Housing is not the only thing that’s really expensive in Vancouver

2 brdm, 2 bathroom condos next to this lake selling for less than $70K in Chandler, AZ

For as long as anyone can remember, Vancouver and its city politicians have strived to make our city number one in the world. Unfortunately, those efforts to make us the greenest, cleanest, safest and most desirable place to live have triggered a few unintended consequences.

According to the Eighth-Annual Demographia International Housing Affordability Survey, Vancouver is the second least affordable place to live amongst the largest English-speaking cities in the world. We have now surpassed Sydney, Australia and only trail Hong Kong for top spot. But housing isn’t the only thing that’s slowly becoming out of reach for local residents.

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In you want to get a better picture of just how expensive Vancouver has become, you need to take a short flight down to Phoenix, Arizona to get some perspective.

When our family decided to purchase an investment property down there, we simply couldn’t believe what we could find. We were easily able to locate a nice two-bedroom, two-bathroom condo next to a private lake with all the amenities for well less than $70,000. Not only was the price of the home unbelievably low; so too are the monthly strata fees and residential property taxes.

During our recent visit to the condo last month, we decided to have a family night out and see a Phoenix Suns basketball game. We purchased three tickets along with three meals, a glass of beer and surface parking located only 150 feet from the entrance of the US Airways Arena.

Our night on the town cost us the grand sum of $81 dollars. Now can you imagine doing a similar family-friendly event for anything less than $200 in Vancouver? Not a chance.

But our lack of affordability doesn’t end with high housing prices and costly Canucks tickets. A range of other goods and services are more expensive here than in most other cities.

For example, if you want to park your car on a public street in downtown Vancouver, city meters will ding you up to $6 per hour. Some downtown parkades are even gouging customers by charging them $25 for all-day or special event parking in the evening.

If you want to fill up your gas tank in Vancouver, you better get ready to pay the highest pump prices of any major city in Canada. And that’s before another tax increase will be tacked on in a few months to help pay for the new Evergreen Line. 

While Demographia’s housing survey results may come as little surprise to most Vancouverites, they are another stark reminder of the costly downsides to living in paradise.

– Post by Daniel. Originally published in 24 Hours Vancouver.

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  • Oldbern

    I want a t-shirt – “I’m from Vancouver – I pay more for less”.

  • DB

    How is it that the laws of supply and demand go put the window when it comes to parking? If the spaces are nearly full at $6 or $25, then that’s the right price! We seem to get this logic with housing (even with all the negative consequences of unaffordability), but not when it comes to parking…

  • Richard

    Everyones a capitalist until they have to pay market prices.

  • JP

    Yeah, but it’s kind of a weird comparison between Vancouver and Phoenix for a few reasons: because Arizona is one of the hardest hit states for the real estate crash, and because Phoenix as a city is a shit hole.
    That’s maybe a harsh way to say that, but Phoenix is like one giant car dependant suburb that doesn’t feel like a city at all, and the city things you do in it like going to a sports game are all at the edge of a giant runny pancake spreading itself across the desert.
    Seriously in metropolitan area Phoenix is about the 5th most populous city in the US, but Edmonton’s downtown dwarfs Phoenix. You can’t walk to or from anything except maybe a big box centre or a gas station.
    In making comparisons, compare apples to apples.
    Vancouver has a unique geographic location, and confined boundaries for growth. Phoenix just keeps growing out, without growing up.

  • gman

    Richard everyone is a socialist until they run out of other peoples money.

  • Sarah

    To JP. It is this kind of Vancouver arrogance that is going to get us all in trouble. We are not perfect. We are not paradise. But Phoenix is no more of a shit hole than our own downtown eastside.
    Open up your eyes and realize that you are being gouged for the right to live in a wet, dreary, traffic-plagued, over-priced, sun-deprived no-fun-city. Wake up my friend.

  • Steven Forth

    So move to Phoenix Sarah. I have chosen to live in Vancouver twice, once in 1988 when we moved here from Tokyo and again in 2010 when we moved back from Cambridge MA.
    But affordability is for sure an issue, and affordability is the product of cost of living and income. Something sure looks out of wack in Vancouver. Of course there are plenty of people here who earn their money elsewhere or who work in the off the books economy, so things may not be as bad as they look, but that is little consolation to the vast majority of people who live and work here in above board jobs.
    What matters is housing, food, transit, education, healthcare (not necessarily in that order). It would be nice to see some comparisons to other cities on those factors.
    I know many young people in arts and technology that are choosing to live in Montreal as it is much more affordable for young creatives and techhnologists.
    On the other hand, I don’t know anyone who wants to move to Phoenix to start a career, and a house in Phoenix at $70,000 is probably about $67,000 more than it is worth as water runs out.

  • Jason

    We’re fooling ourselves if we don’t think the policies and path we’re following isn’t going to kick us in the arse in the long run.
    We are already a city with almost no head offices, and with businesses going to other metropolitan areas, and other provinces to setup. You can’t attract workers to a city where they can’t afford a home. We’ve been ok for the past 10 years because our dollar as been low enough to attract U.S. satellite offices…but I don’t see our dollar dipping much below par moving forward.
    Our kids won’t be living here…how do you “start” a life here when you’re just getting out of university and have student loans, etc. It just isn’t going to happen.
    We’re eventually going to be a “resort” city for the wealthy. Our neighborhoods won’t be neighborhoods, because the owners won’t be living in them 9 months of the year. We’ll still have a good amount of shopping and restaurants to cater to the “visitors”, but their won’t be a ton of jobs other than in the service sector…and those service sector jobs will be tight, because the number of people making “service sector wages” won’t be able to afford to live here.
    But at least all the developers will be happy, and that’s the most important thing, right?

  • Richard

    @gman Especially when it comes to roads and parking. Supposedly people love driving but they would rather have other people pay for roads and parking.

  • Bill

    Pretty lame Richard. Your practice of relating alsolutely every topic to cars/bicycles is getting as tedious and boring as boohoo.

  • boohoo

    You stay classy Bill.
    Comparing Vancouver to Phoenix is kinda meaningless, I’m not sure what a more comparable city would be–I guess the obvious one is Seattle.
    Regardless, ok, so Vancouver is expensive. That’s not really earth shattering news…So what do we do about it?

  • Higgins

    Don’t sweat it Daniel!
    “According to the Eighth-Annual Demographia International Housing Affordability Survey, Vancouver is the second least affordable place to live amongst the largest English-speaking cities in the world.”
    Soon we’ll see a big improvement in the rating as Vancouver will no longer be among the “English speaking cities in the world”…
    Fortune cookie anyone?

  • gman

    Richard you could move too a more socialist country if you dont like it here….oh wait they have all failed.But if you hurry you might be able to make it to Greece,where half the population works for the government,then drop us a line and let us know how thats working out for you.

  • Julia

    I am playing with the Vancity mortgage qualifyer.
    Median household income in Vancouver is $67,500 (2009). If the family has no car loan or credit card debt, and the interest rates are 6%…
    with $25K down, they can buy something worth $256,428 on a 25 year term.
    If the housing market in Vancouver corrects 50%, which is far beyond any previous correction, this couple is still out of the market.
    If they manage to scrape up $100,000, they can afford $336,273 worth of house. That would still require more than a 50% price correction.
    My point – we need to stop thinking that tinkering around the edges with affordability is going to solve this. There is not enough correction room to bring prices in line with wages. Land values would have to almost go to zero and that simply isn’t going to happen.
    That means we need a plan B

  • Steven Forth

    Good analysis Julia. So what ideas do people have for Plan B?
    One thing is to invest in transit, link regions and neighbourhoods and not assume that all density should be concentrated downtown. (My family prefer to live in fairly dense urban areas). Surrey is becoming a more livable place. That would only work for my family if it were easy to carry our bikes on SkyTrain, but I can see it happening.
    Another option is to make it easier to do infill housing and get rid of stupid requirements like the infill housing having to house a car. Let the market make such determinartions.
    But beyond that, can we find other kinds of solution, like housing co-ops. Can new models for housing co-ops be worked out that will make housing more afforable?
    Of course many people are going to rent instead of owning. And if there is a long-term change in real estate values (driven by global demographic change) we probably need to get away from the belief that appreciating real estate will finance our retirement. Many in the US, like Phoenix, have already been stipped of this dream. So city planning and taxation strategies should be neutral beteen business, rental and ownership. The assumption that high levels of home investment represent a native good are not bearing out.

  • Julia

    I have been giving this a lot of personal thought as my age and my non existent pension is going to make retirement extremely difficult.
    Right now, my little townhouse is the best piggy bank I could have. My interest payments are about the same as rent and my principle payments are forced savings. Not only that, I am making 3-4% return – even on the debt portion.
    That is a heck of a lot better than the stock market and I get to enjoy my little patch of grass every day. A correction in the market would hurt, but now that I am in… it will be relative.
    But, when I stop work, all my cash is in my home. I will likely have to move somewhere out of the lower mainland where I can free up my cash so I have something to live on, or have some sort of housing that would have a suite that would provide me monthly income, or…this is where it might get interesting – find a friend and own something together that we can share to reduce our investments in housing and free up some cash.
    I suspect the stand alone single family home is going to be out of reach for many but that does not mean it has to be a concrete tower instead. Shared back yards with a couple of families, common laundry/workshops etc. It’s not for everyone but it provides an option. Perhaps the city might have to get into the land leasing business – seems to me they do that in Europe.
    This is not a problem just for the young. Single mature adults are in the same boat.

  • PJ

    I like Steven’s and Julia’s dialogue…focusing on the issue and not the politics. I think we need to accept that Vancouver is changing. We’re no longer a little city, we’re a growing metropolis and a world-class destination.
    While we haven’t yet achieved the same status, think of other big destination cities: New York, London, Paris, Tokyo, etc. What’s the cost of a single family bungalow with a nice backyard in Manhattan? $15 million (not that it exists)?
    No government or political force can overrule basic supply and demand. I suppose we could halt immigration to reduce demand, but is that realistic (or even moral?). The only side of the equation we can work on is supply…and with limited geography that means condos and townhouses eventually replacing houses and yards…just like happened in all the other big cities of the world as they matured.
    Fact is, Vancouver is urbanizing and to hold onto the idea that the average income family has some kind of “right” to a house and garden is to live in the past. I’m not saying I won’t miss the old Vancouver, but it’s foolish to think we can preserve it like a museum piece.
    Instead, let’s accept expanding urbanization, but make sure we don’t lose the amenities (parks, swimming pools, beaches, trees, bike routes, etc.) that make Vancouver special. Let’s turn our thoughts to ensuring this city doesn’t become a ghetto…soulless housing tracts surrounded by cement.
    And there’s always Cloverdale for those who want a big yard, but again, let’s focus on transit and creating downtown centres in other municipalities across the GVRD to make the area liveable.
    Our desirability has put Vancouver on a path of great change. Denying it and trying to protect the suburban past is a sure formula for making housing unaffordable for any but the richest (or those who bought before 2001). Instead, let’s direct our resources to ensure our city continues to be liveable and desirable.

  • Brilliant

    Said it before, I’ll say it again-slap a ban on anyone deriving their household income from outside of Canada from buying property in Metro Vancouver. Yes the odd American would be caught up in such a plan,but by and large it would eliminate buyers from China who are distorting the market. Catch the news media this week reporting that last year sales spike 40+% in the golden week after lunar new year.
    And preemptively for Julia-a few extra local BMW or Chanel sales is not worth pricing working Vancouverites out of their own housing market.

  • boohoo
  • Julia

    excuse my rant.
    If being able to afford housing was so important to people, you would think spending $100 -$150 on a Saturday night to get loaded in a Granville Street bar would be less popular.

  • dave

    PJ,
    I think you WILL lose beaches to higher density. Even if the square footage stays the same, the crowding will increase. Think of them as a ‘limited resource’. (like ‘water’ in Phoenix 🙂
    Higher density may lead to better housing, better community planning opportunities, etc, but we must grant it will consume limited resources like beaches, parks, clean air, etc.
    – d

  • Everyman

    A better comparison would be with Honolulu, another port city, hemmed in by geography. Vancouver prices have long since rocketed past HNL, and lets be honest the climate in Hawai’i is far, far better than Vancouver ever has been or will be.
    So let’s see what roughly you get in each city, for under $1 mil (I’ve excluded Musqueam homes from the comparison for obvious reasons):
    http://www.hicentral.com/properties/prop_detail.asp?listnum=1113153&type=mls#
    http://www.realtylink.org/prop_search/Detail.cfm?areatitle=&ARPK=&ComID=&agentid=&MLS=V922452&rowc=8&rowp=6&BCD=GV&imdp=9&RSPP=5&AIDL=21,22,23,24,26,27,28,29,30,31,32,33,34,35,36,37,39,40,41,42,43,44,10105,853&SRTB=P_Price&ERTA=True&MNAGE=0&MXAGE=200&MNBT=0&MNBD=0&PTYTID=5&MNPRC=200000&MXPRC=1000000&SCTP=RS

  • Julia

    Honolulu used to be 10-11 times the income too until the mortgage meltdown.
    Either the US prices will not be able to remain at the current low levels, or Canada will not be able to stay at high levels… or we will meet somewhere in between.
    Right now this affordability index require a very large footnote about the US economy

  • Max

    Those people still live at home in their parent’s basement…..
    and will be until they are 40 (+/-)

  • Max

    Did you read the recent column in the courier by Mark Hasiuk (sp?)
    Australia has placed such a ban on foreign ownership.