Kerry Gold’s most recent column on the Vancouver real estate market (“Vancouver homeowners cashing out for smaller markets with more space”, April 2) reminded me of those halcyon days in the late 1990s when a lucky few read their fortune in the daily ascent of the NASDAQ. Where else, I wonder, can one earn upwards of $100,000 per year (and in some cases, much more) in real estate appreciation without necessarily doing anything to their house? As the saying goes, “nice work if you can get it”. While I’m happy for those lucky enough to have purchased a bungalow on the west side of Vancouver a decade or more ago and who can now decamp for less expensive shores, buy a house in cash and begin a new life, what are they leaving behind? I fear it is a city rapidly pulling its past apart, hollowing out neighbourhoods that are now eerily quiet as the new owners are frequently absentee owners who traffic in tradable assets. For them, Vancouver represents a safe place to park capital.
Vancouver is routinely cited as one of the world’s most livable and beautiful cities. It also boasts laudable objectives – and some noteworthy accomplishments – with respect to greening the city and articulating an approach to urban design and densification. So far, so good; but what is the value of this greening and designing if the city isn’t affordable; if people can’t live, work and play in it? What is the cost – socially, culturally and otherwise – if Vancouver becomes an isolated ghetto of extraordinarily expensive real estate largely owned by the global investment elite (the 1% of the 1%) who park their money in cities that are desirable and safe? Among other considerations, an expanding body of sociological research suggests that a city’s resilience has less to do with individual factors such as wealth and more to do with social cohesiveness. Wealthier neighborhoods frequently score poorly on cohesiveness, but that is exactly what Vancouver is creating. Think about it: what is the nature of the Vancouver economy and how is this contributing to, or detracting from, cohesiveness? There is no stock market, very few head offices, and a limited financial services sector. The long-standing economic players in forestry and mining – and their service providers in finance, law, and the consulting profession – are still there, as well as some prominent life sciences and film & media players, but the pool is not deep. And for all of the talk about a green and creative economy – something I care passionately about, by the way – it is still a sliver of the civic economic pie. What is increasingly animating the economic scene is a very particular kind of real estate activity. Thomas Hutton, a UBC professor in the Centre for Human Settlements and the School of Community & Regional Planning, describes it well when he says that it “may well be that our niche is not as a head office or banking city. We’ll have foreign capital for the real estate market and some start-ups, and that will be it.”
There is a yawning gap between Vancouver house prices and average household income in the city. Vancouver has the highest average house price in Canada, and yet average income is lower than most major Canadian cities. With the average selling price of a detached house on the west side nudging $3 million and climbing, the incomes don’t add up. The wealth is visible, but the means to it isn’t. As David Ley, a geography professor at UBC who studies housing bubbles in various cities around the world, puts it, “there’s an astonishing apathy to the very serious issue of inequality and affordability.” This is the weak foundation that undercuts Vancouver’s otherwise impressive sustainability credentials. Former BCIT President, Don Wright, a Harvard-educated economist, bravely named this in an address to a Gaining Ground Sustainability Summit in 2010. The proverbial elephant in the room in any serious conversation about sustainability in Vancouver is affordable housing. Too rich for locals, even those willing to try and carry risky debt levels, the city’s most attractive real estate is no longer someone’s home; rather, it becomes a tradable asset for the hyper rich, who may or may not choose to actually live in the city.
The economist in me can navigate the cool logic of what is playing out with respect to Vancouver real estate, but the student of sustainability and resilience recoils when confronted with real estate transactions that increasingly shine a light on the way in which the investment elite are transforming parts of the city – and not in a good way. I am still haunted by the story of a single-family detached home at 5612 Newton Wynd, near the UBC campus, that sold for $11.83 million, only to see the new owners tear it down and start over again. Apparently, the floor plan “didn’t work.” Indeed. Some will see this as an admittedly extreme but inevitable outcome of global economic activity. Others will say nothing illegal took place and I should be less sensitive. Fair enough. But aren’t we losing something, something important, when it becomes okay to raze a $12 million home in one of the most physically stunning locations on Earth to suit personal whim? Is the tolerance of this form of consumerism, this form of individualism conducive to the creation of resilient, cohesive communities? I don’t think so, and unless and until we address it, Vancouver’s claims to livability, much less sustainability, will ring hollow. In fact, there is a kind of right brain/left brain thinking that conveniently divides environmental sustainability and social sustainability, and what we are witnessing today is an unfortunate capacity for civic leaders to celebrate accomplishments in the former while remaining blind to or bemused by non-accomplishments in the latter. And that’s how Vancouver becomes home for no one but the world’s elite.