely sitting empty. That’s a relatively small amount. It could be vacancy rate.

  But when they looked for “mainland Chinese-sounding names” on sales records, they found that for homes priced $3M and up, almost ¾ of the buyers could be from mainland China. Now that’s a significant number!

  I found this all rather fascinating and I thought you all might as well. It yet again reminds me of how much opacity there is in real estate markets. We’re all craving better data. Why else would people be scouring utility bills?

  2014.06.24

• Vancouver boomers are sitting on $163 billion of mortage-free property

  Continuing with our discussion of Vancouver, I was reading today that baby boomers in the metro area (those aged 55 and older) are estimated to be holding over $163 billion of clear title property. That is, homes without any mortgage. This figure comes from Rennie Marketing Systems out of Vancouver.

  What’s interesting about this number is that it signals both a lot of equity that could be used for downsizing, rightsizing and lateral moves into a condo, and a source of capital for millennials to buy their first home. In fact, according to a survey that Rennie Marketing also conducted, somewhere around 40% of first time buyers in Vancouver are getting deposit help from their parents and/or grandparents.

  But the question that comes to my mind is: Are there going to be enough middle aged people willing and able to buy $163 billion worth of real estate? Because one person’s sale is another person’s buy.

  2014.05.20

• The future of Vancouver’s West End

  

  Spacing Vancouver recently published an interesting look at Vancouver’s West End neighborhood. And it led me into a deep dive of the neighborhood’s recently adopted Community Plan (November 2013). So today I’d like to talk a bit about the neighborhood and also their plans for managing growth over the next 30 years.

  Officially established in 1969, the West End spent the next 3 decades as the most densely populated area of Vancouver. But starting in the 2000s with the development of high-rise condo towers in neighbouring areas such as Downtown South to the southeast and Triangle West and Coal Harbour to the northeast, the West End lost this position. Today it’s the 4th most densely populated neighborhood in the city.

  The bulk of the housing (77%) is in the form of apartments with 5 or more storeys. And 81% of residents are renters. This is well above the city average of 52% and is likely a reflection of the neighborhood’s younger demographic (25-29 years old is the largest segment) and its position as a landing ground for new Vancouverites.

  But as a large central area with exceptional access to natural amenities, I would imagine that development pressures are and will continue to be significant. To plan for this growth, the city wants to intensify the central areas of the neighborhood with low-rise and mid-rise form and the periphery with high-rise towers. And already this is happening with developments such as the 62-storey Shangri-La Hotel.

  Here’s an image depicting their 30 year vision:

  

  But what stands out for me in the Plan is Vancouver’s continued commitment to laneway intensification. The Plan refers to it as “Laneway 2.0” and they specifically mention the opportunity to redevelop the West End’s wide laneways with “ground oriented infill housing.” Below is an example of how this could be done on a small residential lot, but the Plan also includes images for how the same might be accomplished on underutilized apartment building sites.

  

  Laneway housing is a topic I’ve written about extensively on ATC. Toronto is absolutely behind on this. And as I’ve argued before, we need to be looking at urban intensification across all scales, from low-rise to high-rise, if we want to create inclusive and vibrant cities. With the West End Community Plan, Vancouver seems to be doing just that.

  2014.05.18