Bloomberg Businessweek just published a longish article about Vancouver and the Chinese capital that fuels it. It’s called, The City That Had Too Much Money.
Most of you are already familiar with this narrative, but here’s an excerpt that talks about the city’s economic base and its apparent dependency on foreign capital:
Change will be difficult and fraught. Vancouver has been closely connected to Asia since the late 19th century, when the first Chinese laborers arrived to help build the trans-Canada railway, and the city is proud of its record of integrating immigrants. Also, beyond real estate, Vancouver’s economic base is shallow. It’s not the business capital of western Canada—that’s Calgary—and it has few major corporate headquarters or large-scale manufacturing operations. “Asian capital has kept this economy alive, end of story,” says Ron Shon, a Chinese-Canadian venture capitalist who arrived as a teenager in the late 1960s. “You can see it in every aspect of our lives.”
One of the things I found particularly interesting were Chip Wilson’s comments around what is going on. Chip is the founder of Lululemon and is largely credited with pioneering the current “athleisure” trend.
Yet as Wilson explains, sitting in his office on the top floor of a century-old warehouse, these days he’s as interested in bricks and mortar as in quick-drying fabrics. “The global capital flowing out of China across the world, you’d have to be an idiot not to acknowledge it,” he says. “You know, we could just be at the cusp of that.”
To profit from the deluge, he’s been buying up land all over town, especially in False Creek Flats, a derelict industrial area that’s slated for redevelopment. He estimates that about a third of his holdings are now in real estate. British Columbia’s current government may succeed in slowing inflows temporarily, Wilson says, but China’s boom has created many multimillionaires who need a place to put their money. “So where do you go if you’re Chinese? Sydney, maybe. But nowhere, probably, is more friendly than Vancouver.” One way or another, he says, those funds will find their way to Canada.
That’s why, Wilson says, whenever he returns from a trip to Asia, his first thought is simple: “Buy land, Chip. Buy land.”
For the full article, click here.
Image: Jens Kristian Balle/The Forbes Collection/Contour/Getty Images (via Bloomberg)
Earlier this month, Extell Development Company announced the launch of sales for its Central Park Tower – which it is calling “the definitive New York skyscraper”, as well as the tallest residential building in the world.
The project is located on Billionaire’s Row in NYC and it will be 1,550 feet tall when completed. That puts it well into supertall territory.
According to Curbed, the smallest apartments start at 1,435 sf and the largest will be an estate in the sky at around 17,500 sf.
The projected sellout for the project is, or at least was, $4 billion back in 2017. That will set all sorts of records upon completion. At the time of the above filing, the average price was pegged at $7,106 per square foot.
If you’d like to read up on the project’s capital stack, you can do that here. And for those of us who are used to having to pre-sell condos before digging, you may find it interesting to know that this project started construction in 2014.
I wonder how much a parking spot costs (assuming there is even parking).
Andrew Kortina and Namrata Patel recently published an intriguing essay called, Kinky Labor Supply and the Attention Tax.
They begin by talking about declining labor force participation rates, particularly among young men. Remember that the participation rate is distinct from the unemployment rate. Here is a chart from the essay:
Bloomberg Businessweek just published a longish article about Vancouver and the Chinese capital that fuels it. It’s called, The City That Had Too Much Money.
Most of you are already familiar with this narrative, but here’s an excerpt that talks about the city’s economic base and its apparent dependency on foreign capital:
Change will be difficult and fraught. Vancouver has been closely connected to Asia since the late 19th century, when the first Chinese laborers arrived to help build the trans-Canada railway, and the city is proud of its record of integrating immigrants. Also, beyond real estate, Vancouver’s economic base is shallow. It’s not the business capital of western Canada—that’s Calgary—and it has few major corporate headquarters or large-scale manufacturing operations. “Asian capital has kept this economy alive, end of story,” says Ron Shon, a Chinese-Canadian venture capitalist who arrived as a teenager in the late 1960s. “You can see it in every aspect of our lives.”
One of the things I found particularly interesting were Chip Wilson’s comments around what is going on. Chip is the founder of Lululemon and is largely credited with pioneering the current “athleisure” trend.
Yet as Wilson explains, sitting in his office on the top floor of a century-old warehouse, these days he’s as interested in bricks and mortar as in quick-drying fabrics. “The global capital flowing out of China across the world, you’d have to be an idiot not to acknowledge it,” he says. “You know, we could just be at the cusp of that.”
To profit from the deluge, he’s been buying up land all over town, especially in False Creek Flats, a derelict industrial area that’s slated for redevelopment. He estimates that about a third of his holdings are now in real estate. British Columbia’s current government may succeed in slowing inflows temporarily, Wilson says, but China’s boom has created many multimillionaires who need a place to put their money. “So where do you go if you’re Chinese? Sydney, maybe. But nowhere, probably, is more friendly than Vancouver.” One way or another, he says, those funds will find their way to Canada.
That’s why, Wilson says, whenever he returns from a trip to Asia, his first thought is simple: “Buy land, Chip. Buy land.”
For the full article, click here.
Image: Jens Kristian Balle/The Forbes Collection/Contour/Getty Images (via Bloomberg)
Earlier this month, Extell Development Company announced the launch of sales for its Central Park Tower – which it is calling “the definitive New York skyscraper”, as well as the tallest residential building in the world.
The project is located on Billionaire’s Row in NYC and it will be 1,550 feet tall when completed. That puts it well into supertall territory.
According to Curbed, the smallest apartments start at 1,435 sf and the largest will be an estate in the sky at around 17,500 sf.
The projected sellout for the project is, or at least was, $4 billion back in 2017. That will set all sorts of records upon completion. At the time of the above filing, the average price was pegged at $7,106 per square foot.
If you’d like to read up on the project’s capital stack, you can do that here. And for those of us who are used to having to pre-sell condos before digging, you may find it interesting to know that this project started construction in 2014.
I wonder how much a parking spot costs (assuming there is even parking).
Andrew Kortina and Namrata Patel recently published an intriguing essay called, Kinky Labor Supply and the Attention Tax.
They begin by talking about declining labor force participation rates, particularly among young men. Remember that the participation rate is distinct from the unemployment rate. Here is a chart from the essay:
Participation is down for young people, but up for older people. This is perhaps signaling that older demographics still need to work in order to maintain certain needs and/or a particular lifestyle.
The possible explanations for this declining rate among young people are interesting. The authors argue that it is a combination of the declining cost of media entertainment content and the amplification of social status signaling, among other things.
The declining cost of online content has meant that this form of leisure activity has become incredibly cheap, if not entirely free (beyond the mostly fixed cost of an internet connection). So there’s always something enjoyable to do.
At the same time, the authors argue that once people make enough money to satisfy basic needs, there becomes a tradeoff between trying to make more money and simply spending more time on leisure.
Historically, the motivator to make more money has been arguably associated with social status signalling through conspicuous consumption. But with the advent of social media, we are all now signaling globally, instead of just locally.
Due to increased competition, the argument is that people are now feeling demotivated by all the conspicuous consumption that they see online. It is simply too difficult to compete. The Gini coefficient is too high.
So why not just spent more time on leisure?
One potential policy implication is that raising the minimum wage wouldn’t be enough to spur increased labor force participation. Labor isn’t responding in the same way to wage increases. There would need to be a much more significant increase in income for that to happen – hence the “kinky labor supply curve.”
One view of the status quo is that media companies are aggregating human attention and selling it at a discount–far below minimum wage–to advertisers in a massive arbitrage on human capital. So, the state could set the price of an hour of human attention at the minimum wage rate, and charge media companies 12% (the federal income tax rate on minimum wage) of that wage rate for each hour of human attention they consume.
One possible solution is an attention tax. But their takeaway is that this lost productivity will more than likely be made up for with technology, which could ultimately translate into something we are already seeing: increased inequality.
Check out the essay here. It’s an interesting read.
Participation is down for young people, but up for older people. This is perhaps signaling that older demographics still need to work in order to maintain certain needs and/or a particular lifestyle.
The possible explanations for this declining rate among young people are interesting. The authors argue that it is a combination of the declining cost of media entertainment content and the amplification of social status signaling, among other things.
The declining cost of online content has meant that this form of leisure activity has become incredibly cheap, if not entirely free (beyond the mostly fixed cost of an internet connection). So there’s always something enjoyable to do.
At the same time, the authors argue that once people make enough money to satisfy basic needs, there becomes a tradeoff between trying to make more money and simply spending more time on leisure.
Historically, the motivator to make more money has been arguably associated with social status signalling through conspicuous consumption. But with the advent of social media, we are all now signaling globally, instead of just locally.
Due to increased competition, the argument is that people are now feeling demotivated by all the conspicuous consumption that they see online. It is simply too difficult to compete. The Gini coefficient is too high.
So why not just spent more time on leisure?
One potential policy implication is that raising the minimum wage wouldn’t be enough to spur increased labor force participation. Labor isn’t responding in the same way to wage increases. There would need to be a much more significant increase in income for that to happen – hence the “kinky labor supply curve.”
One view of the status quo is that media companies are aggregating human attention and selling it at a discount–far below minimum wage–to advertisers in a massive arbitrage on human capital. So, the state could set the price of an hour of human attention at the minimum wage rate, and charge media companies 12% (the federal income tax rate on minimum wage) of that wage rate for each hour of human attention they consume.
One possible solution is an attention tax. But their takeaway is that this lost productivity will more than likely be made up for with technology, which could ultimately translate into something we are already seeing: increased inequality.
Check out the essay here. It’s an interesting read.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
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