Is Vancouver a Legitimate Tech Hub?

[quobobo]

Originally Posted by jhausner

The only reason why we're seeing companies move into Vancouver and other parts of Canada is because our dollar has tanked.

Amazon and Microsoft both made large moves into Vancouver before CAD tanked.

[twoNeurons]

Originally Posted by quobobo

Amazon and Microsoft both made large moves into Vancouver before CAD tanked.

Partly a proximity thing, but my guess is that it was part of a way to increase their talent pool. There is also more competition in Seattle for tech workers. Amazon, Microsoft, Expedia all compete for the same employees.

jhausner, you make good points.

My concern with Vancouver is that it's easy to live here if you're young and single, but there aren't too many options once you consider families with more than 1 child.

There just aren't that many affordable 3-bedroom places around. Even small ones. Relatively few affordable townhomes, almost 0 row-housing and a seeming refusal to anything more creative than condo boxes and McMansions.

Look at what's happening out in Surrey and Langley and a nice diverse use of land. 10m lot sizes. Single-car garages on a SFH.

Sorry if I turned this into a real estate thread, it was not my intent.

[cornholio]

San Francisco metro area is very large and has very affordable parts within easy commuting distances of the employment hubs. There is no reason for someone to live downtown San Francisco or in some Palace in San Jose. Howwever I agree that based on stats I found rents have gone up allot (though fallen the last quarter) in the desirable places. I will politely disagree with those that think Vancouver is a growing tech hub. Sure I am technically a tech worker, but more importantly what I do is outsource workforce management and payroll for other companies. When the US and Canada reports on job growth/losses guess where they get the data? You guessed it. Companies that outsource work force management. Most notably the big ones like ADP etc. I don't have a perfect view of the situation in Vancouver but I can promise you I have a better view then most. And I think the tech scene in Vancouver is never going to amount to much, and a big part of that is cost of living making it increasingly more difficult to attract and retain talent, at low wages. The low dollar is going to make things worse because good talent is going to leave, and based on my personal experience that is exactly what is starting to happen. If you don't have good talent then you might as well flush your money down the toilet, or outsource to India.

[casper]

Originally Posted by quobobo

Amazon and Microsoft both made large moves into Vancouver before CAD tanked.

I think it has very little to do with the CDN and US dollar. Almost to the point of the dollar being a non-issue.

In the tech industry the Microsoft, Amazon, Google, IBM, Oracle, etc of the world simply look for startup that doing neat things that provide value to their overall product offering and then they buy them out. Overnight you end up with a branch office somewhere working on a product.

Take Victoria as an example. The reason Amazon has a presence in Victoria is the did a buy out of AbleBooks. The reason Expedia is in Vancouver is they bought a cruise ship travel agency they liked. The reason IBM has a big presence in Ottawa is they bought out a who bunch of little software companies in that region. The same applied to Google in Waterloo.

Once the local office exists there is more of an internal battle inside the company for say the Vancouver office to win the mandate for a completely new product area over another office elsewhere in the company.

Microsoft in Vancouver as a bit of an exception in they had all of these US educated graduates that they wanted employed near Seattle but could not get them through US immigration.

[twoNeurons]

Originally Posted by cornholio

San Francisco metro area is very large and has very affordable parts within easy commuting distances of the employment hubs. There is no reason for someone to live downtown San Francisco or in some Palace in San Jose.

There's always Oakland, it's like San Francisco's Surrey... but at much more reasonable prices.

[Kwik-E-Mart]

A friend of mine just passed on a tech job posting (more like a joke) where the going rate for someone having similar qualifications (within Canada) is roughly $35/hr -- even in the current economy.

The salary this Vancouver firm has daringly offered: less than the NYC mandated minimum wage (factoring in the exchange rate).

Talk about increasing affordability through housing supply....

[raggedy13]

Here's a somewhat interesting followup to that Vancity Buzz opinion piece: A generation of young people may leave Vancouver because they can't afford to stay
An Angus Reid Poll suggests that 150,000 families (so... 450k people or so?) are considering leaving Metro Vancouver.

I doubt anything so extreme would actually happen, but I do agree that if current trends continue, there will be a lot of young people leaving Vancouver, especially as more Millennials have, or think about having, kids.

I am in this boat myself. I moved to Winnipeg for grad school and have no plans to return to Vancouver, where I will effectively make the same income, but have to pay many times more for housing. My wife and I are expecting our first child, so we're interested in moving back to BC to be closer to our families, but we just can't justify moving back home when you can buy a 3-bedroom house in places like Chilliwack and Kamloops for $200k-300k, and have monthly mortgage payments cheaper than the price of rent on a small apartment in Vancouver. Sure they're not the big city, but they both still have beautiful natural settings and are within an easy drive of family.

[casper]

Originally Posted by raggedy13

Here's a somewhat interesting followup to that Vancity Buzz opinion piece: A generation of young people may leave Vancouver because they can't afford to stay
An Angus Reid Poll suggests that 150,000 families (so... 450k people or so?) are considering leaving Metro Vancouver.

I doubt anything so extreme would actually happen, but I do agree that if current trends continue, there will be a lot of young people leaving Vancouver, especially as more Millennials have, or think about having, kids.

I am in this boat myself. I moved to Winnipeg for grad school and have no plans to return to Vancouver, where I will effectively make the same income, but have to pay many times more for housing. My wife and I are expecting our first child, so we're interested in moving back to BC to be closer to our families, but we just can't justify moving back home when you can buy a 3-bedroom house in places like Chilliwack and Kamloops for $200k-300k, and have monthly mortgage payments cheaper than the price of rent on a small apartment in Vancouver. Sure they're not the big city, but they both still have beautiful natural settings and are within an easy drive of family.

Honestly, this is a good trend. There is nothing wrong with Chillwiack, Kamloops, Victoria, Nanaimo, Squamish and a host of other communities in BC growing and becoming major economic centers in their own right.

[csbvan]

Originally Posted by casper

Honestly, this is a good trend. There is nothing wrong with Chillwiack, Kamloops, Victoria, Nanaimo, Squamish and a host of other communities in BC growing and becoming major economic centers in their own right.

Why do people always suggest that this is what is going to happen? A lot of people won't sacrifice living in the city to move to a small town just to buy a house. Often these towns will not have the jobs or opportunities that they want. They will go to different CITIES instead, outside of BC and maybe outside of Canada. Young people are increasingly mobile, if they want to live in a city, Nanaimo, Kamloops or Chilliwack often won't suffice. Instead they will go to maybe Toronto, Montreal, Seattle, Amsterdam, Berlin, etc. Obviously this isn't true for everyone, but likely for a large proportion of the most desirable young talent, the places that you mentioned are never going to be an option.

[Migrant_Coconut]

Originally Posted by casper

Honestly, this is a good trend. There is nothing wrong with Chillwiack, Kamloops, Victoria, Nanaimo, Squamish and a host of other communities in BC growing and becoming major economic centers in their own right.

Growing at the expense of Vancouver. Good trend for the province, not so good for this city.

[casper]

Originally Posted by Migrant_Coconut

Growing at the expense of Vancouver. Good trend for the province, not so good for this city.

It is also good for Vancouver. A cluster or corridor of cities that are inter-dependent with Vancouver as the anchor is not a bad thing for Vancouver.

[GMasterAres]

It is difficult to compare all tech companies with a single paint brush. You can't completely accurately compare the motives and driving factors of a company like Amazon, Microsoft, or Google to other tech companies. The majority of tech companies are small and have completely different driving factors than big ones.

A Microsoft can absorb dollar changes without huge affects. A smaller tech company can't as easily. So be careful in saying just because X did something it means Y did the same.

That said MS and Amazon did move into the Vancouver area in a larger sense with the dollar on the decline. Had it tanked yet? No. But January 2014 before the Microsoft announcement the Canadian dollar was bumping $0.90 and trending to the $0.80 cent mark. Also at that time most financial projections had it dropping in the next few years as low as $0.75 cents, so Microsoft and Amazon I'm sure could see the writing on the wall.

Was it the only factor? Likely not, and for them likely not the biggest factor, but it was a factor I'm sure. Had the CAD been still at $1.10 or par, I'm sure these migrations to Vancouver would have been smaller scale.

[GMasterAres]

Originally Posted by csbvan

Why do people always suggest that this is what is going to happen? A lot of people won't sacrifice living in the city to move to a small town just to buy a house. Often these towns will not have the jobs or opportunities that they want. They will go to different CITIES instead, outside of BC and maybe outside of Canada. Young people are increasingly mobile, if they want to live in a city, Nanaimo, Kamloops or Chilliwack often won't suffice. Instead they will go to maybe Toronto, Montreal, Seattle, Amsterdam, Berlin, etc. Obviously this isn't true for everyone, but likely for a large proportion of the most desirable young talent, the places that you mentioned are never going to be an option.

People that would do that will do that anyway. Affordable or not. Anyone willing to up and move to a new city/country will find some reason to do so in the end. Truth is the majority of people aren't like that and saying "young people" as if all young people are that way is not entirely accurate.

Migration statistics have held fairly steady over the past 40 years and in the youth market we have seen a net-loss but we're talking 1,571 in the 20-30 range in 2013 (last stats I can find).

That means in the 20-30 year bracket, Metro-Vancouver lost 1,571 people. Now in context, the 20-30 year bracket in 2013 was about 330,000. So 1,571 = 0.5%.

So we officially lost 0.5% of the 20-30 year bracket.

That's a pretty small number and means the majority of people ages 20-30 (99.5% of them) stayed.

[GMasterAres]

Originally Posted by raggedy13

Here's a somewhat interesting followup to that Vancity Buzz opinion piece: A generation of young people may leave Vancouver because they can't afford to stay
An Angus Reid Poll suggests that 150,000 families (so... 450k people or so?) are considering leaving Metro Vancouver.

I doubt anything so extreme would actually happen, but I do agree that if current trends continue, there will be a lot of young people leaving Vancouver, especially as more Millennials have, or think about having, kids.

I am in this boat myself. I moved to Winnipeg for grad school and have no plans to return to Vancouver, where I will effectively make the same income, but have to pay many times more for housing. My wife and I are expecting our first child, so we're interested in moving back to BC to be closer to our families, but we just can't justify moving back home when you can buy a 3-bedroom house in places like Chilliwack and Kamloops for $200k-300k, and have monthly mortgage payments cheaper than the price of rent on a small apartment in Vancouver. Sure they're not the big city, but they both still have beautiful natural settings and are within an easy drive of family.

And we had a staffer move from Winnipeg to Vancouver and has no plans to move back. So that family moving here negated your moving away.

That's the simple life of economies changing and shifting over time. People move where the work is. Unfortunately when industries change in a city, people are more often not willing to change careers so they move to cities where they can maintain their current career. At the same time in other cities the same is happening and those people are moving here.

Commodities are down so you have mining companies, oil companies, etc., starting to vacate BC and Alberta. On the flip side you have film/movie companies, tech companies coming to BC. So mining consultants leave Vancouver and film crews come to Vancouver.

The problem with these types of polls is they take a point-in-time perspective without any actual context. I'd put more faith into this Angus Reed poll if they were taking it every single year for the last 20 years and we could compare across the years and see actual trends.

Are their findings alarming or a change? Or is it the baseline and in any given year we'd fine the same amount of families considering moving regardless?

That's the problem with putting too much faith in point-in-time or single-use polls, or media talking points.

Finally, they don't tell the whole story. You moved away because of school and stayed away effectively because of income and job/lifestyle prospects. But you're considering moving back to BC and the Vancouver area because of family. So clearly to you family > other factors. Are you moving back TO Vancouver? No but you're still planning on moving back to BC which puts your tax dollars in the same pool.

If we want to look at affordability in Vancouver itself though, I've discussed this at length in other threads. The factors at play here are simple, (1) no space to build and (2) big city reaching critical mass.

There's no real way around it and no way to make Vancouver affordable. I don't care what the politicians and media jump up and down saying. Vancouver has no more space to build so land will just go up and up like it does in every other city around the world with no space. And as the population increases, so do the prices for things like single family houses which don't make use of efficient space. And did I mention no space?

What screws our views is that Vancouver, unlike other cities in Canada isn't one giant amalgamation. So we compare "Vancouver" to Toronto, or Winnipeg, or Edmonton, or Calgary, or Montreal when we really should be comparing "METRO-Vancouver" to those cities. When you look at affordability in METRO-Vancouver to Toronto, Calgary, Montreal, etc., we aren't as bad as people make out.

That's what trips nearly everyone up. Not comparing Apples to Apples. "VANCOUVER = downtown Metro-Vancouver" and it is expensive to live downtown in any city.

[Migrant_Coconut]

Originally Posted by jhausner

That's what trips nearly everyone up. Not comparing Apples to Apples. "VANCOUVER = downtown Metro-Vancouver" and it is expensive to live downtown in any city.

You had some good points until this came up. Marpole and Dunbar are in no way "downtown."

[Bcasey25raptor]

Originally Posted by Migrant_Coconut

You had some good points until this came up. Marpole and Dunbar are in no way "downtown."

Considering how tiny Vancouver CITY is compared with the greater vancouver area, it might as well be treated as the city centre.

Vancouver city has 114 sq km of space and over 600k people.

Do the math.

[cornholio]

Originally Posted by Bcasey25raptor

Considering how tiny Vancouver CITY is compared with the greater vancouver area, it might as well be treated as the city centre.

Vancouver city has 114 sq km of space and over 600k people.

Do the math.

Are you saying the distant suburbs are affordable? You may want to take a peek because things sure changed over the past 6 months. The sentiment is increasingly negative on the ground, and that includes in the business world where decision makers tend to be dissociated from these problems.

[Bcasey25raptor]

Originally Posted by cornholio

Are you saying the distant suburbs are affordable? You may want to take a peek because things sure changed over the past 6 months. The sentiment is increasingly negative on the ground, and that includes in the business world where decision makers tend to be dissociated from these problems.

No i did not say that.

However greater Vancouver vs Greater Toronto for example are much more comparable so the statement above is quite accurate.

SFH prices are high everywhere in metro Vancouver specifically due to demand and the lack of new housing stock.

Yes foreign buyers are part of the problem. But even without foreign buyers, SFH prices would be very very high here.

Not $1 millon dollars high, but an average house cost of $600k-$700k in metro Vancouver is quite likely to be a reality in those circumstances.

[SFUVancouver]

Originally Posted by Bcasey25raptor

Not $1 millon dollars high, but an average house cost of $600k-$700k in metro Vancouver is quite likely to be a reality in those circumstances.

I don't think those numbers are correct any longer.

Sales of detached properties in January 2016 reached 1,047, an increase of 34.1 per cent from the 781 detached sales recorded in January 2015. The benchmark price for detached properties increased 25.9 per cent from January 2015 to $1,273,100.

Greater Vancouver Real Estate Board, January 2016 Monthly Statistics Report

The regional statistics beginning on page 3 are fascinating, but it's also confusing that Surrey doesn't seem to be listed as a separate line item for each housing category. (PDF link)

The Fraser Valley Real Estate Board puts out its own stats and by its numbers in January 2016 the Lower Mainland had a benchmark price for a detached SFH of $1,008,900, with the benchmark price for SFHs south of the Fraser pegged at $689,300. Anyway, stats hare here: http://www.fvreb.bc.ca/statistics/Package%20201601.pdf

[Black Box]

Vancouver is not much of a tech hub at all. Hub implies it's a big deal. For film, yes. Seattle is barely a tech hub itself.