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I know this guy...
He's a pretty young guy who is the partner of one of my wife's musical theatre friends. He is also a helluva a bicycle mechanic.
So...
I guess you could say he's my bike guy.
And yesterday I dropped by his place after work, which is one of those nice low-rise apartment building's just off Main in the 'teens, and noticed that there was a 'For Sale' sign out front with a 'Land Assembly Possibility' banner slapped across it.
Which meant that, after I was done paying my bike guy for trueing my rear wheel, as is pretty much inevitable in this town, we got to talking about the following:
"...Vancouver is ranked among global cities most at risk of a housing bubble for the second time this year as the cost of a typical single-family home surged to a record $1.6 million, about 20 times the median household income. The seemingly relentless run-up has defied attempts to cool it, including a 15-per-cent tax on foreign buyers imposed by the previous, Liberal-led government last year..."
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Anyway, here's the thing...
My wife and I, despite the fact that we were a little late to the Vancouver Real Estate bubble party-party, we are very, very lucky to be a part of a group of folks, who are mostly of a certain age (or older) in Vancouver.
Because after trying like heckfire to help get two co-ops started, one of which was killed by GordCo at the last minute, we bit the bullet and bought our bungalow on the near Eastside back in 2005, which means we paid (the then crazy/astronomical amount of) $440K for it (and the 33' X 120' chunk of dirt).
That chunk of dirt (not the bungalow itself) is now 'worth' about $1.6 million on some paper ledger thingy somewhere.
Which is all fine and good if we could cash in and move away tomorrow (which we can't).
But, much more to the point, what are my bike guy and his partner, who works for the big credit union in town, going to do when they're evicted by the assembyists?
Or my kids?
Or all those teachers that we need to hire?
Or just about anyone of our fellow citizens who actually does real things in this town?
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Now.
I don't want anybody who came to the party even later than us (who is not a speculator) to go seriously under water but I'm really starting to wonder if the only way we are going to hold on to our city (and, most importantly, the young people in it) is if we do some wilful bubble popping.
Of course, if we do this in any serious way that it actually makes a real difference, there is no way there won't be some short term economic pain also.
But seriously, what is the alternative?
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That's not to say that I don't agree that we should also go hog wild on reinvigorating co-op and social housing, it's just that I honestly don't think that will be enough (and that it will be harder and harder to do) if the bubble keeps expanding.
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17 comments:
Bubbles don't keep expanding. They pop. This one will pop too, the only question really being just when that will happen. Hope you've paid your mortgage and don't, post pop, find yourself under water with that.
Ed--
We're fine.
I really worry about the families who have moved into our neighbourhood who don't have two European SUV's and a condo in Whistler though.
Although, truth be told, those folks are becoming few and far between these days.
I guess what I'm really asking is...Should we actively take a chainsaw to the bubble sooner rather than later?
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Lots of people loved it when they were able to sell their homes and move elsewhere. They never stopped to think things could end badly, as they are now. The City of Vancouver is no longer for the residents of the city and that is the same case in cities adjoining Vancouver. The clock can not be turned back. The bubble is not going to pop. There are 35 million, millionaires in China and all sorts of levels of government are encouraging them to come here. We have seen what the money laundering did in this province, it helped drive up the cost of housing. Did many care? Not so much, they were benefitting.
We on Vancouver Island are seeing the results as they cash out in Greater Vancouver and purchase here, driving up prices also.
the Greater Vancouver market still has a lot of room to grow. Just have a look at prices in London, England. 2500 sq. ft. 2/300 yrs old, back yards the size of a living room and $9M
If we want to change Greater Vancouver so families can live in it. Here is the first thing you do: no one lives in Vancouver unless they work there. It really works from an environmental perspective. less bridges to cross to get to work. the market will implode quickly and who ever does it will never be in office again.
Can it be done. Yes, when I was in Rotterdam in the late 1960s, the housing market was still very, very tight. A lot of Rotterdam had been bombed out during WW II. The rule was you didn't live in downtown Rotterdam unless you worked there. That is why people could ride bikes to work.
New York did a better job by having different types of housing with different types of rent and sales control. B.C. not so much. Of course perhaps the rich in New York realized they'd need restaurant workers, nannies, bike repair guys, cops, nurses, etc.
Vancouver could do what New Westmininster did some time ago, developers are required to build family housing in their projects. Currently there is nothing to prevent developers from building only small condos which do not provide housing for families.
If voters don't think of the future, in the end they will only shoot themselves or their children in the foot. Even if prices in Greater Vancouver fell by 50% most working people still couldn't afford to live here.
I recall distinctly the look on Veronica's face when she and hubby moved back to Vancouver from a stint in Stockton, CA, in 1973...total outrage at having to pay $36k for a place on 15th and Trutch. Sold that in 1979 fro $99k and moved to 32nd&Selkirk, digs that cost a horrendous $125k. Sold that c. 2000 for $1.2 m, paid off remote retreat and moved to 40th & Alma. None of this was in any way reflected in the salaries that the family generated. The same silliness applies to just about all the places where I've had the good fortune to live and leave (never cashed in, personally).
e.a.f. " The bubble is not going to pop. There are 35 million, millionaires in China"
I think you need to talk with our gracious host who, I am sure, will be able to explain what "exponential" growth means and what it implies. You are living in a dream world.
SH
e.a.f. is right on the money.
I'd suggest adding more houseboats to the mix, but given our wild weather, there would be nights I wouldn't sleep soundly in one.
Perhaps critical facilities such as the hospital, and UBC ought to purchase, and moor retired ferries, and cruise ships to house their employees until this mess is sorted out.
Property ownership is said to be an Anglo-Saxon obsession. Here in Greater Anglo-Saxony it certainly seems so. It’s more properly an Anglo-Norman thing, the francophonic Duke, descended from Viking occupiers of the western Frankish kingdom, proclaiming on the day the last Anglo-Saxon King was “alive and dead” that all land thenceforth be held of him alone as King William I. All of these ruffians sought to recover the glory of Rome in areas formerly part of that empire, hence the Conqueror’s overweening legalism in the Domesday Book and the evolution of land-holding — tenure — that soon accumulated the precedences of English Common Law, the parliamentary evolutions from House of Lords to the House of Commns, thence colonialism, thence decolonization, in an custodial chain unbroken by revolts noble, common, or republican, as well as a few civil and world wars. Nine-hundred-and-fifty-one years altogether — which just might have impressed one Gordon Campbell to the extent he signed the 999-year “lease” central to the eventual BC Rail corruption trial, and subsequent corruption of the corruption trial. Stuff’s everywhere around here.
But maybe it’s not so much about the durability, immutabilitity, steamroller of property law in Common Law, rather the common attitude, officially encouraged, that property-owning is in some way a necessity. Compared to continental Europe, Anglo-Saxmaniacs are more obsessed with this notion, and more condescending of renting. State assistance in securing rental accommodation has been pegged, in Greater Anglo-Saxony, as the lowest on the social status pole. But there’s no good reason it should be: state-subsidized social housing is common in Europe, and there’s no social opprobrium about it.
Still, with 951 years of precedent, and 500 of frontierism looking as feasible as ever here,on the edge of wilderness, it’s a tough political nut to crack. Hell, we’ve barely held our own against the “invisible hand of the market” — even though it doesn’t really exist with the impartiality Adam Smith tried to illustrate. Meanwhile it’s certainly possible for the state to provide secure and affordable rental housing based on the need for it.
SH
Frankly Scotty, it s*cked to be a renter, mainly for the violation of privacy as landlords showed our places to prospective buyers with zero notice, then there was the indefatigable Landlord Romeo, who just wanted to 'chat', or "check" something out while my partner was absent. A treasured heirloom Romeo admired went missing with no explanation...
The final insult was having nothing to show after years of helping to pay off someone else's investment.
The desire to have control over ones' home is shared by all cultures...
I never forgot this moment in the film: The Apprenticeship of Duddy Kravitz:
Kravitz' Grandfather: "a man without land is a nobody".
(Mordecai Richler)
A. 1:49 p.mn. is quite correct, it sucks to be a renter in Canada. You don't have control over your home. there may be some laws, but really they don't get enforced. In Europe, renting is different. No land lord having keys. they don't get to enter and leave when they want or with some short notice. You rent, its yours as long as you pay the rent. However, in Europe they have rules which benefit the renter not the landlord. In some parts of Europe people/families rent the same building/flat, house/apartment for a couple of generations.
In North America renting is not seen as as socially acceptable as owning. Rental housing, even if it is government owned, can go to wrack and ruin. If a city/municipal/government entity runs into financial difficulties the first thing they drop is maintenance on their rental housing stock. Just looks south of the border.
people in Europe rent, and they rent frequently just the four walls and they put in the kitchen, bathroom, walls, etc. But they are assured that there are rules that it will remain their home. Our housing market is the wild west. Its considered a way to achieve quick riches without having to invest a great deal.
As a society we need to re think the whole housing thing, but it is doubtful that will happen for a generation or so. The baby boomers have theirs and a fair number of Generation X and Y got theirs. so its the milleniuals who won't be "getting theirs" and their children. As they gain the majority, governments may have to deal with the how we view housing and ensure tenants have rights, that landlords can renovate and evict or sell and evict to build new monster houses. we may have to re think how much house do we need. Have a look around at what is being built in Richmond. Does one family really need that much house? Its a question we need to ask.
As to those who have houses in Greater Vancouver, they might want to start thinking about how that house can be rebuilt to accommodate 3 or 4 apartments for their family members. A 33 ft. wide lot can go up 3 full stories or 4. each unit would be approx. 1,200 sq. ft. the size most aging baby boomers were raised in. Today, with 4K sq. ft. houses and up, 1,200 seems so uncivilized.
As the population of Canada increases, so will the population of Greater Vancouver. we do have the best climate and unless dramatic measures are taken things are not going to get better. Even if the market drops by 50% how many can afford that? O.K. half of 2M is one million. A town house or apartment at 600K if its now 300K still many working in the service industry couldn't afford it. If it were to fall more than 50% ouch, Canada we have a problem. In my opinion Canadian and Australian real estate will continue to rise. we live in incredible countries which are safe and have safety nets. we aren't the U.S.A. which if it continues on its current road, will most likely have people leaving. Where will they head? Canada.
Ed, I know what goes up must come down, but if it continues to rise year after year, generation after generation, ......... land isn't a balloon. It has real value. Its not like tulips or all sorts of other commodities. Land is like water. its a tad hard to live without it. You can live without oil, electricity, phones, etc. but no land, no food and no roof over you head. 3 days of no water you're dead.
e.a.f said..." land isn't a balloon."
Didn't say it was. And I was talking about bubbles, not balloons. Balloons, if made right and cared for, don't pop. Bubbles do.
What's in a bubble right now is the market for land, not the land itself. The land won't go away when the bubble pops, but a whole lot of money *will*. And a lot of reasonably innocent gulls of the real estate salesfolks will get hurt real bad.
Meanwhile--
The carving out of the heart of the Pacific Spirit Park to facilitate the gulling has begun in earnest.
More to come...
(of course the deal that resulted in the sharpening of the carving knife was all done back in the deepest, darkest days of GordCo, but the greed heads can afford to play the long game in a bubble like the one we're in)
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@Rossk Your above link is to your post in 2007. Same property, prices have gone up a touch.
NVG--
Yup.
These people play a very, very long game indeed.
(you also have to realize that a lot of the same players had to make sure that they first realized the full potential of their other 'investments' nearby)
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Casino?
Nope.
Condos in the faux-Whistlerian townsite on the pointiest part of the grey point.
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SH:
CBC: October 23/17: "Bowen Island business buys boat to house workers: Union Steamship Company Marina hopes to also build mini floating homes to help alleviate housing crunch"
http://www.cbc.ca/news/canada/british-columbia/union-steamship-marina-bowen-island-housing-for-workers-1.4366760
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