One problem that often arises with overseas investment is that the investors can occasionally act through nominees to avoid the unwelcome gaze of two sets of tax authorities. So records do not always reveal the beneficial owner.

Does it happen here? I have no idea but it is not entirely unknown in Vancouver mining company
investment. It would not be surprising if some of the less scrupulous advisers had at least considered the idea.
-30-

@Dan Cooper #1:

Is there any attractive real estate anywhere on the planet which is not being snapped up by “wealthy Chinese”, whether, as in this case, aided and abetted by cash-strappped governments, or not?? And what will be the long-term effects of this global buying spree? Sadly, those who buy property purely as an investment have one thing and one thing only in mind: Maximizing their investment(s). All other considerations are secondary. And that does not bode well for the futures of those locales where these trends are taking hold.

For reading all 2000 words in one linear piece, one can click on the Print symbol at the bottom of the Van Mag article http://www.vanmag.com/print/7974
and in the Explorer browser it will come on on a separate window, and you can turn off the request for which printer and read it there.
Or send to one of the PDF printers like Adobe, CutePDF, Doroserver etc. and scrape from there.

Why Van Mag doesn’t have View as Single Page (as the Globe and Mail does) I don’t understand.

Meanwhile the BC edition of the Globe had a display head banner on the Report on Business section “Europe looks for answers in China. Battered European countries are searching for a solution to devastated real estate markets. The answer? Wealthy Chinese home buyers.” Page 6 which leads to a Bloomberg wire story by Henrique Almeida from Lisbon on Southern Europe woes.

Still with Bo Xilai’s current trial and other events, the hiding of monies offshore will become more cautious.

Still the “in-conclusion” of Madame Bula’s article is that there are not great numbers from ‘Far Away’, but the usual peoples from closer in.

Q: What proportion of buyers at new one-bedroom condo developments such as Marine Gateway are investors, versus full time owner/residents?

And if you think that investor rentals are a great idea (and the argument is that they add housing stock), or that it really doesn’t matter if you can own, check out the English experience:

http://www.theguardian.com/books/2013/aug/18/default-line-extract-faisal-islam-housing

Home ownership: how the property dream turned into a nightmare

In this exclusive extract from his book, The Default Line, the economics editor for Channel 4 News traces the origins of the housing bubble and argues that we’re condemning a whole generation to paying absurd prices for what is a basic human need – and it doesn’t have to be this way

The Observer, Sunday 18 August 2013
Jump to comments (702)

What is the most dangerous, toxic financial asset in the world?” This was the question put to me by the chief executive of a leading European bank. Anxious to display my superior knowledge of the darkest corners of the shadow banking system, I replied: “Credit-default swaps on super-senior tranches of asset-backed, security-collateralised debt obligations.” I thought I had come up with a pretty pithy answer.

The Default Line: Why the Global Economy is in Such a Mess
by Faisal Islam

Tell us what you think: Star-rate and review this book

“No,” he gently chided me. “The most dangerous financial product in the world,” he paused a moment for effect, “is the mortgage.”

The mortgage: from the Old French words mort and gage. Disputed translation: “death contract”.

In the middle of the credit-crunch crisis of 2008 I met Esther Spick, then a 34-year-old single mum with two kids living in a maisonette in Surrey. It was the first home she’d owned, bought with an entirely inappropriate mortgage in 2005. She had been living on a council estate in Kingston, Surrey, working day and night to get a deposit to get a mortgage for her £235,000 maisonette. It had been sold – or mis-sold – to her during the boom by Northern Rock, and now the mortgage payments had rocketed by £500 per month. Faced with this, but determined to keep the keys to her home, she had been forced to hand her children over to their grandparents. She’d had to give up her local job and find higher-paid employment further afield. The result? Four hours’ commuting per day.

“I don’t want to have my home repossessed or for Northern Rock to say I haven’t been making my payments,” she told me. “I will do whatever I have to do, even if it means I have to get out and get a second job. I will definitely make these payments.”

At that point, however, she was in negative equity – not surprising, given that she had been lent more than 100% of the value of her home. And her new mortgage was eating up two-thirds of her new take-home pay. “They lent me too much. It was a time when everything was wonderful. There was a great big property boom, the prices went through the roof. You were encouraged to go out and buy.”

Now she had boxed up her children’s teddy bears after a charging order arrived in the post. She had fallen behind on just three payments on the unsecured part of the loan. Northern Rock had taken her to court in Newcastle, 300 miles from her home.

A “death contract” indeed, and there was much to behold in its making.

In the decade from 1997 to 2007 house prices trebled. More than that, the home evolved into a multifaceted financial instrument, on top of its traditional role as an indicator of social prestige. Every stage of the house chain is still riven with conflicts of interest, poor data, and ultimately a tendency to fuel inflation.

Housing is the only basic human need for which rapid price rises are met with celebration rather than protest. The house trap stretches from the estate agents mediating house-selling, to the provision of mortgages to buyers, the supply of mortgage finance to the banks and building societies, the construction of house-price indices, the skewing of finance away from owner-occupiers towards landlords, the supply and construction. Homes were always castles, not just in England, but also across Europe and the US. But during the madness they evolved into cash machines, surrogate pensions, principal pensions, and even livelihoods. And in many places, this is still the case.

Let’s go back to the foundations of what might be called the bubble machine. Rising house prices, to some degree, reflected underlying supply and demand in a competitive market. Greater increases in demand than in supply, and the prices went up, as in Britain. Large increases in supply over demand, as in the US, Spain and Ireland after the crisis, and prices go down. Simple enough.

Except, of course, this simple model is entirely misleading. The housing market is not really a market for houses. The housing market is driven principally by the availability of finance, mainly mortgage debt, but sometimes bonuses, inheritances, or hot money from abroad – London in particular has become the preferred residence of the world’s wealthiest people, from Russian oligarchs to Arab oil sheikhs.

There are 27m dwellings in the UK. The short-term supply is basically fixed. The number of new homes built each year has not topped 150,000 since the crisis – that’s less than 0.5% of the total stock. The amount of homes traded is around 900,000 per year, about 3% of the total stock. House prices set by the transaction of that 3% of homes determine property values, the solvency of banks, and the statistic that the UK property stock is worth £6 trillion.

The first thing to notice is that this is a highly illiquid market. Only a small proportion of the housing stock is actually being traded, or ever will be traded. On top of all this, transactions in the housing market are costly. Estate agents’ fees in the UK can typically reach 3%, and as high as 6% in the US, with stamp duty on top of that. These are the crucial features of a housing market: thin trading and high transaction costs. It is a recipe for dysfunction, distortion and inefficiency.

Imagine the entire UK stock of property was called Ladder Street, with 50 houses on either side of the road. Despite demand for two extra houses every year over the next decade or so, it in fact takes two years to build just one extra house. The result? Some of the extra demand will be met by converting houses into flats. But most of the demand will not be met at all. A house will be sold on Ladder Street only every four months. One house will remain empty. The end result is a long queue of people who will buy anything, old or new, good or bad, for sale on Ladder Street.

Now consider the price. In a market such as this, the buyer with the largest wallet wins the house and sets the price. At one time that would have been the buyer with the highest single salary, and who had saved the largest deposit. House prices would therefore rise roughly in line or slightly ahead of the rise in incomes. But imagine if the entire queue of prospective house purchasers is flooded with mortgage credit. At this point, the house price is set by the greatest optimist. Ladder Street’s housing market has become a market, not for homes, but for mortgage credit. It is the availability and terms of credit that have come to determine property prices. Every sluice gate was unlocked, then left ajar, and eventually flung open to accommodate the tidal surge of credit.

Take, for example, the length of mortgage repayment, beyond a typical 25 years. Between 1993 and 2000 the average mortgage period remained exactly 22 years. Around 60% of mortgages were for 25 years, and, typically, less than 2% of mortgages were for periods longer than 25 years. By 2006, nearly a quarter of all mortgages are for longer than 25 years. Around a fifth are now for 30 years or more, meaning an average first-time buyer will still be repaying home loans into their 60s.

‘If only we could afford a place of our own,” says one dainty green extraterrestrial to another in the cartoon advertisement as they sit in a pink car parked in Lovers’ Lane. “You can,” exclaims the advert, “with a Together Mortgage.” The Together Mortgage was launched by Northern Rock in 1999. In effect, it required of borrowers a negative deposit. Customers were able to borrow 125% of the value of a home: 95% as a secured mortgage, and 30% as an unsecured loan. This was the type of loan taken out by Esther Spick.

The Together Mortgage was part of what Adam Applegarth, former chief executive of Northern Rock, called his “virtuous circle strategy”. This essentially turned what had been a solid northern English building society into a giant hedge fund, laser-guiding global flows of hot money into some of the most sensitive suburbs of Britain’s property market. Although launched in 1999, it really took off as Northern Rock went into overdrive at the peak of the boom, doubling its lending every three years. Single borrowers were also offered multiples of as much as five times their annual salary to help keep pace with those borrowing off dual incomes. Competitors such as Abbey National and HBOS (Halifax Bank of Scotland) scrambled to get in on the game, also offering “five times” deals and zero deposits. “Credit has been democratised in this country. And that is a good thing,” crowed one HBOS banker at the top of the market, less than three years before the bank collapsed.

Here is the lesson for those who claim that Britain’s financial issues will be solved through the wonder of competition. There was no lack of competition as Britain’s old building societies spiralled the depths of credit insanity. So competitive were they that, at the peak of the bubble, mortgages were being written at a loss, almost from inception.
Link to video: Faisal Islam on The Default Line

If you went out on any Friday night during the go-go years to the classier pubs and clubs of Newcastle, you’d find them heaving with American investment bankers. Now Newcastle has many charms, but it was not the pleasures of the Bigg Market entertainment quarter nor the games at St James’s Park that had attracted the sharp-suited moneymen to the foggy northern corner of England. They’d come here to build Northern Rock’s factory of mortgage credit.

At the start of the boom Northern Rock faced a challenge of funding its mortgages. It was an ex-building society with no more than 75 branches and a low credit rating. “You’re Northern Rock, you don’t have a great rating. Until securitisation. Whatever you say, it gave Northern Rock a level playing field,” said one member of its team. New rules allowed banks to shift mortgages written after 1995 off their books, without having to tell their customers, into “sidepots”, based in tax havens – a process called securitisation. Securitisation allowed for mortgages to be sliced up and repackaged so that good loans were mixed with riskier ones. The sidepot, formally known as a Master Trust, received the regular mortgage payments from randomly selected homeowners. It attracted flows of hot money from the global financial markets into Britain’s already bubbly property market. The banks did not need to rely on money raised from ordinary savers to lend to housebuyers. The peak of the bubble saw a remarkable race between the banks to reduce the amount of capital put aside to support losses on these mortgages. The first wave of securitisation more than halved the capital, thereby enabling ever more lending. Alliance & Leicester set the benchmark. Instead of £4 of the value of every £100 of a mortgage loan book being kept back, A&L got it down to £1.40. In turn, the Rock enlisted Lehman Brothers to help further engineer away credit risk, getting the capital set aside to below £1 in every £100. With this measure, the team at Northern Rock was again top dog among the feral pack of soon-to-be-bust securitisers. Cheap funding was locked in from US charities, lenders in Africa, and Asian investors impressed by the Newcastle United shirts for mortgage borrowers, such as Esther, taking out huge loans.

And it was not just Northern Rock that strayed from the path of rectitude and probity. At Mortgages 4 You, based in Newbury, John Apicella admits he was not entirely exacting in checking the incomes of his clients. Mortgage brokers such as Mr Apicella were the driving force behind the banks’ desire to supply credit, and the desperation of ordinary Britons to afford a property. In 2007, two-thirds of mortgages (three-quarters of first-time buyer loans) were sold through brokers in Britain’s high streets and on the internet. In the past, prospective homeowners had been required to save for months or sometimes years before their local bank manager would even to agree to talk to them about a mortgage. In the boom, that first filter of the credit process was outsourced to a lightly regulated industry with opaque professional standards: the mortgage brokers. The result of this? Self-certification mortgages.

Mr Apicella is quoted in documents published by the regulators, the Financial Services Authority. When he started working in the mortgage industry he was advised to “just put any income down”. “I was guilty of all that because that’s the way I was trained,” he said. “That’s what the industry did.” The whole of the industry took the same view on self-certification mortgages. He said it was not his responsibility to assess mortgage affordability. “It’s up to the client to see whether they can afford it,” he told me. “I can’t sit in judgment and say you can or can’t afford it.”

When regulators eventually began to investigate certain mortgage brokers, they discovered they were using some innovative ways to up the income stated by mortgage applicants. At one broker in Colwyn Bay, this meant Tipp-Ex, and the mysterious restating of a £30,000 salary as £130,000.

Up until 2007, there were almost no actual checks on the activities of more than 7,000 mortgage brokers responsible for the majority of new mortgages. This industry grew rapidly during the boom, lured by typical incentives of £500-£1,000 on each mortgage signed. Most brokers were small one-adviser shops advising on fewer than 100 mortgages a year. Of the few hundred that have been investigated, more than 100 have conducted their mortgage broking in a way that warranted a prohibition, and 35 were fined. The time to be cracking down was surely as the bubble was inflating, not after it popped.

The credit feeding frenzy in suburban Britain during this time was feeding off itself. But one innovation casts a particularly long shadow. Increasing multiples, decreasing deposits, allowing self-certification and stretching the term of a mortgage are all rather tame compared with never actually expecting the repayment of mortgage debt. That was the strategy behind “interest-only” mortgages.

Interest-only deals boomed from 2002 to 2007, providing another fillip to the housing market. By 2007 a third of all mortgage sales were interest-only. And for the first months of 2008, the majority of new mortgage lending was interest-only. It had briefly become the norm. The FSA, which waved through what should have remained a niche product into the mass market, warned in late 2012 of a “ticking timebomb”. By May 2013, the Financial Conduct Authority, which took over the FSA’s old premises, restated this “wake-up call”. Martin Wheatley, the Financial Conduct Authority’s chief executive, told me: “The big concern is the 10% that as of today could get to the end of their mortgage and simply have nothing to repay the loan with.”

The rapid growth of the buy-to-let (BTL) market brings together all the elements fuelling house prices. For a start, BTL changed the British housing dream from owning your own property into owning other people’s property too. Many expected the credit crunch and recession to put paid to BTL. But the cult of the amateur landlord prospered in the crisis. Property values have held, rents have surged, and there have only been a piddling number of repossessions. After the new coalition government slashed planning red tape, mortgage volumes have ballooned.

A year after the crash, the old names in BTL lending were back in the game. At the National Landlord Show in Kensington in 2010, well-heeled amateur landlords leafed their way through cheap housing for sale in poorer northern English cities. “Eviction popcorn” was being distributed by a law firm promoting its ability to turf out troublesome tenants. Estate agents explained that few locals could obtain a mortgage to buy a £120,000 house. BTL mortgages, however, were priced on the basis of likely rent received.

Young first-time buyers such as Naomi Jacobs in Newcastle finds herself more in a property nightmare than a property dream.

“I’d love to buy a little house now,” she told me. She wants to have a family, and as the family gets bigger so she’d want a bigger house. That is the dream. Naomi is a science graduate, a science graduate with a job. But she can’t get a mortgage. She blames the buy-to-letters. “The smaller flats that first-time buyers would want are ideal for them to rent out,” she sighs. “But that’s the way it is these days. It’s slightly cruel when you think about it.”

This cruelty has state backing. Buy-to-let received a backdoor bailout from the Labour government. Lending was supported in the immediate aftermath of the crisis. The buy-to-let mortgage book of Bradford & Bingley remains in state hands, as does a substantial proportion of Northern Rock’s. Under the coalition, the Bank of England subsidises funding for British banks’ buy-to-let lending. Bank loan officers argue that regulatory restrictions incentivise the granting of loans to landlords above first-time buyers. The coalition’s Help to Buy scheme, as currently constituted, is actually Help to Sell new-build houses – and this was reflected in the share prices of the housebuilders. Predictably, in the absence of large-scale planning reform,it will simply inflate house prices still further.

Remarkably, through the credit bubble the likes of Northern Rock and Bradford & Bingley boasted to investors that Britain’s “very limited” rate of housebuilding supported their doomed strategies. Successive governments delivered that help. The deal for Britain’s young has transpired as follows: pay taxes, pay high rents and endure the sharpest points of austerity in order to help support a housing system that is delivering wildly expensive houses, or none at all, and to help bail out the failed banks that were built on that system.

Are we going to load the burden of adjustment from a decade-long bubble on to people who happen to have been born in the 1980s and 1990s? Progressive voices keen to redistribute through benefits have said very little about the overarching negative redistribution caused by the trebling of house prices. All political parties claim to want to foster “social mobility”, yet it seems that where you live will be determined more now by where your parents lived.

The recent history of property in Britain is wrapped up in notions of freedom and the social mobility of owner-occupation and right-to-buy. Yet right now, Britain faces a return to a more traditional relationship with the land, in which property is the principal agent for holding back opportunity for all. There are other options, as stable house prices, large high-quality flats and secure rental tenure have delivered in Germany, for example. The property ladder was a one-off opportunity for a lucky generation-and-a-half. Now we are back to a kind of neo-feudalism, in which your quality of life depends on who your parents are, and what they owned.

This is an edited extract from The Default Line: The Inside Story of People, Banks and Entire Nations on the Edge by Faisal Islam

Tweet @faisalislam

Housing prices in Vancouver are wildly out of whack yet nowhere have I seen a comprehensive study as to determine the cause. Usually one gets the vapid “everyone wants to live here” answer, but that doesn’t change the fact those people must earn a wage to support such prices. Where are they finding these jobs?

RK@3 – +1

“One thing is indisputable Vancouver’s job creating economy cannot provide the salaries needed for the work force able to afford housing, at least not like when I brought up my kids in Lighthouse Park in the ’60′s.

And that bodes ill for a vibrant economy. Money is a generator of the economy not the be all and end all of it.”

I totally agree with Roger on this one (I know, a shocker). We keep talking about the cost of housing, but affordability is a two-part equation, the other part being income. Many jobs here do not pay enough to make a decent living, at least one that includes home ownership.

Over the last few decades good paying mill, mine and fishing industry and other (generally unionized) primary industry jobs that produced a large postwar middle class are disappearing and are being replaced by McJobs and other low-paying service employment.

There is no way a household with only McJobs can afford housing here, or anywhere else where it is truly desirable to live. Even if one was born and raised here.

I’d say public outcry should be as much about paying a reasonable, living wage as about the one element of housing cost, which has led to much of the ongoing sturn und drang about densification that is our region’s bete noir. (Apologies, didn’t mean to go all fancy with non-English there.)

Wait rph.. today’s news? Aren’t they always trying to convince us that real estate can only go up?

Looking at another aspect of the Condos-for-Whom dilemma, TheMainlander.com looks at Playing Monopoly With Housing and the few big developers in the city.
[ I would wonder what their relationship was with the former Richmond (B.C.) City Planner, one Brian Jackson ]

“COMMENTARY | The debate on housing supply is really about Monopoly”
By Maria Wallstam On August 16, 2013
http://themainlander.com/2013/08/16/commentary-the-debate-on-housing-supply-is-really-about-monopoly/ (about 1000 words)

Vienna’s experience with building 5,000 public housing units per year, with quality.

http://archpaper.com/news/articles.asp?id=6205

@Bill

Seriously? Resource development in or anywhere near Vancouver? Logging Stanley Park or the North Shore mountains? Drilling for oil in English Bay? Fracking in Fraserview?

Pretty much anything easy to extract anywhere near pretty much any big city has been extracted decades ago. Anything being developed today is quite the commute from Vancouver.

Nice talking point though.

Vancouver City Planner Brian Jackson will be at the West End Community Centre tonight between 7 and 9 pm to answer questions. Here five questions arising from the flawed and possibly failed Mount Pleasant planning process:

http://wp.me/p2FnNe-ae

Just to bring the topic back to Coal Harbour condos for minute…
In my small circle, I know 3 couples who lived in Vancouver for years but have retired to the FV. They all keep a condo in Coal Harbour for weekends and other visits to the city. Surely there are others.
As for foreign investors, every time I hear the complaints about this, I look at Hawaii, Arizona, California, Costa Rica, Mexico etc, where I know many people who keep vacation condos in those places. If I lived on the East Coast, I could add Florida and the Caribbean. In many of those places, Canadian ‘investors’ drove up the prices of homes and made it hard for locals to afford to live in the areas they grew up in. Just saying….

@Richard #25

“Many countries and cities around the world have no or low levels of resource extraction and have economies much healthier than ours.”

By one measure – median household income – Canada is 5th in the countries listed. What measure and references are you using to support your statement?

http://en.wikipedia.org/wiki/Median_household_income

“Here is yet another promising Canadian company that had to get investment from the States”

This actually argues against your claim that Canadian companies can’t get funding. Finance is international and there is ample sources of funds looking for good investment ideas. In fact, the resource sector is also financed internationally and is not dependent on internally generated funds.

Thanks Frances. I appreciate you researching this issue.

This is a good article by David Ley and Nicholas Lynch on the emerging pattern of household incomes in the lower mainland:
http://www.citiescentre.utoronto.ca/Assets/Cities+Centre+2013+Digital+Assets/Cities+Centre/Cities+Centre+Digital+Assets/pdfs/publications/Research+Papers/223+Ley+Lynch+2012+Vancouver+Income+Polarization.pdf
It highlights how in some respects there has been a growing inequality between the wealthy and low income households and how this has played out in different areas of the city. Clearly, this results in influencing the pattern of “who can afford to live where.”

I do think that a fundamental tension in this question is that some single family neighbourhoods such as the west side of Vancouver or even parts of West Vancouver that were once accessible for middle income households up until the early 80’s are no longer are accessible to middle income people. Housing prices have edged out the possibility of access to some areas for middle income households.

Another aspect that I do not think is captured by real estate and household income stats is that in many single family neighbourhoods one finds those recently arrived in Vancouver may live in single family homes that house a number of ‘related households’ that together pay for the mortgage. Perhaps this is not what is happening in the West side of Vancouver or West Van where housing prices are highest, but I do think it is what might be happening in Surrey and other parts of the lower mainland where you find extended families living in a house. This does make some areas accessible to live but in cases where they live in homes with close relatives. Clearly, those who have immigrated here in the past few decades often live in such households. Whenever I take a taxi I often ask where the driver lives and generally they reply Surrey, Burnaby or east Vancouver with their extended family.

Another part of the affordable housing issue that what is not captured by comparing household income and housing prices is the wealth of households or the wealth of households they are related to. Census stats do not give the pattern of household wealth. For example, parents or grandparents often contribute to the down payment for children and grandchildren. The other factor is that the large majority of those purchasing a property already own property in the lower mainland so they can make a bigger down payment. So just looking at their household income does not capture the wealth of the household (ie the value of their property) purchasing the home or that of their close family.

I continue to think that a big challenge for affordable housing should be focusing more on the renters and notice the media rarely focuses on this issue and this includes, the single parents, seniors, single folks and others on modest and low incomes who do not own property and without families to contribute to a down payment on a home. They have less choices than those households who own property in Vancouver.

@michael gordon. Very interesting article about income distribution in Vancouver and surrounding cities. As you mention, one thing that does skew it however, is income versus household wealth, and of course this would include overseas income and assets which many immigrants are reluctant to disclose.

You end up with weird statistics such as the Terra Nova area of Richmond, which is about 80% Chinese and home to expensive sf detached and townhouses, being an area of declining average income (and constantly on the child “poverty” grid) versus Steveston where ethnic Chinese would comprise about 30% of the mix, the housing prices are lower, and reported income is much higher.

Don Cayo’s recent column about average wages, BC is fast lagging the roc on wages. The expanding service sector – accommodation and restaurant – average wage is $372 a week, or about $9.30 an hour.

An interesting speculation is put forth by Jock Finlayson that because metro Vancouver is such a draw, that there is a more workers than jobs dynamic at play, and this is also driving down wages. (Why then you ask, do we still need to bring in foreign temp workers? Why indeed.)

Renting and low income levels in the City are becoming an issue in Seattle City Elections where wages are much lower than here.
Vision has no social conscience until the automatons have checked with their higher-ups so it won’t be an issue here of the next year, unless other parties think deeply shallow about enforcing better wages in Vancouver (with rent controls that are ineffective. See renovictions, or the York Rooms paying people to get out.

How should a progressive city seeking to promulgate social justice and equity define public benefit, or the public good?
Better wages in the city would benefit lower income renters

See also http://seattletimes.com/text/2021521157.html
Thursday, August 1, 2013 – Page updated at 07:30 p.m.
“Guest: McGinn’s Whole Foods’ minimum-wage controversy has more than 2 sides”
for Hyeok Kim, executive director of Interim Community Development Association based in Seattle’s Chinatown International District for small retail protection as well

And Danny Westneat Seattle Times staff columnist column in Wednesday, July 24, 2013 ” Mayor’s race ignited as McGinn called out on Whole Foods attack” seattletimes.com/text/2021456712.html
…”Last week Mayor McGinn recommended the city block a major development in West Seattle, on the site of the old Huling Brothers car dealership, because he says a proposed tenant, the nonunion Whole Foods, doesn’t pay as much as unionized grocery stores.

His leverage is that the developer of the project is trying to buy a city-owned alleyway. McGinn recommended the city not sell the blighted alley unless Whole Foods first substantially raises its pay scale at the store.

But stagnant, low wages are a problem, so maybe Seattle is fed up with the status quo. McGinn’s counting on it — he tweeted out Sunday’s column about his attack on Whole Foods along with this quote: “This is a statement of what our values are as a city.”

—
This on a day of protest in the US for better wages in the fast food retail industry. Many stories today in the press on the demos/manifs

Bill Lee@32, aside from the fact that your first paragraph is impossible to follow, there are other issues.
Yes, it is true that better wages for the middle class would improve livability. It is also true that stagnation to some extent is contributed to by ongoing de-unionization.
However, I question what if any role the CoV or any city should take in determining whether a business can or should locate there based on whether it is unionized or pays “fair” wages. That is an issue totally outside their jurisdiction.

Moreover, while better wages would benefit the people the York Rooms are aimed (low wage earners) they would not benefit welfare recipients. The protests in the DTES seem to be that welfare recipients are being enticed to leave. If you have a $375 a month shelter allowance, you cannot afford to live in a $650 per month room. You can if you are making minimum wage.
I noticed in the G&M today various people at the CoV being quoted as saying that you cannot make a go of any of these properties by fixing them up and charging $375. In that case, housing those who are unemployable is the job of the province (who has actually been doing a fair bit in this area) and the federal government (who has been doing a bugger all).

@Frank Ducote #31. Is it ever past time for a good conversation by all stakeholders into wages. It wasn’t so long ago we had the big uproar over raising minimum wage with all the predictions about how the sky would fall with even a modest increment.

But if housing prices are not going to come down, then we need a societal shift to make sure that residents can afford to live here. The problem is not only getting a buy in from all levels of government, there is still a mindset that low paying jobs are entry level jobs, and all you need to do is work harder and smarter to raise yourself up the income ladder.

I think you are right Waltyss, it is not the role of the CoV to restrict business opportunities to those companies that do not pay a living wage. And not just because that form of tinkering is beyond their mandate, but also because the low wage scenario applies to so many types of businesses that by the time you gave them all the boot, there would be few employers left. (We all vilify low paying WalMart, but Canadian Tire is no better. Or the entire retail industry.)

@rph #36:

“But if housing prices are not going to come down, then we need a societal shift to make sure that residents can afford to live here. The problem is not only getting a buy in from all levels of government….”

I can’t imagine you’d have any difficulty getting such a “buy in”; what government is against well paying jobs?

The issue is the mechanism by which such a goal might be achieved.

Any thoughts as to how such a goal might be accomplished by government? I assume you’re not simply talking about raising minimum wage.

Foghorn, why should the taxpayer subsidize major corporations like Macdonalds or even mom and pops by giving poor people cash while they continue to profit on low wage work rather than making them pay a liveable wage. If that makes your Big Mac cost more, so what.

@Bill #21

There are roughly 700 mining companies head officed in Vancouver.

And just as a fun note: there are roughly 58 ‘mined’ components in an i-Phone.

rph – “Our own students struggle to get seats in limited programs. Why is that?”

Thank you for opening so many doors to a rich discussion, even if it seems superfiically off-topic at the moment.

Mitigating the rise of if not actually lowering the cost of health care could be partly accomplished, IMO, if medical schools didn’t intentionally restrict the production of their output – qualified general practitioners.

The same goes for for the legal profession, two professions that really control and limit the supply of graduates in comparison to, say, schools of architecture and planning, which, rightly or wrongly, thought that by offering such services more widely would be a good thing for society and hence vastly increased the number of programs across North America.

Educating more profesionals – as well as tradespeople – here rather than poaching from their home countries should be a very high societal goal, even if it means the income of individual doctors and lawyers may level off somewhat as a result.

Think it’s going to happen anytime soon?

@IanS #43. I hear what you are saying, and yes, Vancouver just does not have the level of high paying jobs that enough citizenry can afford to buy homes. At least not sf detached.

But increasingly we are relying on imported workers and the cry from business is that there is a skills shortage. Remember the tunnel drilling crews for the Canada Line? All brought in, and no doubt when/if the Broadway Line is built we will be bringing in workers again. Actually you do not have to wait until then, we are importing trades on projects all over Metro Vancouver.

Right now business gets away with that because, well, you know, a supposed skills shortage. Wouldn’t it be nice to take that argument out of the equation. You might even see wages rise to a natural competitive level. And maybe those workers could then afford to buy where they work.

@Frank Ducote #44. Good point. Not surprising the medical and legal profession like to restrict graduates just like, well the RE industry restricts product to keep price high.

Yes, it is not going to happen anytime soon. But if I can try to tie this back on topic, overseas speculation/investment may or may not be contributing to absurdly high RE pricing, and we can argue that point for a long time. But what cannot be argued is the fact that average local incomes come nowhere near what is needed to purchase. Eventually will we even be able to afford to rent anything larger than a shoe box?

IanS “Second reaction: the legal profession does not restrict the number of new lawyers. The only real limit is the number of spots available at the universities. ”

Same diff. Controlling supply.

And while you (and I) don’t think we necessarily need more lawyers, society as a whole could certainly stand a less onerous and expensive legal system.

The last line of my post #49 should read” “But I don’t think having more lawyers will solve the problem.”