The Stigma Of Renting In Vancouver – “Oh no, we would never rent”

About 70% of Vancouverites live in homes they own. The rest rent. Some rent out of necessity, some by choice. Through the 2001-2010 housing boom, the growth in net-worth of home owners has outstripped that of renters by a wide margin. Only very, very few renters would have been able to keep up with the paper-wealth gains made by owners through these years. With stock markets essentially flat through the decade, they would have had to have been remarkably talented, brave, and fortunate stock speculators to have matched REs returns. This effect is exaggerated further because the substantial leverage inherent in RE purchases works extremely well in RE bull markets. Thus it’s clear that homeowners have done far, far better than renters. There are a handful of wealthier individuals here who still choose to rent, but, despite them, renting has become broadly socially synonymous with being relatively impoverished and disenfranchised.

Even though rent-versus-purchase math has long worked strongly in favour of renters, even moreso in the last few years, renters are not looked upon as fiscally wise and prudent, but rather as disadvantaged and unfortunate. This is not to say that this is fair, or right, it simply is the truth of what has happened here through the bubble. A renter confessing to renting in company not uncommonly gets responses ranging from pained grimaces, to condolences, to pity, to thinly veiled scorn. And renters can only imagine the opinions expressed when they are out of earshot.

Yes, there are places in the world where renting is the norm. And, yes, many of the superficially wealthy Vancouver owners have abused their RE-ATMs and have large invisible debt loads. But the fact of the matter remains that renters are seen as relatively disadvantaged compared to their owner peers.

Recently there have been quite a number of stories of people deciding to leave Vancouver because they see no prospect of ever being able to afford to buy a home here. Whenever such stories appear on these pages, or on other Vancouver RE blogs, there are always a few well meaning and sincere commenters who appropriately point out that renting in Vancouver really isn’t that much more expensive than elsewhere, that it’s just owning here that is so overpriced. We agree with this analysis, and from the numbers’ perspective it is entirely correct. But we also note that the ‘social cost’ of renting in Vancouver has arguably increased as this bubble has inflated, for the very reasons described above. It is socially seen as less desirable to be a renter now than it was ten years ago. Many individuals, couples, and families avoiding Vancouver in favour of places where RE is more reasonably priced are doing so partly because they can’t imagine living here as socio-economic second-class citizens, indefinitely.

A sordid and sorry truth is that through the Vancouver bubble there has been a considerable and growing social stigma attached to being a renter. This is just one of the many perverse and far-reaching social effects at play in this RE bubble. Any regular reader of these pages knows that we foresee a price collapse in the RE market. Inventory is climbing, sales are below average, and we believe that the price retreat has begun. As home prices descend, we will initially enter a period where renting is seen as a viable option, later as a wise option, and eventually homes will return to  being seen as shelter rather than wealth accumulation vehicles. Renting will become respectable again. -vreaa

Bailing in BC at VREAA 19 May 2010 7:03 am

“I had a strange encounter the other day. I meet a woman who has to relocate for family reasons and so is selling her house. I suggested that that might be a good thing as house prices looked like they were going to go down. She volunteered that she thought house prices would go down about 30%. Thinking that she was of the same opinion as I, I told her that we had sold and were going to rent and that she should rent too. Her reply was “Oh no, we would never rent”. I really didn’t know what to say. This woman’s house is worth about $600k so a drop of 30% is $180,000. Assuming that she buys another house of a similar price, she would rather consciously lose $180k than be a renter!”

UPDATE: One doesn’t have to look too far to find evidence for the prevalence of this way of thinking. This from an article in the Vancouver Sun [26 May 2010] on the low demand for market rental suites set aside for front-line workers at the Olympic Village. – “Gord Ditchburn, president of the Vancouver Firefighters Union, told The Sun one reason there may not be more names on the list is that most firefighters are already established in their own homes by the time they are hired, at an average age of between 29 and 30 years old. “Most of our guys want to own, not rent,” Ditchburn said. “I think that’s the Canadian dream.”

UPDATE 2: Further regarding the sentiment associated with renting – “I’m a mortgage broker and I can tell you that almost nobody who owns goes back to renting. Most people perceive that as a total regression.” – headlined at VREAA 19 June 2010

UPDATE 3: A discussion regarding buying versus renting from vancouvercondo.info archived at VREAA 13 Nov 2010“I am thick-skinned enough to deal with the social pariah status of being a mere renter. A lot of people here believe that responsible adulthood includes home ownership, so if you don’t own, you somehow don’t make the cut.”

Further related links:

TPFKAA on Renting – “It was as though ‘renters’ were another species, quite distinct from their human, homeowning neighbours.” [at VREAA, 27 Dec 2010]

Reader initiated Renter ‘Poll’ – “Where do you rent, how many bedrooms, and how much do you pay?” [at VREAA, 28 Dec 2010]

Canadian Business Mag: ‘Housing: Real insanity’ – On Renters And Owners [at VREAA, 11 Apr 2011]

Landlord Mentality – “I expect my tenants to subsidize my speculative bet on Vancouver RE prices” [at VREAA, 7 May 2011]

‘In Vancouver, renting is a better option than buying’, Gord Goble, Vancouver Sun, 26 April 2011.

Joanna Pachter, Canadian Business – “This is not yet another story about the real estate bubble. It’s a story about why more of us don’t rent.” [VREAA, 18 July 2011]

A request to readers from a producer at ‘The Early Edition’, CBC Radio 1, to hear from people who have personally experienced any stigma regarding being renters in our city, resulted in a discussion of whether such a stigma even exists. [VREAA, 19 Aug 2011]

36 responses to “The Stigma Of Renting In Vancouver – “Oh no, we would never rent”

  1. 70%? Wow, I never knew it was that high! No wonder I feel like the poor pauper when I’m out with my friends (though honestly, I’m the one with the cash!)
    When I first moved to Vancouver in 2001, it seemed like EVERYONE rented-I’d go to look at a place for rent and there would be a lot of people there looking too. It was harder to find a place to rent. Even then, buying RE was seen as “expensive”-though that sure is a laugh these days isn’t it!!! One girl told me “don’t buy a condo-they only depreciate in Vancouver” (I guess the leaky condo crisis was fresh in people’s minds)
    I’m looking forward to a time when the Vancouver I live in now is more like the one I moved to in 2001.

  2. If you are facing a stigma by not owning, you’re hanging out with the wrong crowd.

    It’s should not be a surprise that a lot of people have either chosen to buy or not sell at high prices. Money, apparently, is a means to live life, not necessarily to be maximized for its own sake.

  3. Housing is a touchy issue because most people own some if it. Lucky for me most of my friends don’t own, so I dont have to deal with the talk very often.

    When I’m at work (where many people are recent owners) and get asked why I dont own yet I try to steer away from talk of a housing crash. Instead I go the route of “Not the right time in my life”, “Not sure what area I like, so I will rent in a couple different ones…” and that kind of stuff. Maybe I throw out the ol “I can rent for cheaper than owning right now” but that is usually met with “But then you will be renting forever”.

    Again, I stay away from crash talk as much as possible because many of them bought in recent years.

  4. jesse -> I’m completely in agreement with the position you imply, namely that renters should be perfectly comfortable with renting. And with your position regarding the limited meaning of financial resources.

    But I’m stating my observations about social circumstances current in Vancouver.
    A renting stigma has insidiously infiltrated ‘crowds’ where renting was previously perfectly okay.
    Don’t you see this as having occurred?
    It’s not right, but it has occurred.
    And if you see it in your ‘crowd’, what do you do?
    Take it to task? Change crowds?

    (Note that those leaving Vancouver may be doing so in part because they are choosing to change crowds, but that’s a bad alternative for Vancouver as a society.)

  5. I also try to avoid the conversations.”Speak Softly But Carry a Big Stick”. I have been ridiculed enough about my lunatic RE positions.
    Lately I have been considering the notion of being a perma-renter. I can’t find any good reason to own a house made out of wood shavings glued together by glue made in China.
    Specially after reading Froogle Scott!

    regards

    arit

  6. Arit, whenever I read your words I hear a smile in them.

    • Absinthe

      Pardon my ignorance but I don’t really understand what you are saying. English is not my first language so sometimes I misunderstand the hidden meaning.

      Regards
      arit

      • Only I like to read what you say. You seem have a sense of humour and perspective about the whole crazy situation.

  7. My husband and I (with 2 kids) sold our house for about 4 times what we paid for it and have rented ever since. We have been in the same rental house for 20 years (very low rent on Vancouver Westside) and have had enough money so that I didn’t have to work, we could hire help for the elderly parents, pay for our kids UBC educations and have managed to go on fabulous holidays at least twice a year (one vacation, typically, to an all-inclusive the other trip more adventurous (India, Africa etc). We have also been able to take our kids on holidays every year with us and, now that they’re grown, have been able to help them out. We never did achieve the coveted granite countertops but we always had a roof over our heads, current comfortable furniture and a great life-style without ever owing the bank a penny. We had saved for years to buy our house and had a mortgage we paid off quickly but never wanted a huge overhanging obligation again. We still have plenty of money saved for our old age and don’t feel we missed out not owning a house in the interim.

  8. Personal finances are best left personal; often the reality is different from outwards appearances.

    It’s not just real estate that’s the problem, though. The plat du jour will switch to something else. As with all these financially motivated fads, many are trying to extol their “wisdom” on those who haven’t benefited, others are doing it for status or ego. Regardless it shows a level of arrogance that, in retrospect, is unfounded.

    It’s a real trick finding those who KNOW they were lucky and don’t rub it in the faces of those around them.

  9. Whether it is renting versus owning or leveraging yourself to the hilt there is no question that for the past 10 years owning was a better investment – so long as you sold before now OR carry little debt.

    All of that will now change along with the culture. Conventional wisdom does not stay wisdom for long if the circumstances change.

  10. This post really hit home for me because feel like I’m one of the renters described in the article.

    I’ve lived in Toronto, Ottawa, Montreal, Halifax and Vancouver. I’ve owned properties sometimes, and sometimes I rented. Vancouver is the only place where I felt like a second class citizen because I rented.

    Renters should be comfortable in renting, but Vancouver is the only city where I felt uncomfortable in renting. I’ve never been called the names I was called in Van because I was a renter. I’ve never been on the receiving end of those pitying looks I got in Van, either.

    There’s a very strong class system working in Vancouver. If you’re an owner you’re an acceptable human being and if you rent, there’s something wrong with you. I know a lot of people outside Van who openly mock the culture there. What’s funny is that Vancouverites are so insulated, I don’t think they realize it.

    Even the renters in Van rent at the upper level of their budget and in newer buildings to give the illusion that they own.

    I feel much better since I left Vancouver. I come back to the blogs often, mainly to remind myself of why I left. I have much better career options in Halifax. I also rent a place that would not be affordable at all in Van. I find things much less superficial here. Drivers are calmer and there are *no* horns blaring. I was reflecting on that as I drove home today.

    For all of Van’s reputation as being in on the latest green fads, I find people’s commitment to those paper thin and based on hype. I once went to my friend’s house to cook. He was so proud of himself because he’d gone to Whole Foods and bought a roast that complied with the whole 100 mile diet thing.

    I had to patiently explain to him (a) there’s no way to verify that claim (b) they’d sold him a small quantity of chuck, which is one of the cheapest and lowest quality cuts there is and (c) if he really wanted to be healthy and “green” in his purchases he should have bought locally caught seafood; beef requires large quantities of grain and fresh water.

    I contrast that with my friends, who go to the farmer’s market here (the oldest in North America). We know all the farmers and vendors personally, so when we get there, they know what we’re buying. There’s a really commitment to buying locally here, which helps keep local agriculture viable and afloat. It’s based on real commitments and relationships, rather then a line of bullshit from a stockboy who works in a foreign owned chain.

    I know a lot of former Vancouverites who left for different destinations, but the same reasons. They found it difficult to get ahead in real terms, by advancing their careers and saving money. I am sure Van will continue to top the most livable indices, but that’s only because those are compiled by foreigners who don’t seem able to capture day to day realities in their stats.

    Anyway that’s my $0.02

  11. There’s also a true hassle to renting that I’d never experienced before, in a lifetime of rentals. In this market, seven families in my closest circle have gone through nine moves total because of renovation-eviction or sales-eviction. In fact, of my ten closest friends/family who rent, only four have been untouched.

    Before this run up, I’d never been evicted, and had heard of it happening maybe once to friends and family.

    I’d heard friends say they wanted to buy when they had kids so their kids would stay in the same schools, etc. Nesting, right? So their family would form community contacts – the sort that can pick up your kids from school if you’re running late or whose kids you look after when they have an emergency. I always thought this bizarre – as a life long renter, when had anyone ever moved us along? Never! I had made community in my rental suite… Sure, I was amassing a down payment, but if the bubble went on forever, whatever.

    Ha. My last (unwanted) move took me away from those contacts that I’d nurtured, and now we as a family are more vulnerable to those emergencies and latenesses and illnesses and the like – because we don’t have those support contacts. I must admit, I’m not scratching my head anymore.

    I don’t even care if I get to buy anytime soon: I want stability back, from all this restless property trading.

    • … Sorry, 11 closest friends who rent, only 4 were untouched. I remembered someone last minute.

  12. Absinthe, your experiences are really interesting to me.

    Before this move I’d never had those kinds of contacts. In Vancouver particularly, I found that just under the surface, everyone was really in it for himself. I never had so many greedy little hands in my pocket, taking taking taking. From the health care surcharge to the greedy and dishonest building super to my faux hippie room mate, I don’t think I ever encountered such naked greed and dishonesty.

    I ended up moving in to a neighborhood. The landlord gave me a deal on the rent because it was more important to have good neighbors then money.

    Several former co workers live in the neighborhood and we all reconnected, which was great. When one woman’s toddler fell and she had to go to the hospital, I took care of her son. Being part of an actual community is actually very new to me.

    I don’t think Vancouver’s going to be very stable for at least another generation while all of this nonsense sorts itself out. I’m so glad I decided to leave. For the first time since I moved to Van I feel like life is sorting itself out and stabilizing.

  13. Very true that renting is less stable than owning. Sure, owning isnt 100% as certain circumstances can force you to move, but its still more stable than renting. Luckily my single early 20s lifestyle allows me to move with little notice, though in my reasonably brief renting life I have never been forced to move, or even faced a rent increace.

    Still, I have never felt like a “second class citizen” because I rent. People do try and convince me to buy, but who can blame them? Anyone who purchased more than 5 years ago has done extremly well and they are just sharing their experience with me. It is just like if someone has a bad experience with something then they share that with people and advise them against it.

  14. Absinthe, i sympathize with you. I rent a house and recently the owner has started planning a new roof, paint job, and windows. I’m just waiting for the “I’m really sorry but…” phone call.

    Also, i don’t really feel like other renters on these blogs that claim to be getting rich saving their money. For me renting a house is all i can comfortably afford – it’s all i’d be able to spend on a mortgage anyway. There’s no extra $2k/month to “sock away” towards a vast downpayment.

  15. long.time.renter

    I’ve been renting a 2 bedroom condo for many, many years. The landlord hasn’t raised the rent. I’m one of the good tenants! I’m socking away $3,000 month and wouldn’t think of buying.

  16. Ulsterman, I know what you mean. Just because rent is less than buying doesn’t mean it’s cheap. My landlord lets me have a dog but if I have to move that will make things a challenge. If prices weren’t so ridiculous I would love to buy for that increased security.

  17. I certainly feel the stigma, guessing my wife does too, because she seems depressed about not owning. We have good stable jobs, no debt, we pocket over $4,000 per month cash (not including insurance + rsp’s) and so far have about $160,000 cash for a down payment but we’ve never felt poorer. In hindsight we should have just bought with a 0/40 in 2006 and I’d probably be better off today.

    All our friends have bought in the last few months and I feel like people pity us or something. I really don’t care, but it’s a weird feeling to say the least, perhaps I’m misreading people.

  18. We’ve been renting in Vancouver since moving here from the UK in 2005. I never really felt we were second-class citizens just because we didn’t buy. In general, people here don’t seem quite as class-obsessed as they are in the UK. Sure, there are some who are – but if they are looking down their noses at you do because you rent, do you really need them in your life?

    Given the sky-rocketing prices in 2005 (we started thinking about a move here in 2000), it seemed prudent not to buy. Add to that the poor job prospects and low salaries here and buying is just unaffordable.

    Renting makes you more mobile too, no 6% commission to pay when you decide to move. For owners, strata fees can be exorbitant; not to mention maintenance issues.

    Renting makes far more sense for now.

  19. Only 50% of people in the city of Vancouver own. It is probably much higher in the suburbs where housing is much cheaper.

  20. Thank you, brick.
    The correct statistic is 50/50 owner/renter.
    The unfortunate reality is that the 50% who rent are overwhelmingly shut out of the political discussion and decision-making process in Vancouver.
    As far as the chattering classes of Vancouver are concerned, renter = zero. Less than zero – a nonentity.

  21. I can’t help but wonder a litttle while reading all of these older posts… and this whole site! When is this bubble coming? It is now 2012. It will slow down in my opinion- it may go flat- the market may even decrease. But a bursting bubble? Really? Supply and demand is a factor as well. I don’t see Vancouver’s population decreasing in the last 5 years- and development has slowed. I moved to Vancouver in 2001. I bought in 2002. My family from Manitoba thought I was crazy. People in Vancouver mostly rented. It was hard finding a decent place to rent. My condo went up %50 in a few years, so I flipped it and did that same thing a few more times. I’m fortunate. But if I listened to all those people who said it was going to burst over the last 10/11 years- well I would still be renting. The fact is over time real estate will always go up(even just with inflation).(oh it may go down- but it will recover eventually) I nthe meantime you pay off your principle. You can get ahead. Have a balanced investment portfolio and do what’s right for you- buy or rent. But please everyone- including the creater of this site- have a balanced view- you may be helping people if there is a “burst” but you could hurting people if there is not.

  22. No wonder everyone wants to be owner in Vancouver.. Most (not all) landlords and building managers are complete dicks with super-massive egos. Even in downtown, many high-rises’ stratas’ have rules that basically says renters can’t do this, renters can’t do that, this is privilege for owners. You talk to the building manager and the first thing you’re asked is: “are you renting or you own?”… asshole.

  23. Really no matter if someone doesn’t be aware of afterward its up to other people that they will assist, so here it occurs.

  24. Hello just wanted to give you a brief heads up and let you know a few of the images aren’t loading correctly. I’m not sure why but
    I think its a linking issue. I’ve tried it in two different browsers and both show the same outcome.

  25. A fascinating discussion is worth comment. I
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    don’t discuss such subjects. To the next! Best wishes!!

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    I’m planning to start my own site soon but I’m a little lost on
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  28. Thanks for finally writing about >The Stigma Of Renting In Vancouver – “Oh no, we would never rent”
    | Vancouver Real Estate Anecdote Archive <Liked it!

  29. Where is this 70% number coming from? Are you talking about the city proper or the whole metro area? Last I checked the majority of vancouverites are renters (60% – Stats Canada). Citation needed.

  30. There is nothing wrong with renting.
    But you can never get ahead renting.

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