Saturday, March 30, 2013

Vancouver's vacuous economic engine

Excellent commentary in the local 24 hours newspaper on Wednesday titled: Vancouver needs corporate offices more than condos
On the sleepy West Coast, despite the spin coming out of city hall, Vancouver remains a backwater when it comes to attracting or developing corporate headquarters.

Planners blame a lack of housing affordability, which discourages companies from setting up shop here. Civic politicians point fingers at our obsession with cyclical resources such as forestry and mining, rather than trying to grow the small, but emerging green economy.

At the end of the day, most homeowners are not fussed about a lack of a corporate presence here in Metro Vancouver. But they should be. Compared to Seattle, which generates significant tax revenue and jobs from industry titans such as Microsoft, Boeing and Starbucks, we are bit players.

Our jobs and growth plan is based upon condo development and land speculation. However, take that away, and our local economy is as emaciated as your average catwalk fashion model.

For far too long, we have associated new condo towers with rising property values. In other words, our region has convinced itself we don’t need jobs to increase our personal wealth — we merely need a hot property market.

It is painfully obvious we have lulled ourselves into believing we have a “real” economy. The sad reality is we are only one real estate crash away from finding out that we don’t.
So true.

Speaking of real estate and the slowing market, Landbaron over on VREAA notes that when you a 'Vancouver' craigslist rental search, over 10 pages of 100 rental listings are returned on March 28th alone.

As VREAA notes:
The idea is that some properties held empty (speculating upon future price gains) start coming onto the market as rental properties if they cannot be sold for the ‘right price’. That way, when the crash comes, an entire extended families RE holdings go underwater, rather than one home being battered with a price drop.

Multigenerational wealth destruction.

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  1. Before you wholeheartedly endorse the message, don't forget to consider the messenger. Daniel Fontaine was one of the pair behind City Caucus, Vancouver's mean-spirited-est blog for a long time (a gaudy pro-wrestling-style belt now proudly worn by Alex Tsakumis.)

  2. Still, if the city government had any sense, they'd start taxing properties held vacant at business rates, instead of residential. This would help offset the tax burden on small business owners located in some of these urban ghost towns, where costs are high but walk in traffic is scarce. The practice might also alleviate the problem of homelessness, by encouraging more vacant properties to be rented, lowering rents, and coaxing lower end renters to move up, freeing lower rent units for those in need.

    The upshot is that such a policy would benefit residents, most of whom are eligible to vote in civic elections, at the cost of absentee landlords, the majority of whom do not vote in civic elections, OR slumlords, who may hold lots of properties, but who can only cast one vote in any given election.