Saturday, October 14, 2017

How Ottawa and Victoria Fed Vancouver to the Wolves.

Vancouver is reeling.

The first house I bought in Vancouver, 30+ years ago, illustrates the decay. It was a nice neighbourhood of 40s vintage, 'neat as a pin' bungalows in the 'desirable' west side. 50 X 100 foot lots where a 33 foot lot was standard. Clean, quiet, lovely. I picked it up for about 170 thousand.

Today that lot is worth well over two million, bare land value. Those bungalows are all gone. Honking big, lot-line to lot-line, multi-storey  McMansions own the neighbourhood now. Two mill for the land, another mill for the house, five car garages full of Mercedes, Beemers and exotics. And guess what? It's the poorest neighbourhood in Vancouver. The people who own those houses and drive those cars, they have no money or at least no declared income. The people who own those houses often don't even live in them. The kids may be there, going to school. The grandparents may be there, taking advantage of the health care regime. Just nobody making any income, not here anyway.  Poverty stricken multi-millionaires.

No gas stations anywhere in the downtown area these days. The guys who might have bought them in the 70s are retiring and, guess what, there is nobody who'll buy those properties except for redevelopment. The land cost means operating as a gas station is out of the question.

Lots of jobs. Jobs everywhere. Help Wanted signs abound in shop windows. Only nobody can afford to take those low-wage jobs. Vancouver is just too damned expensive.

The high-priced help is leaving too. My ex had a family doctor who hit 70 and felt he wanted to retire. So he scouted for a young doctor to buy his practice. By the time he turned 75 he looked into recruiting someone to take his practice, free of charge. Then, when he turned 80 he started offering cash to anyone who would take over his patients. Finally, just before he turned 85 he told his patients they would simply have to find new doctors on their own.

I ran into a thoracic surgeon in Nanaimo, freshly minted out of UBC medical school and internships. I asked her why she came to Nanaimo when there were so many openings in Vancouver. She said almost none of her classmates would consider Vancouver. She didn't want to have to work crazy hours for decades just to afford a decent house. She was able to settle in Nanaimo and buy a water-view home. She thought she would be old before she could afford that in Vancouver.

For some time there's been an exodus of retirees from Vancouver relocating to other cities, Victoria and environs, Kelowna and such. Why stay? Their kids would never be able to afford to live where they had been born and raised.

Now another ominous development. There's a class of Vancouverites who aren't waiting for the gold watch before they split. For a host of reasons from traffic congestion to the city's compromised livability, to housing prices, people at the peak of their careers - late 40s to mid 50s - are also cashing out and moving to other places more pleasant to live. They can collect the windfall profits from selling their homes and just move on, do something else, relax.

That's how a city gets hollowed out. Low-wage workers can't afford to live there. Young professionals look for better lives elsewhere. Retirees and high-wage types at the peak of their careers just cash out and relocate. Commercial land and the businesses once established there are cleared and redeveloped into more high-density residential properties.

It's like a castle with all the little people needed to keep the place running pushed out beyond the moat.

Slum has taken on a new meaning in Vancouver where even a rundown, east end crack house can fetch a million and a half, maybe two.  Anyone who can remember Vancouver from the 60s or 70s can't help but be saddened at what it has become. It's been fed to the wolves and they're staying because they're not finished with it yet.


rumleyfips said...

Not a word about Victoria and Ottawa. There must be a more nuanced explanation as this hasn't happened to Nanimo 9 as you show ) with the same governments in charge.

Owen Gray said...

The same thing has happened where we live, Mound. The kids who grew up here can't afford to live here. And there are no jobs for them anyway. And we call that progress?

The Mound of Sound said...

Nanaimo never attracted the same inundation of newcomers that beset Vancouver. Nanaimo was too much of a backwater. That's why it hasn't been ruined.

Hugh said...

Money-laundering, speculation and low interest rates results in housing that is unaffordable for normal people. Thank you, government.

The Mound of Sound said...

There's no question, Hugh, that a lot of the overseas money that's pouring into real estate in the major cities of North America is illicit. Our governments know that. They know the harm it causes ordinary residents. They view it as investment capital, an asset, economic growth and they look the other way and toss their constituents, the ordinary resident, to the wolves.

Trailblazer said...

Nanaimo never attracted the same inundation of newcomers that beset Vancouver.

Sorry squire you are wrong.
A decent building lot in Nanaimo , if you can find one, is about $250,000.

As those that chose to sell up in Vancouver move on to more favourable areas , they move to Nanaimo and before it Parksville,and Courtenay Comox.
The Alberta guys were the first to dump on us with their gated communities and golf courses , devouring much needed potable water whilst voting for the shittiest Conservative MP's you can think of!
Now the Vancouverites are descending upon us, expecting Vancouver attractions without Vancouver taxes.

The money laundering economy of Vancouver has had it's consequences .

10 -15 thousand empty homes!
FFS ; something is really wrong..


The Mound of Sound said...

I understand the state of land prices in Nanaimo and here in Parksville. They're still about a tenth of the cost for a similar lot in Vancouver.

When I moved here I thought they were giving properties away. A good lot was going for about $50,000 and houses were on the market an average of 7 months. It was a buyer's market indeed. I wasn't prepared for how those prices shot up over the following decade. Then again housing is the sort of asset where people routinely confuse cost with value.

Anonymous said...

What you describe is the failure of governments to properly regulate capital flows. Real-estate markets should not be subject to foreign money flows as they are in Vancouver and Toronto. Free trade only works when you limit what it effects. Domestic real estate is one of the areas where strict regulation is needed to ensure price stablility for the people living and working in the area.

It's my understanding that much of the money fueling high real estate prices enters illegally from China. The police should be going after the real estate agents, lawyers and banks that make this possible. And they should be cooperating with the Chinese authorities in prosecuting Chinese nationals. But since the prosecution of white-collar crime in this country is virtually non-existent, we get the kind of housing prices that drive ordinary Canadians out of Van and TO.


Trailblazer said...

When the world's one percent have finished buying all that is useful; what will the rest of us do?


Toby said...

Get out the Guillotine.

deb said...

yeah its starting to change with Nanaimo---the same millenial group that built the olympic village in vancouver, tried to speculate a deal or two in nanaimo before they went bankrupt, and the city council of nanaimo is ripe for the picking --filled with unsophisticated egos. Its happening and why not, Nanaimo is beautiful and with all the money laundering largesse, im sure they will turn it into a world class city---that will push most of us out....the only thing that has caused a bit of wavering---is the bloody expensive ferry system.

im one of the earlier waves of Vancouver housing refugees that moved in 2000---to beautiful gabriola.
We bought our house( and half an acre of land) for 100K----we were lucky---and the houses when I was shopping around were all 120-175K for decent places(waterfront a bit more)
now 17 years later, we have gone into a slump or two, but the houses are all over 350K or so----and there are many racing to buy, thinking its a steal.

the last couple of years, the foreign investment has risen in nanaimo and the real estate agents are rubbing their hands in glee, and no one is questioning it---not really.
Trailblazer is right....whatever Nanaimo was before, that kept folks away, isnt holding them back now, and really I am surprised it took this long.

The Mound of Sound said...

It's happening up my way, too, Deb. Our influx, however, is mainly from the Lower Mainland, Alberta, Ontario and Saskatchewan in that order. The place is getting congested and there's construction everywhere except the earlier, mature neighbourhoods but development is moving out toward the highway. Local trades are swamped which I discovered when I tried to get estimates for a few minor renos.

deb said...

its true, we get many from Alberta, its the running joke, as they take a few years to realize they moved to a very very different culture, but to giv'em credit they do love the outdoors:)They are loathe to understand environmental issues, but we indoctrinize them soon enough;)
and yeah ontarians move to the westcoast, to get away from the snow, but many dont stay as they are appalled at the prices of---well everything.
gabriola has been slower to process the housing issues, as we have the islands trust(thank our lucky stars as the do slow the development),we have the ferry and we have few jobs.
but there has been this realization that a few developers and realestate agents are starting to promote the islands as a place of escape, and a steal of a deal, due to affordability.
lots of retirees realize victoria is expensive and really they can drive there for a day trip still while buying, living and thriving in Nanaimo.