All aboard the poverty train. | Vancouver Condo Info

The middle class in Vancouver is shrinking.

A widening gulf between the rich and the poor makes for a marked shift in demographics over the last 40 years.

And there’s a fascinating difference between Toronto and Vancouver when it comes to distribution of these two classes:

In Toronto high income residents have centered around transit hubs, while in Vancouver the opposite has happened and poverty has spread along the skytrain line.

And numbers from 2010 income tax returns that Ley received this week show accelerated polarization between rich and poor, especially in the Downtown Eastside.
Vancouver’s experience is opposite of Toronto when it comes to transit, Ley said, as high income residents concentrate around transit in Hogtown.
It’s a phenomenon Martin Wyant, CEO of Tri-Cities social services organization the Share Society, can see simply by looking at the increase of residents that need Share’s food bank – a 59 per cent rise since 2007.
In the suburbs, new condo developments hide the poverty, he said, but most people are forced to commute for higher paying jobs.

I guess the question is this: will the recent push to build and sell condo towers at transit hubs shift this trend up or down?

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Benny Hill

10 years ago

@ Extend and Pretend

I don’t know a lot about the farming but my father in law is retired farmer. her rented his land after he retired. I even met the guy that is farming it. I hope he helps me out in making decision. I have 200k saved and i have no idea how to invest in some productive asset. I will travel next week to MB and ask a lot of questions. I will report here when I come back.

Extend and Pretend

@Benny Hill: re: “buying farm land in Manitoba and renting out”

“D” for depreciation on productive business assets like a farm can be subtracted from the bottom line each year. For a productive asset “D”, probably doesn’t matter if you have enough operating capital. What is more important than “A” appreciaion or “D” depreciation is if your property can be reliably rented out for productive farming operation. Is the property reliably above regional flood watermarks? Are there any special mineral encumberances or coventants which will retard tenant farming operations? Is the land suitable for all types of crops? If I were you I would visit the area and talk to the neighbors before buying anything.

@VMD: Banking Execs Capital Requirements. Harrumph!

http://www.youtube.com/watch?v=JN99jshaQbY

Carney should be more critical of a regulatory system that allows any business to grow to an extent that it requires government supervision to prevent public harm. The title of the article ought to be “Carney, Dickson to Meet Overpaid Self Entitled Numbskulls Who Think Their Wealth Is Due To Intellect and Merit”

I am seriously thinking about buying farm land in Manitoba and renting out. I just wonder if farm land would depreciate as much as real estate in the cities?

Devore

@patriotz: This is not just a technicality, like so many things Patriotz says 😉 It’s an extend and pretend mechanism. Just because we are able to appear not poor by being able to borrow tons of money (individually and as a society) does not change the fact we are poor. A bursting bubble reveals who has been swimming naked all along, it doesn’t remove any clothing on its own. This is why people always blame the bubble bursting for economic troubles (it was the boom that did the damage), and want a return to bubble times, a contradiction. The excesses, waste, misallocations of a bubble economy and easy credit cover up many faults. One of the important things of learning from history is being able to properly account for causality and chronology. It is important to understand that the damage… Read more »

patriotz

@HAM Solo:
“Of course a correction will exacerbate poverty.”

Actually it won’t. It will simply remove the illusion of wealth from inflated RE prices. In your example, the tradesman is making himself poorer by borrowing money to buy an unproductive asset. And his job itself depends on other people making themselves poorer by borrowing money.

It’s actually the bubble that increases poverty, by diverting resources away from real production.

UnagiDon

“Disgusted by the endemic bribery, Wang Ping, 37, a bar owner in Beijing, decided to send her son abroad for his education. In August, she wept as she waved goodbye to her only child, whom she had enrolled at a public high school in Iowa.”

http://www.nytimes.com/2012/11/22/world/asia/in-china-schools-a-culture-of-bribery-spreads.html

RaggedyRenter

I can’t really trust any income/poverty stat. Richmond and West Van has the highest child poverty. Not declaring income does not constitute poverty. Building more condos around the stations should push up the income average if only because you need more income to qualify for a mortgage as opposed to renting in the neighbourhood. You’re basically knocking down the available rental stock and replacing them with condo ownership. That would spike up the income average in a hurry. Refurbishing the station and the nearby surrounding area would also make the area more enticing. Installing fare-gates on the stations would serve as additional crime deterrent and make the area more appealing to the middle class. Look at Metrotown and Brentwood station. Metrotown is old cheap rental stock riddled with drug pushers, property criminals, homeless, dark corners. Meanwhile Brentwood is mostly condo… Read more »

VMD

Carney, Dickson Said to Meet Top Banking Executives Nov 22, 2012 Canadian bank chief executives will discuss new regulatory hurdles and risks to the global economy at a meeting with Bank of Canada Governor Mark Carney and banking watchdog Julie Dickson next week, according to a person familiar with the meeting. Carney will speak to executives on global economic issues and household debt while Dickson, who heads the Office of the Superintendent of Financial Institutions, will focus on risk management issues such as new capital requirements, the person said on condition they not be identified because the Nov. 26 discussions at the central bank’s Toronto office will be private. …Dickson and Carney, who also chairs the Financial Stability Board group of global regulators and central bankers, are expected to discuss new regulatory initiatives such as additional capital requirements for domestic… Read more »

I wonder how much of the money that is spent on Vancouver RE is earned by selling things in Vancouver. For example, my company has no clients in Vancouver, very few of the clients for the video games and movies made here actually live here, HAM obviously comes from Asia, and COCs don’t earn money they borrow it. But some of the money comes from people working in construction and the service industry, and of course the FIRE industries. I wonder which source is larger and by how much.

HAM Solo

Did we get hacked? Or is this just a Tech issue?

Of course a correction will exacerbate poverty. Exhibit A: Surrey tradesman, with $10,000 cash, buys condo. Uses HELOC to borrow deposit for pre-sale condo investment. Market cools. He loses both places to foreclosure and his job. Multiply that by 300,000 and then again by 2.2 average household size and you have a problem.

Bubble? What Bubble?