housing

Vancouver Dirt Now Earns Twice as Much as All of the City’s Workers Combined

It’s getting harder and harder to put Vancouver’s freakish housing market in perspective.

by Sarah Berman
Jan 23 2017, 5:57pm

Not that deep down, renters in Vancouver know we've been given a raw deal. The city has once again been ranked third least affordable in the world—behind Hong Kong and Sydney, Australia—which means the average cost of housing is way beyond average income.

What we don't usually get is a clear sense of the scale of this gap—especially when it comes to the massive fortunes being made in the process.

Data analyst Jens von Bergmann is at least making an effort, and the results are equal parts absurd and enraging. His latest breakdown of land values found that dirt in Vancouver earned twice as much as all of the city's working humans combined.

This isn't the first time Jens has run these numbers. Last year, Jens added up the accumulated land value of all the city's single detached homes between 2015 and 2016. This excludes the value of any buildings—so you could essentially call it the total annual earnings of about 80,000 patches of dirt.

"It came out to a huge number," he recalled to VICE. (At the time it was $24 billion.) "I looked for a comparable one, and it turned out to be just slightly more than the entire income of the population of the city of Vancouver." In other words, no amount of shifts at your local coffee shop would have made you as wealthy as signed papers and land.

But that was last year. In 2017, new numbers from the BC housing assessment office show something even worse. It turns out those same patches of dirt managed to earn twice as much as working humans the following year, a cool $46.7 billion all told.

"The comparison doesn't work that well anymore, because now it's about double," Jens told VICE. "So single family home land values in the city of Vancouver went up twice as much as the amount of money the entire population brought home working."

Read More: How Foreign Investors Are Using Drug Cartel Tactics in the Canadian Real Estate Market

According to Jens, it's becoming harder and harder to illustrate how out-of-proportion Vancouver's freakshow real estate bubble has become. Over the last decade, the city has seen the most housing market deterioration out of any city in the world. An average property made $239 per hour, up from $126 the previous year. (That's more than twenty times the minimum wage, for those keeping score.)

Jens has tried a few new methods to give a sense of scale to the ridiculous, unfathomable numbers, with varied success. He recently decided to find out which lots accumulated over a million in wealth just by virtue of being located in Vancouver. Looking only at the land—who cares about the inside parts where the people go, tbh—about 10,000 houses cleared this line.

"Clearly it was an extraordinary year," he said—something we probably won't see repeated in 2017. Since the numbers run from July to July, Jens' calculations don't account for the tax on foreign investors that was brought in later in the summer, or the slight dip in prices that finally came in the winter.

Even with the beginnings of a correction, Jens says that barely makes a dent in the "extreme growth" of the last two years.

"Last year it was mostly single family homes that picked up tremendously, with condos gaining only half that rate. This time was different—condos appreciated at almost the same rate as single family homes."

"I found that amazing," he said, "it really highlights the pressures the housing market is facing."

"I'm just trying to highlight how extreme things have gone," he told VICE. "Maybe it's time to go beyond the small steps that have been taken."

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