Paul Liberatore

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How do Vancouverites pay more for housing than they earn?


The homes around Vancouver’s W. 19th Avenue and Valley Drive are mostly comfortable one- and two-storey detached houses with tidy, compact lawns. The view from the sidewalk offers nothing unusual.

Yet a map created by a Vancouver mathematician using Statistics Canada figures suggests that almost half of the households in this unassuming West Coast neighbourhood pay more for their shelter than they earn.

In fact, about 45 per cent of residents in this neighbourhood report that their mortgage, taxes, utilities and fees or their rent exceeds their annual income. With statistics like that, you’d expect falling-down hovels inhabited by people living beyond their means or mansions inhabited by the fabulously wealthy. But the area’s not much different from nearby Trutch Street and W. 15th Avenue, where not a single household has shelter costs so out of sync with earnings.

The math doesn’t work. You can’t pay more than you’re making. The money has to come from somewhere.”
Jens von Bergmann

 It’s always been something of a mystery how people get by in Canada’s most expensive city, ranked up there with other global hot spots like Hong Kong, Sydney, Australia and Manhattan. This summer the eternally sizzling real-estate market has pushed the benchmark price of a detached home past the $1.1-million mark. But the map, produced by Jens von Bergmann using 2011 Census data, is even more puzzling. How can about 25,000 households—almost 10 per cent of Vancouver households—pay more for a roof over their heads than they make?

Answering the question is trickier than it first appears. 

“The math doesn’t work. You can’t pay more than you’re making. The money has to come from somewhere,” said von Bergmann, who runs the Vancouver-based software firm Mountain Math.

One possibility: It could be people living off of savings for the short-term, “when someone loses a job or is in between jobs,” von Bergmann said.

That guess makes sense. At the time of the 2011 Census, the 2008 global economic slowdown was still looming and provincial unemployment rate had jumped to 8.2 per cent. Housing costs have certainly risen faster than incomes. But Vancouver weathered the economic storm relatively well, so temporary job losses can’t be the whole story.


Students lucky enough to have their expenses covered by their parents could also contribute to the trend. But the neighbourhoods that seem the most out of whack are scattered all over the city, not necessarily close to universities or colleges where students would normally cluster. “You wouldn’t expect students to be in expensive neighbourhoods like some of these,” von Bergmann said.


While Vancouver is Canada’s wealthiest city (the average household net worth is $867,817), median family incomes are below the national average. So one pet theory is that wealthy immigrants come to the city to live off their savings and investments after making their money overseas. HAM or “Hot Asian Money” is frequently blamed for pushing the prices of Vancouver real estate beyond what local wage-earners can afford, so wealthy immigrants might also be playing havoc with the statistics. In Coal Harbour, an affluent waterfront neighbourhood of high-rise glass towers where many newcomers live, 37.8 per cent of residents report paying more for shelter than they earn.



“Vancouver’s a nice place to live. It’s got a mild climate and there are direct flights to Asia. If I were to ask myself where I’d want to live if I don’t have to work, Vancouver’s a good choice,” von Bergmann said.

Some experts find the data hard to swallow. The 2011 Census was the first that wasn’t mandatory, and the voluntary response rate in Vancouver was notably lower than in the rest of the country. Some neighbourhoods on the map are greyed out because Statistics Canada was not confident about the numbers or wanted to protect the privacy of the participants who could be easily identified because of the small numbers.

“I think the data is really noisy,” said Tsur Somerville, a professor and director of the UBC Centre for Urban Economics and Real Estate. “Because you can’t see what’s happening in individual households, it’s hard to tell a clear story.”


One clue that things are off: In most neighbourhoods, when you remove the people who say they’re spending more than they’re earning, most Vancouverites are putting 30 per cent or less of their income toward their housing, which is about right. Few households report being between the two, which is suspicious.


Somerville agrees that new Canadians and wealthy people—and perhaps especially wealthy new Canadians—may have thrown off the numbers for a few reasons. They possibly didn’t understand the questions or fail to take into account some of their revenue, including income from overseas.

Of course, some of this confusion may not be entirely accidental.

“There might be whole neighbourhoods where there’s undeclared income,” von Bergmann said.

Certainly the city’s supply of single-family homes is not growing, even though its population is. People will go to great lengths to get the house of their dreams.

“Independent of foreign wealth, you have more people, many of whom have more money chasing the same number or even a smaller number of single family houses,” Somerville said.

But it’s also true they can’t spend more than they actually have.


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