“I have spent time in New York, London, San Francisco, Boston, as well as worked and interviewed in each. I also have discussed the experiences of multiple friends who used to live here and who now live in these places. Forget not being in the same ballpark. Vancouver isn’t even playing the same sport. All of those cities have far, far more opportunities than here – and far better compensation. The only thing Vancouver shares with them is high real estate prices.
Most people who have worked with executive search firms or are attempting to staff a mid-to-senior-level positions with non-local talent are having a devil of a time doing so. The most recent story I heard was at a friend’s company, where they were trying to staff a VP vacancy. The assessment of the outside international executive search team was that the proposed salary – based on the desired skill-set, the size of the organization, and the cost of living here – was around half a million short of where it needed to be. Yet the company simply didn’t have the ability to go higher. Thus, the position remains unfilled. I’ll grant you that there can be some alchemy that goes into the numbers used in these executive searches, but I have heard this same sort of shortfall in multiple other instances now.
You take a growing number of stories like those, stories about being unable to hire bar staff at $18/ hour, and everything in between – and you’re left with a failing community. The moment sharks start circling and making an actual concerted movement to entice young locals away – showing them just how much better they can do – this goes from being a gradually escalating problem to a full blown crisis in the private and public sector.”
The entry above is an incomplete assessment. While the points about: affordability for many, staff transfers into Vancouver, higher wages in the USA, and a number of other consequential Vancouver housing issues, are true, so much is left unsaid, that the entry above is an inaccurate assessment. 1) The cities comparisons is incomplete; ie, just ask Vancouver buyers. People can locate where they like. google why people come here; noting some reasons are not published. Point is some people do choose Vancouver, for reasons, and voluntarily pay the asking prices. Those buyers are not just bigger fools like this author suggests. Rather Vancouver buyers have reasons for being here that work for them. 2) The author is unsure about how real estate is bought/sold. Real estate is not sold based on “the median price most people wish it was” – that is a different model that has been done before and elsewhere – but for now, in Vancouver, mostly, real estate is sold to “the highest bidder”. Just like cat food, gold, and your used car and last year’s laptop. That free market model for housing, could change of course – but that is what it is now. People do not sell their used car to poor people who need transportation, they sell it in a free market to the highest bidder. So too with housing. Currently. While some other products and services are sold by a controlled market price mechanism; that is not real estate, now. 3) That Vancouver housing prices will crash, because it has too, or because it is priced above what many people can afford, is but bold posturing, or hopeful thinking. You all are forgetting about the actual Vancouver sellers (who are mostly mortgage free, and don’t have to sell, and don’t really have another place to relocate too), and the actual Vancouver buyers (who mostly have cash, and for some reasons want to be in Vancouver). Or, some times my cynical perspective says these kind of entries are the musing of the central bank, (can’t or won’t raise interest rates), or the motivation of corporations (who want to continue to compress wages & avoid other civic responsibilities (fair taxes paid, contribute to a transparent, rational, and efficient government)), – so, these people are working hard to talk it down. 4) That there are real issues on affordability and other consequences – is very real. And sad to me that our governments work so hard as the wealth managers for the so few. However, as a starting point, to a solution, for the many, by this site and others, the avoidance of some serious, constructive, and researched based critical thinking on this important topic is not helpful. Real solutions, good solutions for everyone, comes from: identifying the problem clearly, with some constructive and researched based critical thinking, and then some constructive and respectful conversations.
I love it when someone espouses critical thinking, while asserting that house sellers are one big, coordinated group that, through some sort of shared conscientiousness, all agree to never sell and thus protect their collective (paper) wealth indefinitely.
They form a pact, apparently: No one comes or goes. Ever! Dissidents will be reported and sent to Surrey for the rest of their days.
This is NOT how free-market constituents actually behave, and it is NOT how prices are actually set. There are ALWAYS sellers, both voluntary and forced, all of whom serve only their own selfish interests. It is their interactions with buyers that produce price discovery for the entire market. The fate of those who choose not to sell is dictated by the motivated minority.
And just as houses will sell *to* the highest bidder, so too will they be sold *by* the most the competitive seller. Prices move in two directions–up AND down. Free market’s a b*tch, eh.
@Frank: Thank you for taking the time to respond.
A few points:
– I’m very aware of the “Vancouver premium”. It has allowed this region to coast on recruiting for decades, since it quite beautiful. And to some degree it’s completely warranted (though I think that the less tangible reasons those other major cities might be a big draw too is obvious as well). If a Vancouver clone existed in Saskatchewan, identical in size, opportunity, etc. to this Vancouver – and if I had no ties to either – of course I would pay a premium to live in the coastal BC setting (though not the 200%, 300%, or more premium that has grown up). I don’t think it’s remotely controversial to suggest that the spike in prices here has outstripped the “Vancouver premium” for a growing number of people. The challenges we hear regarding staffing lower-end positions and the challenges at higher levels of employment as well in this region support that. The polls indicating that many different cohorts are considering leaving, while certainly imperfect, speak to this larger issue as well.
– I made no comment about “greater fools”. Obviously some people move here and their reasons are myriad. From what I have seen – particularly in the realm of health care – a lot of people are choosing not to stay or are turning down recruitment. Interestingly, I have noticed (nearly uniformly) that the people who have actually come here, taking higher level positions, nearly always have family living here, and/ or they (or their partner) lived here back in the day. In my experience and from what I have gathered from others working in other fields, recruiting talent at higher levels here is tough, but recruiting that same talent when people have no existing ties to the region is nearly impossible. YMMV.
– Also, I don’t accept that Lower Mainland real estate market represents a free market, as you seem to suggest. Many layers of government interference exist in the market – and the majority of these layers are designed to promote higher prices/ “preserve” high values (consider various types of special tax treatment relative to other asset classes). And then there is the active promotion of citizenship of convenience/ foreign money, which has become increasingly influential since the CAD began to tank relative to other currencies in 2014. Prices would not be as high as they are – and real estate/ construction/ related sectors might not comprise over 1/3 of BC’s GDP – if these factors didn’t exist. I believe these systemic issues, which disproportionately favor older, long-term owners, are the precise reason why younger Vancouverites are increasingly easy targets for poaching to other places or simply giving up on the region.
– As to the mortgage-free folks who don’t have to sell, I’m not forgetting them. I don’t believe they are immune to the social fallout of this affordability crisis. Sticking with medicine: there is a minimum need for doctors, nurses, etc. for the region. If we cannot convince enough GOOD people in this field to move here to meet that minimum, then we will need to raise their pay to entice them, no? Where might the $ to cover these costs come from? User fees, new taxes, tolls, canceling special tax treatments for real estate, etc. That hits the mortgage-free people (who may have no choice but to relocate if they can’t absorb those growing costs because they don’t have gobs of money outside of their real estate net worth). The same thing goes with other sectors (restaurants that stay open but need to shell out $25/hour for a dishwasher ain’t gonna be cheap).
Is this wishful thinking on my part? To some extent, certainly. But it also seems like an entirely plausible scenario based on the challenges I’ve seen with hiring locally over the last few years and the stories we can all read coming out of other sectors. I am talking about things I have seen over the last ~7 years that have only grown in stature. Again, YMMV.
(And for the record: I have had this conversation with people working locally from Amazon too. The same hiring challenges exist and I would not be the least bit shocked if we start seeing articles from their people talking about the challenges in recruiting talent here.)
@VREAA: Apologies for the long, long response.
This piece is going to totally bum out the bad news bears. There’s another vid that came out a couple of years ago: Million dollar shack: Trapped in Silicon Valley’s housing bubble; also: London’s out of control ponzi scheme. It’s a crowded competitive world.
@royce…..thanks for your considered reply. :). Yupe: Lots of powerful players and market forces, (globalization, commodification of Cdn real estate, intl wealthy looking for safe/civil/sustainable havens, locals stuck with consequences, world wide population increase, civil unrest elsewhere, intl players’ rise in wealth, gov’t operating as wealth managers, consequences for locals, etc). Yupe that is happening. And with respect! 🙂 -“what are you-all, who want better/affordable housing, going to do about it” ? For example, there are other models for low cost housing. See Whistler solution for workers, as an example. Other models exist too. And my reply to others with lots of angst, sure l understand why you are feeling it, but that’s not helpful to the issue; ie it’s driving while looking in the review mirror, that’s not a problem solving approach. Rather, understanding the issues and alternative solutions, and then doing that something, that helps. As an illustration, for your-all consideration: Gov’t should be asked to buy land before the zoning change. Part of the funding can be raised by 2% property tax on ‘non-resident/non-income-paying’ home owners’; and way more has to be done to deal with income tax evaders, and tax unfairness, – start protesting that. Gov’t should provide this affordable-housing mortgages at their cost; (most mortgages are backed by taxpayers anyways). Development should/must be done by “not-for-profit” organizations, (that you-all start up), and with owner completion options (ie: you-all can hang a towel rack, or paint a wall, or volunteer time on the job site) to defer/reduce start up costs. This affordable housing needs to stay in the affordable pool! This type of housing should be only available to locals who work and pay income taxes here. And get politically involved, it’s part of the solution: Especially stop voting for the neocons and piped pipers who are culpable in this issue. Rather find/promote/fund/vote for people who can represent public-interest and who are not paid to do otherwise once elected. Start with setting up a not-for-profit housing association. As an illustration. For your consideration. Best Regards.
I remember seeing letters to strata boards where the subtleties of paragraph breaks went unheeded. Such letters require an additional layer of interpretation.
Many like to say that Vancouver real estate prices are ridiculous compared to certain other cities, but look at the ones with which they choose to compare – not Bathurst, not Edmonton, not Manila, not Chennai, not Kiev, not Cairo. It’s always a handful of the supposedly most desirable, though I wouldn’t want to live in any of the ones listed above. That this city is frequently compared to London and San Francisco is ipso facto testimony to its uber desirability – price and protestations notwhithstanding.
No serious observer compares Vancouver to London and San Francisco–just deluded bulls.