Three Vancouvers? – “A recent report paints a picture of a city riven with inequality and the growing geographic segmentation of its classes.”

“The 21st century is shaping up to be the century of the city. But global cities are not only becoming increasingly-important economic forces of the world economy. They are also becoming increasingly divided and segmented. …
A new report, by David Ley and Nicholas Lynch of the Cities Centre, takes a detailed look at Vancouver’s growing class divides and geographic segmentation. Vancouver is a very different city than Toronto. It is a city of tremendous natural assets and physical beauty, noted for its mild climate, perched on the Pacific coast. It is widely thought of as an affluent city, with some of the highest housing prices in North America. It has attracted a huge influx of immigrants, especially from the Pacific Rim. It is a frequent winner of “livable cities” titles, as the study notes. This city is sometimes referred to as “Dream City” or “Lotus-Land.”
But their recent report, “Divisions and Disparities in Lotus-Land: Socio-Spatial Income Polarization in Greater Vancouver, 1970-2005,” paints a Vancouver riven with inequality and the growing geographic segmentation of its classes. …
City #1 is affluent Vancouver, made up of neighborhoods where average individual incomes grew by more than 15 percent of the metro average between 1970 and 2005, comprises roughly 30 percent of the region’s census tracts and covers three distinct areas: the central core, the North Shore suburbs, and scattered areas with high-priced condos and houses close in proximity to valued amenities, such as waterfronts, views, and green spaces.
City #2 is middle class Vancouver, with income changes of plus or minus 15 percent of the metro average. It includes nearly half (47 percent) of the region’s census tracts.
And City #3 is disadvantaged Vancouver, areas where incomes fell by more than 15 percent of the metro average between 1970 and 2005. These areas account for some 22 percent of the region’s census tracts; and as the authors note, they “are relatively concentrated in the southern and eastern neighborhoods of Vancouver and extending out to the southern and eastern suburbs.”
While City #1 consists overwhelmingly of native-born Canadians and is more than three-quarters white, City #3 has an immigrant majority and is 61 percent minority. It has the highest population densities too, as well as the lowest gross incomes, and despite its lower property values, a lower share of homeowners. More of its residents are employed in working class and service occupations than in either City #1 or #2. …
The study concludes:
As a result, the dominantly middle-income City of 1971 is now divided three ways: one-third lower income, one-third higher income, and one-third middle-income. The middle-income city of the 1970s has become the polarized city of the 2000s. …
Even the city widely recognized as the world’s “most livable” cannot escape the growing class polarization of our increasingly spiky and divided world.”

– excerpts and image from ‘The Growing Urban Class Divide, Vancouver Edition’, Richard Florida, The Atlantic Cities, 14 Nov 2012 [hat-tip Aldus Huxtable]

35 responses to “Three Vancouvers? – “A recent report paints a picture of a city riven with inequality and the growing geographic segmentation of its classes.”

  1. And Nem’s favourite quote [not elsewhere featured in this morning’s abstract]…

    “In 1970, 70 percent of its tracts were of middle- or low-income status; by 2005 this figure had fallen to 33 percent, and the largest of the five income classes, comprising 43 percent of tracts, was very high-income, at least 40 percent above the metropolitan average…This represents a dramatic transition toward income polarization.”

    When it comes to the RainForestBordello – ‘HardSciences’ excepted – you won’t find better/more authentic scholarship than David’s.

    [NoteToEd: I’ve always wondered why they were called the “Hard’ sciences… how ‘hard’ can they be when your experiments always yield the same results and there’s only one ‘correct’ answer.]

    • Of particular interest to this forum… and abstracted directly from Ley&Lynch’s paper…

      …”There is a surprisingly modest differential in housing indicators across the three cities (Table 5, lines 38–46). In all three urban regions, between 62 percent and 69 percent of residents were homeowners in 2006, although this figure has increased in Cities #1 and #2, but slightly decreased in City #3 since 1971. However, the centralization of housing price gains since the 1970s in the Vancouver region (Ley and Tutchener, 2001) has disproportionately affected City #1, where housing values grew substantially relative to the metropolitan average while in Cities #2 and #3, relative property values fell. Like income gains, disproportionately more real estate wealth is accumulating in the historically more affluent neighbourhoods.

      Nonetheless, the income differential between the three regions was even greater, so that affordability burdens were heavier in Cities #2 and #3 despite the lower gain in property values; indeed, City #3 is where housing burdens have been multiplying most grievously. Differentials are less marked in the rental market, with affordability burdens shared across all three regions, as over 40 percent of tenants in each region spent more than 30 percent of their income on rents. It is worth noting, however, that while the share of tenants has fallen in Cities #1 and #2, it has risen in City #3. Indeed, while City #3 had the lowest share of tenant households in 1971, it had the highest level in 2006.”…

  2. This map makes itself a failure and one can tells it is made by someone doesn’t live in Vancouver or by an armchair economist.

    UBC area is moving towards lower class?

    • The report’s authors are David Ley and Nicholas Lynch, UBC academics, which suggests to me they probably live in Vancouver.

      I guess Ley is an “armchair economist” of a sort, or at least an armchair geographer. From the report: “David Ley is the Canada Research Chair of Geography at the University of British Columbia.”

    • Naked Official #9000

      @cris

      Comrade!

      Save your breath, these splittists will not be swayed by your superior grasp of rhetoric and the written word! We will we have to retrench and return with the tanks, like on 6/4.

    • The legend depicts UBC as a decreasing in income, but remaining in the mid to high income bracket. In areas were the densities are low, or a rapid expansion of population has occurred, percentages can be skewed. As an example, there was a relatively low population in the UEL in the 70’s, a small area of single family homes, and if they were uber-wealthy, then an influx of moderately wealthy people could cause a 15% average income drop, but still keep the area in the upper third of incomes. I suspect that is what has happened due to the new development that has gone on there.

  3. Those of us who have lived in Vancouver for a number of years can probably ‘feel’ that the city is becoming more polarized economically. Interesting to see it quantified in this manner. I suspect the most recent six years, not covered by the report’s data, have seen the trend intensify even further.

    • …”Canada, of course, is not the United States and so far this nation’s housing bubble – notably in Vancouver and Toronto – has not burst, although if it did, immigrants in these cities would be vulnerable. But knowing what we do about the precarious state of immigrant employment and many immigrant businesses, we would anticipate disproportionate income losses by immigrants (and thus visible minorities) in Canada through the recession, while the native-born, more secure
      with good jobs and a diversified portfolio, have survived more successfully. In fact lowincome rates rose by over 6 percent in Vancouver from 2007 to 2009 (Conference Board, 2011). As a result, we anticipate that income polarization in urban neighbourhoods in Greater Vancouver has deteriorated further since 2005.”…

      http://tinyurl.com/cjk3lq8

    • And those of us that have lived here for a number of years can see where neighbourhoods, especially near South East False Creek have moved from industry/warehouse to residential.
      The Surrey King George Corridor is reflective of many immigrants settling there from South and Southeast Asia. That is a neighbourhood greatly changed since 1970 and I believe we will see incomes rise in that area over the next 35 years as it becomes another urban centre for the region.

    • UBCghettodweller

      The main things that most people outside of Vancouver know about it is
      (1) It rains a lot but is mild
      (2) It’s amazing beautiful when it is sunny
      (3) The housing prices are out of control
      (4) There’s lots of rich people from the pacific rim here
      (5) There are a ton of homeless people and drug addicts because there’s a low chance that they’ll freeze to death in the winter.

  4. BTW I expect this graph to align with price gains over that time period. In other words gentrification can explain some of the long running bifurcation in prices between neighbourhoods. BTW this is not a Vancouver specific phenomenon, I know a few areas of Toronto that have experienced similar bluish tendencies.

  5. I think this is part of a much broader trend seen worldwide. Assortative mating, assortative living, increased mobility, the Internet, and continuous use of polling data to subsegment and characterize local populations — combined, these give people the tools to discover exactly where they want to live. A high percentage of new building development means a large number of people living in a new place not through happenstance, but because each of them picked that one development, above all others available at the time, as their optimum. Birds of a feather flock together, and a building boom coupled with ever more sophisticated developer targeting and marketing techniques helps the process along.

    Every intersection is now a local optimum for some group, from “values transit proximity over transfer station miasma” to “wants to overpay for near-westside eastside teardown.”

  6. My takeaway: City of Langley and Point Grey are equally crappy places.

  7. Real Estate Tsunami

    Please note, that this report is now over 7 years old. Since then we’ve had a recession, an explosion in RE prices and a dramatic increase in immigration from Asia.
    My educated guess is that the income inequality has gotten worse during the last 7 years and will continue in the future and could lead to social unrest.

  8. The interesting thing is that there might be no territorial correlation between the officially stated income, RE prices and a dramatic increase in immigration from Asia. Most of the wealthy immigrants (HAM carriers) have very negligible stated income. They are paying for their properties in cash, have no jobs here and often by the formal criteria their kids fall into the “poor families” formal category when in fact they drive their BNW to school. This situation sets the limitations for the study like is discussed here. I remember seen that Richmond is statistically considered to be one of the low income cities. May be we should have the wealth tax like in France to accurately tax these people.

    • Bingo, you can see that in the suspiciously large swath of Richmond in the map, where income has supposedly fallen, while at the same time monster have arisen in a huge part of that geographic area,

      Until the Federal government sees its way clear to tax offshore income this will always be a problem.

      • Naked Official #9000

        “Shut the fucking door, you’re letting the heat out.”

        That’s the only Canadian thing I have to say regarding this moment.

        Back to spreading harmony!

    • Real Estate Tsunami

      BNW?
      Bavarian Notor Works.
      Just teasing. Good post.

  9. Don’t forget that some income is likely substantially under reported. If I had a dollar for every dollar of tax that astronaut fathers are not paying tax while their family sits in vancouver, I’d be very very rich.

    • Naked Official #9000

      And you would be a racist!

      Comrade, you must become more harmonious and take the advice of our ambassador, Zhang Jusai, and either “come with the evidence, or SHUT UP!!”

    • Absolutely correct. Declared income is lower in the west side neighborhood adjacent to my east side abode. Yet the houses are worth 2 to 3 times as much. Of course people are not paying Canadian income tax on foreign income. Why would they? Even if it is the law. Doesn’t matter what their origin. It’s human nature.
      That leaves the rest of us shrinking middle class still fortunate enough to have decent jobs to shoulder the burden.
      So, more people trying to access health care, education etc., with fewer contributing. Isn’t that why they tried to introduce a head tax in the UK?

    • Not to quibble but as I stated above the income gains align well with price changes up to 2005. I’m bearish as the next bear but income gains explain some of the runup. If these supposed undeclared incomes were reported it might explain even more of the runup. Not exactly portending 60% drops for certain areas.

      • Real Estate Tsunami

        “Not exactly portending 60% drops for certain areas”.
        Meaning?

      • Meaning if someone is expecting a reversion to 1985 prices in real terms they will be disappointed. Certain areas are gentrifying and increasing their density. These two effects can reasonably lead to a 1-2% annual difference in price appreciation in the long run. Over 20 years that’s a 35% difference.

        I’m in no way stating that Vancouver as a whole is not overvalued and I’m not stating that Vancouver could face a severe correction that could undershoot “fundamental” value especially for lots, but… there are areas that are more desirable and have seen an increase in prevailing incomes relative to the regional average. That is something that needs to be critically confronted by those wishing for large price drops.

        Some perspective is, of course, in order: look at values 10 years ago and compare to the run-up during that time. The trend to which I am referring is generations, not decades, long. Further, by my measures, condos are at least 70% overvalued. That would suggest a drop of -41%. Detached is another story, in part because lots’ utility varies significantly depending upon the structure. To wit a newly-built Vancouver Special with 2 suites and a laneway, if highest and best, is going to set the price level IMO. We can go through some exercises as to what such a property should sell for at “fundamental” value if you like. I’m sure it would be fascinating!

  10. The blue areas areas are white neighborhoods. Even Asian Richmond has a spec of blue in the white part of town, stevston.

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