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.

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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?

 

 

 

 

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.

 

If the Problem is Speculation, then Why Focus on Foreigners?

Ok, I’ll admit it. I’m an immigrant to Canada. And from the US, which has recently seen a surge in anti-immigrant and anti-foreigner rhetoric and mobilization. We saw the same, of course, in the UK leading up to Brexit, and there are outbreaks in many other places around the world as well. Anti-foreigner rhetoric is having its populist moment. And I don’t like it.

So I’m especially sensitive to anti-foreigner rhetoric. Combine that with my research interests in housing and immigration and my love for my adopted city of Vancouver, and well, you can probably see where this is going: I think we should stop our destructive focus on blaming “foreigners” for our housing problems.

This doesn’t mean we should stop paying attention to the impact of immigration policy and global flows of capital (and there are many good reasons to oppose wealth-based immigration policies like the investor program still operating out of Quebec!)* But it does mean we should stop using “foreigners” as our go-to explanation for sky-high housing prices.

Why? First, it’s dangerous. It should be patently obvious at this point that anti-foreigner rhetoric is the handmaiden to fascism. If I need to explain why that’s bad news, go visit some other blog. Second, it’s sloppy. The concept of “foreignness” is not well-defined in rhetoric, readily lends itself to racism, xenophobia and related “other”-blaming, and remains inconsistent with rhetoric when applied to policy. Let’s take Andrew Weaver’s recent foray into advocacy for a ban on foreign ownership as an example. He defends the ban this way: “We are delighted for people to come and work and live and own property in B.C. but it’s not okay for people to park capital here with no intention of living here.” I’m on-board with carefully tracking flows of capital, but does “foreignness” now apply to folks from Alberta and Ontario? And how do we square “foreignness” with the complexity of immigration? (I worked here on a visa for three years prior to becoming a permanent resident and then citizen, fully intending to live here all the while). Analyst Andy Yan offers a different, but related take for his focus on foreign-buying data: ““It comes down to a question of fairness. As people struggle with keeping their existing home or even having a home in Metro Vancouver, is it fair to treat them in the same way as someone who has a secondary or tertiary home here?” This is an entirely legitimate question, but it has little to do with foreignness, and everything to do with speculation and investment. To put the matter differently, if we’re trying to counter the possible negative effects of speculation and counteract wealth inequality, then I’m in, but if all we’re doing is coming up with policy responses to favor Canadian speculators over foreign speculators, then count me out.

And just what is the balance between “foreign” speculation and Canadian speculation? This is a tricky question to answer, in no small part because we DON’T track global capital very well. Like, at all… I’m all on-board at doing better with this – let a thousand Panama Papers blossom and the CRA take notice! But for now, instead of tracking capital, we track bodies and assign them to residence and rights of citizenship in complicated fashion. We have legislation in BC distinguishing “Foreigners” on the basis of PR and Citizenship status, regardless of their actual place of residence (our “foreign-buyer tax“). And now we have Andrew Weaver extolling the virtues of New Zealand’s proposed “foreign-buyer ban“, which is a little more complicated, but linked to assigned residency (e.g., temporary residents on visas can buy a home, but have to sell it when they leave). The latter issue of residency is what was kinda-sorta measured by Statistics Canada in its recent release of data on non-resident (“foreign”) property ownership (CHSP). This is the data Andy Yan’s been playing around with. But to date most write-ups of this data that I’ve seen, including that from Statistics Canada, have simply focused on the comparison between non-resident (outside Canada) and resident (in Canada) property owners. When we use this as a proxy for talking about speculation, the implicit assumption seems to be that everyone outside of Canada is a speculator/investor/vacation home owner, and everyone living in Canada owns only the property they live in. We lose sight of domestic speculation and investment. How do we fix this?

One answer is we combine this information with Statistics Canada’s Survey of Financial Security (SFS). This handy little survey differentiates between principal residence and other real estate for participants, including those in metropolitan Vancouver and Toronto. Here I’m going to combine these datasets together in a very simple and replicable fashion to divide up the value of residential real estate into principal residence, other Canadian residence, and cross-border (Non-Canadian) residence. Effectively I’m just taking the total value of resident real estate holdings from CHSP and subtracting the Principal Residence real estate holdings value estimated from SFS to get the Other Canadian Residence category. This enables us to compare domestic speculators/investors/vacation home owners with foreign speculators/investors/vacation home owners. So what does total property value look like broken down into Principal Residence, Other Canadian Residence (a.k.a. “domestic investors”), and Non-Canadian Residence (a.k.a. “foreign investors”)?

Something like this:

Res-RE-Holdings-Residency

Principal resident owners are separated out in purple, leaving only the properties held by investors / speculators / vacation home owners and the like in green. These are further distinguished between owners residing someplace else in Canada and owners residing someplace else across the border. In Toronto, these two groups are closely matched, though domestic investors look just a little more prominent than international investors and both are dwarfed by principal resident owners. In Vancouver, overall investment in the real estate market by non-owner occupiers is much, much larger, and domestic investors account for the lion’s share of the investment. Many of these investors, no doubt, live in Vancouver (where the SFS data estimate around 1 in 5 families own a second property besides their principal residence). Others live in Toronto, Calgary, and elsewhere across the country.  But with respect to Vancouver’s place in Canada the following seems clear: If speculation is the problem, then its largely home-grown.

There are some decent arguments out there for favoring the buyers in purple over the buyers in green. We’ve got lots of policy options for reducing the value of BC properties as investment vehicles – many having to do with tax policy. There are even better arguments, I think, for focusing on providing lots of affordable rental and non-market housing options for people so that ownership isn’t the only decent game in town. But what arguments do we see for favoring the folks in dark green over the folks in light green? If the important thing is to prop up the middle class in their entry into home ownership, why pit middle-class home ownership against foreigners instead of against the far broader class of investors and speculators as a whole? It’s for BC’s Green Party to answer that one, I guess…

 

*- I’m proud to have elicited the approval of at least one prominent academic I admire by ending my recent co-authored piece on Chinese-Canadian immigration with the line: “Investigations into the work of home-making suggest how Canada’s immigration policies contribute to rather than ameliorate global inequality, revealing an invitation that reads: give us your energetically leisured, your wealthy, your elites yearning to breathe freely.” Yes. We can do better, including taking in lots more refugees instead of fast-tracking “investor-class” immigrants!

NOTE: Inspired by the transparency of Jens von Bermann’s gitHub kits, but not knowing how to do that, please see my following spreadsheet if you’re interested in the data extracts I worked with and how I produced the above! Feel free to check my work and by all means let me know if I missed something!

ValueRE-SFS-CHSP-2016

The Things I Teach

I’m archiving my syllabi for current and recent undergraduate courses here on the blog, both for (ungated) student use and for public consumption. My courses all combine interactive lectures with student-led reading group discussions and some form of sustained research or building project.

Built Environments (2018) UBC SOCI 364: Syllabus-BuiltEnv2018

Sociology of the Life Course (2018) UBC SOCI 324:  Syllabus-LifeCourse-2018

Urban Sociology (2017) UBC SOCI 425-A:  UrbanSoc-Syllabus-2017

In the recent past, I’ve also taught graduate level courses (especially in Urban Sociology) and our undergraduate course in Research Methods. For other teaching scholars out there, please send me any suggestions for improvement! I’m especially interested in keeping my readings updated and interesting.

A Little Army of Artisanal Landlords

A relatively recent Sightline Institute post by Margaret Morales explores a key difference between development patterns in Seattle and Vancouver. While Seattle tends to construct lots of purpose-built rental apartments, Vancouver tends to construct condominiums. Why? The post walks us through various explanations, many of which have to do with tax codes. Rental construction in Canada is burdened by bad tax policy, including, for instance, the application of GST to rental construction (many housing advocates were hoping the recent Canada National Housing Strategy would roll back these taxes, but no luck!) On the other side of the border, many Seattleites would actually like to see more condos! Morales provides guidance for what’s holding condo development there back – much of it having to do with insurance policy.

On the whole, Morales provides a nice little dive into cross-border policy differences*. Moreover, Sightline is a handy little organization to have around. I’ve been a fan ever since I first came across their old papers (here and here) comparing Vancouver and Seattle in terms of sprawl. I still teach with these sometimes!

But I wanted to provide a little more insight into Vancouver’s rental situation. Morales is absolutely right about Vancouver’s dearth of purpose-built rental construction (though more is in the pipeline!) Nevertheless, Metro Vancouver appears to have almost EXACTLY the same proportion of households renting as Metro Seattle: just a little over 36%. How does that happen? Enter Vancouver’s little army of “artisanal landlords.”**

RentalStock

What do I mean by “artisanal landlords”? Effectively I’m talking about people who own and rent out one or more properties beyond their principle residence, but probably don’t consider themselves professional landlords (I’m sure there’s a reasonable cut-off concerning how many units you might own before crossing over… maybe five?). These artisanal landlords are important for multiple reasons. First, to get back to that Sightline piece, while Vancouver’s mostly been building condos, about one in three condos ends up occupied by renters.*** Effectively, this means about a third of our condo stock is actually treated like rental stock, only controlled by artisanal landlords. Legally, these rentals are subject to both the residential tenancy act and local strata (condominium) by-laws (which in some cases do not allow rentals at all). This sometimes makes for confusing jurisdiction, especially since tenants are often forced to communicate with strata councils through their landlords, and vice-versa. As for the artisanal landlords themselves, they may have limited knowledge of their actual obligations, and if they contract management of their properties out, that adds another level of bureaucracy to an already tenuous relationship.

In addition to condo rentals, another huge chunk of Vancouver’s rental stock is made up of secondary suites. Many (though not all) of these secondary suites are carved up from buildings that were once, ostensibly, single-family detached houses. So we get the familiar basement apartments Vancouverites know and *ahem* love, often tucked away beneath their landlords above. Sometimes the above suites are rented out too, and even further subdivided. Pretty much all duplexes are owned by artisanal landlords, many of them on-site. Triplexes and other internally subdivided houses that might be owned by artisanal landlords are trickier to find (grouped in with the non-condo other and low-rise categories above).

Then, of course, there are the rented detached houses, which in most cases are likely also owned by artisanal landlords. Combining the three likely artisanal (or smallholding) landlord types, we see they make up the majority of rental situations in Vancouver (as well as in Calgary). Other rentals, especially low-rises (which may contain as few as three units) and townhouses, may also be run by smallholding landlords, but are more likely to have professional landlords.

The difference between artisanal and professional landlords matters for how well different rental units are run, how often discrimination occurs (see my past scholarly work on this here), how many protections renters receive, how stable tenancies are likely to be, and how well rental units can be tracked (the CMHC has only recently tried to get a handle on what they call the “secondary” rental market, and Metro Vancouver can only estimate a range for just how many secondary suites exist in the area, echoing my difficulty in pinning them down beyond “likely”).

So if we have some idea about how many rental units are likely controlled by artisanal landlords, can we estimate how many artisanal landlords there are? This is actually surprisingly tricky! It’s not a question asked in the Census. But there IS a question asked about ownership of real estate aside from one’s principle residence in Stats Canada’s Survey of Financial Security (tables here). There are caveats to using this measure as a proxy for how many artisanal landlords we’ve got in Metro Vancouver (lots of people own vacation properties elsewhere and non-residential real estate is also presumably included), but it gives us something to work with.

The data suggests that over 20% of Vancouver’s families own real estate aside from their principle residence.**** That’s approximately 216,000 families in all, potentially making for quite a few artisanal landlords (the number has more than doubled between 1999 and 2016). We also know the median value of these holdings, which is CAD$400,000 – about the price of many Vancouver condo units (this value doubles for Vancouverites in the wealthiest quintile). Of course, this probably doesn’t even include those artisanal landlords with basement suites below them, since it’s likely they’re considering their secondary suites as contained within their principle residences.

So even though Vancouver hasn’t built nearly as many purpose-built rental buildings as Seattle, we’ve still built lots of units that get rented out. Moreover, artisanal landlords are worth keeping an eye on, both because of what they imply for renters and rental markets, and because they’re likely a potent force in local politics. Considered as a class, they have plenty of plausible reasons to both oppose new purpose-built rentals (competition for tenants) and to cast blame on foreigners (competition for properties). It’s a group worth watching more closely.

 

*- minor note: I managed to rip only a teeny bit of my hair out over the mixing of terms for tenure arrangements (rental, condominium ownership, etc.) with terms for structure arrangements (apartment, rowhouse, etc.). But I suppose when I write a book describing how often people fail to make these distinctions – often justifiably – I really can’t complain.

**- I stole the “artisanal landlord” descriptor from Jens Von Bergmann, who may very well have stolen it from somewhere else.

***- notably, this does not include condos not occupied by usual residents, where we do not have data from the census.

****-Of note, the only other major metro area exceeding 20% of families reporting owning RE besides their principle residence is Calgary!

A Limerick (and a reply to a response to a critique of a study)

John Rose posted a response to my critique of his study this morning. Almost immediately after I was alerted to the posting (via Kerry Gold), we met up to chat at Sweet Obsession cafe. In appreciation of this turn of events, I offer this limerick:

John Rose is a very nice guy

Despite our dispute o’er supply

We just met for tea

And we mostly agree

Where not, please see my reply

He really is a nice guy. And in order to insure our back-and-forth doesn’t become too tiresome, I’ll offer just a quick reply.

  1. Though I replicated John’s Census results from 2001-2016 for Vancouver, I apparently did not replicate his results for other metro areas. I admit, I didn’t catch this, since I was focused on Vancouver (and since I ran the replication of his 1.19 ratio of new dwellings to new households very quickly, before he’d provided his full report). I don’t know why his results and my own differ for metro areas beyond Vancouver, but it’s worth looking into! The data should be from the same source (Statistics Canada), but sometimes they report things differently in different documents, and it’s also entirely possible that errors were introduced in transcribing data (in which case, they were probably mine! My response was hastily assembled). Though it does not change the results for Vancouver, it’d be good to nail down overall dwelling count and occupancy changes.
  2. As John notes, the Census does not offer guidance with respect to how their procedural changes affect underlying dwelling count data between 2001 and 2006. But in noting their newly inclusive criteria for expanding the count of secondary suites, they clearly point out how single-family dwellings changed to duplexes in their structure data. This implies that each of those dwellings formerly counted as one unit (but containing a secondary suite) would henceforth be counted as two or more. As we know, Vancouver has a LOT of secondary suites, and this shift in classification both could and should have boosted the count of dwelling units significantly, even without any new dwellings being built or added. Worth noting as well that new secondary suites are the LEAST likely to show up in permitting data (though the Metro Van databook for 2017 at least tries to capture them). It would be great to get more from the Census on the characteristics of “dwellings unoccupied by usual residents.” On a related note: I’d love it if someone could point me toward or carry out an intensive study of how the Census counts dwellings in Canada!
  3. John acknowledges the awesomeness of the construction permitting data, but does not (yet) engage with how much better it fits new household formation than census counts of dwellings, indicating a shortage rather than a surplus of supply. I’ll look forward to seeing his comparison between construction and census data if he’s able to pull one together! (Both of us have time constraints involving stacks of grading and lots of other work on our plates).

Otherwise, as I said, John Rose is both a nice guy and clearly well-intentioned. He mentioned during our conversation that his study was motivated over concerns about new construction in the Agricultural Land Reserve (ALR) in Richmond. On this point, we clearly agree. The ALR is worth saving, and we don’t need to expand our housing supply any further out into Vancouver’s agricultural and wild lands, which is part of why I focus on densifying single-family residential neighbourhoods as the best path toward making Vancouver a more affordable, more inclusive, more lively, and more sustainable city.

 

[Postscript, Dec 15th: for more see Jens’ careful response with a detailed dive into the data over at MountainMath, and see the smart historical commentary on the Census in Vancouver in the comments below by the folks at Changing City (added bonus: see their lovely pictures of changing streetscapes around town!)