CBC Radio – Tyee Bridge Interviewed By Stephen Quinn

Posted on 19 October 2011 | 18 Comments

On The Coast | Young Adults Leaving Vancouver.
– CBC, 19 Oct 2011 (8 min radio interview)

Must listen, all.
Thanks for the link, jesse.
– vreaa

This entry was posted in 05. Where do Buyers get the money?, 07. Avoiding Vancouver, 08. Overextended Buyers, 09. Delaying Buying, 10. Demoralized Renters?, 14. Social Effects of the Boom, 15. Misallocation of Resources and tagged , , , , , , , . Bookmark the permalink.

18 responses to “CBC Radio – Tyee Bridge Interviewed By Stephen Quinn”

  1. jesse | 19 October 2011 at 11:53 pm | Reply

    What I heard is that there is a sense to get on planning for the “new normal” of high prices in Vancouver.

    I like creativity and all, but I think banality surrounding housing as an investment is needed first. Until then all efforts to improve broad affordability are going to be second-rate.

  2. vreaa | 20 October 2011 at 12:06 am | Reply

    I, too, note the acceptance that we won’t crash (apparent in Tyee Bridge’s current position, and the opinions of innumerable others). People are exhausted; they have capitulated.
    IMHO, they are wrong.
    Just because we haven’t crashed since 2001 (Tyee’s timeframe), doesn’t mean it isn’t going to happen. There remains a massive amount of speculative air under price levels.

    • jesse | 20 October 2011 at 1:18 pm | Reply

      “There remains a massive amount of speculative air under price levels.”

      Yes, though Tyee’s point is that even if Vancouver were to severely crash, pundits he has talked to seem to think that Vancouver is a “boom bust” city due to its exposure to international financial market swings: if prices fall they will be lofted back up again, eventually.

      The City, it is therefore concluded, should start adopting measures to facilitate broad-based affordability under stressed conditions, due to its inherent land price volatility.

      I say, with due respect, that’s hogwash. I reject the view that Vancouver’s price volatility is inherent. It can be solved with acknowledgement what would need to be done to ensure land prices are kept in-line with prevailing incomes. There are examples of this working in other jurisdictions.

      That does not undermine the point that Vancouver is expensive, and land is appreciating in real terms. So the acknowledgment that the city needs to increase its density in a thoughtful way is a good one; I just think it would be magnitudes simpler and more effective if land prices (and zoning in core areas) weren’t a barrier to livable density increases.

      • Tyee Bridge | 21 October 2011 at 9:04 pm |

        Jesse — Tyee here– curious at this: “It can be solved with acknowledgement what would need to be done to ensure land prices are kept in-line with prevailing incomes. There are examples of this working in other jurisdictions.”

        Sounds very interesting. Can you elaborate?

    • Yank | 20 October 2011 at 10:56 pm | Reply

      yeah – economic events take longer to happen then everyone predicts, and then happen much faster then everyone expects.

  3. rdd in Abbotsford | 20 October 2011 at 8:12 am | Reply

    Journalism is a very competitive field, and Tyee may have a passion for it. However, when choosing a career, one should look at the compensation attached to it. I’m sure if he was as good at his job as say…Douglas Coupland… he’d be living downtown and writing about barge traffic under the Lions Gate rather than complaining about life in his basement apartment.

  4. E.G. | 20 October 2011 at 8:22 am | Reply

    Excellent interview. Thanks.

    The part that struck me was the discussion of comparisons of Vancouver with Paris or NYC. Of course Vancouver does not compare. But, if there is a perception that it does (or for a zillion other reasons), perhaps perennially high RE prices are in the mix. I do know that RE prices in Vancouver have always been higher than most of the rest of Canada.

    That said, the discussion around that point by Mr. Bridge and the host was bang on. And it comes down to the fact that in places like Paris, London, NYC, people with normal jobs (restaurant workers, cabbies, cops) can find a place for their family to live. So some policies in those places – also plagued with high RE prices – must have been successful.

    Compare that to Vancouver… which brings me to comment on this statement, above, from “rdd in Abbotsford”:

    “However, when choosing a career, one should look at the compensation attached to it.”

    True enough. No one expects a cop to make what a brain surgeon makes. But we need cops and teachers and cabbies as much as we need brain surgeons. In fact, some might argue, we need them more in the grand scheme of things.

    But if said cops, teachers, and cabbies can’t survive in Vancouver (or even in the suburbs), then there’s something wrong. And, as we’re seeing more and more lately, even the proverbial brain surgeons are finding Vancouver to be beyond what they want to commit to financially.

    When we get to that point – and we have well and firmly arrived – then there is a big problem. And that problem will begin to manifest itself (and I think we can argue that it has begun to do so already) in a broken community.

    So, no matter what happens to RE prices in the near- or mid-term, Vancouver and the surrounding municipalities have to start thinking creatively about retaining the middle class. And, like it or not, that middle class is broad and extends from cabbies to brain surgeons.

    To do otherwise is to invite problems that will be worse than RE prices.

    • CHG | 20 October 2011 at 8:34 am | Reply

      well put,

      for the record rdd in Abbotsford is our local troll so dont pay it any mind.

    • jesse | 20 October 2011 at 10:45 am | Reply

      “Vancouver and the surrounding municipalities have to start thinking creatively about retaining the middle class.”

      There’s that “creative” word again. Creative options become much simpler if land prices were based on utility rather than speculation. But interference=bad. (Never mind what CMHC does.)

  5. armourb | 20 October 2011 at 9:41 am | Reply

    “I do know that RE prices in Vancouver have always been higher than most of the rest of Canada.”

    When I was a kid my parents sold our ordinary home in Red Deer AB and moved us to an extravagant house in Tsawwassen. The AB house sold for $150k and the Delta house was $139k. This was in 1977. There was no bubble in RE then, that came later in 1981 and ended badly. My point is that we’ve been there, done that when it comes to bursting RE bubbles. The capitulation in this interview ignores the historical reality.

    • Robert Dudek | 20 October 2011 at 9:51 am | Reply

      Yes, but things have changed since 1977. Vancouver will continue to have the highest RE prices in Canada for the foreseeable future.

      • matt | 20 October 2011 at 10:32 am |

        I think Fort McMurray has higher RE prices. If they don’t they certainly have the best price/income ratio.

  6. Tyee Bridge | 21 October 2011 at 9:28 pm | Reply

    Hi, Tyee of the article here, with thanks to Jesse and VREAA for their input on the piece early on. If you’re interested, go to the link below for a response to the CBC interview and my response in return (assuming the moderator lets it thru)– relates to the premise of the effect of Chinese capital.

    http://www.cbc.ca/onthecoast/episodes/2011/10/19/young-adults-leaving-vancouver/#socialcomments-submit

    Two quick chippy points:
    1) I know this is not Jesse or VREEA’s position, but I often hear a sort of default assumption that media and journalists are unwitting (or witting) dupes for the real estate industry– cheerleading for the market to stay ludicrously inflated, or something, an uncritically regurgitating PR as part of the corporate media conspiracy. I’d suggest that this characterization is off the mark, certain Sun columnists excepted. I for one would selfishly love to see the market take a nosedive, if it didn’t kick the heck out of all those I know who do own homes. I do think it will correct, perhaps seriously, esp if something hammers the Chinese economy. But as mentioned, I don’t know that it matters, which brings me to the next pt.

    2) I read somewhere on this blog– can’t find it at the moment– that I was wrong in my my assertion that a 40% market crash would not put median-income earners in reach of a 3-bdrm home in Vancouver. By my rather ham-handed calculations, a household income of $68K (the family median here) would get you a mortgage of about $300K. That means you would need to have 3-bdrm homes that go for $500K to make them affordable to median-income earners in a 40% crash. Am I wrong here? When I looked on MLS this week there were exactly 19 three-bdrm homes of any description (condo/townhome/detached) in all of Vancouver and North Vancouver going for less than $500K. Unless I’m missing something, that’s only 19 of 150,000 owner households, which seems negligible.

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