1 Transit Infrastructure: Underinvestment in roads and public transit infrastructure
2 Housing Affordability: Poor housing affordability
3 Port Expansion: Land scarcity for trade-enabling port expansion
4 Productivity Levels: Low labour productivity levels
5 Educational Attainment Rates: That fall short of the Scorecard leaders
6 Tax Rates: High marginal effective tax rate on capital
7 Head Offices: Fewer head offices than cities of comparable size
How many times have you thought: I’d love to sit outside but it’s kinda noisy and stinky with the cars right there?
This is my fourth post in a series on transforming our shopping districts into more pleasant places to get to safely and hang out in.
We’ve reached an awkward moment in Vancouver’s history where trips by active transportation and transit are increasing without updating our shopping districts to accommodate those modes as well.
If as of May, 2015 50% of all trips in Vancouver are made by walking, bicycling, or transit and we haven’t updated the safety for those modes in any of our shopping districts yet, is this affecting how well businesses are doing? It seems it must be.
Janette Sadik-Khan, likening a City to a business for a moment, said about updating streets: “If you didn’t change your major capital asset in 50-60 years, would you still be in business?”
Now that an interesting amount of data from best practices elsewhere confirms these changes are good for business, it is time for the City to plan improving the streets in our shopping districts with updates such as wider sidewalks including bulges, raised crosswalks, mid-block crossings, protected bike lanes and intersections, better bicycle parking, car-free plazas, space for transitioning between modes, and other additions.
Successful business owners like Jimmy Pattison always talk about exceptional, friendly customer service being the most important step for companies. What they really mean is that the whole customer experience – from the first website visit, to ease of getting there and getting through the door, to the impression the place is clean and appealing indoors and out, through the direct customer experience until the good-bye/see you soon – should be at least safe and pleasant or even fun.
Every successful business also adapts to the times to continue to be desired. They adjust to new ways their customers reach them (both online and via other modes of travel). Businesses are not served well by being seen as on the wrong side of history on the issue of safer streets.
Reach out to the successful ones who intend to be there throughout and after these transitions. The businesses who do well for many years do the following:
- keep their awnings clean, readable, and free of green fuzz,
- ask the City to install bike racks near them by tweeting details @CityofVancouver #311,
- make sure the doors, floors, tables, chairs and bathrooms are clean,
- greet customers with a smile,
- make an effort to get to know regulars,
- are in tune with what menu items or stock their customers really want,
- have great relationships with their suppliers to get those items on a consistent basis,
- handle complaints graciously – often with follow-up check-ins,
- and always say please and thank you.
What we can do to help local businesses – especially through this transition:
- make an effort to thank and support local businesses and their owners – especially the ones who support safer streets for all,
- avoid lecturing (or “You should…” sentences to) business owners who have no intention of changing; it’s a waste of energy; they will learn the hard way,
- go to the business manager or owner before complaining elsewhere if you have any problems: Assume If you like us, tell your friends; if not, tell us! is the motto of every business,
- spread the word about great experiences in person, on social media, and with your friends and co-workers,
- every time you visit, casually mention to the server what mode you took to get there,
- notify the City if you see loose bike racks, street lights out, plastic bags stuck in street trees, etc. by tweeting the details to @CityofVancouver #311,
- and always say please and thank you.
The City, together with residents, business owners, employees, and our visitors will need to pitch in to improve the health, safety, economic viability, and delightfulness of our shopping districts.
1) Bikeshare system area
On February 24th, the City of Vancouver announced the Summer 2016 launch of our first bikesharing program.
They explained that the initial geographical area where bikeshare bikes can be picked up/dropped off would roughly be Arbutus to Main Street and 16th Ave north to, and including, the downtown peninsula. I thought this was odd. Why Arbutus? It’s not bike friendly. Why didn’t they start at Cypress? Improvements on Cypress Street should be completed before May. It would be much safer to ride along.
2) Arbutus Corridor announcement
On March 7th the City announced a major deal to purchase the CP railway along the Arbutus Corridor and, once the old tracks are ripped out, it will become a stellar active transportation corridor of green space.
A-ha! Oh-ho! Arbutus as a western boundary within the new bikeshare system area makes more sense now. It felt like some puzzle pieces in my head were coming together. Hadn’t a City Councillor recently talked about trail connectivity?
3) What does the map say?
The City plans to upgrade active transportation on all 3 False Creek bridges within the next 5 years, G-d willing. Remember that rendering of 2-way walking paths and 2-way bicycle lanes down the centre of the bridge? Some of us want that type of improvement sooner rather than later, of course. Ask anyone who wants to walk or ride a bike to work downtown and lives in Fairview or Shaughnessy.
I always urge pedestrians and bicyclists to avoid Granville Bridge entirely for now as it’s very unsafe and unpleasant to use. There’s a narrow space for the 2 modes to share that to get to it, in some parts you have to cross traffic going quickly around a curve. Worse, I understand 2 people in wheelchairs cannot easily pass each other in that narrow space. They have to maneuver to get around each other over the deafening traffic going 80kph. I’m embarrassed by that.
One person who shall remain nameless whispered, “follow the train tracks”.
I opened maps.google.com, which took me to google.ca/maps, and followed the faint train tracks along Arbutus north from 16th, doo doo doo, to 6th Ave where I had seen bunnies many times, doo doo doo, I hadn’t really thought about where the train goes after that, doot da da doo, east to Fir Street. I froze. Ooo. Fir & 6th. That’s very close to the Granville Street Bridge!
I visualized the possibilities. My first thought: Lord’s. Oh Lord, that place has beautiful shoes! Imagine taking a stroll or riding bikes on the middle of the Granville Street Bridge surrounded by trees and gentle people to check out the store’s fascinators, stop for a nosh somewhere, smell the flowers at GIF, and get some more nail & cuticle butter at Rocky Mountain Soap Company.
Going to South Granville by booking a car, taking a bus, or riding over Burrard Street (and then what?) just doesn’t seem appealing. But the Arbutus Corridor land purchase is looking more appealing every day.
On Tuesday I cracked myself up in prep for an evening with Janette Sadik-Khan (JSK), former NYCDOT Transportation Commissioner and author of Streetfight: Handbook for an Urban Revolution. Here are the highlights.
Whether you livestreamed it under the covers or attended at the Vancouver Playhouse, you probably had at least one moment of inspiration, imagining the delight that street transformation can bring to where you live. What if the City of Vancouver became the largest real-estate developer in town like JSK was for NYC?
Her statistics were all US based but we’re used to that. When we translate their numbers to our population, the information is uncomfortably more relevant than we would like. She included in her slides pictures of Vancouver and local examples to go with them. For those of us who attended her last visit, a few of the NYC successes were the same and still had a stunning, audible impact on attendees; she has more data to back her up now. She is confident and motivating.
Gordon Price is consistently a top-notch moderator and interviewer. He was a gracious Canadian host, animated, and entertaining. He had a great rapport with JSK. Price asked the pertinent questions and got solid answers.
What’s as interesting is who attended. At $5 a ticket, there were all ages and abilities present. I wondered how many business owners or BIA staff were there. Did Nick Pogor attend?
Unfortunately, I didn’t catch all of the electeds who introduced themselves from my perch on the balcony. I was pleased to see Vancouver’s Deputy Mayor Heather Deal front and center, who is also a Councillor Liaison to the City’s Active Transportation Policy Council and Arts & Culture Policy Council, among others. It was announced for the first time publicly that Lon LaClaire is the new City of Vancouver Director of Transportation. He introduced JSK. At least one Park Board Commissioner attended.
There was at least one City Councillor from New Westminster, Patrick Johnstone there – a fan of 30kph. I was tickled that Nathan Pascal, City Councillor for Langley City was there in his first week on the job! I was even more delighted to hear that the Mayor of Abbotsford Henry Braun was there. It symbolizes a shift in decision-makers toward at least open ears and at most safer, healthier city centres in the Lower Mainland.
The first rule of Hollywood is: Always thank the crew.
JSK started by thanking the 4500 within New York City’s Department of Transportation. She acknowledged that they implemented the changes her team tried – often quickly. Being fast and keeping the momentum up is key.
Interview well. Be yourself. Be bold.
When JSK was interviewing for the top transportation job with then NYC Mayor Michael Bloomberg, he asked: Why do you want to be Traffic Commissioner? She answered: I don’t. I want to be Transportation Commissioner.
A City’s assets – the public realm – need to reflect current values. Invest in the best use of public space.
JSK on streets: “If you didn’t change your major capital asset in 50-60 years, would you still be in business?”
“We transformed places to park [cars] to places people wanted to be…we created 65,000 square feet of public space with traffic cones.” “Broadway alone was 2.5 acres of new public space.”
JSK talked about the imbalance between the space for cars and space for people. Crowded sidewalks of slow walking tourists that fast-walking New Yorkers were willing to walk in car lanes to pass or avoid. In Vancouver, we already see this imbalance in our shopping districts and entertainment corridors.
She appreciated working for a Mayor who would back her up on her bold suggestions and who asked her to take risks because it was the right thing to do.
Consultation + Visualization = Education + Transformation
“People find it hard to visualize from drawings and boards. Create temporary space and program it.” Basically: traffic cones, paint, and planters are your friends.
“We need to do a better job of showing the possible on our streets.”
“Involve people in the process…Just try it out. Pilot it. We [all already] know the streets aren’t perfect.”
She estimated that once [in 5-10 years] shared, driverless cars are operating in our cities, most of our on-street parking won’t be needed. In the meantime, one of the many community requested programs is time-of-day based pricing for on-street parking. Of course, the higher turnover of vehicles is better for business.
Even better for business is putting in bicycle lanes. Some of the areas where businesses were most opposed have some of the highest bike volumes now.
It takes 4 things to increase bicyclist volumes significantly and NYC does them all.
- a network of bicycle infrastructure (and traffic-calming design)
- lower speed limits (and traffic-calming designs help)
JSK saw 3 of the above steps to fruition. Mayor de Blasio lowered speed limits to 25mph in November, 2014.
When Broadway closed to cars and opened to people, in Midtown:
- pedestrian injuries decreased by 35%
- motorists injuries went down by 35%
- vehicle travel times increased by 17%
- protected bike lanes brought a 50% increase in sales
Ciclovias, Car-free Spaces and Street Art
“The Public Domain is the Public’s Domain.”
“We asked the community where they wanted plazas and they took ownership of them.”
“The canvas of our streets was transformed by artists.”
Ciclovias involve closing streets to vehicles and allowing people to roam on them via any active transportation mode, often on weekends. In NYC it’s known as Summer Streets. Every Saturday in the summer from 7am-1pm they have about 300,000 people take part. Small businesses along the way have seen sales increase by 71%.
On making parts of Robson Street a car-free space, JSK said: “Try it; you’ll like it.”
Three words: Dedicated. Bus. Lanes.
These are enforced by cameras. Green traffic lights are synchronized with bus use. Like in Colombia, they have off-board fare collection. [Senior planners at TransLink would love dedicated bus lanes on Georgia Street, Hastings Street, or Broadway in Vancouver.]
NYC needs to up our game on the following:
- more bikeshare next to low-income housing and public housing
- #VisionZero “Our streets are sick. Thousands are dying and people are blasé about it. In any other field you would lose your job if that many died.”
- seamless, integrated, multi-modal transportation (all on one card/app) like in Helsinki
- congestion pricing. The state capital is less urban and turned down their request for it. Plus people hate both “congestion”and “pricing”. The rebrand is MoveNY. JSK said paying more to drive to Manhattan is “inevitable”.
Migration Astonishment: 1M here, 1M there
I was astonished (and by the looks of it so was Gordon Price) that NYC estimates that they will have 1 million more people living there by 2030. That’s the same number we expect in Metro Vancouver by 2030! Clearly, the impact here will be a much larger transformation. There’s a lot of work to do.
JSK advised: “Leverage the density. Recognize the value of density.”
“People want safe streets (and affordable housing) and are ahead of politicians and the media.”
“Inaction is inexcusable,” JSK said.
There was much anticipation before the federal budget was unlocked yesterday. Many of us were particularly interested in how much money would go towards transit investments in our region and whether the 33.3% x 3 percentage split for transportation infrastructure amongst federal, provincial, and municipal governments would be adjusted.
At first I was underwhelmed by the initial commitment of $370M for transit projects in Metro Vancouver. It doesn’t seem like much for the next 3 years. I have been assured by those in the know it’s a great start for the planning and design of projects in The Mayors’ Plan (pedestrian and bicycle improvements, subway and LRT, for instance) with more funding to come after that. That depends on re-election, of course.
The federal government also announced it will cover up to 50% of transit project construction costs. It seems to me, assuming the provincial portion remains at 33% and the max of 50% doesn’t depend on the provincial portion changing*, 100%-50-33=17% for municipalities – a long overdue improvement in the funding structure.
My federal budget scoop on Monday about The Mayors’ Plan, directing our regional requests for federal funds, continues to be good scoop. The Mayors’ Council put out a PDF statement on the federal budget yesterday. The federal Infrastructure and Communities Minister Sohi meets our Mayors’ Council tomorrow. My source tells me we will get more details after that meeting. Stay tuned.
*The BC provincial election is May 9, 2017: contact BC political parties now urging them to put sustainable transportation in their platforms.
From the Daily Scot:
I’ve had the pleasure of knowing Founder and Co-Executive Director of LOCO BC Amy Robinson for quite a few years now through my sister. Amy and her team are passionate about all things great about local businesses, their under-appreciated economic contributions, how they support local jobs and communities, and all the great sustainability aspects that come with supporting people in your own backyard.
Amy and her team put together the following article. Please also check out what LOCO BC does by visiting their website: www.locobc.com
Will Densification Bring an End to Independent Business in Vancouver?
by Amy Robinson
Our unique neighbourhoods and local business community are at risk of gentrification in the race to densify our housing stock without including better planning for ground floor retail spaces.
Ground floor retail businesses influence how we interact with our city, whether walking, cycling, driving or on transit. Development along commercial corridors is increasingly creating a gentrified retail environment and Vancouver risks losing the unique character of its neighbourhoods.
Residents feel the change when new condos bring lifeless, large format retail spaces to their communities. When Shopper’s Drug Mart set up shop on Main Street at the corner of 18th, residents appealed to the company to make more of an effort to fit into the neighbourhood.
Residents are asking that new retail on the street better reflect the historic and eclectic character of one of the city’s oldest streets. “We can’t stop development, and that’s fine, but they are one of the first, not big box, but chain kind of stores to go in on Main Street, so they will have a big influence on how future ones might think that they’re going to develop there.”
The company replied to community efforts by saying they were simply leasing a space in a development whose design was approved by the city.
Ironically, one independent business that attempted to make another commercial condo space further down Main Street more unique was taken to task by the city. Popular independent restaurant East is East (Chai Gallery Restaurant) erected a wooden awning to reflect their business concept, one “built on using natural, sustainable materials in all aspects of the restaurant – in both design and cuisine”. The company was denied an occupancy permit that delayed opening. The restaurant refused, saying the city was “forcing us to change our nature-inspired design and use non-organic materials compromises the heart of what East is East stands for…[we are] building a new and expanded venue to bring world-class music, art and culture to Main St. However, the city planning department is demanding that we change our façade and outdoor patio to match their sterile vision of Main St.”
Chai Gallery’s sign may not be your thing, but it represents a fight to save the independence and spirit of local business in the city. In Hastings Sunrise, Dunbar, Marpole, South Main Street, Strathcona and other parts of the City, entire City blocks of local, independent retailers are being evicted to make room for new developments that provide increased housing density. That loss means that unique independent businesses are often being replaced with chain stores that leak wealth from our local economy.
Local businesses contribute more to our economy because their ownership is here (circulating profits), their management is here (circulating wages from good jobs), and they more often use local suppliers (circulating their purchasing dollars). Big chains have dispersed shareholders, corporate head offices elsewhere, and centralized supply chains that don’t support local suppliers for their marketing, web development, office supply, banking and other needs. The vast majority of dollars that flow into multi-national chain stores flows right back out of our community. Research shows that when consumers spend $1 with a chain, only 18c stays in the community, versus 45c for independent business. That’s 2.6x more local recirculation of dollars by local businesses!
Another example of the fight for unique, independent retail is being fought on West Broadway. Block after block of vibrant local businesses are being replaced with four and five story developments. Popular locally owned stores like Kids Books are being forced to move in order to make way for new development. One only has to look at similar developments east and west of that block for an example of what’s coming. These developments are filled with Shopper’s Drug Mark, McDonald’s, Tim Horton’s and the like. The convenience of these types of stores comes at the cost of local economic development as well as neighbourhood character.
Some of the constraints to local businesses relocating to these new developments are:
- The floor plates are designed for larger format chain stores who can afford large lease contracts
- Developers require proof that the tenant has several years worth of rental income in the bank
- Rents are too high in newly developed properties
How do we create opportunities for local economic development as we grow our cities? We’d like to see Cities need to search for best practices, and also engage residents and businesses into a conversation about what kind of planning is needed to keep independent businesses in our communities. Without this effort we risk losing them and the ways they create wealth, forever.
A link to The New Yorker from Tim Pawsey: an article with “echoes that resonate.” Some assorted quotes.
Will the government’s efforts to pierce the veil of anonymity in real-estate transactions also burst the Manhattan housing bubble?
Last year, when consultants from Deloitte surveyed Swiss watch executives, eighty per cent of them indicated that demand was down “due to anticorruption legislation”in China. This question of how one country’s graft might fuel the economy of another arose again last week, when the U.S.Treasury Department announced an initiative to track the secret buyers behind the trade in luxury properties in New York City. …
Sleek and skinny super-luxury buildings spring up around Central Park, and single apartments sell for nine-digit figures, adding credence to the caricature of Manhattan as a club for global plutocrats.
For many New Yorkers, this is not, in fact, a godsend: exorbitant prices in the tens of millions of dollars pull up prices in the lower end of the market, driving working- and middle-class people out of the city. And as a contemporary Jane Jacobs might observe, had she not been priced out of the West Village, billionaires don’t necessarily make good neighbors.
Because luxe Manhattan real estate generates a good return, many people don’t actually live in their investment properties.If they’re not residents, they’re paying no local income tax here, and because of a steep tax abatement on certain luxury properties, they can often pay very little in real-estate taxes. …
On the upside, you won’t actually see these neighbors very often—because they aren’t here. According to the Census Bureau, throughout a sweeping stretch of midtown—from Forty-ninth to Seventieth streets, between Fifth Avenue and Park—nearly one in three apartments is completely empty at least ten months a year.
… real-estate ownership in the city “can be made as untraceable as a numbered bank account,” a developer concludes,“The global elite is basically looking for a safe-deposit box.” …
Today, while banks are obliged to institute “know-your-customer”safeguards against money laundering, real-estate professionals are not. …
The new regulations will oblige them to be interested. The effort will begin by focussing on two real-estate markets—Manhattan and Miami—and requiring title-insurance
companies to identify the “beneficial owners” behind the shell companies and L.L.C.s involved in a transaction, in order to determine who the actual buyers are.This
information would then be reported to Treasury. If officials can definitively establish that any of these apartments or houses were purchased with funds that were misappropriated or otherwise tainted, there could be a basis for seizing the property, through the Kleptocracy Asset Recovery Initiative. …
There’s no reason to think that, on its own,Treasury’s efforts to pierce the veil of anonymity in real-estate transactions might also burst the Manhattan housing bubble.
But if I were a real-estate professional who catered largely to wealthy foreigners,I’d be thinking about the lesson of those Swiss watchmakers.
Full article here.
Much talk about this topic, and so much to say. It is my opinion that in this world, massive forces are at play, even in our tiny soggy corner. And it is no accident that motordom is challenging at every turn.
First the final report from SFU’s “Moving In a Liveable Region”. It nicely covers the unprecedented transit referendum we held in Metro Vancouver.
As to lessons learned: “In a country where investments in infrastructure are generally made without direct public voting (though not without consultation), Metro Vancouver’s transit and transportation referendum is a political anomaly.
For campaigners and transportation professionals who worked to secure a positive result on the transit and transportation referendum, the No vote was a great disappointment. Many supporters were students, volunteers, low-income transit users, nonprofit workers, and young professionals.
In hindsight, the result was not particularly surprising: Asking voters whether they want to pay more taxes, with only 10 weeks to explain the benefits they will receive in return, is a nearly impossible task, as many visiting American transportation experts had forewarned. A global survey of referendum timelines indicates that 10 weeks was unusually short for a campaign on such a complex issue, and our early research revealed that opponents of transportation funding usually have an easier campaign (Weyrich and Lind, 2001).
The mayors knew this, but felt they had no choice; it was a vote or the prospect of no funding for transportation for years to come. ”
Second: since transportation is largely dependent upon fossil fuels, and in some cases is transporting fossil fuels, a look at the enabling product is worth your time: ” Investors managing some $2.6-trillion (U.S.) in assets have signalled their intention to shift focus away from fossil fuels, a report released at a United Nations climate session this week states. ”
Third: Who pays for roads? Yet another report (this time from the US) that comes to the same conclusion as so many others — a conclusion that never seems to make it into public consciousness. (Bike-haters: I’m lookin’ at you.)
But this massive subsidization goes mostly unnoticed, and affects us all, and most transportation decisions.
‘“We need to dispel the myth that user fees are paying for the building and maintenance of our road network. The reality is that these funds are barely covering a fraction of the cost,” said Gabe Klein, SVP of Fontinalis Partners, and former Commissioner of Transportation for Chicago and Washington, D.C. “The highest return on investment is on bike, pedestrian and transit projects,” he said.’
Thanks to Todd Litman for sending this around.
Fourth: who’s profiting from motordom? Well, the short answer is that lots of corporations profit.
But here’s a glimpse of just one corporation, and the profit from just one of its product families. And if people have the option to switch to transit, biking or walking — some of this goes away. It’s a powerful incentive to the rich and powerful to keep and expand the status quo of free (or subsidized) roads and lots of them, and to battle investment in walking, biking and especially the big one — transit.
On the Ford F-150, -250 and -350: “The gross profit on each pickup is about $8,000. If Ford can continue selling more than 700,000 trucks a year, that’s a $5.6-billion cushion.” Yearly. Every year.
Ken Ohrn | Cypress Digital | 604-307-8052
A major transformation is underway. The tipping point has been reached. Everywhere, it seems, but in Canada, and particularly in BC.
The way others produce their energy is rapidly changing, with solar energy rising, and fossil fuels declining. The power plants may bear similar construction costs, but solar’s no-cost supply of an essentially limitless clean source energy is the key factor in it’s long-term economics.
Even with the Pope’s recent elevation of climate change action into the realm of moral imperative, our Federal and Provincial governments focus squarely on that which is in decline economically and morally — fossil fuels. And any chance to become a leader on design or manufacture of new-era energy technology is quickly disappearing. It’s a massive loss of economic opportunity; lost, I believe, due to pure partisan dogma.
There will be lots of Canadian jobs some day in changing our energy system, but it will likely involve contractors, designs and equipment sourced elsewhere.
Renewable energy will draw almost two-thirds of the spending on new power plants over the next 25 years, dwarfing spending on fossil fuels, as plunging costs make solar the first choice for consumers and the poorest nations.
Solar power will draw $3.7 trillion in investment through 2040, with a total of $8 trillion going toward clean energy. That’s almost double the $4.1 trillion that will be spent on coal, natural gas and nuclear plants, according to a forecast from Bloomberg New Energy Finance.
The figures show the traditional dominance of coal and natural gas suppliers will slip in the coming years as cheaper renewables mean developing nations can tap less-polluting sources to meet their swelling energy needs. The forecast from New Energy Finance also indicates that coal will remain an important fuel, suggesting policy makers must take further steps to control greenhouse gases.
It’s hardly an original observation: Whenever the “tallest building in the world” rises up, the world economy goes into a downfall. It’s true even in individual cities, like Vancouver.
The tallest buildings in the British Empire, the Dominion Building (1910) and the Sun (or World) Tower (1912) respectively, were completed just in time for the Crash of 1913; the Marine Building (1930) was opened just in time to go bankrupt in the Crash of ’29, and Park Place (1984) got swept away in the downtown after 1981.
The Real Deal updates the international list: Why this 2,073-foot Chinese building could be an omen of economic doom, and provides a timeline of other towers that got hit in economic gales.
The newly completed 2,073-foot-tall Shanghai Tower is officially the second-tallest building in the world (behind Dubai’s Burj Khalifa) and the tallest in China.
Equitable Life Building (1873) and The Long Depression, 1873–1878
The 142-foot building was the world’s first skyscraper. (You could stack 14 of these on top of one another, and they still wouldn’t be taller than China’s new Shanghai Tower.)
Auditorium (1889) and New York World (1890) and the British banking crisis, 1890
Masonic Temple, Manhattan Life Building, and Milwaukee City Hall (1893) and the US panic marked by the collapse of railroad overbuilding, 1893
Chicago’s 302-foot-tall Masonic Temple, the 348-foot-tall Manhattan Life Building, and the 353-foot-tall Milwaukee City Hall coincided with the US panic of 1893 marked by the collapse of railroad overbuilding.
It also overlapped with a string of bank failures and a run on gold.
Park Row Building and Philadelphia City Hall (1901) and the First stock market crash on the NYSE, 1901
Durning chooses this from CityLab:
How super-luxury apartments became a major global investment tool.
Glass and steel tributes to the lords of industry and finance are sprouting up fast on the south side of Central Park. The price points might be extreme. But they also illustrate a larger trend in the post-crisis housing market: while spending on residential construction in New York City grew by 73 percent in 2014, the number of new units only grew by 11 percent,according to the New York Building Congress. Here’s how NYBC PresidentRichard Anderson put it to Marketplace:Just 5 or 10 years ago, “… it was more a range of housing, more outer borough housing, more affordable housing. Now, we’re spending more money but getting less housing units.” …
“Sometimes we mistake a real good for a financial good,” says George McCarthy, an economist and president of the Lincoln Institute of Land Policy. “And unfortunately, housing is both. It’s a real and a financial good.” …
That such a large quantity of global capital is seeking real estate assets in cities like New York, San Francisco, Los Angeles, Miami Beach, Chicago, Boston,Seattle, Washington D.C., Sydney, London, Singapore, and Dubai means that the “laws” of housing supply and demand are not functioning like the simple model presented in an introductory economics textbook. According to the prevailing theory, adding more housing supply at any price point should ease the upward pressure on rents across the board, and ultimately lower prices. But the overseas demand for such housing assets, for both investors and buyers, has of late been basically insatiable. In Manhattan, Billionaire’s Row is one very shiny example. …
As long as the demand for such “safe deposit boxes in the sky” remains strong, the overriding economic incentive for developers in these cities will be to build for the global super rich. Some buy them to live in, but also as an investment asset (though many are apparently underoccupied). At a time when tight credit, tough mortgage requirements and stagnant wages have excluded many from the housing market, purchasers of New York ultra-luxury condos nearly always pay in cash, says Liebman. …
In addition, land prices in the hottest markets are high, which makes funding more affordable projects unattractive or even impossible for private developers. The concern is that super-luxury developments could make things even worse, driving land prices higher and fomenting a virtuous cycle for investors who view high-end real estate as a constantly appreciating asset—unless and until it’s a bubble that goes pop. …
… adding new capacity can no doubt release some of the upward pressure on rents. But what many of the world’s hottest global cities are currently discovering is that left to its own devices, the market is adding only a relatively small amount of supply concentrated at the very top of the market, which doesn’t do much, if anything, to help keep rents more affordable across the board. In reality, it could very well be making things worse….
… those in the housing debate who are focused solely on supply seem to miss the current contours of the market they so desperately want to unleash: the influx of massive amounts of global capital has turned certain real estate markets into a speculative asset, driving up the value of land and housing and making affordable housing less, and not more, viable.
During the pre-crash mortgage boom, the prevailing view was that easy credit and lax lending standards would help poor households achieve the American dream of owning a home. Now, the breakneck construction of housing for wealthy people is touted as the improbable solution to affordable housing for everyone else. But today’s market mostly works for those who can pay. Too many Americans are straight-up broke. Global investors are ravenous. The rent is, indeed, too damn high.
Janis Magnuson asks: What do you think a similar analysis would find in Canada/Vancouver?
By Richard Florida, from CityLab.
For the first time, economists have put a price tag on restrictive urban land use policies.
While we know that cities and metro areas contribute massively to economic growth—the nation’s 380 plus metro areas generated $14.6 trillion in GDP in 2012, about 90 percent of the total—we know a great deal less about which factors limit the growth of cities and metros. …
The dearth of affordable housing options in superstar cities like New York, San Francisco and San Jose (home of Silicon Valley) costs the U.S. economy about $1.6 trillion a year in lost wages and productivity, according to a new analysis from economists Chang-Tai Hsieh of the University of Chicago and Enrico Moretti of the University of California at Berkeley.
… the economists’ research examines the geographic allocation of workers across the United States, and tests the following proposition: What might happen if workers were free to move to the cities and metros with the most robust economies, where they could be most productive, thus fueling even greater productivity and growth for the U.S. economy as a whole? To get at this, Hsieh and Moretti develop a number of alternative scenarios based on the ability of workers to move to and settle in these highly productive metros. The exercise leads to several intriguing findings.
… they find that roughly 75 percent of the nation’s economic growth between 1964 and 2009 came from a relatively small group of Southern metros and 19 other large metros. Even though superstar metros like New York, San Francisco, and San Jose created great wealth in sectors like finance and high-tech, nearly all of those gains were eaten up by the wages used to pay for higher housing costs. … As the authors point out, “the main effect of the fast productivity growth in New York, San Francisco, and San Jose was an increase in local housing prices and local wages, not in employment.” …
The crux of the economists’ analysis is their models, which create an “alternate universe” where workers can move freely to where they can contribute the most to the U.S. economy. They note the substantial wage differentials between the superstar cities of New York, San Francisco and San Jose and others over the past half-century. To correct for this, their models essentially reallocate workers in today’s economy according to the prevailing wage back in 1964. Based on this, they find that employment in New York would increase by nearly 800 percent, while it would grow by more than 500 percent in San Jose and San Francisco. …
How to begin to fix the problem? Here the authors offer a welcome corrective to the naïve notion promoted by too many urban economists that simply loosening housing restrictions and overcoming urban NIMBYism will magically solve the problems of America’s superstar cities.
Moretti and Hseih rightly point out that a big part of the solution lies in transit. As I have long argued, transit is a key part of the great reset required for our current era of knowledge-based capitalism.
Transit can work on two levels. Within metros, it can more seamlessly connect suburban areas to the more clustered urban core, enabling workers to commute from greater distances while also spurring denser clustering and development along transit corridors. And it can help stretch labor and housing markets across metros, creating more economically functional mega-regions. …
Moretti and Hsieh’s study reminds us of the enormous costs of trying to run the powerful, highly clustered new economy on the platform of our outmoded suburban, industrial model. Unleashing the productive power of this new age requires a spatial fix based on transit-based infrastructure and a more flexible housing system. Without that, as Moretti and Hsieh so pointedly remind us, we will continue to squander this country’s productive potential, its economic performance and, critically, our overall well-being.
From Ohrn: Change, change and more change . . . . From shareable:
The authors of the PwC report point to changing attitudes toward ownership as both cause and effect of the growth of the market-oriented sharing economy. The shift away from ownership as status symbol and toward the flexibility engendered by borrowing or renting is especially pronounced among adults between the ages of 18 and 24, who were twice as likely as older consumers to agree that “access is the new ownership.”
Of respondents familiar with the sharing sector, 81% agreed that sharing is less expensive than owning, and 43% affirmed that “owning today feels like a burden.”
As a result of the above, the report argues, consumer purchase behavior is changing, especially with respect to big-ticket items like cars and high-end clothing …
Executives are concerned that if they do not ride the sharing wave, they will be submerged during the transition to a new economic paradigm.
New York University Stern School of Business professor Arun Sundarajan compared the potential transformation to the change wrought by the mass production of personal automobiles. “The way we lived, the way we consumed, this whole ownership economy[,] much of it emerged out of driving our cars,” he said. “We built a big house in the suburbs, we moved there, we acquired stuff. The direction of change here is probably different, but its comparable in how profound it was and the societal implications.”
Remember this next time some politician, aspiring or otherwise, says that government should be run the way people, the voters, run their homes and finances.
From Business in Vancouver:
Canadian households are not being irresponsible when it comes to taking on new debt, according to a Fraser Institute study released May 20.
According to Statistics Canada, household debt in this country has increased in almost every year since the agency began tracking this information in 1961. This statistic on its own may sound alarming, but when the whole picture is taken into account, the situation isn’t as dire as it may seem.
“Almost every day we hear analysts warning that household debt levels have reached record highs,” said study co-author Philip Cross, former StatsCan chief economic analyst.
“While debt levels are growing, those warnings should be tempered by the fact that asset and net worth levels are increasing at a far greater rate.”
Between 2010 and 2014, household debt grew 21% to $1.8 trillion. At the same time, however, the value of household assets increased to $10 trillion, representing growth of 31% – a full 10 percentage points higher than the increase in debt. …
The Fraser Institute argues that debt increases are now being leveraged into gains in household assets, which in turn improves household incomes and net worth.
Worth bringing forward: MB’s comment on Coals Ports, Stranded Assets and the Massey Bridge.
MB makes a connection often overlooked: the rise in oil prices and the collapse of the over-leveraged US financial system in 2007-08, based on unrealistic, if not fraudulent, housing prices and homeowners’ ability to pay. When commuting costs surged, particularly for ex-urban developments, it was a factor that undermined the confidence that is the basis for any liquid market. The housing-mortgage market across the country simultaneously collapsed (something thought improbable if not impossible), along with the value of derivatives and the credit default swaps that had ostensibly insured them. But it started with oil prices.
He also makes a good point on peak oil – not much heard about now in a world awash with shale products. But the analogy seems evident.
From what I’ve read, mostly based on the analyses of production data and rock strata by geologists, the world production of cheap conventional oil peaked in 2005 which precipitated a price surge, which in turn encouraged the exploitation of unconventional oil resources (tar sands, deep sea, fracked shale).
It was a Gold Rush fueled by investment bank hype. Enter the US shale plays rife with over-leveraged companies, and the price was driven to almost $150 a barrel, which was the straw that broke the toxic paper camel’s back and precipitated the 2008-09 recession and a succession of bailouts.
The thing about fracking shale is that it is an expensive process, and companies have to drill more and more, faster and faster, just to keep production steady in the face of extraordinary decline rates. Some wells decline as high as 90% after only a year. That’s just the nature of wringing drops of oil and puffs of gas from solid rock. Added to this is the indebtedness of the companies who need to keep drilling and selling even at today’s loss leader prices (which are still 350% higher than in the 90s) just to make the loan payments. All this drilling in the US, coupled with lower demand for oil in China created an oversupply in the US, thus the “lower” prices of today. All Saudi Arabia did was ignore the situation and keep their faucets open.
Geologically speaking, the Day of Reckoning when all five US shale plays taper off very dramatically due to their inherent steep decline rates will be somewhere around 2020. The world will then likely face an increasing shortage and leaps in the price never seen before. This is why transit and renewable energy are so important. If anything they will add some stability to a volatile economy that bounces between the floor and ceiling of oil prices beyond which recessions occur.
Regarding coal, it too is nearing a world peak in production. The highest quality stuff is already gone. Metallurgical coal is necessary for the production of high strength steel, but thermal coal is a useless, low quality, filthy energy source that should be banned immediately all over the planet. Why Ports Canada has agreed to allow the Metro to be the primary coal transiting facility for the US when several other ports in the Pacific Northwest rejected it is beyond logic.
For a perspective on what the next stage of energy might look like, you may wish to subscribe to David Roberts’ new column in Vox. (He was previously at Grist.) Roberts first column:
… insofar as one can feel confident about far-future predictions, I feel pretty good about this one.
Here it is: solar photovoltaic (PV) power is eventually going to dominate global energy. The question is not if, but when. Maybe it will happen radically faster than anyone expects — say, by 2050. Or maybe it won’t be until the year 3000, or later. But it’ll happen.
The main reason is pretty simple: solar PV is different from every other source of electricity, in ways that make it uniquely well-suited to 21st-century needs. (Among those needs I count abundance, resilience, and sustainability.) …
It will be a long, fraught process. Any number of things could make a mockery of my prediction. Nuclear fusion or (just as likely) Tony Stark’s arc reactor could render the conversation moot. A meteor could hit. Humanity could decide to abandon Earth for other planets. Whatever.
But if energy keeps evolving roughly along the paths that are visible now, the unique properties of solar PV will eventually propel it to dominance. We will find that in energy, as in so many other human systems, distributed power works better, to more people’s advantage, than the concentrated kind.
The book launch of Andrew MacLeod’s A Better Place on Earth: The Search for Fairness in Super Unequal British Columbia and panel discussion.
The award-winning journalist Andrew MacLeod, The Tyee Founder David Beers, and Senior Economist with Canadian Centre for Policy Alternatives, Iglika Ivanova will discuss tangible solutions for reducing inequality in BC and increasing political will to create a fairer society.
Monday, May 11
Djavad Mowafaghian World Art Centre, Goldcorp Centre for the Arts, 149 West Hastings Street
David’s comment to this post deserves highlighting:
Vancouver house prices were increasing at a ridiculous rate before there was a such thing as a Chinese millionaire immigrant.
In the 20 years leading up to Expo 86 Vancouver house prices doubled three times. In the 30 years since then they’ve doubled a further four times.
There have been many ups and downs along the way, but on average the price of a house in Vancouver has been going up 10 percent per year for five decades.
So why are we so worried today? Why are so many calling for regulations to stop foreigners from bidding up our real estate?
There were years when incomes outpaced inflation, when people could get ahead simply by working hard. There were years when inflation was much higher than it is today. A 10 percent growth in real estate value didn’t look like much when the bank was offering 12 percent on a GIC.
But incomes stopped growing in real, inflation adjusted terms a long time ago. Today local buyers’ wages are moving along at the 2 percent inflation rate, if they’re moving at all, while housing continues to grow at the same 10 percent rate it’s been at for the last 50 years.
Ordinary citizens are like pedestrians on the side of a highway watching their dreams get smaller every second. It’s hard to blame them for wanting someone to install a traffic signal and turn it red.
Replacing today’s take-make-dispose economy with one that is restorative by design, the circular economy is gaining significant traction globally as a game changing concept that can redefine our relationship with resources and energy while stimulating innovation and job creation. How can businesses benefit from pursuing circular economy approaches? What are the opportunities for businesses, policy makers, and citizens in Canada?
Hear what is happening in Canada through the National Zero Waste Council. Learn how and why the Netherlands is embracing the circular economy at scale and about circular opportunities in industrial symbiosis and the built environment.
Wednesday, April 29
SFU Segal Centre, 500 Granville Street
8 – 10 am
(Networking breakfast 8:00 – 8:30 am; dialogue 8:30 – 10:00 am)
· Vanessa Timmer, Board Member, National Zero Waste Council, and Co-Founder/Executive Director, One Earth
· Derek Corrigan, Chair Metro Vancouver Regional Planning Committee, Mayor City of Burnaby
· Brock Macdonald, Vice Chair, National Zero Waste Council and Co-lead of the Circular Economy Working Group; Chief Executive Officer, Recycling Council of BC
· Jan Douwe Kroeske, Dutch Radio and TV producer and presenter and founder of multi-media sustainability platform and travelling summer festival: SummerLabb
· Gerben van Straaten, CEO, Walas
· Luke Smeaton, Acting Executive Director, Lighthouse Sustainable Building Centre
· Stephanie Bertels, Associate Professor, SFU Beedie School of Business
A good example of Fraser Institute thinking, and strategy.
Taxes are indeed needed to fund important government services, critical both to a well functioning economy and, more generally, civilization. But there is a point when a larger, more interventionist government, combined with a heavier tax burden, can stunt economic growth and social outcomes, or achieve those outcomes only at great additional cost. …
Research shows that taxpayers get the best bang for their buck (in terms of economic and social outcomes) when total government spending is around 30 per cent of the economy. In Canada, total government spending is now 41 per cent, down from about 53 per cent in 1992, but still higher than what is optimal.
That means there’s room to scale back. When governments faced major fiscal problems in the 1990s, they responded with sweeping action to cut spending and reform programs, leading to a major structural change in the government’s involvement in the Canadian economy. The reforms created room for important tax reductions and ultimately helped usher in a period of sustained economic growth and job creation.
So it’s not surprising that Bramham and others feel that the public discourse since the 1990s has focused primarily on tax reductions and ensuring the right tax mix. After all, the reforms worked! …
In fact, voters in the upcoming plebiscite, which proposes a regional PST hike to fund transit expansion, should understand the economic problems associated with this particular type of tax, which discourages investment and job creation.
Lastly, and perhaps most importantly, it’s not even clear that governments in Metro Vancouver need the extra revenue. Municipal governments would do well to more heavily scrutinize their spending choices before requiring Metro Vancouverites to pay higher taxes, simplistic arguments notwithstanding.
Well, that seems unequivocal: 30 percent gives the best bang. And whose research might that be? And who defined what ‘best bang’ means in terms of economic and social outcomes? In any event, it’s contradicted by the next highlight:
The reforms created room for important tax reductions and ultimately helped usher in a period of sustained economic growth and job creation.
If sustained economic growth was achieved at 41 percent while still delivering social goods (like non-market housing, a program sacrificed as part of the noted reforms), then why is 30 percent better? This sounds like dogma, not economics: tax cuts good, government spending bad. In a word: simplistic. In another: silly.
But this is the usual op-ed back-and-forth. The most important line is the one at the end:
Municipal governments would do well to more heavily scrutinize their spending choices before requiring Metro Vancouverites to pay higher taxes, simplistic arguments notwithstanding.
This in fact is what the referendum is about: forcing local government to cut their budgets by denying any source of revenue, new or existing, to fund anticipated growth – in this case, public transit. (More here in Fraser Games – 5: The Larger Agenda.)
As an unstated outcome, the strategy has led to rising inequality, first by defunding those programs that provide similar services to all regardless of income. Secondly, by cutting taxes that disproportionately benefit the affluent.
Let me repeat something that so far has failed to resonate:
AMOUNT RICHEST 2 PERCENT OF BRITISH COLUMBIANS WILL RECEIVE IN A TAX DECREASE THIS YEAR:
Roughly the same amount that could be raised by the sales tax to fund transit – and support the economic activity that would result – will be retained by the richest 2 percent in the province. It couldn’t be more blatant.
For the Fraser Institute, this, presumably, is the best bang for the buck: less government services for all, more wealth for the already rich.