UBC Faculty and Staff Housing Anecdotes – “As a recently recruited Assistant Professor, I feel I have no hope of supporting a family and purchasing a house in Vancouver. I lose a great deal of sleep over trying to make ends meet. This is holding me back from making research and education advances.”

Following up on our recent post, ‘UBC Staff And Faculty Housing Demand Study’ [VREAA 19 Sep 2011], here below is a series of first- and second-hand personal anecdotes excerpted from UBC faculty and staff comments posted at ubc.ca 27 Sep – 3 Oct 2011 as part of a discussion UBC is encouraging in order to develop a ‘Housing Action Plan’. [Many thanks to David for forwarding us the link].

It is perhaps remarkable that not one of the discussants appears to address the giant over-arching truth: that a speculative mania in housing is the cause of the problem. On the contrary, many of the posters explicitly state the belief that local housing prices can do no other than power forever upwards.
Once the housing bubble is recognized for what it is, it follows that only with an implosion of that bubble will any housing challenges be meaningfully addressable. Housing in Vancouver is currently two to three times overvalued, as determined by fundamental measures such as incomes, rents, and GDP. The mania will end, as all manias do, with substantial price drops. This will likely occur not as a result of policy changes, but as a result of market dynamics. Indeed, such an implosion may have already begun.

Under the shadow of this mania, the vast majority of ‘affordable housing’ plans in Vancouver are akin to rearranging the proverbial deck-chairs on the Titanic; to blowing into a hurricane. Any such plans will be incapable of addressing the powerful negative forces of the mania. Getting 10% or 15% assistance purchasing extremely overpriced RE still results in it being very, very overpriced.

The coming Vancouver RE price deflation will go a long way to solving Vancouver’s (and UBC’s) housing challenges. Imagine how different the UBC discussion will be when prices are 50% lower. Or even lower than that. Yes, there will still be a need for sensible policy about campus housing, and perhaps a need for housing assistance plans to attract desirable faculty, but housing would no longer sit centre-stage, where it is now, and where it certainly doesn’t belong.

Granted, a real estate price crash will at the same time result in other significant problems for Vancouverites, many of whom are over-invested in RE. Our local economy will suffer greatly, as it has become sorely over-dependent on activity related to real estate. This is, unfortunately, what happens when a massive speculative mania plays out. It’s baked into the cake. UBC has, of course, been an eager bubble participant, via large for-profit RE development projects. While showing concern about the cost of housing, the university, ironically, also has an economic stake in the bubble being sustained. This is why we haven’t seen (and don’t expect to see) strong statements truly critical of the status quo coming from within UBC itself.

Regardless, the personal stories below are noteworthy, and the detrimental effect that the housing mania is having on academic endeavours is apparent.
– vreaa

—

As an Assistant Professor that was recently recruited to the University, I feel like I have no hope of supporting a family and purchasing a house in Vancouver. I lose a great deal of sleep over trying to make ends meet in Vancouver and I feel this is holding me back from making research and education advances at UBC. I believe housing is only a symptom of a systemic problem at UBC: very poor support of young academic faculty.
– G.T.T., October 1, 2011 at 9:36 am

Very recently, I lost a dear and outstanding colleague to Oxford. He confided that one of the main reasons for him moving was that Oxford offered him the opportunity to own a home near his work (The university partners with faculty to ensure they can own a place near campus). In Vancouver, he could not see how he would ever afford a place for his family, including a newborn.
I too am about to start a family. I have been incredibly worried about moving from my small apartment to a bigger place. Paging through the real estate ads is depressing. It is clear that my salary and consulting fees are simply not enough. In this sense, it is heart warming to read about colleagues with the same concerns and about UBC leaders trying to alleviate the problem.
– Nando de Freitas, September 29, 2011 at 4:12 pm

If I had known about the future housing situation back in 2004 when I was hired, I would have probably reconsidered my decision to come to UBC.
– L. Van Waerbeke, Faculty of Science, [September 30, 2011 at 10:45 am], who also suggests “create a parallel UBC housing market where sells/buys can only happen between UBC employees”.

I am a graduate student at UBC and my stipend is $21,000. I have to live one hour from campus to pay for rent that is $800 per month. After my health insurance and phone bill, I barely have enough money for food. This summer, I calculated that I could spend only $10 per day for food. To top it off, the on-campus housing is more expensive. Shouldn’t campus provide CHEAP housing for students? This makes me want to leave UBC…
– Anonymous, September 30, 2011 at 3:46 pm

I live in East Vancouver and I could drive out to Tsawwassen in less time than it takes for me to creep west in my morning bumper-to-bumper convoy of the damned.
– SR, Library, September 30, 2011 at 3:45 pm

My salary is competitive compared to performing a similar job at a non-profit or charity but Vancouver is just too expensive.
As a staff member with two young children I have been despairing for a while. My paycheque after deductions covers rent and both kids at UBC daycare ($1300 for 3-days/week) I am left with a couple of hundred dollars each month to pay for rising costs of food, clothing, vehicle expenses etc. We’re just able to make it with my wife’s part-time, self-employed income but if she doesn’t work (as happened this summer) we’re running up the line of credit with the bank just to keep food on the table.
As rents have risen and our family has grown we have moved further and further east. We rent a small, run down 2-BR East Van bungalow for a bit less than what a 2-BR apartment would go for on campus. We have privacy, space and a nice vegetable garden in the yard but it means I spend at least two hours on bike or bus each day commuting instead of with my family.
As long as UBC’s definition of affordable housing is slightly below west side of Vancouver market rates, most staff will be shut out.
– I.P., Staff, Faculty of Arts, September 27, 2011 at 11:59 pm

When I moved to UBC, the faculty housing assistance was not sufficient for me to enter the housing market. The assistance options have improved slightly since then, but are only available within the first seven years, and I am no longer eligible. Meanwhile, the housing prices in Vancouver have become prohibitive, having doubled to tripled over this relatively short time. The UBC Village Gate Homes rentals on campus are very nice, and are extremely convenient, even though the rental rates are not really subsidized.
– A.F, Associate Professor, Science, October 3, 2011 at 3:32 pm

We know several faculty whose behaviour changed dramatically once they moved off-campus. Owing to traffic and the loss of efficiency in terms of writing, they started coming in only 2 days a week. Gradually, they started avoiding students and meetings, the opposite of what they were doing for years when they lived on campus. The incentives became too strong. The situation also creates perverse incentives towards devoting more and more time to consulting and non-scholarly activities, or accepting visiting positions elsewhere, as soon as April comes along. Gradually, faculty who stay at UBC will find themselves becoming helicopter professors, dropping in for classes and crucial duties, and rushing off to earn money or do their long commute home. In sum, there are many benefits that are externalities and not integrated into the pure monetary equation.
– Yves Tiberghien & Darrin Lehman, October 2, 2011 at 6:04 pm

In our own case, we would like to move to a larger 3 bedroom unit on campus. But there are none available, for almost three years now.
Rent, currently charged by UBC Properties is around 15-20% lower then market. Why not making it 40% lower, allowing families to live on campus and promote sustainability by reducing commutes for 4 people a day!
– Eugene Barsky, Library, October 1, 2011 at 12:24 am

Many of my colleagues who are since quite some time at UBC could buy into the market to relatively low prices and enjoy (nominal) windfall profits with which they leverage all kind of expenditures. People like me who only recently came to UBC are in a different situation and usually can’t afford buying a house, and yes, looking for locational options is always in our mind.
– Kurt Huebner, September 30, 2011 at 10:43 am

I was disappointed when I tried to obtain rental accommodation on campus, because of the no-pets policy. There was not a single building on campus that would allow me to have my cat in the dwelling. This policy probably prevents many people from being able to live on campus, and I strongly suggest that it be changed. Pets are important in many people’s lives.
– Selina Fast, administrative-support staff, September 30, 2011 at 10:30 am

I now finally have a house that I can afford…in Squamish.
– JKS, Faculty Dept of Medicine, September 30, 2011 at 10:09 am

Arriving to UBC 2 years ago from the US we found the dip in the US market while price increase in Vancouver to be much more difficult that we initially thought.
We were very frustrated from UBC policies that seem to encourage selling on-campus housing to retirees rather than to faculty. It seems that the current administration is thinking more about the short term profit than the longer term effect on UBC. I am hoping that this will change.
We finally bought a nice house in east van. With the size of our mortgage, I will not retire before I’m 85.
– Eldad Haber, September 29, 2011 at 11:50 pm

When I arrived at UBC from Stanford, the whole “University Town” plan was just starting. Given my experience with Stanford (similarly blessed with a large amount of extraordinarily valuable land in a very expensive real estate market), it was painfully obvious the plan was not in the long-term best interests of UBC. I do not fault the folks who pushed the “University Town” through, as UBC was desperately short of money, and they executed very well on a plan to convert UBC’s land wealth into endowment dollars. The failure, though, was a lack of long-term strategic vision, to see that buildable land at UBC was more vital to the University’s future, and faster appreciating, than financial assets in an endowment.
– Alan Hu, September 29, 2011 at 11:21 pm

As many previous contributors noted, the cost of housing in greater Vancouver will very likely continue to rise.
– Marcel Franz, Professor of Physics, September 29, 2011 at 2:32 pm

My frustration has grown since 2004, until I just decided to lose any hope that UBC Trust would care about people working on campus and any hope to ever own a place. There is only so far some one can go with the mounting frustration of seeing high end condos built on campus everywhere out of reach of a family of 4. Even the condos built for faculty/staff were unaffordable. Townhouses built for faculty/staff are now back on the market at more than a million dollars. I look at other options in other cities every year.
– B. Pfeiffer, Faculty of Education, September 29, 2011 at 1:47 pm

At my salary, I would not have moved here if I had young kids at home because I would not have been able to provide them the same “home” facilities as I had in Ontario. Since my kids are all old now, moving to a condo made sense and made it possible financially but if I had a younger family, the discussion would have dramatically changed.
There is a psychological factor that makes many professors bitter and angry with UBC. When a professor feels that after 20 years of service to UBC he/she is unable to buy a unit on campus but others who have nothing to do with UBC are; it is very demoralizing. I have been hearing that on a regular basis since joining UBC.
– Dr. T. Aboulnasr, Dean of Applied Science, September 27, 2011 at 3:53 pm

Six years ago I … told the Provost at the time (Lorne Whitehead) that I was worried about UBC retaining many of the outstanding colleagues that had been hired over the past several years, and that I was particularly worried about Vancouver’s expensive housing market and the minimal assistance offered by the University (i.e., little more than covering closing costs).
Owing to an even higher Vancouver real estate market, my worry is still there. Many colleagues that we’ve hired over the past decade are highly marketable and moveable.
– Darrin Lehman, September 27, 2011 at 3:52 pm

During the recruitment process housing or the lack of affordable housing is the number one issue. It is common to every single conversation that I had with all our candidates regardless of rank.
– Vanessa Auld, Assoc Dean of Science, September 27, 2011 at 3:51 pm

In my experience, the affordability of housing comes up at some point in almost every faculty negotiation (recruitment and retention). In a couple of instances, housing was arguably the major reason a faculty member chose not to join UBC, or chose to leave.
– Simon Peacock, Dean of Science, September 27, 2011 at 3:51 pm

We have lost candidates due to the difference in housing costs with many other locations.
– Rachel Kuske, Head, Dept of Mathematics, September 27, 2011 at 3:51 pm

In Vancouver, for a newcomer like me, it is very hard to accumulate enough funds for a reasonable mortgage within a reasonable amount of time not to be out-passed by the price increase. In the UBC area, I heard that two-bedroom units are currently worth about $0.7 million or more. … As a family of four, we found that it is very hard to find a townhouse unit or three-bedroom apartment, rented or owned, unless paying a very high price.
– Y.K., Assistant Professor, Faculty of Science, September 27, 2011 at 3:51 pm

Housing issues comprised the main reason that we lost an excellent prospective faculty member, Y. M., who we had made an offer to in computational applied math a couple of years ago. He liked the department a lot, but was not able to afford to get a place to live where he and his wife would be happy raising a family. They were priced out of the market. He went to U Minnesota instead. We lost out.
As I had written to the BoG a few years ago, we almost lost another collegue to housing issues (D.C.). Somehow that catastrophe was averted at the last moment by the head’s work. I think you will find many such stories among recent hires (last 10 yrs) who left us due to the real estate woes, or candidates we wanted to attract who took a look at the housing prices and voted with their feet.
– Leah Keshet, Professor, Faculty of Science, September 27, 2011 at 3:50 pm

First a theorem: Due to a large influx of immigrants who desire to live in Vancouver, the housing price in Vancouver will grow beyond the reach of a new faculty with regular salary. This will soon become an obstacle for UBC to hire new faculty.
– T.T., Professor, Faculty of Science, September 27, 2011 at 3:50 pm

After 16 years at UBC, I’m still living in 540 square feet.
– K.B., Professor, Faculty of Science, September 27, 2011 at 3:32 pm

2003 arrive UBC. 2004 look for a house. Kid #1 arrives; decide to rent for a bit longer and save $ for better place than we could afford at that time.
2004-2008 cost of acceptable house to purchase increases faster than our ability to pay. Period of frustration at that time.
2008 investigate positions elsewhere. Obtain great offers. Nearly leave. Stay at UBC after competitive retention raise is offered.
2009 combination of slight dip in prices, low interest rates, improved housing assistance program and increased salary mean we start looking again
2010 buy house (nice place near Fraser street). Notably just barely within the “seven years at UBC” time limit on the housing assistance program.
– Daniel Coombs, Associate Professor, Mathematics, September 27, 2011 at 3:44 pm

“Sold our condo in noisy Yaletown, bought 5 acres in a small town in Eastern Township of Quebec, built a house. Debt load is a small fraction of what we had and lifestyle is way up.”

“Sold our condo in noisy Yaletown, bought 5 acres in a small town in Eastern Township of Quebec, built a house. Debt load is a small fraction of what we had and lifestyle is way up. Every day I think to myself, what are all those people clinging too? Running along the Seawall is the only think I can think of.”
– Ultramam at vancouvercondo.info October 4th, 2011 at 8:15 am

Global TV – Young Couples Leaving BC – “You’re not putting all your money into the house itself.”

Tanya Beja, reporter: “Mike and Elaine Garland want their son Nicholas to grow up with the same opportunities they did: a house, a backyard, maybe a dog, but when they look at the cost of real estate, they know their options are limited.”

Elaine Garland: “Knowing that our dollar didn’t go very far in this city… kinda was disappointing for me, because I grew up in this city, I was a Burnaby girl.”

Beja: “So the ‘Burnaby-girl’ and her husband are heading East, getting ready to move to Newfoundland, where a home costs half of what they paid here.”

Mike Garland: “Out here you feel like you’re struggling, every week, trying to pay the bills, pay your mortgage, and the commute. You never think you’re getting ahead.”

Beja: “The Garlands have no doubts that a new life in Newfoundland will allow them more time with their son, and more money for his education and activities like hockey.”

Mike Garland: “I think it’s a better choice to raise a family… you’re not putting all your money into the house itself.”

—

Beja: “Holly and Rob Williams know what it’s like to struggle: Thousands of dollars in debt, they want to start a family and own a home, something they say thay can only do by moving to Ottawa.”

Holly Williams: “We don’t want to be house-poor, and I do believe, that if we stayed, we would end up being house-poor.”

Rob Williams: “… looking forward to the next step in life, which is going to be children, which is going to be more expensive… the option is clear, it’s very clear, what has to be done.”

—

Beja: “For the first time in more than a decade, more people have left BC this year than the number moving here from other provinces.”

Feras Elkhalil, head of a tech recruiting firm: “In the past, we’ve been known to call across the nation, just to get that good, specialized talent into Vancouver, and it has been easier, to sell a lifestyle and temperature change, … but that’s gone.”

Beja: “BC prides itself on its livability and lifestyle, but are we selling a bill-of-goods? … Ours is the most expensive in the country, costing more than eleven times the median income.”

“But our income is at the bottom of the list, Vancouverites make less than people living in places like Regina and Saskatoon.”

“If young people continue to leave, it could spell trouble for our economy.”

– above excerpts from Global TV, 3 Oct 2011.

Kudos, on this occasion, to Global TV and to Tanya Beja, for plainly stating aspects of the effects of housing prices.
The montage of clips from the ‘Best Place On Earth’ BC advert interspersed with voice-over questions about housing is the closest Global has come to asking real journalistic questions about our RE.
It’d be even better if Global went further, and joined some of the dots:
Given the prices and incomes, we’re experiencing a ‘speculative mania’ in housing prices, aren’t we?
And, given the effects on migration that they cite, and given that prices have been driven up by bubble-dynamics, are prices sustainable?
– vreaa

“I just can not wait to move to Alberta in the new year. This is a major loss to BC. My education was funded by BC taxpayers.”

“I am completing my bachelors degree in December. Vancouver does not have entry level graduate trainee programs. This is mainly due to the lack of head offices. All jobs in Vancouver demand experience and will pay peanuts.
Now, Ontario and Alberta have hundreds of graduate entry positions with salaries ranging from $40k-50k. Even if Vancouver were to offer such positions – $40k in Vancouver is below the poverty line. Being a mature student with a family, my income should be able to offer my family a middle class existence. For me apartment/condo living does not cut it. I want my kids playing in the backyard. In other Canadian metropolitan cities one can buy a detached family home for $250k. It might not be all that but as a starter home for a young family that would be great.
I just can not wait to move to Alberta in the new year. This is a major loss to BC since my education was funded by BC taxpayers. As a full time student I had to put my child into daycare and the province subsidized the cost. I even received rent subsidies. I would have loved to serve the Province that enabled me to attain an education but just can not afford to due to the exorbitant cost of living and lack of meaningful career opportunities.
When you are as busy as I am you hardly have time for the skiing and kayaking. During winter times Vancouverites also get to shovel snow off their driveways. Vancouver winters are relatively mild compared to other parts of Canada but Vancouver weather is no California weather.”
– IamOuttaHere at VREAA 26 September 2011 at 11:16 pm

“You move to Vancouver, you make a lot of sacrifices to look at mountains and avoid a couple of months of snow. It’s far from a slam dunk.”

“I hire positions at a prestigious government employer [here in Vancouver] with an amazing benefit and pension package. I’ve noticed a serious drop off in resumes. 4 years ago I would see 40+ resumes for a professional IT position. The last post garnered 7. I didn’t necessarily connect it with the real estate market, but it does beg the question of where all these people clamouring to live in the “best place on earth” are.
I also perform stand up comedy on the side. There are 4 (soon to be 5) decent places to perform in Vancouver. I recently took a look at the scene in Toronto and there are dozens, you could do a different room every night for a month and never duplicate. You move to Vancouver, you make a lot of sacrifices to look at mountains and avoid a couple of months of snow. I still prefer it to any other city in Canada (I’ve lived in Toronto, Montreal and Calgary), but it’s far from a slam dunk.”
– LexLimo at VREAA 18 Sept 2011 11:50am

“Depending on what you’re looking for, Vancouver is actually a great city to live in. If you can’t be happy here, forget it and go live somewhere else where you can find your happiness…”

“Depending on what you’re looking for, Vancouver is actually a great city to live in. I don’t come from a 3rd world country, but from western europe. I’m not an aging baby boomer either, I’m 34! I’ve lived in London and Paris for years, so I know what’s living in a world class city is like. I also did my MBA at UBC (that’s the reason why I came here in the first place) and decided to get a job and live here (as did a lot of my fellow classmates). Depending on your chosen field, you can have a decent career here. For sure the opportunities might be more limited, of course you may have to compromise a bit on salary, but would I trade my life today to go back to London or Paris? Hell no! In fact, most of my work involved projects located anywhere in Canada and the US. I could be located pretty much everywhere I want, and I chose to be here.
Is everything perfect in Vancouver? Of course not. I wish so much I could afford a house here, which I can’t despite my 6 figure salary (that’s the reason why I’m on this blog!). But I’m renting a nice condo in a great location in downtown, the same way I was renting in London and Paris. I don’t have any problem with it and I’m patiently waiting (and saving) for prices to come down and be reasonable again, as they certainly will… If they don’t? well, I’ll be sitting on a pile of cash…
Vancouver is not for everyone, and there is no reason to be angry about it. I have a happy life here, and I know lots of people do too. If you can’t be happy here, forget it and go live somewhere else where you can find your happiness…”
—
“I agree this is not a city for everyone and a lot of my friends in Paris or London would have a miserable life living here. But Vancouver works great for me and this is where I want to raise my kid…”
—
“This city/province has a lot to offer, but not everyone enjoys nature and all the activities that come with it. If you prefer museums, a developed music scene and other cultural activities, you will have a pretty miserable life here.”
—
“When I went camping to Garibaldi Lake last month, there were all kinds of people, very young “party” folks, older mature ladies (early 60′s) and parents with young children (I brought my 7 month old baby up there and I was not alone, to my biggest surprised! Talking about family responsibilities…).
I agree with you there are a lot more important things in life than outdoor activities. It’s all about putting your priorities in order. I love great food and I have yet to find a good yet affordable restaurant in Vancouver. I’m still amazed at the costs of fruits and vegetables here, and don’t get me started about the price of cheese here. I would also love to have more music festivals in Vancouver during the summer season.
The same way some people go and spend spring break in Florida or Mexico to get sunny and warm weather, it’s possible to travel from Vancouver to satisfy your cultural (and other) cravings you can’t satisfy in Vancouver… Portland, SF or even NY are not that far away.”

– Makaya at VREAA, 20 Sep 2011 at 12:44pm, 2:25pm, 2:37pm& 4:49pm.

“Vancouver isn’t vibrant or exciting, it’s as dead as a doornail. It isn’t a big city, a world class city or even really a city. It’s a large sleepy tourist village that wishes it matters on the world stage.”

“Downtown Vancouver isn’t vibrant or exciting, it’s as dead as a doornail. I lived in False Creek for 11 years so I know how bland and lame that town is. Dining was also bland and uninspired. Vancouverites to this day are the most arrogant closed off unworldly bunch I have ever met. Far worse than Americans, and I’m in the Southern USA now. What baffles me is that people actually pay to live there. I love living in the USA now, as a dual citizen and we’ll never go back to Canada. I couldn’t justify doing my MBA with zero real career prospects in the Vancouver ‘business district’ (laughable) and then driving up and down Broadway, Granville and Seymour thinking that bubble tea, camping, fishing and the Canucks is actually worth living there for and deluding myself in thinking it’s cosmopolitan. It isn’t a big city, a world class city or even really a city. It’s a large sleepy tourist village that wishes it matters on the world stage and the propaganda there just proves it. I hate Vancouver so much it makes my blood boil and get angry even thinking about it. I went to GNS private school in Victoria BC in Oak Bay. The lot of my old classmates either moved away to live in real cities and have real lives or went to private school and didn’t become successful at all. Canadian schools don’t seem to that much better. It’s what silly Canucks tell themselves to spite and convince themselves to the USA. No more Granville Island, no more skiing, no more small town people. A buddy of mine just become an oral surgeon, he moved to NYC to start his practice, why on earth would he choose NYC over the “best place on earth”? Maybe Vancouver isn’t on the map for educated people. Way to go Vancouver!!! the only people that live there (or want to) are aging baby boomers and the 3rd world… what a city !!!!! And one final comment, I never lived in a city like Vancouver where people pretended to be rich like they do there, what the hell kind of careers do people do there? I never figured that out. I know engineers that bag groceries at save on foods in east van, my realtor was an engineer but realized that he would never have a real career as an engineer there so in 1986 became a realtor. Vancouver is a poor city, with piss poor opportunities. I only stayed to do my MBA and watch my property values rise from when I got in during April of 2001. I cashed out to some foreign fool. I’m so happy I left.”
– Reality Check at VREAA, 18 Sep 2011 7:26am

Wow. We don’t share Reality Check’s vitriol; we at VREAA like many aspects of life in Vancouver, that is why we live here.
At the same time we acknowledge that in many ways, in many quarters (particularly amongst locals), Vancouver is simply over-rated. An unrealistic over-assessment of the city has undoubtably contributed to the speculative mania in housing prices.
– vreaa

“On a flight from Berlin to Frankfurt I ended up sitting next to a guy from Vancouver. He seemed to believe that Vancouver is the best place on earth and it would be heresy to want to move.”

“On a flight from Berlin to Frankfurt I ended up sitting next to a guy from Vancouver on his way back to Vancouver, we did not talk till the end of the short flight. He was shocked when i told him that I was moving my family out of Vancouver. He seems to believe that Vancouver is the best place on earth and it would be heresy to want to move.”
– ams at VREAA 18 Sep 2011 12:55am

UBC Staff And Faculty Housing Demand Study – “Inability to settle in Vancouver may lead me to leave UBC, despite being ranked as top faculty both in terms of teaching and research”

Thanks to ‘Durr’ at VREAA 30 July 2011 for alerting us to a report, prepared for UBC Campus Planning, by McClanaghan & Associates, and dated more than one year ago, July 2010. pdf here.
The commissioned study was aimed at assessing “housing choices and housing pressures for staff and faculty members” in order “to provide important research and data for UBC to understand the potential implications that the cost of housing can have on their recruitment and retention of staff and faculty members”. The study used census data, MLS data, CMHC data, a web-based survey, UBC income data, & UBC focus group sessions held in April 2010.

The entire report is of interest and worth the read. We will relay a handful of the reported statistics, and then, given the major focus of VREAA, record many of the personal anecdotes ‘snippets’ that the survey gleaned.

UBC employs 12,700 staff and faculty members (1% of Metro Vancouver workforce)
36% faculty, 64% staff
34% originate from outside Metro Vancouver
41% want to live closer to campus
31% take transit to work (69% drive)
Average annual faculty income: $93,524
Average staff income: $51,754
[For comparison, City of Vancouver incomes –
homeowner households: $66,087
renter households: $34,872]

Given lender guidelines, income thresholds required to purchase –
a 2BR condo or Townhouse ($611K price): $138K p.a.
a Single detached house ($1M price): $195K p.a.

Only 29% of staff or faculty members live in a detached SFH.
24% of those have a secondary suite in their home that they are currently renting out.

Renting or owning:
39% own
45% rent
(16% no response)

Average rent: $1,229
Average mortgage cost: $1,901
Average monthly condo fee (46% of owners): $260

Satisfaction with current housing situation:
Satisfied 60.2%; Dissatisfied 20.9%

When surveyed on what is important to them about housing, the UBC respondents indicated as follows (selection):
Affordability 90%
Close to employment 83%
Close to social opportunities 64%
Close to friends and family 62%
Close to schools 34%

FOCUS GROUP RESPONSES (excerpts from various question categories):

How long have you lived in the Metro Vancouver region?/Are you a recent arrival to the Vancouver housing market and how does this affect your housing choices/arrangements?
• Recent arrival from US (last fall). Recognize that this is a very expensive and difficult to read market and will not consider buying for at least 2 years until they can comprehend the local circumstances and context.
• Shortly returning to UBC after a sabbatical but the return will be ‘very tough’ due to housing market conditions.
• Recent arrival from US. Coquitlam resident, renter. Unable to afford any housing closer to UBC. This move have made it challenging to find housing that is adequate and affordable.
• Has moved to Vancouver in recent years. Busy establishing career. Has one child with second on the way. Likes access to UBC and rents a house in close proximity. But is unable to purchase a home.
• Long time Vancouver resident with large family. Previously lived at UBC but unable to find suitable housing arrangements at UBC. Proposed co-housing option but UBC expressed no interest.
• Arrived in Metro Vancouver in 2001, but never got a chance to enter the real estate market, as budget was taken up by childcare expenses for young children.
• Housing has been a big disappointment with UBC & Vancouver and a perpetual source of struggle.

Describe your experience in looking for housing in the Vancouver market. (Difficulty, vacancy rates, market conditions, narrow range or choices, type of neighbourhoods, trade off with commute time to work, etc.) What challenges, trade-offs did you have to make?
• Luckily, were able to land one of the few rental options with not too great an effort. Anticipates market will go down as in US and thinks that may be a good time to buy. But is generally leery of buying if market remains high.
• Challenging. Bought 5 years ago and even then, had to share a mortgage for a single family home with another family/household. This was not preferred option even though it has worked out well. Wife is so frustrated with local housing market and lack of opportunities that she would happily accept offer of employment from a university in another city.
• Difficult. Live on campus at Acadia Park and am entertaining the UBC housing offer. Realize that there are few strong opportunities in local housing marketplace and thinks that UBC may be best opportunity. But it, too, is a challenge.
• Sticker shock. Housing is very expensive and rental market is narrow. Came from US and had to move to Burnaby Coquitlam boundary to find suitable rental housing. This involves a long public transit commute. Would give up UBC employment if better situation could be found.
• Very difficult for young couple still paying off student loans. Forced to live with in-laws in east Vancouver basement suite to attempt to save money for down payment (get a rent break). Would like a family but the housing situation is putting planning on hold. Car pools to UBC.
• Complete unaffordability of 4BR option for a 2 child family as a long-term option ($3,000+ to rent; $6,000+ to buy).
• UBC should be a leader, as proposed by our president, on reducing the environmental
footprint and addressing climate change. Yet faculty are pushed far off campus & into private vehicles.
• There is no solution to housing problem off campus with $1,000,000 homes not accessible to UBC faculty income.
• Could afford $750K-$800K for type of housing household requires, but nothing is available.
• Very tight market, very few options, short-term leases. Very hard to settle down in durable way.
• Willingness to stay at UBC over time is eroded.

Metro Vancouver is recognized as a high cost housing market – what implications does this challenge have for you/your household in terms of the choices that are/were available?
• Generally speaking, this has severely constrained options.
• Buying and settling down is “beyond hope” for young tenured professor with family
• Unable to buy, Forced to rent, Forced to live in a basement suite
• Forced to live with in-laws
• Forced to share mortgage with another family.
• Unable to move up in housing market as they could do in most housing markets.
• Forced to wait to see where the local housing market goes (delaying decision).
• Forced to put off having a family.
• May have to limit the size of planned family.
• Forced to consider options that are long distance from employment.
• Also has implications for UBC with faculty who would spend less time on campus or with students due to imposition of a long commute.
• Off-campus market is “very very tight” with very few rental options available
• The few suitable rental options are “around $3000 to $3500 per month”
• Family would consider offers from elsewhere (other universities) as a function of the local housing market.
• Inability to settle in Vancouver or at UBC may lead me to leave UBC (despite being ranked as top faculty both in terms of teaching and research)

If you were advising a potential new recruit to UBC, what type of housing advice would you provide?
• Rent and observe the market for some time.
• Plan your family size carefully as larger families are particularly challenged in this market.
• Be prepared to make extensive trade-offs (location, amenities, affordability, commute time, size and age of housing, rental vs. ownership).
• Be realistic about lack of housing for families, as it can make life quite tough. Vancouver and UBC are not attractive anymore, due to the inability to settle down in a durable way.

“We have often had to hire from outside of the province for certain specialist roles and it’s very difficult to convince people to move to Vancouver. Telling them they can rent doesn’t go over too well.”

An exchange at RE Talks, 12 Sep 2011:

“There’s a battle for good workers. I cannot tell you how many resumes have passed my desk and how many interviews I’ve run for people who aren’t up to snuff.” – jesse1, 10:08am

“I have heard the same, for high tech companies in Vancouver – too few quality people for open positions. Could it be that the good ones are simply leaving town? I know I still see a very healthy number of quality resume’s in Toronto, and have had no problem with recent hiring.” – westcoastfella, 2:08pm

“Paying more doesn’t help; you need a specialist doctor’s salary to afford what you can get in other North American cities. This is always the thing: we have often had to hire from outside of the province for certain specialist roles and it’s very difficult to convince people to move to Vancouver, even after showing them all the province has to offer. It’s just not for everyone and not deemed a location they want to move to; this is in big part because they look at what they can afford to buy but also because they have to forgo their professional networks when moving to a small-time market like Vancouver’s; if they get cut loose by us they have nowhere else to turn and we can’t afford to make them an offer they can’t refuse. Telling them they can rent doesn’t go over too well.” – jesse1, 2:18pm

A speculative mania in housing prices is very, very bad for a society; it causes misallocation of resources that hobbles future economic and intellectual health. See the ‘Avoiding Vancouver‘ sidebar category for numerous examples of people either not coming to Vancouver, or deciding to leave, largely because of RE prices. – vreaa

“I landed a job in Seattle working for Microsoft and we will be moving there November 1.”

“I have reached my goal, I landed a great job in Seattle working for Microsoft and we will be moving there November 1. Seattle is a much much larger metro than Vancouver and it has more to offer. It is definitely underrated but the world is catching on to it quickly. They are building so many new public works projects that the city will be in constant change over the next 10-15 years. Also housing is considered affordable when compared to Vancouver. The neighbourhoods in Seattle trump any of those compared to Vancouver, they are amazingly clean and very unique with great architecture to boot. I know Vancouver has some nice spots as we live in Kits, but when you compare it to the Seattle equivalents none of our areas really measure up. We will be able to actually afford a nice house in a nice area at around $800,000-$1,000,000 depending on the area. (Maybe I should say this is in a nice middle class to upper middle class area. If we want to live in a nicer area than this then we would be spending $1,250,000-sky is the limit. My point is homes there are going for what feels like half the amount.) We are all just so excited to be a part of such a wonderful place while surrounding ourselves by highly educated people. We think it is a tremendous service to our children to have this experience. We’ll even have sufficient funds to provide our children private schooling if we choose to go that route and the schools there are quite nice. We are doing our part as parents and we are teaching them that putting all your money in a single asset is just plain stupid. Here is why we are not going to miss Vancouver. Yes we like Vancouver but the affordability is out of control and we own our place. The cost/benefit analysis does not add up and there are places on this planet that are just as nice if not nicer that we can live and be happy while being able to save sufficiently for our retirements. We could not be more pleased.”
– Brad in Van, greaterfool.ca, 13 Sep 2011, 10:21am and 10:24am

Ok, ok, Seattle’s nice, we get the picture. 😉
As the comedian said to his toddler son, eager to see his Dad at day’s end: “Okay, okay… you’ve got the job!”
An interesting story for its eagerness, and the quality of emotional relief (which we suspect is partly related to housing issues, but partly related to the new job). – vreaa

“I could pay cash for two average Windsor homes, but would need to borrow an extra half a million dollars on top of that to buy in my deluded town.”

“This guy is crying about the risk of buying a home that is 2 times average income? I could pay cash for two average Windsor homes, but would need to borrow an extra half a million dollars to buy in my deluded town.”
– ‘A Fan in Van’, at greaterfool.ca, 30 Aug 2011 10:43pm, commenting on the story of a man deciding whether to buy a $165K home for his family, at less than 3 times his income. [In Windsor, average household income is $78K, average house 2.1x income; in Vancouver income is a tad higher at $83K, but the average house costs 11x income.]

“My deluded town.” Amen.
Here is one of the central delusions that is keeping the bubble afloat, for now:
“The average income is not a factor in Vancouver real estate, if it was, 90 percent of the people couldn’t buy houses. Wealthy Chinese and Hong Kong businessmen are the ones driving the prices and buying the real estate.” [Tim at greaterfool.ca, 30 Aug 2011]
The vast majority of sales are still to locals who are overextending themselves to the gills with cheap, borrowed money.
Once prices clearly turn:
1. buyers will sit on their hands (why overextend when prices show they can come down?)
2. move-up-wannabes will be stuck in falling price condos and townhomes
3. some of the owners dependent on the market price of their home for their financial future will come to market (see the 29 Aug 2011 post for an example)
4. the relatively small number of true flippers will flip out entirely and sell asap
5. whatever foreign investor/buyer component there has been will slow markedly: these guys didn’t ever buy into Vancouver RE as a value investment, but as a momentum play – they were attracted by the fact that prices were going up and by the promise of  future strength. With falling prices (and the falling loonie that will likely accompany our housing implosion) they will like Vancouver RE a lot, lot less. We don’t buy the idea that foreigners will be stepping in to snap up ‘bargains’ at 10% or 15% off.. more likely they’ll be adding to supply. The presumed ‘floor’ is more likely to be a ‘trapdoor’. These players are very aware of how volatile assets can be, and many won’t want to stand around and watch their Vancouver RE holdings do what other assets have done in recent months and years. They’ll likely be quicker at connecting those dots than Vancouver residents.
It’ll be interesting to see if a ‘foreigners are selling’ meme becomes part of our crash.
– vreaa

Mayor Robertson – “People come here with money and they want to be part of this. That creates challenges for my kids and the next generation to live here. It’s not affordable to live here now.”

“There are many hopeful environmental stories in the city of Vancouver. In the past 15 years, residents’ use of cars and carbon emissions have both gone down dramatically, by roughly one per cent every year – even while the population has expanded to 570,000 people and the economy continues to grow. This is a very unusual trend in the world’s cities now. A city that is committed, and that sets aside the perceived inevitability of calamity, can be a stronger community. We can change our ways of getting around and looking after each other. I think there’s a lot of hope in that for generations to come.
The converse is that Vancouver becomes a very desirable city. People come here from all over the world for the beauty and for the sense of community… That creates challenges for my kids and the next generation to live here. It’s not affordable to live here now. People come here with money and they want to be part of this. And that makes it difficult. So it’s creating other challenges for us.”
– mayor Gregor Robertson, Vancouver Sun, 23 Aug 2011, from a conversation with David Suzuki, Thich Nhat Hanh, and Jim Hoggan

The mayor is deducing that Vancouver RE prices are high because his “green” policies are perceived as successful. We believe that he is sincere in his logic, but also that he is simply wrong. Housing prices have ballooned to “unaffordable” levels in Vancouver because we are in a very large debt-driven speculative mania, not because we have any particular desirability as an environmentally friendly city.
Many of the apparent problems of unaffordable housing will be ‘solved’ by a simple market crash. Of course there will be all sorts of bad effects for the community from such a crash, but that is now unavoidable. You may say that such an outlook is an example of a “perceived inevitability of calamity”, but this outlook is not pessimistic, it is simply realistic. Ask any student of speculative manias. It’s already woven into the fabric of the market; it’s a completely natural consequence of the speculative mania. – vreaa

“Both my grandfathers came to this city in the dirty 30s with NOTHING and worked hard to raise families, fight World Wars and make B.C. the AMAZING province that it WAS years ago.”

“It’s funny that since we left and two other couples that we were really good friends with in Vancouver have also left around the same time. We all tried so hard to make things work, two incomes, NO kids and still No home ownership. Now, what ticks me off the most is that both my grandfathers came to this city in the dirty 30s from NOTHING and worked hard to raise families, fight World Wars and make B.C. the AMAZING province that it WAS years ago. Suddenly all the foreigners walk into the front doors with LOTS of money from Asia. Who knows if it is clean or dirty money, I don’t know. They start buying up and taking over everything. I don’t understand why the Asian culture was just ALLOWED to walk through the front doors and start taking over Vancouver neighbourhoods that were originally built by European settlers and knocked down to build these MASSIVE homes that don’t even fit properly onto the properties that were meant for, much smaller homes. Now for many European Canadians the opportunity to ever own your own home and property is now gone FOREVER due to the OUTRAGEOUS real estate prices. The only chance that my husband and I would have had in ever owning a home in this city would have been to do Ilegal drug activity and I’m PROUD to say, NO WAY. I’m true to my ancestors that if I cannot earn my way in life the OLD fashioned way by hard work and paying my DUES then I DON’T want it.”
– Carol at VREAA 12 Aug 2011 12:44pm

Note: Archived here for the record. Headlining a story does not mean we endorse its content. -ed.

Spot The Speculators #52 – “A very dear friend I left behind in Vancouver bought a house five years ago in Ladner. It was a huge stretch for him and his wife to pay $539k. Fortunately, the CMHC made it easy. Fast forward five years.”

“I was a Vancouverite until 1986 — when I realized I could never make a decent career for myself there as an Engineer, so I de-camped to Toronto for many years. And this was before the real estate boom. It’s only gotten worse in terms of career possibilities and affordability since the eighties.

A very dear friend I left behind in Vancouver bought a house five years ago in Ladner. It was a huge stretch for him and his wife to pay $539k for a side split on a 50 foot lot. But they were kicked out of their rental home and needed a place to raise a family and keep their stuff (bikes, skis, etc.). For some reason my friend thought that he couldn’t possible rent (no room) and besides, he argued, the mortgage payments would be the same as rent. (Insurance, taxes, maintenance etc were overlooked in the zeal to justify.)

Fortunately, the CMHC made it easy: a 40 year amortization and no money down and voila: a home. The $2,900 mortgage payment would be eased by a renter in the illegal basement suite. A combined income of $120k would make things tight, but what can you do? (Move away, or rent, I said.)

Fast forward five years. Despite an old vehicle in the driveway that cannot be driven because raising a few hundred dollars for repairs was impossible right now, the place looked great, with new hardwood floors and kitchen cabinets (RRSP withdrawal). But, the mortgage is up for renewal and guess what, new terms are required. Like a minimum equity requirement (80%), and a new amortization (25 years). This requires another loan for $100k (Mom) plus a big bump in monthly payments. What’s a man to do? Just talk to your financial advisor and come away with a new line of credit from your insurance company. Now he can pay interest only! (At a floating rate.)

The next leg down in real estate prices will bring about a fresh loss of the borrowed $100k and maybe more. The inevitable rise in interest rates will push the monthly payment beyond reach. Bankruptcy or family bailout has to be the final outcome.

And really, this sad state of affairs is due to a nesting desire and a bad case of rationalization. Curses, Vancouver, for ruining my best friend’s hopes for retirement and wrecking his balance sheet. I have to ask, is it really worth all this to live in Rain City?”

– ‘armourb’, via e-mail to VREAA, 18 Aug 2011

Pre-emptive comment: “Yes, they are, indeed, speculating. They are betting very heavily that RE prices will remain robust. They will be completely destroyed by any significant price drops. If they fully understood the reasonable risk of just 15%, 20%, 25% price pullbacks, they would consider selling. They are ‘speculative holders’.”
– vreaa

Software Engineer – “What is ultimately driving me out is the price of real estate. Establishing a family home is a higher priority than zip lining in Whistler. Adios BC.”

“Living in Vancouver definitely comes at a price. The salaries for my line of work (software engineering) are definitely 30% higher down in the US and quite possibly 5-10% higher in ON/QC. Given that, I’m not complaining about my salary: what is ultimately driving me out of BC in the next year or two is the price of real estate. When you are working crazy hard and the pay cheque is inadequate to purchase a 1-bedroom $600k nice apartment in Downtown Vancouver then I’m better off in ON buying a 3-bedroom $400k apartment in Downtown Toronto by the water. Sure the view isn’t as nice, and it will get terribly cold and terribly hot, but I never fancied myself the die hard nature lover or weather junkie. For a young family as in my case, establishing a family home is a higher priority than zip lining in Whistler. If majority of Canada’s population can bear the cold, so can I. Hey if I’m making more money and saving more, I can always come on vacation 😉 Ultimately it is a shame for BC as a lot of talented engineers and other professionals I know are leaving for better opportunities else in the country. What good is the weather and view if you can’t afford a decent lifestyle because everything is exorbitantly over priced. My 2cents. Adios BC.”
– Newman at VREAA 12 Aug 2011 10:10am

Sure, we all know Newman could rent, but perhaps that doesn’t equate to “establishing a family home” for him and his young family. – vreaa

Unashamed House Porn: Seattle Vs Vancouver

3018 W Lake Sammamish Pkwy, Redmond, WA
5,040 sqft SFH; 17,859 sqft lot (0.41 acres)
Built 1991
“110′ of preeminent, level waterfront”, “Terrific privacy, with front row expansive lake, mountain and coastline views from nearly every room.” Sammamish Lake. Pool and hot-tub.
Zillow estimate value $3.34M
Listed for sale Aug 2010 $3.925M
Price reduced May 2011
Current asking price $2.85M

[hat-tip to Jeff Murdock for this example. Jeff adds “Biking distance to Microsoft”(2.1 miles)]
—
Vancouver comparison:

4411 W 11th; 4,696 sqft SFH; 63×121 lot (7,623 sqft; 0.175 acres)
(Backs onto alleyway behind 10th Avenue stores.)
Listed 9 Oct 2010 $2,980,000;
Price change 6 Dec 2010 $2,890,000
Sold 15 Feb 2011 $2,830,000

“RCMP report suggests the dramatic plunge in U.S. house prices has caused some gangsters to re-evaluate whether B.C. is really the best place to do business.”

From ‘Cheap housing luring Canadian marijuana growers into U.S.: RCMP report‘, The Province, 7 Aug 2011 –
The U.S. housing crash has lured some marijuana growers to move their operations south of the border, according to an internal RCMP report obtained by the Vancouver Sun.
“Some VOC (Vietnamese Organized Crime) groups have moved their marijuana grow operations to the United States where the lower cost of real estate (in some regions) allows them to operate a more profitable enterprise and where they can also avoid police/customs detection at the border,” states the RCMP report.
—
For more than a decade Canada has been home to a multi-billion-dollar marijuana-growing industry, the bulk of whose product has been shipped to the U.S.
B.C., where the largest number of those operations are located, has generally been seen as an attractive place for drug gangs to set up shop because the legal penalties for growing marijuana here are more lenient than in the U.S.
However, the RCMP report suggests the dramatic plunge in U.S. house prices has caused some gangsters to re-evaluate whether B.C. is really the best place to do business.
Since 2007, house prices in the U.S. have dropped by roughly a third nationwide and in some markets, like Las Vegas, by more than half.
During that same period, prices in most Canadian cities have been flat or rising, with particularly large price gains in Vancouver.
Growing operations tend to be located in residential properties, so real estate is one of the biggest expenses for growers.
—

“Without the Vancouver housing bubble I would have probably spent 3,500 hours working on building my business instead of getting addicted to learning everything I can about finance and economics.”

“I hate to invest in things I don’t understand, so from the age of 18 to 28 I invested in the thing I understood best: myself. My investment involved spending enormous amounts of time studying computer science, marketing, sales, accounting, the basic skills needed to operate a business, and IT management practices. In the first 3 years after finishing university I had spent $25,000 on computer books (crazy, but true). I am sure some RE bull observers would say that I would have been better off buying a house and watching it appreciate in value but they would be wrong because I loved every minute of reading hundreds of books on all things comp sci, IT management and geo politics. End result I have a consulting business where I am tax optimized, and only work 100 days of the year, generating 140K to 200K of revenue per year while being able to live anywhere in the world, so I effectively own my job.

My obsession with finance and economics was born around 2007 when I decided that I would stay in Vancouver. The plan was to live in Vancouver, enjoy the great outdoors, start a family, buy a house, and put what I learned into hitting a home run with a product based business (still swinging for the home run; have not hit it yet).
What really pissed me off is that, even though I had done something totally crazy [in a good way] compared to the average 28 year old (starting out as an immigrant kid with no connections and no money and lots of student debt), I still could not afford to buy a house in Vancouver. At this point I owned some commercial RE in Ontario and had cash accumulating in the bank at a healthy rate. My definition of affordable is minimum 25% ideally over 50% down payment and prices close to fundamentals.
My obsession with finance and economics became an addiction in 2008 as the world economy was blowing up. As of now I estimate that I have spent over 3,500 hours reading finance and economics books, and blogs. For fun, I wrote the CSI exam to see if I had learned enough, and I had no trouble passing it.
After 3,500 hours of research I have learned how to tell if something is a bad investment. The problem is that I have no idea what the [current] good investments are, other than my business, and myself.
I don’t have enough money to afford the seriously good money managers that know what they are doing and I know that the financial advisers at the banks and insurance companies really don’t know anything that I don’t know and will probably not advise me on anything and just sell me some product from their company.
It also seems to me that the markets are fundamentally corrupt and rigged against those who don’t have servers in the stock exchanges, or friends in government, or 100 million +.
Buying a house and putting all my money into it would have freed me from dilemma of figuring out what to do with my savings because I would have worked to pay off the house in 5 to 8 years and get mortgage free.

Now it seems to me that my options for my money are:
A) Put my money into a grossly overvalued housing and lose lots of it – I have worked too hard to let that happen.
B) Put my money into the fundamentally corrupt politically rigged and manipulated public markets.
C) Keep it in cash and let the bank gamble with it and loan it to fools who buy over valued real estate while my taxes “guarantee” the loans (current strategy)
D) Spend it
E) Try my hand at investing and see if I learn anything useful (I like learning and creating things not buying things in hope of selling them for more not really who I am the game just does not appeal to me but maybe I could grow to like it)
F) Invest it in my business and work to increase my revenue to $300K per year while only working 60 days per year. Use increased time and cash flow to search for business model with a personal 25 million + exit where I bootstrap the business from the ground up.
G) Raise money from investors for a business idea that I have developed business models for, then work 60 hour weeks 50 weeks of the year, be in perpetual raise capital mode, baby sit investors, lose my time to learn and grow, and then maybe exit if my interests are still aligned with the interests of the investors by the time an exit opportunity shows up.
H) Keep learning more and see if I learn anything new to change my mind about what my options are.
I) Leave Vancouver and hope that by doing so I don’t end up being obsessed about finance and economics any more.

Now that I have written this rather long post, it seems to be too personal and revealing to post online. But … I share my story for sake of contributing to this blog’s effort to capture the impact of the housing bubble.
So, without the Vancouver housing bubble I would have probably spent 3,500 hours working on building my business instead of getting addicted to learning everything I can about finance and economics.”

– ams at VREAA 5 Aug 2011 4:36pm

—
Thanks, ‘ams’, for sharing your illustrative story so openly. You are by no means alone, as the pressures applied to you through these profoundly abnormal times have been felt by many of us. And the perversion of behaviour you describe has also affected many; each in their own way. Witness the very existence of this blog as just one small example.
A few thoughts:
1. The speculative mania in housing has distracted many from usual productive activity. This is just one of the many ways in which asset bubbles misallocate resources.
2. Despite ‘austerity’ talk internationally and nationally (BOC Governor Mark Carney, etc), economic pressures continue to punish the prudent. ‘ams’ still feels pressure to use his accumulated wealth in an arguably unwise fashion: to speculate, to buy overvalued assets, or to squander it (spend unnecessarily).
3. The speculative mania in Vancouver RE was very clearly underway by 2007, and it was prudent of ‘ams’ to avoid the market then. Price action in the four years since then has punished him psychologically. This is a common phenomenon in bubbles.

Having said all this, if one lives through abnormal times, and if one is naturally drawn to examining one’s own behaviour and the behaviour of those around you, isn’t it normal to be fascinated by these massive social forces, to study them, to document them, to discuss them, to attempt to take advantage of them? Isn’t that a particularly human thing to do under the circumstances? – We are all to a certain extent products of our times. The results of ‘ams’s 3,500 hours spent studying ‘finance and economics’ are perhaps as much an important part of who he is as his business career, or the business that he has built, or any other valued aspect of his life.
– vreaa

“To buy in Vancouver’s west end would be insane, I would end up leaving my child a mortgage for an inheritance!”

“I have lived in Vancouver and seen the changes and the remarkable price hikes and have decided to leave and return once the housing market corrects itself and it will, to buy in Vancouvers west end would be insane I would end up leaving my child a mortgage for an inheritance ! You can expect a correction of up to a sixty percent drop in the next couple of years as a looming financial crisis in china rears its ugly head and as our own interest rates climb I would guess to at least ten percent within the next few years then I will return and swoop up a nice west end property and wait for the next boom its a nice place to live but to pay those prices for real estate and to pay the vastly overpriced prices to enjoy the amenities the area has to offer ,skiing etc is beyond reason and anyone doing it is a sucker in my mind even if they are rich …A sucker is always a sucker ! BTW There will be very few people who will be bullet proof this time around as they were in 02 and 08 so beware all you high and mighty Vancouverites !!!”
– ‘Anth.’ at VREAA 6 Aug 2011 12:43pm

Noted for action (avoiding buying; leaving) and sentiment.
We disagree regarding us seeing ten percent interest rates (not likely anytime soon), but agree regarding the probability of a price crash. – vreaa
(PS: we suspect that ‘Anth.’ may mean ‘westside’ rather than ‘west end’, but the idea is the same.)

“You people who live in Vancouver have taken on that same air of superiority that you once criticized Torontonians for.”

“You people who live in Vancouver have taken on that same air of superiority that you once criticized Torontonians for.
Believe it or not, there is life – and good life – outside of Vancouver.
I know. I was born and raised there, but I choose to live elsewhere.”
– Michele K., Globe & Mail, 3 Aug 2011 2:46pm

“The dissonance between the tranquil image Vancouver exports and the lie the city has become: You cannot be a sustainable city when no working-class resident can afford to live within a 45-minute drive of the city centre.”

‘High-end Vancouver, like its high-end hockey team, has alienated working-class fans to the point of anger’, by Shefa Siegel, themarknews.com, 24 Jun 2011 [hat-tip ‘lex’]. Siegel is a Research Fellow at the Vale Columbia Center on Sustainable International Investment. Excerpts –

“[There exists] a dissonance between the tranquil image Vancouver exports and the lie the city has become.”

“Gregor Robertson lives in a comfortable 23rd Avenue house one block west of Oak Street. Until the mid-1980s, Oak was the division between the city’s wealthy and middle classes. Moving east from Oak to Cambie, Main, and Fraser, each major north-south street was a further step toward working-class homes, immigrants, and the rundown schools that defined Vancouver as an affordable city at the continental edge.”

“Until I was 13, I lived four houses up the hill on 23rd Avenue from where Robertson resides. We had a plum tree and raspberry bushes. There was a schoolyard across the alley where we shot hoops and practised wrist shots. We walked to school. Our friends lived in the neighbourhood. It was a good place to live.”

“Today, a single-floor postwar home on 23rd is worth a cool million. The districts across Cambie, Main, and Fraser, once avoided by puny Jewish kids who knew nothing about fists and fights, are coveted grounds for swanky young parents. Coupled with obscene food prices, living in the heart of Vancouver is no less expensive than life in Manhattan.
Were I now living in Vancouver, I would have to move further east. No matter my ordinations from the educated class, I am a data point on the downward trend where the purchasing power of middle-class offspring is exponentially lower than the income of the parents who spawned them.
Because the million-dollar range stretches past the Pacific National Exhibition and the old Canucks Coliseum, my hypothetical move east displaces still further the working classes and immigrants who once occupied these formerly grunge areas. The people upon whose backs the city – any city – hums are not part of the post- Expo ’86, Hong Kong, Whistler-Blackcomb, cannabis capitalism, cult-of-celebrity, and Olympics economic boom that make the 2011 Vancouver Canucks possible.”

“There is no undeveloped property anywhere – every nook and niche claimed by condominiums, stadia, coffee, and casinos; timbermen’s jackets replaced by adorable Lululemon asses, the costume of a leisure class with time to shape their figures; hippies gone wealthy, local festivals marketed worldwide, mountains transformed to Monte Carlo; the mines – though still economic bedrock – obscured by film crews and marijuana monopolies.”

“..the Vancouver mayor glamourizes the city as a beacon of “sustainable” urbanism. I am sorry, but sustainability has nothing to do with bike lanes to cross bridges connecting one affluent neighbourhood to another. Sustainable development is equal parts environmentalism and social justice; it is the principle that every individual, class, race, nation, and generation has equal rights to prosperity and resources – an ethics of distribution. And for the past 30 years, up to and including Robertson’s administration, Vancouver has veered away from, not toward, the ethics of sustainability.
Testifying internationally to Vancouver’s glory does not change the crisis. You cannot be a sustainable city when no working-class resident can afford to live within a 45-minute drive of the city centre..”

“My American relatives would never even consider living here. My cousin sold an inherited Vancouver property for millions, and now lives a happy, carefree life travelling the world.”

pricedoutfornow at VREAA 23 July 2011 9:36am –
“My American relatives would never even consider living in Vancouver after having lived in New York City, Washington, DC and Southern California. It’s just a podunk little town to them, with the obligatory visit to family once in awhile. My cousin spotted this housing bubble a mile away, after having been through all the hype down there. She took this opportunity to sell an inherited property for millions (literally!) and now lives a happy, carefree life travelling the world, seeing all sorts of neat places (note: no city in Canada was on her list of “places to visit”). Ahh..what a life! I’m happy for her, glad at least someone’s profited from this bloody bubble.”

“I’m Peeved” [‘Vancouver RE-Verse’; Found Poem]

I’m peeved

I confess I am really angry that I have to
leave the city I was born and raised in
(where my parents and grandparents grew up)
because I can no longer afford to live here.

Why is it that we are working
more and more
but can afford
less and less.

– from Georgia Straight, 18 Jul 2011, ‘Confessions’ section
[also made the print edition this week; hat-tip to AR]

A post in the very, very occasional ‘Vancouver RE-Verse’ [Found Poems] series.
Poems are completely unedited but for layout.
Prior example here.

“I work long hours to be able to pay for a house. I drive long distances to get to and from work. I barely do anything in my expensive house other than sleep and go back to work each day.”

“A caller on the Bill Good show this morning [29 July 2011, as recalled by E.G. at VREAA] was saying something to the effect of his being not sure why he bothers living in the Lower Mainland anymore:
Caller (Paraphrased): “I work long hours to be able to pay for a house. I drive long distances to get to and from work. I barely do anything in my expensive house other than sleep and go back to work each day. And on top of that (speaking about the upcoming additional gas tax) every time I turn around I’m being taxed for something else.”
Mr. Good: “I think that you’re speaking for thousands of people right now.”

When the speculative bubble deflates, as all bubbles inevitably do, these “thousands of people” will be in an even worse situation, as their “expensive homes” will be significantly less expensive, but they won’t be in a position to benefit from that. Their mortgages, workload, commutes, and taxes will all be just as onerous as before. And because our economy is so overdependent on RE, some will have the added burden of their employment and/or income being in jeopardy.
Can we imagine how demoralizing all that is going to be?
The misallocation of resources caused by speculative manias is deeply detrimental to a society, in so many different ways.
– vreaa

“A client of mine had an offer to take a teaching job at the Emily Carr art school and turned it down after seeing the housing prices.”

“A client of mine had an offer to take a teaching job at the Emily Carr art school and turned it down after seeing the housing prices.” – daloo22 at reddit.com 15 July 2011

“I grew up in Vancouver and left in my late twenties looking for better career opportunities and have spent the last 10 years in Los Angeles. Vancouver has a massive inferiority complex.”

WS at vancouvercondo.info 6 July 2011 9:21am –
“I grew up in Vancouver and left in my late twenties looking for better career opportunities and have spent the last 10 years in Los Angeles.
I am not sure what one considers “world class” or if it is even definable. Regardless, Vancouver does not resonate on the minds of people in Southern California (or the US for that matter) any more than other far off NW cities like Portland or Seattle. You’d think Vancouver would be more prominent with the entertainment industry focus or self proclaimed “Hollywood North” moniker. Interestingly that is a term I have never heard used outside of Canada. Although, admittedly I am not in the entertainment industry.
In my view, Vancouver is a pretty city in a remote, backwater area of the world with a large port that ships out natural resources to the rest of the world. World class scenery for sure, with horrendously crappy weather and not really important on the world stage outside of being a conduit to Canada’s great natural resource assets.
When I tell people in the States I am from Vancouver about 66% give me blank stares not knowing what to say and the other 33% say “Oh what a pretty city!” then I proceed to ask them if they visited in July, August or the first two weeks of September.
Lately though – Sadly many people asked me about the riots. but that only lasted a week or two.
Vancouver (and Canada) has a massive inferiority complex.”

“Three friends are planning on moving away due to the disproportionate cost of living:income ratio. One is going to Calgary and the other two are going to UK and Australia.”

Vansanity at vancouvercondo.info 19 Jul 2011 3:40pm –
“This week I’ve had the conversation with 3 friends that are planning on moving away due to the disproportionate ratio between the cost of living:income.
One is going to Calgary and the other two are going to UK and Australia (Australia has its own housing bubble to deal with but it sounds like the incomes are higher in their field).”

“We’re facing an exodus” – “Young families will say ‘Let’s sell what we have here, get a better mortgage and make more money somewhere else.’”

Nizam Ibrahim lives in Vancouver but commutes to Calgary, where he rents a two-bedroom apartment in a nice part of town. Despite added monthly expenses of more than $3,000, he still averages $15 an hour more than any job he could get in Vancouver.
“It’s a bit tiring, but to enjoy any kind of lifestyle in Vancouver it’s a compromise I need to make,” said the IBM IT consultant. “I’ve saved more in the last two years working in Alberta and traveling back and forth than I ever did working in Vancouver.”
Recruitment experts predict with its high living costs, skyrocketing real estate and grossly inadequate salaries, more Vancouverites will flee to where salaries are higher and commensurate with their skills and inflation.
“We’re facing an exodus,” said Feras Elkhalil of the WPCG recruitment firm. “We don’t want a brain drain out of Vancouver. We don’t want to lose talented people. If you want good talent, you need to pay for it.”
He added Toronto salaries are at least 15 per cent higher, and 20 per cent greater in Calgary and Edmonton where taxes and real estate prices are lower.
“Employers are not keeping up,” he warned. “I fear they’re turning a blind eye, saying it doesn’t apply to them and we’ll have people frustrated at the cost of living and (foreign investment) driving up costs of real estate. Young families will say ‘let’s sell what we have here, get a better mortgage and make more money somewhere else.’”
– From ‘BC facing a brain drain‘, Erica Bulman, 24 Hours, 17 Jul 2011 [hat-tip to Brent]

The math for Ibrahim is remarkable. It appears that, given the pay differential and his cited extra expenses, he only profits from the commute if he works more than 200 hours per month. Perhaps there are also career advantages.
That aside, the main point of the piece is sound: That income:RE_price ratio in Vancouver is forcing some people away. – vreaa

“Lately I find myself overwhelmed by stories of young(ish) professionals who are leaving the city – often in their thirties, driven by the desire to purchase a home that is affordable for them and their families.”

“I have been asking myself what would make Vancouver a better place to live, work and play?  Lately I find myself overwhelmed by stories of young(ish) professionals who are leaving the city – often in their thirties, driven by the desire to purchase a home that is affordable for them and their families. They are grantmakers, green building specialists, filmmakers, and socially progressive bankers. All smart, caring folks, emerging in their respective fields.  All are assets to Vancouver.  
Mostly they love the city but can’t afford to live here, even working at good jobs and earning good incomes. Sadly, the lowest rung on the home ownership ladder is too big a step. Or with children, the lowest rung (typically the one bedroom apartment) is not workable.  I wonder, is this cohort the ‘lost generation’ – talented, skilled, thoughtful people that are bidding adieu to the city, and taking with them their energy, skills and unique potential contributions.”
– Heather Tremain, ‘What would make Vancouver a better place to live?’, The Vancouver Observer, 8 July 2011

In the rest of the post, Heather Tremain, discusses affordable or ‘attainable’ housing. The most important factor in understanding Vancouver’s RE predicament is not recognized: The speculative mania in RE prices. This is a giant bubble, folks. To ignore that makes the task of trying to ‘solve’ the problems of affordable housing completely meaningless.
A collapse in RE prices will change the landscape profoundly. The process won’t be painless, but in the end, it’ll be better for the city. – vreaa

Opinion And Anecdote – “We have a disenfranchised class in Vancouver from a real estate perspective. My children had to move away to own their own homes.”

Excerpted from a letter by ‘ Trevor Gibbs, Vancouver‘ published in the National Post, 21 Jul 2011 –
“My children had to move away from Vancouver to own their own homes. Meanwhile, financial institutions push mortgages like crazy. At the same time, planeloads of investors from Mainland China are buying downtown Vancouver properties that regular Canadians can’t afford. So we have a disenfranchised class in Vancouver from a real estate perspective.
Children of immigrant families are doing better in school than their peers, and as a result they are first in line for university professional degree classes. So we also may have a disenfranchised education class who may never get to university.
This could be the reason why many of the people watching the hockey game felt little hope for the future. As long as the Canucks were winning, they could still feel good about themselves. When their team lost, their one emotional crutch collapsed, and they vented their frustration, urged on by a core group of criminals in their midst.
That basic disenfranchisement is still there, and will come out again. Someone should study the effect of foreign investment in residential real estate, and how it is a threat to a cohesive and equitable society. Last week’s riot may be a clue that something more is at work behind the scenes than just hockey frustration.”

“Only one UBC employee can afford to own a westside home.”

Unagi Don kindly posted this observation/analysis at VREAA 12 July 2011–

“Only one UBC employee can afford to own a westside home.”

#1) The income levels required to own a westside home: $496k.
http://www.yattermatters.com/2011/07/vancouver-home-buyers-adopt-slogan/

#2) The largest employer in Vancouver (which happens to be on the west side): UBC
http://www.lib.uwo.ca/programs/companyinformationcanada/canadaslargestemployersbycity2007.html

#3) The number of UBC employees earning more than $496k: 1
Prof. Donald Wehrung in Sauder School of business earns $510k.
Stephen Toope, the university president, earns only $483k.
http://www.vancouversun.com/business/public-sector-salaries/advanced.html

For the sake of comparison, the public universities in the US located in the most expensive housing areas are probably UCLA and UCSD. (I’m excluding Manhattan as single family detached homes simply do not exist there.)

At UCLA, there are roughly 100 employees with salaries over $400k:
http://www.sacbee.com/statepay/?name=&agency=UC+LOS+ANGELES&salarylevel=400000
And the average home price in Westwood (the upscale area where UCLA is) is around $650k:
http://www.zillow.com/local-info/CA-Los-Angeles/Westwood/r_118920/

It goes without saying that UCLA is not the largest employer in LA.

At UCSD, there are roughly 70 employees with salaries over $400k:
http://www.sacbee.com/statepay/?name=&agency=UC+SAN+DIEGO&salarylevel=400000
And the average home price in La Jolla (the upscale area where UCSD is) is around $1m:
http://www.zillow.com/local-info/CA-San-Diego/La-Jolla-home-value/r_46087/

UCSD is the fourth largest employer in the San Diego area.
http://www.alliant.edu/wps/wcm/connect/resources/file/eb9ce84c34a1a77/San_Diego_Major_Employers.pdf?MOD=AJPERES

“I’ve got friends in Vancouver, and I’m sort of horrified and entranced by the situation. Half a million is a lot of money. This bubble just baffles me. Canada has land. Canada has trees. WTF?”

Yank at VREAA 4 July 2011 6:39pm –
“I’m a US ex-pat living in Canada, enjoying the country and the people very much. For bubblelicious reasons, I’m concerned about buying — especially as I might not be in town for more then 5 years. I’m not in Vancouver — prices are just mildly insane in the prairie city where I live. I’ve got friends in Vancouver, and I’m sort of horrified, entranced, and baffled by the situation.
Until recently I was living in the medical and university center in a rural midwestern state. My small city had the most expensive housing in the state: 5000 square foot mansions were going for 400 – 500K. A large 2 story was going for 200-300K. Townhouses with 2story attached garages, 1400 square feet, not including the finished basements, new construction were selling for 150K.
About a year ago friends bought a detached house in a nice area near Greenlake (Seattle) for 350K. You can get a good house in the nicest suburbs of Chicago, with the best public schools in the nation for half a mil. (Northbrook, Glenview, Willmette, Evanston). I’ve also seen nice two stories in those suburbs for as low at 350K.
Half a mil is a lot of money. This bubble just baffles me. Canada has land. Canada has trees. WTF?”

We also experience the bafflement, the horror, the entrancement.
And the fascination appears to have gone up a notch this last 6 months.
It’s like we’re watching a freak show and the rubber man is pushing limits we hadn’t anticipated.
Even his handlers are aghast; surely he can’t do that without hurting himself? – vreaa

“The city seems hellbent on turning Vancouver into a giant suburb. Right now it’s home but not sure if it will always be the case.”

Christopher at francesbula.com Jun 23, 2011 at 11:45 am –
“An interesting question to ask is, without the usual talk of “beauty, nature, 2 minute walk to the ocean, biking the seawall, etc” what do we have? If that were not here, how many would flee?
I was born in Winnipeg and moved here as a child and i often go back to visit family. People often joke they would never live in a city like Winnipeg yet despite its lack of size and style often has more arts and cultural events happening in the city than Vancouver does…and bonus, you can buy a house! this isn’t an endorsement for Winnipeg but when me and my wife think of leaving Vancouver the only thing that keeps us here is the ability to live a “urban” lifestyle without being stuck in the city all the time (escaping to third beach, etc).
I know there are many people in the art, music, etc scene that are trying their hardest to make Vancouver more vibrant and I applaud and support that effort but the city seems hellbent on turning Vancouver into a giant suburb. I won’t be surprised when a cactus club opens up on main street or an american eagle on commercial. It feels like we’re headed that way.
I really like Vancouver but compared to most other cities it’s not that diverse, exciting or affordable. Right now it’s home but not sure if it will always be the case. I think a lot of young(ish) adults we know are feeling this way. A lot of our friends have recently moved to Toronto or abroad.”

“My wife and I are in our mid-30s with what others would call wildly successful careers here. We are seriously thinking about moving to Seattle or San Diego or at least elsewhere in Canada.”

bubbles at VREAA 27 Jun 201 6:45am –
“My wife and I are in our mid-30s with what others would call wildly successful careers here. We, however, hate the lack of any real economy or even culture coupled with the insecurity-manifesting-as-egomania of most residents. If I have to hear one more time about how Vancouver is the best place on earth from someone who’s never visited any other major centre in Canada (let alone the world) I’ll scream. Yes, the outdoor activities are nice, but experience living elsewhere has taught me that Vancouver residents do not have a monopoly on their pursuit. Despite the fact that it would mean essentially re-starting our careers, we are seriously thinking about moving to Seattle or San Diego or at least elsewhere in Canada. There is no way we would pick Vancouver as our home if starting again from scratch.”

“We moved to the interior of BC years ago. We have friends and family in Vancouver, and we like to visit. But we can’t imagine living there anymore.”

E.G. at VREAA 25 June 2011 at 1:56 pm–
“My family and I moved to the interior of BC years ago, and we aren’t looking back. We have friends and family in Vancouver, and we like to visit. But we can’t imagine living there anymore.
Yes, we get more snow in the interior. And the temperatures are colder for about four months of the year. But during those cold months it’s raining continually in Vancouver. So pick your poison. And during the rest of the year we’re as warm, or warmer. And the sun is out so much of the time in comparison… even when it’s cold.
We can’t imagine trying to buy a house in Vancouver. And we know that if we did both my wife and I would have to work, rather than having the option of one of us home with the kids. And, not only work, but commute a couple of hours a day as well.
So we decided to live in a city where we could have time with our family and time with our community – where we wouldn’t be slaves to our mortgage in terms of our money and our time. And lots of other people here have chosen the same thing. And because of those choices by others and ourselves we can enjoy neighborhoods that are much like south Burnaby – and so many other parts of the Lower Mainland – used to be.
On top of that, people here have well-paying jobs and, with lower mortgages and lower fuel costs, they have the extra money to go to Maui for a couple of weeks in the winter. Or to get that cottage by the lake. Or… well, you get the picture.
Of course, the average Lower Mainlander will read this and say, “well, yes, but we’d have to live in the Interior.”
Yup, you would. Either the Interior or some other part of Canada.”

“In Vancouver, you need a family income of at least $250K per year to be able to afford a house, save for retirement, and save for your kids’ education. Unfortunately on $140K we can only do two of the above.”

ams at VREAA 1 July 2011 10:34pm–
“Vancouver was the place I wanted to move to from Toronto. I moved here in 2007, by accident, to do a project for a few months. I met the right woman and got married. What was a temporary assignment became home. Now that I have been here almost 5 years I am planning the family exit out of Vancouver. Vancouver will always be a very nice place to visit. As a place to raise a family and grow a high tech IT business it is not a good spot.
Based on detailed spreadsheets of our current family expenses we live a very modest lifestyle (we don’t own anything fancy). You need a family income of at least $250,000 per year to be able to afford a house, save for retirement, save for kids education. Unfortunately on a family income of $140,000 we can only do two of the above, so bye bye Vancouver hello Toronto. The issue with Vancouver is far deeper than just the housing bubble the economy is not diverse enough there are hardly any world class companies here and I don’t see why any major company would setup shop here than say Toronto, or Calgary.
April of 2012 we will leave, sell all our stuff move out of the rented place and head to Germany with the kids for the summer we will come back to Canada in September 2012 to Toronto, or who knows maybe we will stay in Germany till 2013.”

—

Note that ‘ams’ is not claiming that a family can’t ‘get by’ on $140K p.a. in this town. They are comparing the lifestyle and future security that their skills can earn them in Vancouver with what they can earn them elsewhere. It is not good for our community that those comparisons are leading to people leaving. The speculative mania in housing is resulting in loss of human capital. – vreaa

“The house prices, the sense of the city as a place where the main economic base is the city itself as a spectacle…”

Local civic-life commentator Frances Bula on her blog 22 Jun 2011 –
“I have a feeling that many people who once thought Vancouver was a good place to live are beginning to see it as a good place to visit only — stay a week, visit the sites, and then head back to home. The house prices, the sense of the city as a place where the main economic base is the city itself as a spectacle: those give the sense to some that it’s not really a city to live in any more.
I don’t feel that way myself. I’ve lived in the city proper for more than half my adult life. It feels workable to me, a place with neighborhoods and a sense of civic life. But are those of us who feel that way dying out?”

“If you’re willing to live in a home half or a third the size you could afford elsewhere, Vancouver is perfect.”

Dan Cooper at francesbula.com Jun 24, 2011 at 11:42 am–
“I live in a tiny condo in the Douglas Park neighbourhood, about halfway between the Mayor and the Premier if I have their locations correct. I can walk or at a pinch bike or bus to almost everything I could possibly want to do, be it stores, restaurants, sports venues, theatre and opera, shopping, parks, work, libraries or whatever else… Well, they did move the government map store from Broadway and Cambie out onto some such foresaken strip of road in the ‘burbs, but I’ve been managing somehow despite no longer having instant access to the latest geodesics. Anyway, my child continues to have a great experience in his local public school, again within walking distance. Did I mention the multiple community centres with all kinds of activity and sport options, ranging from a few blocks to a kilometre or so away? The youth sports teams? I would say that from a middle class perspective, Vancouver is a really good place to live, with the only drawback being the expense of housing. If you’re willing to live in a place half or a third the size you could afford elsewhere, Vancouver is perfect. For me, it’s been well worth that trade-off. As for visitors, as others have said they tend to go and do many of the same things I do when I’m relaxing: parks, seawall, Granville Island, theatre, restaurants…”
—

“If you’re willing to live in a place half or a third the size you could afford elsewhere, Vancouver is perfect.”
Hahahahaha? (Ummm… no..) Under normal circumstances, such a statement would produce a round of laughter, but Dan Cooper is serious. For him, the trade-off is worth it. For many others, not.
And, by the way, we co-incidentally agree with Dan’s math: Vancouver RE is overvalued by a factor of 2 to 3. – vreaa

Michael Geller on Living in Vancouver – “I think there are many better places to live… where you are not worrying quite so much about whether you will ever be able to buy a home, or how to pay such large mortgage payments… and even whether you can afford to have kids…”

Michael Geller (‘a Vancouver based architect, planner, real estate consultant and property developer with four decades’ experience in the public, private and institutional sectors‘) in a comment at Frances Bula’s blog, 24 Jun 2011 12:00am. Excerpts –
“I´m currently ´living´in Javea, on the Costa Blanca about 75 minutes from Valencia on another house exchange. …
Last night, my wife and I were discussing just how our house exchange partners are enjoying life in Vancouver, compared to how we are enjoying life here. [In Spain gas pricier; wine cheaper] From our modern villa we can walk to town, buy an incredible variety of fresh fish at a fraction of the price in Vancouver, or when eating out, enjoy a string of seafront restaurants where you can get a nice 3 course meal, with wine for 9 to 12 euros…no worry about drinking and driving… [In Vancouver drive to restaurant for meal at twice the price] Then again, unemployment is 22% in the Valencia region and although there seems to be so much more industrial activity than in Vancouver, the region is spending more than it takes in and is reportedly on the verge of bankruptcy. …
I would conclude by saying that one´s enjoyment of Vancouver as a place to live is obviously a function of where and how you live…whether you worry about money…and how satisfying your work/life balance is….

There is no doubt that Vancouver is beautiful to look at, but every time we do a house exchange we realize there are many plusses to life in other cities and countries…New Zealand and Australia both come to mind….But we don´t move because we are ‘established’ in Vancouver… our friends are there… etc.
However, if one could feel free to choose, I think there are many better places to live… where you are not worrying quite so much about whether you will ever be able to buy a home, or how to pay such large mortgage payments… and even whether you can afford to have kids… this one really troubles me whenever I hear it from young Vancouver couples…

I agree with [the opinion] that if you can resign yourself to renting, Vancouver may be a better place to live than for those struggling to buy…although those who bought homes for $100,000 that are now worth $2 million and can sell and move elsewhere and retire on their nest egg… would probably not think this way!

So my advice, start doing house exchanges as a way to enjoy relatively inexpensive holidays, and a way to experience life in other places…go to homelink.org to see what´s available.
I must admit that while I am tempted to move to another place, if only for half the year…I do always come back to Vancouver… but I´m not sure it´s because it´s better… just because it´s where I live and it might be too much effort to change!”

[Earlier comments by Michael Geller were headlined at VREAA 23 Mar 2011.]

Quality Of Life Calculations – “They essentially are having 20 years more enjoyment than if they lived in Vancouver.”

gse36 at RE Talks 23 Jun 2011 1:28pm –
“I know 2 people in their 40’s who just retired in Toronto ($1.2M equity in Vancouver home, paid it off, bought $600k in Toronto, plus have investment savings (and will later cash out RRSP savings)). Actively invested.
They chose retirement in Toronto as opposed to working and living in Vancouver. Sure, they could buy a condo in Vancouver, but they wanted a house. Sure, it may not be as beautiful, but there’s something to be said about having 16 hours a day to yourself and spouse (assuming 8 hrs sleep) = 112 hrs a week.
[Compare this with] what they had before: 9 hour work + 1 hr commute each way (*2) + 8 hr sleep = 5 hr left to themselves 5 days w eek. = 25 hours a week + 32 on weekend = 57 hr a week. + all the anxiety and stress from their jobs + occasional overtime, etc.
They have 2x as much free time as before. They are in excellent physical shape, and go travelling a lot (yes, and back to Vancouver too), volunteer a lot. Basically doing all the things they enjoy. Contribute back to society, and help those around them. They felt this was more meaningful than paying the bank interest and paying for a modest house.
Given there’s 20 years to normal retirement age, and they get 2x more time to do what they want than others, then they essentially are having 20 years more enjoyment than if they lived in Vancouver. More importantly, it is while they are still relatively young.”

—
Two working, tax contributing citizens fall off the map because the price of their home hits ‘x’. This is one type of ‘misallocation of resources’ that occurs with speculative manias in RE.
This kind of move makes perfect sense for the couple, provided they do indeed have enough funds for 30+ years of retirement. It should be emphasized that their easy retirement is being funded by another couple taking on the opposite end of the deal: a very large lifetime liability.
This reminds us of a recently suggested strategy: Sell your house in Vancouver, buy 3 or 4 or 5 almost identical properties in the US (depending on city/state), live in one and live off the rental income from the others, retire.
How long can this kind of price differential last?
– vreaa

Out-Migration? – “Three friends of mine moved out of country this year, citing high home prices.”

“Three friends of mine moved out of Country this year. Citing high home prices. Young, no kids yet. 2 are married. They’re smart people with no debt, with aspirations of financial freedom. Each had downpayment of $300k+. Pity to lose them. Well, 2 of them will keep their places here so at least if prices continue to go up, they won’t lose out.” – gse36 at RE Talks 23 Jun 2011 11:42am

“British Columbia’s net international migration is negative for the first time ever” (Q4 2010) “…the first time that BC’s quarterly net international migration has been negative in Statistics Canada’s database, which dates back to 1972…”
– via report from urbanfutures.com

Request To Readers From A Journalist For ‘La Presse’

Nicolas Bérubé, a journalist for ‘La Presse‘, the Montreal daily newspaper, would like to hear from readers who have either left Vancouver, or who are considering leaving, because of RE prices in our city.
Nicolas has lived in LA since 2006. He watched the US housing market implode first hand, and he is, like many of us, now watching the Vancouver RE market with fascination.
Nicolas can be reached at:
nicolas.losangeles@gmail.com

“I live in Calgary and work for a Vancouver based company. I refused a promotion involving a move to Vancouver because of the cost of housing.”

“I live in Calgary but work for a Vancouver based company and refused a promotion involving a move to Vancouver for this very reason… This was the only reason I refused the promotion… Cost of housing = reduced standard of living.”
– ajau at city-data.com/forum/vancouver  5 Jun 2011  [hat-tip Polly]

“I have been here five years now; I still can’t figure out what all the people here do.”

Michael at VREAA 13 Jun 2011 11:15am –
“I have been here now five years, I still can’t figure out what all the people here do. The Tech people I know all seem to hope for the big break or work for a US company that once upon a time decided it was cheaper here than in the US, but that seems to be changing quickly too.
Anything, at least in the computer field, that has proven successful has moved to other places, mainly the US, either on it’s own power or being sold to a US company.

Having hung around the “startup” world here in Van for a bit I think what is happening is that this is the place where quite a few smart people come to play, mainly outdoors. On the side they develop an idea and because wages here are low (comparatively) they start their business here.
They soon realize that the cost of doing business here is high, that the good employees want to have money they don’t have so they either move or sell the business (Flickr comes to mind) and the cycle repeats.

There really isn’t that much high-tech success here, it’s mostly a lot of self celebrating of the “high technology” field. Vancouver was a small border town with a large rail yard and some industries that lived off of the interior (e.g. sawmills, tanneries in False Creek). Once those industries were “cleaned up” there wasn’t really a lot left.
Interesting times ahead for Vancouver, and BC as a whole, that’s for sure.”

“My brother in law and sister recently moved from Vancouver back to Ontario due to the cost of housing.”

“My brother in law and sister recently moved back to Ontario due to [the cost of housing]. He makes about $90k a year which doesn’t even get him in the door for a mortgage. The real kicker is that he still works in BC.
He flies here every 2 weeks, stays with my brother and then go back cheque in hand. That is a huge drain on the economy as he gets his wages here but spends it in Ontario and that reinforces it’s economy not ours. The biggest impact is that that is where he pays his income and sales taxes as income taxes are deducted on where you live not on where you earn the money.
If I was in that position I wouldn’t think twice about doing the exact same thing.”
– ssiguy at city-data.com/forum/vancouver  7 Jun 2011  [hat-tip Polly]

“I thought if I sold my house in London, UK, I could buy a much bigger place in Vancouver. I had no idea Vancouver was so expensive.”

This exchange at city-data.com/forum/vancouver  1 Jun 2011, on a thread regarding Vancouver RE prices  [hat-tip Polly] –

LondonUSA: “Is it really that expensive in Vancouver? Is it talking about in the city or suburbs? Where I live [is] still technically in London but in the suburbs my house (4 bedrooms, 3 bathrooms) would easily go for £450,000 if not more. If this was sold I could buy a much bigger place in Vancouver, I thought, exchange rate taken into account.”

rockerode: “yep. i just did a search for 4 bedroom 3 bathroom houses in vancouver, and the cheapest is £420,000 house in one of the less desirable locations in vancouver. you need at least £600,000+ for decent housing, otherwise you gotta rent.”

LondonUSA: “£450,000 is $720,000. I could buy but would not be able to sustain a reasonable living standard. I had no idea Vancouver was so expensive. Are theses places in the city or suburbs?”

“The number of resumes I see at work from people currently in Vancouver looking to leave, or that have already left is pretty surprising.”

westcoastfella [living in Toronto] at RE Talks 11 Jun 2011 8:08am –
“The number of resumes I see at work from people currently in Vancouver looking to leave, or that have already left is pretty surprising. The simple fact is they make more in Toronto and pay less for everything around them, and when you’re raising a family and have no tangible ties to Vancouver, it can sometimes be an easy decision to make. My observations are anecdotal for sure, I’m one guy in one industry. But the people I hire are technical engineers earning 70-120K a year (so 60-90 in Vancouver) – not the sort that Vancouver wants to be losing in droves.”

“My brother works in the film industry in Vancouver, and after a few years of nonstop employment, no longer has steady work. He said that there is nearly nothing filming now (which is understandable given its the summer), but more alarming, there is little on the horizon for the fall. 4 regular TV shows film there in the winter, and a handful of movies – but not enough to employ the industry in any significant way, he estimated 40-50% of the usual workers are looking for work. He is leaving this summer to go to Toronto or Montreal, or possibly Europe. The high dollar is stopping some projects from coming here at all, and a lot of others are moving east.”

“I’m not too surprised that the local Vancouver media has not picked up on it, given the negativity of the implication – I’m sure they’ll finally start reporting on it when its too late.”

“On my walks around Kits and Downtown, over the past 3-4 months I have seen more property available for rent signs than I have seen in the past 5 years.”

Aldus Huxtable at VREAA 8 Jun 2011 1:59pm and 3:34pm–“On my walks around Kits and Downtown, over the past 3-4 months I have seen more property available for rent signs than I have seen in the past 5 years. Quite a number of friends I have made who were traveling from the UK and Australia have all absconded from Vancouver to elsewhere in Canada for in their words “a better cost of living”. I’ve spoken to a few building managers who have had to lower prices for the first time in years due to a lack of rental applications.People are beginning to go elsewhere, because at a certain point, something becomes bad value for money.”… “I have lived here for 20+ years now and have year by year over the past 8 years seen a majority of long term local friends depart to Montreal, Toronto, Winnipeg, Edmonton, Calgary and Kelowna due to the price of property. People who have grown up here, cannot afford to live close to their families and are forced to move elsewhere. Strangely enough, everyone who has moved away laughs at the cost of living here and insists they’ve given up nothing asides from their friends by leaving.”

“I’m in my mid-30s but I feel like someone who is in their 80s saying “in my day…”. The disconnect between income and housing prices is insane.”

HM at VREAA 2 Jun 2011 11:05pm – “I’ve been working in various companies in the software industry and I’m seeing that there is a difference in what I’d get paid here versus elsewhere. The disconnect between income and housing prices is insane, and this is speaking as someone born in the Interior who has seen the prices go to crazy levels there. I feel like someone who is in their eighties saying “in my day….” and I’m only in my mid thirties. I remember when the coal harbour condos were just going up and seeing the sell prices at $150 – 200K and the prices they go for now is insane. I’m resolved to pretty well never buy a home, probably stay as a renter or take whatever inheritance I get from my parents (god I don’t want to be that ghoul) or move elsewhere and not buy there as well, prices across this country just seem delusional and out of touch with common sense.”