[lpaone]

What isn't talked about in this article is the effect this is having on the other industries in the city aside from real estate.

I believe that Vancouver has potential to be THE tech hub in Canada. Unfortunately, wages are very low compared to the cost of housing, and so the cost of living is super high. Combine that with extremely low vacancy rates, and it is very hard to attract talent from out of town. In fact, many young, smart and talented people just head south to Seattle or the valley because the wages are so much higher, and the economics of staying in Vancouver just don't make sense.

The other industries that could be thriving and building up a real economy in city are some of the biggest casualties in this whole mess. Unfortunately, all of the politicians from municipal to provincial are in bed with the real estate industry, so nothing truly effective and meaningful will be done.

[jlos]

>> In fact, many young, smart and talented people just head south to Seattle or the valley because the wages are so much higher, and the economics of staying in Vancouver just don't make sense.

Your claim is especially true if those people have families. 60% of Families said they planned on leaving the city in the next year due to the problems surrounding housing. Rental rates are also a problem with only a 0.6% vacancy rates and of those available only 16% are 2 bedroom and less than 1% are three bedroom.(1)

(1) http://www.theglobeandmail.com/news/british-columbia/familie...

[Mikeb85]

Unfortunately in Canada we've gone for easy money (real estate in Vancouver, oil in Alberta) before trying to establish actual industries. We'd rather just grab US and Chinese cash then vacation in Mexico than actually work.

[ivoras]

> We'd rather just grab US and Chinese cash then vacation in Mexico than actually work.

That's hardly unique to Canada. It's the default human state to prioritise short-term gains. See e.g. the phenomenon of obesity.

[branchless]

Former British colony with banking and enslaving land price shocker, page 4.

[sdenton4]

(I suppose I shouldn't be shocked that broad national generalizations should be followed up with fat shaming. But I am, none-the-less, disappointed.)

[forgetsusername]

>We'd rather just grab US and Chinese cash then vacation in Mexico than actually work.

I would also like to grab cash and vacation. What's so honourable about working?

[schwarrrtz]

> what's so honourable about building a future for your country?

FTFY

[rz2k]

Introduction of a gradual increase in property taxes, as well as a gradual decease in income taxes, even lower than zero if appropriate, would be the naïve, straightforward economic policy recommendation if the problem has been accurately described. Some details yo resolve would be the numerous people who were using their primary residence as their main investment for retirement, and deciding how to handle people who were improving properties in order to make a living.

[delecti]

Is there any reason that property taxes couldn't be increased solely on homes without residents? It would at least encourage putting foreign owned homes on the rental market.

[acveilleux]

It's hard to define "no resident" and to effectively verify.

People would just hire someone or ask a relative to sign a lease and officially be "the resident" without actually having anyone live in the unit.

[caffodian]

Residency tracking is hard. Actually, the city of Vancouver got permission from the provincial government to implement a vacant homes tax, but it's based on the home being unoccupied for a whole year. It probably won't work.

[paulsutter]

Why gradual? (not disagreeing, just asking)

[linkregister]

Impact on retirees, impact on existing resident property owners, and lack of control over what income tax Ottawa sets are a few reasons.

[hx87]

As for the latter, can't BC just allow tax payed to Ottawa to be counted as a credit towards provincial/municipal income taxes?

[run4yourlives2]

As a Vancouverite (well, metro at least) who moved here from Toronto 15 years ago, one of the things that has bothered me most about BC and Vancouver specifically is how reliant the economy is on a few distinct sectors.

In BC, it's resources and literally nothing else. In Vancouver, since resources overall are declining, we run the economy via real estate investment. That's moronic.

As you say, we could become a tech hub easily if we leveraged our easy connection to Seattle and the gateway to Asia that we are. We could become a medical tech hub as well. We could be a centre for finance as well if we invested properly, particularly since oil is now on a downslide.

Our local governments simply have no vision. Our residents are too afraid of change to actually do, well anything really, and all our innovators simply move elsewhere.

[Apocryphon]

Perhaps Montreal can do the same, if the city finds some way to sidestep the provincial language laws.

[celerystock]

Unfortunately the software industry in Montreal has decided that developers are not valuable. Salaries are hilariously low compared to american counterparts.

[branchless]

Living costs are very low. And hours are good. Can you buy time? Do you want to live in a country with shameful inequality? Not me.

[lintiness]

you guys are important, really, no need to constantly whine about your neighbor to the south.

[raverbashing]

They also seem prejudiced to foreign labour that is not French or American

[frandroid]

Funny story: I have friends from Québec City (unilingual city) who work in Montréal who complain of always having to work in English, and I have former anglo-Montréaler friends living in Toronto because "it was impossible to find a job in Montréal as a non-native French speaker".

[mastazi]

Learning a second language is a great thing - your mind becomes more flexible and you get access to movies, books and songs which you wouldn't be able to enjoy otherwise - having to cope with language laws, though, sucks big time.

[seanmcdirmid]

Yes, I know mandarin and English. Wait, I have to learn French also? Pass.

I had the same problem in Lausanne, though French wasn't required for my job. I just couldn't completely devote myself to my research AND learn another language concurrently.

[mastazi]

> Yes, I know mandarin and English. Wait, I have to learn French also? Pass.

Is there a government that makes it mandatory? Because otherwise we're not talking about the same thing. I speak 4 languages and I learned each of them for different reasons... None of which was "because otherwise I would be breaking the law".

[Kluny]

All services that serve Quebec have to be available in french. So if you're making an application front end, you have to provide a french version even if your userbase doesn't care. It's just extra overhead.

[Apocryphon]

Well, localization is good practice and something that should be supported already. But I think it's more like the Quebecois language laws mandate bilingualism in the workplace, which is a greater hassle.

[Mikeb85]

Nothing wrong with language laws, people just need to stop being lazy. Learning a second language isn't that hard.

[cvinson]

Try having a startup in Montreal. Our has been targeted by the language police, and is being forced to translate not just our front end, but our blog and social media presences. It doesn't matter that 0.01% of customers are in Quebec, and that we have determined that there is no market for our product in french.

Anyone can send an anonymous message to this government agency and it will audit your business to make sure you are compliant. Have more than 50 employees? Make sure the copy button on your photocopier says "copiez" or you'll have to put stickers over it (true story, happened at my brother's pharma startup).

The sad thing is that most Montrealers have the attitude that "you're in Montreal, you should learn french." The problem is, this law goes far beyond that, and is a serious impediment for Montreal startups.

[ArnoldP]

My understanding is that you do have the right to know who complained about your compliance under Bill 101.

Anyways, I don't think it's asking much to have your website/blog/frontend in the language of the province where you operate, but the photocopier business, keyboards in french etc is ridiculous. Also it seems the language police always get more confident whenever a PQ government gets power.

[quicknir]

Actually, it is "asking a lot". Quebec's language laws have been found to be in violation of the Canadian Charter of Rights and Freedoms. Unfortunately, the Charter (which Quebec did not support) has a "notwithstanding" clause, which Quebec invokes more often than all other provinces combined.

Quebec is a joke, both economically and with respect to liberal democracy.

[miguelrochefort]

This is accurate.

The company I work for had to put French stickers on every key of every keyboard. They had to put stickers on the microwave oven as well...

[serge2k]

I hate Canadian bilingual keyboards so much.

[frandroid]

Wait, you actually look at the keys? You can use whatever keyboard but keep it mapped out to your favourite layout. I personally use a Canadian bilingual layout but haven't owned such a keyboard in quite a while, since work doesn't look fondly in buying a MacBook Pro with a layout that a future inheritor would bristle at...

Now if you mean that you really hate the layout, it's really anti-programming, and sometimes I wonder why I stick to it. :) It's so easy to use a layout switching keyboard shortcut...

[Mikeb85]

This is for real. US alt international layout on Linux is great, best ever. And Azerty > Canadian bilingual keyboards too. Canadian bilingual keyboards suck for writing in both French and English.

[nayuki]

I hate how the left shift key is split, and how the backslash moves to the enter position.

Despite being in Canada, I only buy laptops with US keyboards.

[Mikeb85]

Apart from the photocopier sticker, that seems pretty reasonable.

If you speak both languages (or have employees who do), how difficult is it anyway?

[cvinson]

Very. We post multiple times a day on social media, create videos, do webinars, and long-form eBooks. Most of our staff are in the US, and don't speak french. Of our ~25,000 customers, 10 are in Quebec.

As you can imagine, hiring a full time french speaker just doesn't make sense. So, we have to "fire" our Quebec customers and block the province via IP. This is what dozens of startups (and big web companies) are doing now to circumvent the crazy laws.

[Mikeb85]

> Most of our staff are in the US, and don't speak french.

> As you can imagine, hiring a full time french speaker just doesn't make sense.

So how are you based in Montreal, and why? Why not relocate to the US, or English-speaking Canada?

[system16]

Learning to order lunch or talk about the weather in a second language is not that hard. Communicating at a professional level takes years of practice. For most people - especially mid-career adults with limited time - that's not going to happen.

[Raphmedia]

I work in tech in Montreal.

People speak in english. You can speak english all day if you want. My clients speak in english. We speak in english. We create websites that are 100% english for clients who are based in the USA.

What isn't allowed it having a workplace where the local (who can't speak english) have no chance of being hired because of the language. That is also why the employer must provide all workplace tools with french label. All else is lies, stereotypes and people not understanding the law.

[quicknir]

No that's not all it is, and the person who does not understand the law is you. Quebec language laws require for instance that commercial signs not only have French, but that French be predominant. Why does a sign having big print in English and small print in French, prevent a native French speaker from working there?

Also, realistically if you hire many programmers who only speak English, it's simply not realistic to hire a programmer who speaks French exclusively because he can't communicate with the team. Putting "copiez" on your photocopier does not alleviate that.

These laws are discrimination, pure and simple, and have been found as such by the Canadian Supreme Court on many occasions. Most Quebecois just don't care about paltry things like individual rights, where their language is involved.

[Raphmedia]

> Quebec language laws require for instance that commercial signs not only have French, but that French be predominant.

No. If that was true, Best Buy would have big billboards that say "Meilleur Achat". "Canadian Tire" would be "Pneus Canadiens". They don't. The law don't ask for it.

> Also, realistically if you hire many programmers who only speak English, it's simply not realistic to hire a programmer who speaks French exclusively because he can't communicate with the team.

That's the entire point of the law. It's the very reason it's there. To prevent business from hiring an all english staff which would prevent local people from working there.

Edit: Some of it may not make sense to you because we are working in the tech industry. The abuses those laws are there to protect against happen mostly to minimum wage workers in the industrial sector. Some people could get hurt if the machines are not labelled correctly. I admit that stickers on the photocopying machine is a joke but it could be life and death when we are talking about a big industrial machines filled with saws.

[piva00]

It's still a big effort, learning a language properly is not something you do for 2 hours on the weekend and get proficient at it.

Even more so if you don't plan to use that language for anything else afterwards.

It isn't that hard but isn't that easy either.

[ivoras]

> It's still a big effort, learning a language properly is not something you do for 2 hours on the weekend and get proficient at it.

There's a big difference between being really proficient and knowing enough to be productive. In any case, like other skills, everyone gets better by actually doing it, but they need to start first.

[robotresearcher]

Many, many of the people injecting money into Vancouver already speak a second language just fine. French would be a third at least.

[raverbashing]

Apprendre une deuxième langue n'est pas le problème, mais la Loi 101 derange beaucoup de gens

[kejaed]

Exactly, how many people coming to Montreal would be happy that their kids could only go to school in French?

[pjonesdotca]

Probably about as many parents who are fighting to get their kids in French Immersion in the rest of Canada. I can't speak about anywhere other than Toronto but here it's quite sought after, second language for children.

Especially amongst first generation immigrants like myself.

[sir_terenced]

The difference is that in the rest of Canada, your child (and their children) does not lose their right to go to English school if they go to a French school first.

[myth_drannon]

That's not because of French language, they would try even if it had Zulu immersion. It's just that it's cheaper than private schools, but you still get good students and quality environment

[Kluny]

Anyone wants to work for the federal government or in politics needs French, beyond a certain level. So making sure your kids learn it opens some really valuable opportunities for them.

[MAGZine]

I don't speak French but would love to put my kids in a French-only school.

They pretty much learn a second language for free. Why not?

[jellicle]

If by "free" you mean "at the cost of learning anything else".

[Mikeb85]

How many people come to the rest of Canada and are happy that their kids are forced to learn English?

[Gustomaximus]

This lacks recognition. So many factors could come into play. E.g.

The downstream effects of house prices has to hit entrepreneurship. Previously a bunch of people would be in a good place to take a couple years off to start a business mid-career. Now people have these huge mortgages where your ability to start a business is hampered by your ability to get a financial buffer to take this year or 2 off. And lets not forget most businesses are created form people mid-career, not the TV typical university dropout.

And small community business, how will they exist in the future. If someone wants to set up a local 'physical presence' vet/daycare type business that are typically mixed into residential areas the threshold is now too high to exist let-alone set up a new business. How can a daycare buy a million+ dollar house and expect to make money paying that back on having 30 local kids being looked after.

Also what is going to happen with social services like retirement and periods of higher unemployment. I suspect society will be less stable as either the government has to foot much higher rent costs (unlikely) or we will see increased population movements during retirement, and now the government has to look after older people that before a family who lived nearby could help out with. And during low employment cycles society can no-longer absorb this downturn if people have large income-to-debt loans. Historically people could 'tighten belts' for a year while things improve, harder when you're neck deep in debt. So we will again see more movement of people, debt default etc. It will serve to exacerbate recessions etc.

Also these higher prices skew the economy. When people are tied up in these ever increasing loan/income ratios there will be less spending on dining, holidays, hobbies etc. It will weaken the economy by concentrating the spend in limited areas.

From this I really believe we should be talking seriously about ensuring affordable housing for owner occupiers. Residential investment need to be discouraged (note I'm not saying stopped) as a speculative asset class. I've seen a few suggested methods to achieve this but I feel the simplest is to place a yearly 'asset tax' on non-owner occupied residential property (I would also include farms). Having a % tax would make it easy to adjust to find the right balance given economic cycles change. Also this would encourage property hoarders not in heavy debt to sell for lower taxed asset classes. This I feel is important as most solutions focus on controlling the investment lending side which is limiting in reach. And the 'add supply' will always be a limited case solution.

Good luck. It seems most western governments have stopped caring about looking past the most immediate budgets.

[lpaone]

Some great points here for sure.

I forgot to mention in my post that not only is the government in bed with the real estate industry (new rumors that the biggest real estate marketer in the city was notified weeks in advance about the new foreign buyer tax), but that they also "unexpectedly" took in 50% more than forecast, to the toon of $500+ million, in extra property transfer tax last year. Good luck getting them to slow down that gravy train.

[Gustomaximus]

The gravy train doesn't have to stop. With a non-owner tax they ride a new gravy train. And the biggest complainers will be non-voting foreigners that dont matter and the foreign governments like China will hardly care exiting money is being punished, so bonus. It will be tough for those that bough at the peak, but it seems those will be the minority to the almost 50% of the population in my town that cant afford a home in their own city.

That said the 'loudest' voices will be the uber wealthy with large property holdings so again...good luck...

[restalis]

I was very tempted to just play devil's advocate here, but then I come to think there might be more than that. So...

"Now people have these huge mortgages where your ability to start a business is hampered by your ability to get a financial buffer to take this year or 2 off."

How will they manage? By learning to adapt, which will be a critical ability in their careers as entrepreneurs. Say, they can start modest, with modest allocation of time instead of lavishing with both time and money to only hit the ground if they fail. Also, they may identify the opportunity of having around them this market of deep pocket potential clients! ...or may not, we'll see. The idea is, wealth is coming in, and people complain instead of finding ways to take advantage of it. I know that this isn't as easy to do in other domains as it is in real estate, but still.

"How can a daycare buy a million+ dollar house and expect to make money paying that back on having 30 local kids being looked after."

By raising the price of the provided services accordingly! The city is getting stuffed by each passing day with rich kids. What are you waiting for?

"When people are tied up in these ever increasing loan/income ratios there will be less spending on dining, holidays, hobbies etc."

I think those people can ask more for their services in order to get in an enjoyable zone or leave the city entirely if they can not. A life of struggle is not one worth living when you have a choice.

[geoka9]

> The city is getting stuffed by each passing day with rich kids. What are you waiting for?

My impression is that many of those buyers don't even set foot in Vancouver. It's just an investment for them.

[alsocasey]

I think this is true, but it's also the case that businesses that cater to the very rich are doing very well. My wife works for a luxury retailer who's Vancouver location is seemingly supporting the entire company with it's sales. Revenue has basically tripled over the past 4-5 years.

[geoka9]

So this is why they tore down all those grocery stores in Park Royal and built high end clothing stores instead.

[branchless]

Exactly. Just last night talking to a guy in Montreal about to open a new eco cafe. He can take the risk because rents are lower here. Fuck the banks. Long live Henry George.

[hx87]

They don't even care about the immediate budgets; otherwise the taxes on foreign-owned residential properties would be sky-high.

[chocolatebunny]

I don't understand how Seattle hasn't had a big housing problem compared to the valley or Vancouver. They have a decent tech sector and they're in close proximity to Vancouver.

[run4yourlives2]

Simply: It's more difficult to emigrate to the US as a foreigner in many key ways, coupled with the fact that it's a slightly larger city with a much stronger and more diversified economy.

[guardiangod]

(I am Chinese, is living in Vancouver, and know many mainland Chinese.)

In the eye of a mainland Chinese, an US citizenship is worth significantly less than Canadian citizenship. Take it for what you will, the bottom line is, no one wants to be an US citizen.

The difference in application fee is dramatic, as a Canadian citizenship application fee (to the middleman) costs 3x more than the US counterpart (Green Card).

[cesarbs]

I think it's coming. Rents have been climbing at a fast rate. My wife and I are paying close to $3K for a two bedroom + den in Bellevue, and this was the cheapest we could find. When we first moved in 3 years ago, our rent was just a little over $2K.

[guyzero]

It's much less geographically constrained than Vancouver and it has fewer tech millionaires than the Valley. It has also had fairly significant price gains over the last few years though.

[aminok]

Billionaires buying houses does not increase housing costs. You do not need to purchase a Single Family House in Vancouver to have housing. You can buy a condo, the prices of which are totally uncoupled from SFHs, or rent. If foreign investors were leaving the houses they buy empty, and thus removing units from the housing stock, you might be able to make a case for foreign investment negatively impacting Vancouver housing costs, but that's not what's happening. The percentage of homes in the Vancouver West Side, where foreign investors are exceptionally active, (edit to add: 'that are unoccupied') is only 3 percent, which is below the typical rate for major cities.

What this means is that foreigners are not leaving houses that they buy in Vancouver empty. They are being rented out. The rental cost in Vancouver are below Seattle's when you compare it to the median wage so then couver housing as far as rentals is actually more affordable than neighbouring Seattle.

[kohanz]

> You can buy a condo, the prices of which are totally uncoupled from SFHs

If domestic buyers can't afford SFH's and shift their attention to condos, this increases demand for condos, thus raising the price. It is practically impossible for the two to be "totally uncoupled".

[aianus]

> this increases demand for condos, thus raising the price

Condos are not supply-constrained. You can tear down like 6 detached houses and build 240 condos in that space.

In Toronto they're making over 100,000 new units a year: http://business.financialpost.com/personal-finance/mortgages...

[kohanz]

Toronto and Vancouver is an apples and oranges comparison when it comes to having space/land to build new structures.

[aianus]

Why's that? They're still building them in the downtown core, which is already way more developed than Vancouver's. There's probably some stupid NIMBY 'I need to keep my mountain views' stuff going on if they can't do the same in Vancouver.

[seanmcdirmid]

Are they renting them out? I've heard speculators buying housing and then just sitting on them are turning some Vancouver neighborhoods into host towns. Is there anywhere we can get occupancy numbers? Also, aren't Vancouver rents higher than Seattle?

[aminok]

The city of Vancouver did a very rigorous study, and found unoccupancy in the West Side, where much of the foreign investment has been going, at only 3 percent:

http://vancouver.ca/news-calendar/city-releases-comprehensiv...

Which is below the average for other major cities.

[seanmcdirmid]

Eh. But aren't they biased? They were going through a lot of effort to show that there wasn't a bubble, or that the market wasn't being targeted by the Chinese.

[aminok]

I put the possibility of them massaging the data in some way at very remote. This study had a lot of eyeballs on it so risk of getting caught would be too high for them to entertain. Moreoever, the CoV grunts who do the actual work, like doing studies, seem both competent and of high integrity, and I don't think they'd be willing to betray their duty to the public and try to create a false impression of the unoccupancy rate.

[allengeorge]

I'm also puzzled by some of the numbers they post.

They point out that non-occupancy in many other housing types is incredibly low (0% - 1%).

They then estimate condo non-occupancy as ~ 12.5% (I'd say that's a big deal, since most new housing stock is in condo form).

And finally point out that short-term-non-occupancy (aka. two months of the 4 they're counting) sits at ~ 10% across all housing types - without breaking out the numbers for condos alone, or clarifying whether this short-term-non-occupancy is on top of the non-occupancy numbers above.

Clarification welcome.

[seanmcdirmid]

They've been willfully ignorant to the numbers for some time. What is to say they aren't misinterpreting the data, fudging it, or ingoring factors like "more houses" or "more energy usage" while the number of people are dropping? This kind of thing goes on all the time here in Beijing, the only reliable way to determine vacancy is to count the lights that come on at night. All the other metrics, including energy consumption, are so gamed that they are useless.

[allengeorge]

So...I looked at their methodology, and I noticed one thing right off the bat:

They define a home as "unoccupied for the year" if its electricity usage is low during the non-heating months - aka. summer. This strikes me as flawed: summer is when you're most likely to be in Vancouver!

[lpaone]

I think you are naïve if you believe that a government wouldn't fudge a study to support their best interests (best interests in this case being that most of their top campaign contributors are in the real estate business (1)). Let me give you an example of this happening recently in regards to the Vancouver real estate market.

The provincial government released a study on July 7th, stating that only 3% of real estate transactions across BC were from foreign buyers (2). Nobody believed this number, and plenty of people called foul (3). Every single person I talked to involved in the market laughed at those numbers (it is hard not to know someone involved in the market here). The government used these numbers as proof that foreign buyers were not an issue in BC.

Only 3 weeks later on July 26th, the exact same ministry in the government released new data that said that foreign buyers accounted for more than 10% of the value of real estate transactions in Metro Vancouver, which is by far the largest real estate market in BC (4). They used this as proof that foreign buyers were indeed a problem.

This is a prime example of the ridiculous politics that are at play here.

Also of note, if you look at (4), you will see that foreign buyers aren't just buying houses in the exclusive and expensive West Side Vancouver neighbourhoods. According to the data, Burnaby and Richmond, both had 18% foreign buyers.

(1) - http://www.cbc.ca/news/canada/british-columbia/campaign-dono...

(2) - http://www.theglobeandmail.com/news/bc-government-releases-p...

(3) - https://www.biv.com/article/2016/7/asian-real-estate-confere...

(4) - http://www.cbc.ca/news/canada/british-columbia/vancouver-rea...

*Edit - formatting