Is Vancouver a Legitimate Tech Hub?

[a very long weekend]

^ the reason that the family units haven't been big in vancouver is that before the chinese brokers set up what's basically a chinese futures market on canadian real estate, the assumption was that people would move into the single family homes. since the chinese have taken bid that option off the table, vancouver is facing a catastrophic affordability problem.

if the government refuses to put restrictions on foreign in canadian real estate, then cities should get creative. my preference is for vancouver to rezone some of these single family home neighborhoods to mid-rise or high-rise. this would take pressure off land prices in areas already zoned for height, gradually drive down prices in some of these neighborhoods (who wants a 5 bedroom home next to an 10 story/100 unit residential tower?) and bring more units to the market. in a way, it's sort of obvious.

[WBC]

Originally Posted by cornholio

Good tech workers can make well in to 6 figure salaries, easily. They have the right to expect comfortable living. Vancouver does not offer affordable family condo accommodations. Had they built more 1200-to 2000 square foot 3+ bedroom condos I can assure you the problems would be smaller. They did not. There is nothing fairly priced that you can raise a family in or live comfortably. Nothing. And no one will commute through traffic for 2 hours when two hours away your still spending a arm and a leg to buy something decent. In say Dallas a hour commute gives you a infinite supply of quarter to half acre houses priced in the 100k to 300k range. I mean you can buy THIS 20 min from downtown Dallas 20 min or be thrifty and buy this in the same area. Now I use Dallas as a example because I love the city but this is just one example of what Vancouver is trying to compete with in the tech world. And it will lose. Because I as a tech worker can work in the states, I get a job offer and at the border I get a work permit, or use the H-1B or L-1 route. I am in Vancouver because I have a good job that I can telecommute to from anywhere and because my wife wants to get her citizenship before we leave. Vancouver really screwed up. Look I have a house in Sao Paulo for example, lots of people live in apartments there but guess what? They build 1000 to 2000 square foot apartments. You can buy a smaller apartment, and move up to a larger apartment when you start a family and have enough space. Here are some floor plan examples that don't exist in Vancouver 1 2 3 4 5 6 I also have family in Prague same thing. I just don't understand Vancouver, I mean maybe its the Asian mind set that has had such a effect on housing stock (ignoring prices). Because there literarlly are no options. Then throw in the prices and low wages. No talent in their right mind will come here or stay here and no tech company will pay to compensate the situation.

This post nails my biggest complaint about real estate in Vancouver. Why are we building absolute crap that can only suit singles? Is that what our future will be - bunch of single people, childless, living on their own in 500 sq feet apartments?

Secondly there seems to be crazy price difference between new stock of condos and old ones. I live in 890 sq foot 2 bedroom in Metrotown that is now 18 years old. The price is about 400K. A brand new 2 bedroom apartment slightly smaller then mine (800-870 sq feet) now ranges between 600-750K. That is insane...These new apartments that I visited though open houses just out of curiosity are actually worse then where I am now in terms of location (busier street), layout and overall quality (all glass windows, no insulation, tiny balconies).

[WarrenC12]

Originally Posted by logan5

We always hear about all the higher salaries that you get in New York and Los Angeles, but when I look up the median incomes for these cities, they are much lower than Vancouver. For example the median income for the New York Metro area is 13 000$ less than Metro Vancouver. Even SanFrancisco is 10k less. Even with less taxes, there is still a big difference in median incomes. Are they measured differently?

By the way, the average price for an apartment in Manhattan is 1.7 million dollars.

http://www.statcan.gc.ca/tables-tabl...il107a-eng.htm
https://en.wikipedia.org/wiki/Highes..._United_States

Income inequality is a huge problem in the US. This type of inequality has a better correlation to murders and violent crime than gun ownership.

[WarrenC12]

Originally Posted by logan5

The demise of Canada is on the horizon. Dark days indeed.

[VarBreStr18]

Originally Posted by ssiguy

I can't believe what I just read. You are actually comparing the wages of Hong Kong, New York, L.A., and Tokyo to Vancouver's?? This is to say nothing of the fact that those are world economic, political, and social powerhouses and Vancouver doesn't have even a TSX listed corporation that cracks Canada's top 40.

Also read what you read..........a working COUPLE can afford a small one bedroom condo in the suburbs. You consider that a win? God forbid that couple actually has the audacity to have a child.

There is no point to compare wages of those "world class economic power house" if you do not see the buying power of their wages at their city. Trust me young people in those cities also find to hard to own a condo. Last time I heard average price per sq footage in Hong Kong is around $1000 CAD. How many young married couple in Hong Kong end up living with in-laws until they saved up their downpayment? Vancouver is by far still affordable if you are willing to start small and farther away. If you think it is bad now, think about 2040 when population in metro Vanvoucer estimated to gain another million.
Pasture is not necessarily greener in those cities.
Every generation has their affordability problem, our parents . grand parents also scraped to own their first house. Prices may be $25000 then, but then their wage may have been 50 cent per hour.
Going forward our expectation of the condo we live in making huge capital gain like our parents 'house may not happen. Best we get out is a stable roof over our head with convseniences close by simply because of the large supplies each new tower . I got carried away. This is not even the correct thread. But since you start ranting.....

[MIPS]

As someone desperate to get into Vancouver's tech centers my lifestyle and most especially my equipment that ranges from air compressors to racks of servers do NOT work well in multi-family properties. You get lots of complaints and issues crop up regarding the absurdly small amount of space. I need a single-family home, which regardless of the condition of the structure or property is simply impossible to get unless I was already financially established or guaranteed I will be able to pull a loan to start making mortgage payments and eventually pay it off. Again, that's not possible in most of the post-graduate population. I'd rather move back to rural Southwestern Ontario where you can still get fairly decent places in the $250K range and you're often still only having a 30 minute commute.

[cornholio]

Originally Posted by VarBreStr18

There is no point to compare wages of those "world class economic power house" if you do not see the buying power of their wages at their city. Trust me young people in those cities also find to hard to own a condo. Last time I heard average price per sq footage in Hong Kong is around $1000 CAD. How many young married couple in Hong Kong end up living with in-laws until they saved up their downpayment? Vancouver is by far still affordable if you are willing to start small and farther away. If you think it is bad now, think about 2040 when population in metro Vanvoucer estimated to gain another million.
Pasture is not necessarily greener in those cities.
Every generation has their affordability problem, our parents . grand parents also scraped to own their first house. Prices may be $25000 then, but then their wage may have been 50 cent per hour.
Going forward our expectation of the condo we live in making huge capital gain like our parents 'house may not happen. Best we get out is a stable roof over our head with convseniences close by simply because of the large supplies each new tower . I got carried away. This is not even the correct thread. But since you start ranting.....

You missed the point that there are no standard condos in appropriate sizes (1200-2000 square feet). It doesn't exist. Hong Kong is not something to compare to. Actually East and South East Asia is not something worth comparing to. These parts of the world are overpopulated and have problems because of that. Who we can compare to is the Americas and Europe. Vancouver has little to offer a person with talent. There are no options for family friendly accommodations. If there are please point out where, include price, size, age, and distance to the main employment hubs. Remember that a talented tech worker will be in the top 10% of income earners, even with our depressed wages.

[Pinion]

Originally Posted by VarBreStr18

If you think it is bad now, think about 2040 when population in metro Vanvoucer estimated to gain another million.

I think Vancouver will be significantly cheaper (relative to inflation) in 2040. Things don't always increase.

[LeftCoaster]

Originally Posted by cornholio

I can confirm Victoria has a pretty big tech scene (per capita bigger then Vancouver but not in real terms) and a better future then Vancouver in that regard.

You can confirm that Victoria has a better future than Vancouver's tech scene?

That's one mighty powerful crystal ball you've got there Cornholio.

Microsoft, Amazon, Tableau and Sony should take a look at it. The literally 3,000+ people they are currently hiring/recently hired in Vancouver should probably hop on a ferry then I guess?

Vancouver's tech scene no doubt faces its fair share of challenges, but there is no arguing it is currently absolutely booming. Affordability, access to capital and talent retention will continue to be an issue, however every tech hub has its share of hurdles to overcome, even the mighty silicon valley, where salary expectations are completely out of control.

For every one of Vancouver's negatives there is a corresponding positive. Don't for a second think that the decision makers at large tech firms don't know about the downside to operating in Vancouver, yet they have all chosen to locate significant operations here, many of those decisions came before the CAD drop to boot. The low dollar is just icing on the cake. I just heard last week Intel is looking to double or even triple their presence in Vancouver, and this is just one of many firms announcing expansions in the city for 2016.

And when it comes to attracting talent, well you're absolutely right not many Americans will be enticed to move to Vancouver, given the exchange rate disparity and real wage differences (not to mention weather, taxes etc...). That is irrelevant though, as Vancouver's tech scene has never been about pulling american talent. The city revolves around home grown Canadian employees, and more and more frequently, highly trained skilled employees from abroad, ie Asia, India etc... where comparisons to wages in Dallas or inability to buy a 4,000SF McMansion are far less pertinent.

Vancouver's start up scene faces its own set of challenges as well, with the biggest issue being investor capital, but the city has many intelligent creative people who have proved themselves more than capable. Though we may lose a few companies south of the border, there will be many more Hootsuites, Global Relays, Build Directs and ACLs. They may not be global giants (yet) but they provide a lot of meaningful desirable employment.

Does Vancouver's tech scene face a lot of competition? Of course it does, but it always has. Vancouver, along with several other cities, will continue to be an emerging tech hub and given the growth in the industry right now that is a damn good thing.

[VarBreStr18]

Originally Posted by Pinion

I think Vancouver will be significantly cheaper (relative to inflation) in 2040. Things don't always increase.

i certainly hope you are right and you sounded so assured

[Pinion]

Originally Posted by VarBreStr18

i certainly hope you are right and you sounded so assured

It will not be a good thing for anyone if what I think is going to happen happens. I hope I'm wrong.

[zoomer]

They actually had a story on the local news in Victoria tonight about the impact of the tech sector - these are old numbers from 2014 for Victora:

Economic impact: 4.03 billion
Companies: 884
Employees: 15,000

I'm sure Vancouver will do just fine for many years, heck San Fran still is right?

Tech is having a big impact on downtown now, seems every other week a new pot shop or tech company opens up a new location, and these people like to eat out lots! I've never seen restaurants so busy, in February no less. At lunch I have to go outside peak hours to my favourite places, and there are lots to choose from. In fact this Victoria restaurant got the first ever four star review from Alexandra Gill, Vancouver Globe and Mail restaurant reviewer.

[casper]

Originally Posted by zoomer

They actually had a story on the local news in Victoria tonight about the impact of the tech sector - these are old numbers from 2014 for Victora:

Economic impact: 4.03 billion
Companies: 884
Employees: 15,000

I'm sure Vancouver will do just fine for many years, heck San Fran still is right?

Tech is having a big impact on downtown now, seems every other week a new pot shop or tech company opens up a new location, and these people like to eat out lots! I've never seen restaurants so busy, in February no less. At lunch I have to go outside peak hours to my favourite places, and there are lots to choose from. In fact this Victoria restaurant got the first ever four star review from Alexandra Gill, Vancouver Globe and Mail restaurant reviewer.

Absolutely. Here is the link to the study that is referenced https://viatec.silkstart.com/article...c-impact-study

I think one of the challenges that the industry faces is it is pretty good are startups and then they get to stage where they are bought out by major tech companies. After the buy out sometimes they turn in to branch operations and other times they get merged into the parent company and disappear. Same problem happens in Vancouver.

A good example is Microsoft Mail that evolved into Microsoft Exchange and Outlook was originally a Vancouver company. Microsoft bought them in the 90s and the product eventually moved down to Seattle.

In the case of Victoria the reason Amazon has a presence in Victoria is the bought AbleBooks. The reason Schneider Electric has a presence is the bought out a local power metering business. The list goes on be it Codan radio or Adego.

[twoNeurons]

Originally Posted by zoomer

They actually had a story on the local news in Victoria tonight about the impact of the tech sector - these are old numbers from 2014 for Victora:

Economic impact: 4.03 billion
Companies: 884
Employees: 15,000

I'm sure Vancouver will do just fine for many years, heck San Fran still is right?

You can't come close to comparing San Francisco and Vancouver. San Francisco's cost of living is actually quite low compared to Vancouver because wages are much much higher.

The list of tech companies based in San Francisco goes on and on and on...

The San Francisco Bay Area has more Fortune 500 headquarters than any other region except for the tri-state New York City region

Vancouver doesn't even come CLOSE ( and crappier weather ).

In fact, it can't even really be called a big CANADIAN tech hub. I'd name Ottawa a bigger hub. The only thing it's got going for it is proximity to the large tech cities on the west coast and a relaxed work environment for that ever elusive work/life balance.

For Vancouver to start to attract large companies to form it has to attract talent and have affordable real estate. Being pretty for a 3 months of the year is simply not enough.

Repeal the silly laneway home idea ( unless it's made into a separate sellable property ) and encourage rowhousing or 25' wide lots like they have in new developments SoF. It's ridiculous that a family has to become a landlord to 2 basement dwellers and a laneway tenant just to like in a home that has 3/4 bedrooms.

To those that say 'go live in a condo' try finding a condo to fit 2 kids and 2 parents in, not to mention blended families which also house an aging parent. How many 3 bedroom apartments even exist? The ones that do... are they even CLOSE to affordable?

Yeah, I know that it's mostly cheap money and FUD that has fueled this debt-orgy into real-estate, but policies that simply force home owners to become slumlords are backwards. The land should become too expensive to have a SFH. Having 3 suites in a house should be penalized, not encouraged. It's not a civil way to create density.

Without mortgage helpers, lots would would be consolidated and 2 40' lots becomes 3 27' ones. 3 42' lots becomes 5 25' lots with single car garages or 5 fee-simple row houses.

Larger parcels are purchased and innovative ideas like townhomes and TRUE SFH can be built.

[csbvan]

San Francisco's cost of living is actually completely insane despite the high wages. Sorry.

[Bcasey25raptor]

Originally Posted by csbvan

San Francisco's cost of living is actually completely insane despite the high wages. Sorry.

Rents in San Francisco make Vancouver look like a bargain.

[WarrenC12]

Why is this an argument?

Sounds like Victoria has a decent tech sector, but it will never be Vancouver. Vancouver has a good tech sector, but it will never be San Fran. The end.

[twoNeurons]

Originally Posted by Bcasey25raptor

Rents in San Francisco make Vancouver look like a bargain.

Rents. yes! They're in line with sky-high salaries there.

But buying a place in San Francisco is about $800 / sq ft.

Vancouver right in line with that.

Essentially, there's USUALLY a premium on renting, especially when wages are high ( see Fort McMurray ). This is where the term 'throwing your money away on rent' comes from.

Renters don't carry the debt, the risk, or the carrying costs and yet maintain the flexibility of picking up and moving if their neighbour is annoying.

San Francisco's market is high for renters, true. But their real estate market is more or less in line with expectations.


Interestingly, Seattle has a booming corporate tech scene, high salaries and rents are relatively higher than owning there as well.

[quobobo]

Originally Posted by twoNeurons

San Francisco's cost of living is actually quite low compared to Vancouver because wages are much much higher.

It depends. I'm a software engineer and I'm able to save more living in Vancouver. Taxes are quite a bit higher in California than here, and I'd have to pay ~$4k USD for a 1BR in San Francisco compared to ~$1500 CAD here.

That said there are still some local companies that pay terribly here, I agree that SF is more affordable compared to working for one of those.

[GMasterAres]

Median cost of living in Vancouver is 36% lower than in San Francisco. Wages are roughly 28% lower in Vancouver. So cost of living difference is greater than the wage difference therefor on average, it is more affordable to live in Vancouver than in San Francisco.

Now in the tech sector, as the wages go up they start to really go up a lot quicker than in Vancouver because you have higher jobs. For example when you look at Senior Software Engineers or people bumping into higher level management, the wages in San Francisco are as much as 40% higher than in Vancouver so the difference in wage is slightly more than the cost of living difference.

What you have to keep in mind though is that even then the difference is not huge (4%) and as wages go up, people's cost of living tend to start to go up too.

What it means is that statistics don't back the notion that people's wages in San Francisco are so drastically higher compared to those in Vancouver that it makes up for the higher costs of living. That type of opinion and thinking has no basis in actual fact. For the majority of the same jobs in both cities, you would simply have less to live on in San Francisco all things equal compared to Vancouver therefor it is cheaper to live here.


Regarding the whole tech sector in Vancouver thing though, much like the film industry, it is completely contingent on the Canadian dollar compared to the US dollar. The only reason why we're seeing companies move into Vancouver and other parts of Canada is because our dollar has tanked. If the dollar jumped back to par or a bit above, most would close up shop and head back south in a heart beat. You're dealing with US companies making USD but paying operating and capital expenses in CAD so right now getting $1.35 return for every $1 they spend.

Just think about that from a Software Engineering making $108,000 in San Francisco vs $69,900 in Vancouver (median).

The Software Engineer making $108,000 in San Francisco costs US Software Company A $108,000 of their USD
The Software Engineer making $69,900 in Vancouver costs the same US Software Company A $50,375 of their USD

So US Software Company A can get 2 x Software Engineers and still have about $8,000 USD in their bank account, for the price of 1 engineer in San Francisco given current exchange rates.

No-brainer.