From Vancouver With Love

The Old Arbutus Corridor Out of Town

Dear Leaving Vancouver,

It’s not that I’m not into you. It’s just that I’m having a hard time committing.

I mean, don’t get me wrong. I’ve made some big decisions in my short life. I decided I wasn’t going to be just another sprawling North American city back in the early 1970s. That’s when I ditched the freeway and put in place boundaries, like the Agricultural Land Reserve, meant to preserve my livable figure. I’m proud to say that despite splurging on a few mansions here and there, I’ve pretty much stuck with it. And good news! People like me! They really, really like me!

VancouverUrbanBoundary
Urban Containment Boundary

But that’s part of the problem now, isn’t it? You feel like too many people like me, and since I’m not growing outward there’s just no room for you. Instead, it’s all about the bling. Like only the fast crowd can catch my attention any more.

I have to admit, there’s some truth to that. You see, I’m struggling with some family stuff. The olds aren’t always happy with the ways I’ve changed. And they’re terrible snobs. Like they think they should get to choose who I live with! And the only ones they think deserve me are those who can afford my most expensive tastes – fancy cars, detached houses, you know the drill. And, ok, I admit that with so many suitors my most expensive tastes have gotten really, really expensive!

Is it any wonder I’ve grown a little… high maintenance?

But I’m here to tell you that you don’t have to be rich! You don’t even have to be cool! It’s not you, it’s me, and I’m working on it. I really want you to stay. I do! As a matter of fact, I NEED you to stay. Someone’s got to work around here.

ResortCityZoning
Reserving Land for Millionaires?

So what has to happen? If I want you in my life, I think my tastes need to change. A little public transit here, some social housing over there. If I raise my property taxes, I can cover it. I mean, have you SEEN how low my taxes are? Lots of potential there. Then I just need to stop reserving so much room for that fancy-pants in-crowd. Like, why can’t I have low-rise rental housing everywhere? If I just work on myself a bit, I know I could make room for you!

That’s what I want, you know.

So help me follow-through on my commitments. Like I said, I’ve done it before. I can do it again. I can be sustainable, livable, AND inclusively welcoming. So encourage me to be the city I want to be. Stick around. Vote.

As for me, maybe all I really need to do is… grow up.

Love and Kisses,

Vancouver

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Fact-checking Vancouver’s Swamp Drainers

[co-authored with Jens von Bergmann and cross-posted with MountainMath]

Swampy facts: the dark, broken, and ugly side of housing talk in Vancouver.

Down south of the border, a politician who shall remain nameless campaigned on “draining the swamp” of Washington D.C., trafficked in countless conspiracies, and lied his way into office. His lies painted a picture of a United States turned dark, corrupt and menacing. He promised to fix it, Making American Great Again, mostly by shutting down globalization and kicking out the immigrants.

In Canada, we like to think we’re immune to this kind of rhetoric. But a strain has made its way into discussions concerning Vancouver, where the intersection of real estate, politics, and globalization are increasingly portrayed as a swamp in need of draining. We don’t believe most of those portraying Vancouver as swamp-like are intentionally lying (and in real life they surely favour the preservation of environmentally sensitive wetlands). Nevertheless many commenters are muddying the discourse with poorly sourced claims as a means of scoring political points and attacking various aspects of globalization.

It’s tricky to track down the spread of all the false claims out there. Fortunately a bunch of them were concentrated in a recent piece on “Dirty Money” in Macleans by Terry Glavin that views Vancouver as “a case study in the dark, broken and ugly side of globalization.” Recognizing that getting facts and interpretations right is often difficult for even the most well-intentioned, let’s work toward correcting a few misperceptions, line by line:

“At least 20,000 Vancouver homes are empty, and nobody’s really sure who owns them.”

Variations of similar statements permeate the media, with various degrees of factual accuracy. The most common misrepresentation is to refer to the 25k homes not “occupied by usual residents” as “empty”, which the above quote avoids by using an appropriately lower number.

The main issue with the above quote is that it’s portraying those “at least 20,000” homes as problematic vacancies, neglecting that that count includes moving vacancies around census day, empty suites (about 4000 of them), and units in buildings that completed around census time and did not have the time to fill in yet.

Accounting for these types of vacancies, we arrive at the ballpark of the Ecotagious Study based on BC Hydro data that found between 10,800 (for year-long vacancies) to around 13,500 (for four-month vacancies) and now the 8,481 empty homes through the Empty Homes Tax declarations, although some of those empty homes found via the EHT are outside of the universe Ecotagious reported on.

When quoting these numbers, the key question is what are the numbers supposed to be used for. If it’s to highlight “problematic” vacancies, then the Ecotagious numbers probably get us the best estimate for that point in time. Since then the number has likely dropped due to Empty Homes Tax pressure, we will have to wait until the repeat of the Ecotagious study to get confirmation on by how much.

And the reason we don’t know who owns them is not for some nefarious reason but simply because the methods we have for estimating empty homes (other than the ones caught by the Empty Homes Tax) do not allow for the identification of units.

“Another 25,000 residences are occupied by homeowners whose declared taxable household incomes are mysteriously lower than the amount they’re shelling out in property taxes, utilities and mortgage payments.”

That’s plain false, we have looked at this before. The 2016 census counted only 8,940 owner households with higher shelter costs than income. An additional 14,510 renter households paid more than their income in rent and utilities, making for a total of 23,450 households in the City of Vancouver that had higher shelter cost than income, most of which were renter households.

The wording of the sentence, followed by the next talking about tax avoidance in British Columbia real estate, seemingly suggests that the majority of these 23,450 households were cheating in some way. Let’s take a closer look at these households with shelter cost higher than income.

One of us (Jens) is partially responsible for bringing this stat into circulation and failing to provide more extensive context from the get-go.

figure-chunk-1

Looking more closely, we see that the bulk of these households are non-census-family households, probably roommates in many cases. Students likely account for a lot of the data. Single parents are also common. While there are some indications of irregularities in the data worth investigating further, broadly suggesting all these households are tax cheats is irresponsible.

“Non-residents own roughly $45 billion worth of Metro Vancouver’s residential properties, and non-residents picked up one in five condominiums sold in Metro Vancouver over the past three years.”

The first part is fairly accurate, CHCP reports that $43 billion worth of residential properties in Metro Vancouver were owned by non-residents. Of course that’s less than 5% of the total value of $884.5 billion.

The second part is a prime example of making statements without understanding the data. We don’t have data on non-resident buyers, presumably referring to buyers with primary resident outside of Canada at the time of the sale.

Considering similar statements in an earlier article by the same author, our best guess is that the author was referring to non-resident owners of condos that were built between 2016 and late 2017. Owners of recently built condos could be taken as a proxy for buyers if one makes some assumptions on resales.

Except the ratio of condo units built between 2016 and late 2017 that were held by non-resident owners is one in 7.1 for Metro Vancouver, and for the City of Vancouver that the previous article was referring to the ratio is one in 6.5. (CANSIM 33-10-0003)

In summary it seems the original statement is the product of playing loose with definitions, Metro vs City mixup and aggressive rounding to pump up the numbers.

“But Transparency International reckons about half of Vancouver’s west-side residences are owned by mystery trusts or shell companies.”

Big if true, a claim so outrageous that it needs data to back it up. It seems that this is based on a transparency international report that the author also referred to in a February column, where the author characterized this as “Transparency International estimates that perhaps half of Vancouver’s high-end residences are now owned by shell companies or trusts”. Now this has morphed into “about half of Vancouver’s west-side residences”. It’s good to remember what the Transparency International study actually did, it looked at the 100 most expensive properties in Metro Vancouver and found that 46 of these were owned by companies or trusts (not all of which have opaque ownership).

Via StatCan’s CHSP (CANSIM 39-10-0003) we now know that 5.61% of Metro Vancouver’s residential properties are owned by companies or trusts (or “non-individuals”), roughly in line with most other Canadian metropolitan areas in BC and ON as the following graph shows. Needless to say, the 100 most expensive properties on Vancouver’s west side are likely quite distinct from the rest.

Even after adding the non-resident owners to the non-individual owners, Vancouver still looks a lot like most other metro areas. In fact, the only metro area that really stands out is London, ON. Otherwise it’s the non-metropolitan portions of BC and ON that have the highest representation of company and trust ownership structures.

figure-chunk-2.company_non_resident

“In Metro Vancouver, homeownership costs amount to 87.8 per cent of a typical household’s income”

It does not. Most people spend far less, as the following graph on share of income spent by owners on shelter costs demonstrates.

figure-chunk-3

The author appears to be conflating running shelter costs of owner households with the RBC affordability metric which compares the cost of financing the typical home for sale in the region to the typical household income. The latter metric may (imperfectly) reflect some of the difficulty now facing those wishing to jump from renting to owning, but has little bearing on how much typical households currently spend in either category.

“Vancouver has also become a major global hub for organized crime networks based in China.”

Here the author immediately pivots to the opioid crisis and the suspicious transactions identified in the recent money laundering report concerning lax oversight of casinos, attempting to link these to broader affordability issues and to globalization. To be clear, both the opioid epidemic and money laundering are serious issues in their own right. The fentanyl crisis has killed way too many British Columbians. As a recent report by Sandy Garossino notes, the criminal organizations associated with money laundering through BC Casinos have also claimed multiple lives. We should be outraged by the crisis and the crime ring, but it’s wrong, as Garossino adds, that this, “mainly bugs us because we figure it’s driving up the cost of housing in Vancouver.” The opioid epidemic demands more sustained attention than it’s likely to receive as a prop for tarring globalization. That’s not at all what it’s about. It requires a comprehensive re-think of our health care systems, pain management strategies, and criminalization of drug use, and the biggest villain in the story so far appears to be a major American pharmaceutical company. As for money laundering, further reporting on its role within the real estate sector has been promised by the Attorney General, but so far it’s not clear that shady practices – while certainly present – have had much to do with driving up real estate prices. As multiple commenters have noted, even if all the $100 million so far reported to have been laundered in our casinos over 10 years was re-invested in real estate, it would represent at most tiny fraction of total real estate transactions. Property transfer tax data shows that Metro Vancouver averaged $5.2bn worth of residential real estate transactions each month in 2017, dropping to $4.4bn during the first 5 months of 2018. There are real reasons to be outraged over the opioid epidemic and money laundering. But the link between these issues and affordability remains tenuous, and insisting upon the link in the absence of further reporting diminishes the importance of the documented damage they’ve already generated without pointing toward any good solutions for affordability, the opioid crisis, or tackling money laundering.

“Freeland could have been describing Vancouver: ‘Median wages have been stagnating, jobs are becoming more precarious, pensions uncertain, housing, child care and education harder to afford.’”

This is plain false. To its credit, back in February the NDP government moved to make childcare much more affordable for British Columbians. Why ignore this progress? Moreover, Vancouver has seen strong jobs and income growth. To gauge wage growth, we look at full-time employment income for couple families, lone parent families and unattached individuals and compare the trajectories to Metro Toronto.

figure-chunk-4

We see that Vancouver CMA has overtaken Toronto for non-family individual income and lone-parent median income, and almost closed the cap on couple family income.

figure-chunk-5

This shows how Vancouver’s labour force participation rate has increased with respect to Toronto while the unemployment rate decreased. Lastly we can look at the regional job vacancy rate for the respective economic regions to see how Vancouver’s job market is much stronger than the labour force is able to fill.

figure-chunk-6

Afterword

In our hyper-polarized environment it is probably not enough to simply point out factual errors without further comment. So we take this opportunity to state that we strongly support stricter oversight and enforcement of money-laundering, as well as implementing measures to increase transparency in property ownership. We are also gravely concerned about Vancouver’s affordability problems. We’ve supported a number of housing policies recently put forward by local governments, including the empty homes tax, the school tax, and the boost to social housing investments, all aimed at fixing regulation and providing more housing to those most in need. It’s important to separate out what governments are doing right from where they might be failing. This is where swamp imagery fails us, blending everything together and dragging it all into the mud.

We think fixing our affordability problems is going to involve making tough choices and policy tradeoffs, and we should approach them with a clear sense of what’s at stake rather than mixed up facts, vague swamp-ish imagery and the sense it can all be blamed on the dark, corrupting forces of globalization. We’ve all seen where that last route can take us.

As usual (for Jens), the underlying R Notebook for this post that includes all the code for the graphs and numbers in this post is available on GitHub. Feel free to download it to reproduce the analysis or adapt it for your own purposes. Hopefully this kind of transparent and reproducible analysis can help establish a shared base of facts. And reduce the amount of guessing needed to make sense of people’s numbers and statements.

 

Update (July 27, 2018)

Several people have pointed out via Twitter and comments that inflation-adjusted income growth might be a better metric to use. And that’s a good point. In the context of housing we often have nominal housing prices in mind, so nominal income can be a good metric in this context. But inflation-adjusted incomes add another important perspective.

figure-chunk-Add

Here we used Canada-wide inflation estimates, Vancouver’s income growth looks even stronger when normalizing by CMA-specific CPI. (Digging into the reasons for this would probably make another interesting blog post.) The two graphs show the inflation-adjusted incomes, as well as change in adjusted incomes indexed to 2000. We can clearly see the growth in all categories, both in absolute terms, as well as in relative terms compared to Toronto. Despite this, the notion of “stagnant incomes” in Vancouver is quite pervasive in news stories.

Mother Tongues and Motherlands

Browsing around for Immigration, Refugees and Citizenship Canada (IRCC) data, I stepped into their portal and stumbled across some updated “facts and figures” data on immigrant intake for permanent residents from 2007 to 2016. Tables included intake by nationality (15) and mother tongue (22).  Playing around with the data, I was struck by the way these two variables overlapped, but did not quite match. Pretty cool! So I thought I’d show off the matches for the BIG THREE Canadian migrant-sending countries: India, the Philippines, and China (in that order).

But first, it’s worth noting that the hold of the big three wavered in 2016. In a dramatic move, the upstart, Syria, actually knocked off China for third place sending country. This, of course, reflected a very real (and very welcome!) move on the part of Canada to accept Syrian refugees. Canada has taken in no where near as many Syrian refugees as many other countries, especially those nearby (Turkey, Lebanon, Jordan) and Germany. But credit where it’s due, Trudeau’s Liberals stepped up to their campaign promises to do something to help.

Intake-Country-Top5

 

Aside from the sudden rise of Syria, the big three continue to dominate migration to Canada, trading off for first place, though China has dropped considerably since 2013. Pakistan rounds out the top five in 2016, and I promise I won’t leave it behind.

So what about mother tongues! How do they match to nation-states?

Let’s start with China. While there are many dialects of Chinese, all are treated as Chinese by IRCC. When we map Chinese as mother tongue onto China as a sending country, we actually see more Chinese-speakers entering Canada than arrive from the People’s Republic of China (a.k.a. Mainland China). When we add in arrivals from Taiwan and Hong Kong, we’re very near total arrivals speaking Chinese as their mother tongue. Nevertheless, there are still a few Chinese-speakers to spare! The Chinese diaspora extends to other countries (e.g. Singapore), so this makes sense.

Intake-Country-Chinese

Let’s look at the Philippines! This was actually the case that motivated my post, insofar as I saw Ilocano listed as one of the top 25 mother tongues of arrivals to Canada in 2016, and in my ignorance, I must confess that I had never heard of the language before. If wikipedia is to be believed, it’s the third-most spoken language in the Philippines, after Tagalog (which I knew) and Cebuano (which I did not know). Unfortunately, only Tagalog and Ilocano are recorded as mother tongues in the top 25 for immigrants to Canada. But let’s see how well they cover arrivals from the Philippines…

Intake-Country-Philippines

It looks like Tagalog is the mother tongue for the vast majority of immigrants from the Philippines, but recently Ilocano has been added. A number of other Filipino languages probably make up the balance (there are twelve indigenous languages listed as per wikipedia, and English and Spanish are also commonly spoken). Though Tagalog is dominant, Tagalog alone will not catch all immigrants from the Philippines. Good to know!

What about India? Holy smokes! Talk about complicated! Due to the partition of the Indian subcontinent into India and Pakistan (and then Bangladesh), there’s simply no easy way to contain languages within India. At the same time, there are a LOT of languages to deal with. Here I chart India, Pakistan and Bangladesh together against the many subcontinent languages to make up the top 25 for immigrants to Canada.

Intake-Country-Subcontinent

Once again, it’s a pretty good match. In the early years, it appears some migrants speaking the subcontinental languages involved arrive from outside India, Pakistan, and Bangladesh. I wouldn’t be at all surprised if Sri Lanka accounted for some of the Tamil-speaking migrants. More recently, it would appear I’m still missing some mother tongues by only tracking the languages in the top 25. India is a motherland with a lot of mother tongues!

What I also find intriguing is that the linguistic variation in migrants does not track the overall prevalence of languages in each sending country. What’s going on? Linguistic selection! We can see this especially insofar as Canada constitutes a real destination for Punjabi migrants from India. We can also see this insofar as the Philippines is increasingly sending migrants speaking its third (but not second) most common mother tongue. And of course selection has long been an issue for Chinese dialects (For instance, Cantonese is only now being replaced by other dialects here in Vancouver).

How to Become a Resort City

I think many people are concerned that Vancouver is turning into a “resort city” – a playground for the rich – rather than a diverse and thriving city for all. But is this really happening? Yes. And I’m concerned too!

Certainly we see a lot of luxury cars and retail outlets, but we don’t really track wealth very well in Canada. Nevertheless owner-occupiers report their home values in the census and that’s where most wealth ultimately lies for Canadians. We can ask a simple question: where do the millionaires live? By millionaires I’m referring to anyone who reports owning and occupying a home worth a million dollars or more – not a perfect proxy, but not bad. The census uses self-reporting to get at this, and Statcan Table 98-400-X2016232 – in conjunction with total household numbers from Census metro area profiles – enables me to generate the following figure.

MillionaireHHs

Vancouver contains almost as many millionaires as Toronto, despite being less than half the size. Together the two metropolitan areas account for less than a fifth of Canada’s total number of households but over three-quarters of all owned dwellings worth on million dollars or more. To put matters differently, nearly 25% of Metro Vancouver’s households own a dwelling worth a million dollars or more, compared to just over 1% of the Rest of Canada (outside Toronto). We are literally concentrating the One Percent in terms of Canada’s wealthiest households.

Maybe Vancouver’s not quite a resort city yet, but it’s definitely in the neighbourhood!

So how did we get to this point?

In some ways Vancouver was predisposed to growth because it’s got lots of things people want: ocean, mountains, one of the mildest climates in Canada, a thriving port, a railroad line, lots of jobs, diverse ex-patriot communities, parks, strawberry-picking in the Agricultural Land Reserve, etc. This could explain growth overall. But everybody wants these things, not just rich people.

If it’s not just amenities that attract specifically rich people to Vancouver, then how are we becoming a resort city? Some people blame the fact that Vancouver’s amenities have been heavily marketed to rich people around the world in recent years. They have a point: this has certainly happened. But lots of other places try to market themselves to the rich as well. What makes Vancouver special?

We might not be attracting the wealthy so much as we’re systematically excluding everyone else who wants to live here. It’s about changing the composition of in-movers, so that wealthier and wealthier people tend to come (incidentally, this fits with research on neighbourhood change suggesting this is mostly how gentrification occurs).

How are we systematically excluding everyone who’s not rich? Easy! Under conditions of growth, all we have to do is preserve lots of urban land for millionaires and largely prevent anyone else from competing with them. Effectively this is what residential single-family (RS) zoning accomplishes in places like Vancouver, which we can see by comparing what proportion of detached and duplex housing is evaluated at over a million dollars.

ResortCityZoning

Across Metro Vancouver, nearly 60% of detached or duplex housing is evaluated at over one million dollars, yet the vast majority of urban residential land is zoned to support only these forms of housing. This is how you get a resort city, fit only for millionaires (with a little bit of room for their servant-tenants living in basement suites below – which is what duplexes mostly consist of in Canada). This compares to around of quarter of detached houses worth over a million in Toronto, and just over 2% in the Rest of Canada.

We can flip the question around to ask what percent of million-dollar dwellings are single-family detached or duplex dwellings. Strikingly, the answer in Metro Vancouver, Metro Toronto, and the Rest of Canada is pretty much the same: almost 90%.

Luxury zoning is almost entirely detached zoning. Across Metro Vancouver, the converse is also increasingly the case: detached zoning is becoming luxury zoning, affordable only to millionaires.

In places with lots of amenities – including jobs! – where people really want to move, growth is mostly limited by housing. If we only make housing for millionaires, we’ll increasingly have a city of millionaires. If we want to keep Metro Vancouver from becoming a Resort City, we’re going to have to tackle the zoning issue.

For this and more: yadda yadda yadda… book.

Thanks to Frances Bula, Jens von Bergmann, and Chad Skelton for inspiring today’s post and/or snatching away my afternoon! And if you’re interested in what you can do about reforming zoning, look into the platforms of municipal parties, like OneCity, that advocate for inclusivity across our urban landscapes.

A Rough Working Guide to Housing Crises and Policy Levers

The housing market: it’s all about supply and demand, right?

Not quite. States and markets – especially markets for housing – grew up together. Housing is heavily regulated in ways that generate, constrain, and ultimately channel supply and demand, creating not one, but many sub-markets and also non-markets. The policies governing housing have been layered one atop the other through history.

Where do these policies come from? They often respond to perceived crises. For instance, Vancouver enacted its first Fire By-law on July 19, 1886, just five weeks after the newly incorporated city burned to the ground. As a result, the policies set in place to deal with various crises are frequently reactive in nature. They also tend to be crafted in the image and interests of those most powerfully situated to govern.

Since the late 19th Century, policies across North America (and elsewhere) also tend to respond to an ideological background of “market fundamentalism,” or the idea that the market governs best (sometimes referred to as “neoliberalism”). As Karl Polanyi diagnosed early in the 20th Century, markets are terrible at governing some things (people, nature, productive capacity). As I argue in my book, urban land and the housing built atop it is one of these things. This sets up an interesting dynamic whereby ideological attempts to govern by a singular market create all manner of housing problems, which in turn generate reactive policy responses and explain why housing is so heavily regulated. The most frequent policy response, I think, has been to set up protective partitions within markets. This produces sub-markets and non-markets and helps explain the distinct nature of our various housing crises.

In what follows, I’m going to attempt to provide some insights into Vancouver’s current housing crises in a way that gets at the history of this partitioning of markets. The past barriers we’ve created to generate, constrain, and channel the market forces of supply and demand continue to shape policy levers available to us today.

Here’s a working visual guide (link to larger version). Sorry: it’s still pretty rough and necessarily messy, so it might not “work” for everyone!

RoughModelCrisis4

Ok, so what’s going on here? Just to get it out of the way: “SFD” = Single Family Dwelling and “PBR” = Purpose-Built Rental. Combined together with “Condo” and “Non-market” housing, we’ve got our (heavily simplified) major basic forms in which housing is provided.

We can link these basic housing forms into how they relate to our perceptions of four distinct housing crises. I’ve distinguished these housing crises in terms of need, primary group of interest, and how Vancouver is doing addressing these crises in comparative perspective (more here).

Crisis #1: Homelessness involves the greatest need for housing, mostly affects the poor, and in comparative perspective, Vancouver actually has a not-terrible track record addressing this crisis. Though it’s gone up in recent years, the prevalence of homelessness remains relatively low. But the homeless are those most likely to be at risk of dying due to their housing situation. Everyone else’s crises pale by comparison.

Crisis #2: Rent Access involves high and immediate need for housing, mostly affects the working class and/or young, and Vancouver has a mediocre track record addressing this crisis. Rents remain relatively middle-of-the-pack for North American cities, but this is largely due to rent control and vacancy rates are very low, making it difficult for new entrants into the rental market. Failure to provide rentals can lead to real hardship and (ultimately) homelessness.

Crisis #3: Housing Price to Income reflects relatively low need, mostly affects the aspirational middle class, and Vancouver looks awful in comparative perspective (at least within North America). Since it affects the middle class & Vancouver does pretty terrible compared to elsewhere, this crisis sucks up most of the attention in Vancouver’s debates, despite reflecting relatively low need compared to the rental and homelessness crises.

Crisis #4: Return to Investment is unlike the other housing crises insofar as it reflects a more general crisis involving finance. Correspondingly, I place it as the lowest of needs, and it tends to affect an investor class already most protected by their assets. Recently, at least, Vancouver’s housing market has provided a very good return on investment. No real crisis here (despite recent attempts to set in motion a property tax revolt).

I’ve tried to cram as much of the history of reactive housing policy as I could into describing the barriers channeling supply and demand, with particular reference to Vancouver. Each letter describes a partition in markets and also acts as a policy lever. The letters identifying each lever / barrier are ordered in rough historical fashion. When was each barrier or lever put in place? Meanwhile, the arrows follow the production of housing from its monetary backing (capital – in green) through its development (in blue) to one of the four major forms of housing described above, and finally to its end use (consumption) as non-market, primary rental, secondary rental, resident owner-occupation, and empty or other.

It’s complicated! And I’m still leaving a lot out (e.g. non-profit organizations) and simplifying in places (e.g. treating resident-owners as strongly distinct from investors).

Nevertheless, a few points are worth making:

1) there is no such thing as a singular “housing market.” Instead there are many little sub-markets and non-markets produced by the layering of policies.

2) sub-markets are still connected to one another, but the connections are shaped by policies and determine how processes like “filtering” are variously enabled to work.

3) this reflects real concerns that there can be a “right” and “wrong” kind of supply. The overall history of housing policy insures that there really are different kinds of supplies that end up addressing different kinds of crisis. At the same time, supplies and crises do relate to one another. The trick is that the relationships aren’t at all straightforward, and some kinds of supply (e.g. condos) have been made more flexible than others.

4) earlier and wider ranging policies (e.g. A & B, covering tax, finance and land use) can have really wide-ranging effects on how housing works. For instance, shifting from extensive to intensive land use policies potentially unlocks a wide range of new housing stock that could help address all kinds of housing crises. Later policies tend to have more limited effects, carving off new little sub-markets (e.g. Accessory Dwelling Units) and specifying their links to other little sub-markets. But these links can be important!

5) sometimes the effects of policies can be complementary or conflict, depending upon the crisis at hand. For instance, Empty Home Taxes (policy lever F) diminish the range & value of benefits for investment (crisis #4, lowest need), but encourage the channeling of existing supply toward resident-owners (crisis #3, low need) and rentals (crisis #2, high need), ideally benefiting both the middle and working class. By contrast, a broader tax on use of housing for investment (policy lever A) without any exemption for rental tenancies would channel even more existing supply toward resident-owners (crisis #3, low need), but possibly exacerbate the options available for renters (crisis #2, high need). Rental restrictions within strata associations do the same thing. One concern with enabling the stratification of ADUs (policy levers D & G) – currently limited to rentals – is that it may have a similar effect, pitting the working class and middle class against one another.

6) am I already at six?!? I have lots more to say about this working model, which I began sketching months ago just to begin thinking through some of housing policy change we’ve seen and continue to see in Vancouver. With luck, I’ll work toward turning it into a paper! But as it is, this blog post is already too long. What’s your working model look like?

 

 

 

 

Fleeing Millennial Zombies

We are plagued with zombie factoids. You can kill them over and over again with evidence of their falsehood, but they keep resurrecting and coming back because they fit prevalent narratives.

The “fleeing millennial” is one of Vancouver’s key zombie factoids. The basic idea is that the city is getting so expensive that it’s driving out millennials. Vancouver is sacrificing its own future! The detritus of uneaten avocado toast will ruin our tidy streets! (I kid, that’s what seagulls are for). The problem with this factoid is that it’s false. I’ve previously attempted to kill this idea here, here, here, and here. But it keeps coming back. It’s a zombie; undead and on the lookout for brains to eat.

As factoids go, this one highlights a real and pressing problem: the local unaffordability of housing. But it does so in a misleading and harmful fashion. It’s misleading because there is NO data anywhere suggesting that we’re selectively losing people in the age groups reasonably corresponding to millennials. It’s harmful because every time it re-appears, the fine print reveals that it necessarily valorizes some millennials over others.

The most recent resurrection of the fleeing millennial zombie factoid arrives via the folks at Better Dwelling, running their headline: See Ya! Local Millennials Are Abandoning Toronto and Vancouver. The valorization of a particular set of millennials receives a nod in the headline: we’re dealing with “local” millennials. Within the body of the piece, this is fleshed out: we’re dealing with intraprovincial migration patterns, between Metro Vancouver and other parts of BC, and between Metro Toronto and other parts of Ontario. Intraprovincial migration leaves out international immigration and interprovincial migration, the two other main components of migration overall (as described by Statistics Canada). Given that Toronto and Vancouver are Canada’s premier gateway cities, this is a pretty big oversight! Immigrants flood into these cities, with some staying while others move on to other parts of Canada.

I’ll come back to this problem, but let’s start with Better Dwelling’s focus, on intraprovincial migration. Can I replicate their findings drawing upon Statistics Canada components of population change data (StatCan 051-0057)? Nope.

Intraprovincial-Migration-MetVan

I can get the same pattern, but not the same numbers. Here’s what I get looking at intraprovincial migration (summing net change for the years and age groups covered and adding the historical context from 2002-2007 just because it’s there!) This worries me a bit, and I asked Better Dwelling for clarification, but they have yet to respond (I also checked my numbers with the ever-helpful Jens over at MountainMath, who also couldn’t reproduce Better Dwelling’s numbers).

At any rate, the pattern is the same. But the pattern is misleading. After all, we’re only looking at a single component of migration. What happens if we add them all in?

MigrationComponents-MetVan

Wow. That looks quite different! If anything, net migration from millennials (age 20-34) is soaring to all new heights in the latest five year period estimation. It’s just that intraprovincial migration has a slight drag on this pattern (compared to a more steady drag across other age groups). What to make of this?

As a gateway city, Vancouver’s population growth is driven first and foremost by international migration. Both interprovincial and intraprovincial migration play a role at the margins. We are definitely not losing millennials. But what about the claim that we’re losing “local” millennials? It’s a weird claim. It’s likely the case that many of the millennials showing up as international migrants in one period might later show up as intraprovincial or intraprovincial migrants in another. Ideally that’s what gateway cities do: take in huge numbers of migrants, keep some, and send others toward the broader set of communities in the province (and the rest of Canada) looking for workers and growth. Personally, I happen to know at least one Chinese immigrant to Vancouver now working and residing in Kelowna. It might be fun to break down intraprovincial migration by place of birth or the like, but absent that kind of careful analysis there’s no reason to imagine intraprovincial migration patterns identify “locals” or are uniquely informative about the state of millennials in Vancouver or Toronto.

As a methodological aside, it also feels a little odd to sum up the components of growth from Statistics Canada models in the time periods specified without acknowledging that they’re calibrated to the census years (2001, 2006, 2011, 2016). So 2012-2017 provides an estimated breakdown of components of change drawn from the combination of a 2011-2016 comparison with various sources of administrative data. The 2016-2017 estimations are especially subject to change! Still, it’s neat to see how Stats Can does this work. As a bonus, here’s what you get in terms of Statistics Canada’s model of population change by age group in Metro Vancouver moving forward from the the Census year (2016) to the next (2017), but setting births aside.

PopChangeComponents-2016-17-MetVan

What really jumps out is the contribution non-permanent residents are making! They don’t show up in net migration figures here, but wow! Look at how much they’re contributing to growth, especially in the late teens. See the CMHC’s write-up about the effects non-permanent residents might be having on housing demand, but keep in mind that many will transform (like I did) into permanent residents.

And in the meantime: watch out for zombies! Don’t let them near your brains!

 

[UPDATE: May 25th, 2018. This blog post was combined with a couple of others in its own The Tyee article! No, Vancouver Is Not Losing Its Millennials. Thanks to awesome local reporter Christopher Cheung for reaching out and pulling that together. After the Tyee piece went up, I’m told that Better Dwelling contacted them to report that they’d used the CANSIM table 051-0060 rather than CANSIM 051-0057, as above. This seems to explain the disjuncture in specific numbers, which is good! But the problems with ignoring interprovincial and international migration of millennials remain. Also, CANSIM 051-0060 covers a HUGE amount of territory. Rather than just looking at Metro Vancouver, it looks at an economic region defined as the “Lower Mainland-Southwest, British Columbia.” Unlike a metro regions, which build their integrity largely around daily commute-sheds, economic regions seem to work more like ways of dividing up the entire country into manageable, if somewhat arbitrary, contiguously defined units. So the economic region of “Lower Mainland-Southwest” combines the Census Divisions of Greater Vancouver, the Fraser Valley, the Sunshine Coast, and Squamish-Lillooet. Full Statistics Canada map here (it’s big!). The Immigration Settlement and Integration Program (ISIP) has put up a smaller map illustrating the economic regions of BC which I borrow below, showing what nice things you can do when you work to recognize and welcome international immigrants!]

 

BC Regions Map

 

Visualizing Succession

After my talk at the Vancouver Historical Society, I’ve been playing around with some of the old fire insurance maps for Vancouver. As it turns out, fire insurance maps are super-awesome resources for historical research. Here I want to explore ways of using them to visualize succession as an urban process.

Succession, meaning the gradual outward expansion of an urban core, was thought by many observers of the early 20th Century to be the key process driving neighbourhood change. For sociologists like Ernest Burgess and Roderick McKenzie, succession was a process of “invasion” from the centre outward through a series of concentrically organized ecological habitats. The central business district (Habitat I) was always attempting to move into the surrounding industrial and commercial areas (Habitat II), which in turn were always invading the areas of dense working class housing beyond (Habitat III), which were always trying to muscle in on the middle class and wealthy residential suburbs on the outskirts of the city (Habitat IV).*

“Succession” was a science-y and neutral sounding concept (having been drawn directly from plant ecology), while “invasion” was quite threatening, especially to the middle class and wealthy suburban neighbourhoods hoping to hold the urban core at bay (very much including its working class & minorities). With the invention, legalization and rapid spread of single-family detached zoning, the middle class managed to mostly surround and contain the urban core, as I describe in my recent talk and book. As a direct implication of halting the process of urban succession, constrained urban cores mostly grow up instead of out, and now we mostly talk about gentrification instead of succession as a key process affecting our cities.

But let’s go back to succession. Can we see it in action? Let’s start with an early residential development consisting of two blocks (subdivided by alleyways into six) on the outskirts of a rapidly growing city in the late 19th century.

ASuburbSuccessionI

The base layer here is an old fire insurance map from the Vancouver archives, though I’ve faded it out a bit to draw over top of it. Let’s highlight all of the houses.

ASuburbSuccessionII

 

We can see this is pretty much just a residential neighbourhood at this point, with the only non-residential use a church (lower-left). Most of the other buildings are sheds. But wait a minute, are these all single-family detached houses?

ASuburbSuccessionIII

 

Trick question! Those weren’t invented yet! So nobody was recording whether or not single families lived in these houses, nor how they might have been subdivided. That said, it’s clear that four houses in the upper-left block were all connected to each other, making them recognizable as rowhouses. Meanwhile, there were at least two houses connected side-by-side on other lots, making them semi-detached houses (by modern Canadian census categories). Also notable: at least four lots had both houses fronting onto major streets and houses fronting onto alleyways – with the latter now identified as “laneway houses” in Vancouver. Lots of “missing middle” housing!

Importantly, these residential blocks were located on the outskirts of a growing urban core in 1889. What will become of them? Let’s jump ahead 25 years and see…

ASuburbSuccessionIV

 

I’ve highlighted in red all of the buildings that disappear over the course of 25 years. Oh no! There goes our church! Over half of the houses are also gone. Devastation in Habitat IV! But at least the townhouses remain. Let’s fill in the neighbourhood…

ASuburbSuccessionV

 

Some of those old houses remain, and new ones have been added too, meaning that we don’t see a complete replacement of seemingly middle-class residential uses (Habitat IV). That said, for the most part torn-down houses have been replaced by much larger buildings that take up their lots and add abundant industrial, commercial, and office uses to the neighbourhood. At least three hotels (Alcazar, Cadillac, and Canada) join numerous rooming houses, with the latter being an especially important source of housing for the working class and poor (Habitat III). Industrial uses (machine shop, workshop, numerous printers, warehouse) also crowd the block, along with commercial uses and services (second-hand shop, steam laundry, tailor, restaurant). There’s even an undertaker with lodging above! Lots of what Burgess termed a zone in transition (Habitat II). And offices… so many offices. We can make a strong claim for central business district uses (Habitat I). In effect, the entire urban core has moved into a former middle-class residential district over the course of 25 years, give or take, without completely destroying it. On a first pass, pre-zoning urban succession looks more like urban mixing than invasion and replacement. But maybe we just didn’t give it enough time.

What does this marvelous neighbourhood look like now, some 100+ years later?**

ASuburbSuccessionVI

 

It looks like the two blocks bounded by Pender, Hamilton, Dunsmuir & Richards, right smack in downtown Vancouver. The 19-story BC Hydro Centre Tower dominates these blocks. But remarkably, at least nine of the old buildings that replaced the original houses in the neighbourhood during the 1906-1914 era remain intact! Alas, the townhouses in the upper-left have been replaced by a parking lot. Overall, the neighbourhood still has a mix of low-income housing, commercial and service space, and office space, though probably not a lot in the way of middle class housing (have to seek out some condos nearby for that).

I grabbed the dates on all the buildings I could find from VanMap‘s Assessment data. Old Fire Insurance Maps can be found in the Vancouver Archives.

Here’s the Fire Insurance Map from 1889, with zoomed in panel below:

Excerpt-1889

Here’s the Goad’s Atlas Map from 1910-1920, with zoomed in panel below:

Excerpt-1910-1920

This is a first-pass, of sorts, at drawing upon Vancouver’s old fire insurance maps to get at patterns of urban succession in the days before zoning. I’d welcome suggestions, collaborations, and better visualizations! (This was pretty much all done with powerpoint on the fly). In the meantime, here’s my cheap-o little animated gif of the slides above. Enjoy!

 

ASuburbAnimated

 

*- The Chicago School of Sociology modeled this process on Chicago itself – though McKenzie, it should be noted, also detoured to Seattle in describing “The Ecological Approach” to the study of The City (1925), in a volume for which Park & Burgess are usually given first billing.

**- The maps date from 1889 and somewhere between 1910 and 1920, which is why I say “give or take” in assessing the length of time that’s passed! Though the Goad’s Atlas dates itself as 1910, it was reproduced (with consolidated updates) in 1920, and includes buildings up to at least 1914, which is why I can narrow it down to around 25 years after 1889.