Michael Kluckner’s superb lecture at SFU Woodwards a few weeks ago is a must-see for anyone interested in the history of Vancouver, gentrification optional. The G word is certainly the hook that Michael uses to structure his presentation, but the scope of his survey and the stories he tells to accompany the illustrations, in addition to the original observations and analysis, makes this a good introduction to the history of Vancouver itself.
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Fascinating presentation, I quite enjoyed it.
I’m a young guy, and I am certainly no expert on any issue. However, I’ve got to make a point. I’ve been confused for a long time about commonly expressed opinions surrounding condos and gentrification in Vancouver. Although I hear attitudes that differ to mine, I sometimes don’t understand what the evidence is to motivate certain attitudes.
I think it’s safe to say Michael Kluckner values housing affordability, historical preservation, and neighborhood character and considers gentrification to be a force that works against those things. A common notion (expressed not just by Michael) is that condos are a symbol (and cause) of gentrification.
But I’m just confused by the economics. In the graph near the end of the presentation, condos ranked the most affordable (admittedly to buy) compared to single detached homes and townhouses. Also, the most conventional story in economic theory suggests that increasing housing supply decreases housing prices (with a ceteris paribus assumption). If a condo tower increases the density and population of a neighborhood by adding 150 units, in the long-run it doesn’t make sense to me that prices should be caused to rise. I think what might be going on is a correlation-causation fallacy. Housing prices rise, so there is increased pressure to build condos; it’s NOT that the building of condos causes housing prices to rise.
Some of the ideas expressed in Michael’s presentation stuck me. He said there is a strong connection between housing affordability and deferred maintenance, so much so that they are synonyms. He also said that gentrification leads to depopulation. Of course I may be wrong, but I just don’t think the data backs up these points. I recently read a piece in the Atlantic about the affordability crisis in San Fransisco, which, much more than Vancouver, has pursued a policy of preservationism over housing supply growth. Left wing neighborhood groups have succeeded in preventing construction of new housing in the hopes of preserving their neighborhoods and preventing gentrification. In reality, it has exacerbated the problem.
Economic theory suggests that it’s not necessarily quality of the product that determines price, but the relation between the quantity supplied and quantity demanded. Historians and economists are sometimes at odds, but I think the more compelling story is simply that Vancouver has become a more desirable place to live over the past half century and growth in demand for housing has outstripped growth in supply. Thus, the building of condo towers could actually be a method of “de-gentrification”, and preservationist, neighborhood groups may be the true agents of gentrification. Vancouver is a victim of its own success and desirability, and gentrification on commercial drive can be resisted, but as long as the well off can buy what they want, it cannot be stopped. The only way to keep prices down is to make room for the newcomers.
I can see how people might think condo development is a cause of gentrification and stopping it will stop gentrification. The newcomers will live in these buildings, right? So stopping these buildings will prevent the newcomers from coming? Perhaps to a limited degree, but unfortunately not entirely. As long as newcomers come and there isn’t room made for them in the neighborhoods they want to live in, economic theory suggests they will bid up the prices in those neighborhoods and drive out the current tenants anyways. Counter intuitively, perhaps the best way to help the poor and prevent them from getting evicted from their neighborhoods is to build housing for the gentrifying rich.
Here’s a short piece giving the economists’ perspective: http://www.nber.org/digest/mar07/w12355.html
Jimbo: “I can see how people might think condo development is a cause of gentrification and stopping it will stop gentrification. The newcomers will live in these buildings, right? So stopping these buildings will prevent the newcomers from coming? Perhaps to a limited degree, but unfortunately not entirely. As long as newcomers come and there isn’t room made for them in the neighborhoods they want to live in, economic theory suggests they will bid up the prices in those neighborhoods and drive out the current tenants anyways.”
That phenomenon is certainly true in my personal experience. As house prices were soaring ever upward in 1979-1980, we found ourselves having to look more and more eastward (from Kitsilano) in ordre to find a house – not a condo – that we could afford. Luckily no displacement was involved, as the family who lived in the house were the venders, not renters. But paying the going price doesn’t necessarily signal gentrification, as I’m fairly certain the family that sold the house to us were wealthier than we were at the time.
So, the question is, just what is gentrification, especially, in our case, if “poorer” folks replaced richer folks, and, additionally, there wasn’t any impact on phyiscal charactr of the neighbourhood.