Tuesday, January 27, 2015

Vancouver's Wild World of De Facto Density

How zoning distorts the demand for housing at Pacific Standard magazine.

Theme: Gentrification

Subject Article: "Low-Rent Mansion Living? In Vancouver? Really?"

Postscript: "Toronto's shrinking condos: Built for families, perfect for roommates or couples without kids":

The three-bedroom condominium Krishna KC owns on the 21st floor of 126 Simcoe St. was ostensibly built for a family. When developers tried to build the tower, they agreed to make 10 per cent of units from floors 19 and above three-bedroom ones, a condition applied by the city in order to create new dwellings for families.

Mr. KC, a property investor, bought the unit preconstruction and rents it out – but not to whom the city had in mind. His current tenants are a trio of roommates in their early 20s with jobs in marketing and sales. They’ve turned the condo into a bachelor pad: there are two flat-screen televisions, an Alexander Keith’s chalkboard – the kind pubs use to advertise drink specials – is set up in the kitchen and bottles of gin, vodka and Gatorade are stored on every available surface.

I'm tempted to deviate from my game plan and discuss how supply, in this case, was supposed to induce demand. The intended demand would put, perhaps, two incomes in a space that now supports three incomes. Furthermore, the dual income house (if both parents do, indeed, work) is burdened with dependent costs (e.g. child care) that chip away at the money available for mortgage or rent payments. Conventional metrics such as average income and population don't capture the differences in demand for the same urban space. There exists much error (and hot air) in our models of real estate markets.

1 comment:

Done By Forty said...

As a family who still rents out the spare bedroom (despite the neighbors' odd looks), the post struck a chord with me. Zoning laws can be discrimination, too.