Social Matter

Vancouver is a city of contradictions.

It markets itself as a gateway from North America to the Pacific and a world city. Yet residents and business alike are becoming increasingly fed up with the costs of living and working here. The city greets you with endless construction from the UBC campus all the way to the easternmost suburbs of the Metro area. Despite this, young people and professionals alike find it difficult to become homeowners and have families. Recently, a post reporting on the hiring difficulties this places even on the lucrative tech industry was shared widely online. Despite being an immigration hub, Vancouver seems to be losing those parts of the population which give it a future. Young people aged 20-30 are leaving the city and heading to provinces like Alberta.

Who is replacing them? Apart from the boomers who have a tidy nest egg in the form of a downtown condo, wealthy immigrants have been a growing presence in the city, especially from China. Now you might think that these people will contribute far more economically to the city. You would be wrong. After 15 years, the incomes reported by the wealthiest class of immigrants is lower than every other group, including refugees. This suggests that many come for the citizenship and then leave, and even many of those who stay will live here but keep their businesses in the homeland. In other words, Vancouver has been sacrificing the liveability – and the possibilities for creating families – of those who contribute the most to its existence and growth. There is little to show for it. With broader economic trends which will likely exacerbate this crisis, the city is building its future on increasingly shaky foundations.

Vancouver isn’t the only place where living and housing costs are forcing demographic shifts. Economist and author Tyler Cowen recently wrote a Time article about how Texas is benefiting from a similar phenomenon. The central phenomenon is differences in costs of living:

“The lower house prices, along with a generally low cost of living–helped along by cheap labor, cheap produce and cheap gas (currently about $3 a gallon)–really matter when it comes to quality of life. For instance, the federal government calculated the Texas poverty rate as 18.4% for 2010 and that of California as about 16%. That may sound bad for Texas, but once adjustments are made for the different costs of living across the two states, as the federal government does in its Supplemental Poverty Measure, Texas’ poverty rate drops to 16.5% and California’s spikes to a dismal 22.4%. Not surprisingly, it is the lower-income residents who are most likely to leave California. On the flip side, Texas has a higher per capita income than California, adjusted for cost of living, and nearly catches up with New York by the same measure. Once you factor in state and local taxes, Texas pulls ahead of New York–by a wide margin.”

Now as Cowen points out, the Texas model is based on a minimalist model of governance, a model which Vancouverites generally reject. We might complain about Translink or zoning laws, but most people are glad to have a decent transit system and ways to protect the fertile land the city sits on. But if that’s the case, then a trade-off exists. If Vancouver needs to tax its citizens more to provide such services, then it needs a population which is willing to accept this model of government while bringing in competence, skills, and a demographic future. In other words, we need to attract skilled professionals who want to have families, and will invest their economic and social capital in the city. But as we’ve seen, this isn’t happening.

So where are young people and the middle to upper-middle income earners going? Some are moving further out into Vancouver’s expanding suburbs, and further into the Fraser Valley’s smaller (and more conservative) communities. Others are headed to the prairies. There is a certain stereotype that the Alberta economy is for people in the trades, but that’s not the case at all anymore. Calgary has plenty of white collar jobs and a fairly good university. For those not willing to brave the hardy lifestyles of the natural resource camps in the province’s north, the southern part offers a better environment and a place where one can balance a career with a family. Demographics journalist Steve Sailer has launched the criticism that the clash between Texas’ Anglo-white population and the Hispanic population should inspire a bearish attitude toward Texas’ future. But Alberta does not have a similar population crisis in the wings. Of course Alberta isn’t the only other province. In fact, young people looking to make their incomes go further are better off pretty much anywhere else in the country. I personally know people who have gone as far as Nova Scotia and Newfoundland – not exactly popular migration hubs. And that’s before we even add the US into the mix. A young graduate going into tech has just a short shuttle bus ride south to Seattle, after all.

If the young are leaving, this tells us several things about Vancouver’s demographic future. First, it will need to be wealthy enough to afford the high costs of living. Given this wealth, we can also predict certain things about its ability to replace itself. Wealth, especially wealth plus high population density, correlates with low fertility rates. As Singapore has discovered, no amount of pro-family policies seem to be able to reverse this phenomenon. This is true for locals as well as for immigrants from East Asia and Europe, although not for African and South Asian immigrants. Since the bulk of Vancouver’s population is European and East Asian, this means that Vancouver’s population will become even more migrant-based than it already is.

On the one hand, Vancouver prides itself about being a hub for multiculturalism. Yet the literature detailing the effects of “hyperdiversity” on social trust and cultural cohesion is expanding. Douglas Todd, a Vancouver Sun columnist who has written about the impact of multiculturalism on the city, calls it “hunkering down“:

“…when the Vancouver Foundation recently conducted a massive survey of Metro Vancouver residents, researchers discovered most people in this West Coast city feel unusually high levels of loneliness and lack of friends.”

He quotes Harvard’s Robert Putnam, of Bowling Alone fame:

“Diversity, at least in the short run, seems to bring out the turtle in all of us. … The more ethnically diverse the people we live around, the less we trust them.” Putnam adds an additional disturbing discovery — that “in-group trust, too, is lower in more diverse settings.” In other words, people also become more distrustful even of members of their own ethnic group. “Inhabitants of diverse communities tend to withdraw from collective life, to distrust their neighbours, regardless of the colour of their skin, to withdraw even from close friends, to expect the worst from their community and its leaders, to volunteer less, give less to charity and work on community projects less often, vote less … have less faith that they can actually make a difference, and to huddle unhappily in front of the television,” Putnam writes in his report E Pluribus Unum: Diversity and Community in the 21st century.”

In a city where constant migration is needed to replace the population, the short run never ends.

When social trust is low and families have few roots, what motivates people to invest in the community? This goes beyond economic investment. Social investment is just as important. Vancouver prides itself on being a friendly and polite city, but many newcomers complain that this friendliness is a shield against developing deeper relationships. Healthy social networks impact everything from physical health to controlling crime. As these deteriorate further, Vancouverites can expect conflicts like the urban-suburban divide on increased public transit funding to become more common. Furthermore, it bears consideration that Vancouver has been economically healthy for many years now. But when economic downturns increase political polarization and inter-group tension, having countless points of friction leads to increased conflict, and this can have drastic effects. We have seen the path which the European countries have taken with their disastrous policies regarding mass migration and integration. Vancouverites who blanch at the idea of parties like Golden Dawn and the Communists making inroads in Greece would do well to reflect on how these policies created the perfect environment for extreme polarization. Vancouver is very far indeed from the abyss which our friends across the Atlantic are walking along, and we should learn the necessary lessons to remain so. Our city has inherited a particularly Anglo balance which tolerates difference precisely because it reinforces mutual respect and boundaries. This is what distinguishes our city, and those who wish to see it continue must guard against unsound governance.

Of course, it’s bad manners to present a problem without at least suggesting some solutions. So let’s examine what needs to change in Vancouver in order to secure its demographic future and maintain a culture which encourages social investment. First, we must examine the root cause: Vancouver’s high costs of living, which discourage family formation for professionals and drive off the next generation. If rent and utilities take up more than 30% of income, they are not considered affordable. For renters in Vancouver, nearly 45% of households fall into this category.

A lot of ink has been spilled on how to solve Vancouver’s housing problem, and we’re not going to come to a definitive conclusion here. Vancouver will have to continue building housing if prices are going to get lower. This is especially tricky for a city which has ocean to the West, a border to the South, and mountains to the North. The only way to expand is east – but this will encroach on valuable fertile land which could also be utilized to further secure the region’s food security. Once it’s built on, it’s gone. To echo what someone else said about California, God wanted Vancouver to be expensive. All this leaves increased-density housing as the main solution for both the city of Vancouver itself and the growing suburbs and small towns which surround it. However, it’s also necessary to confront the huge numbers of buildings which stand empty, owned by foreign investors who use them for perhaps a season a year. The costs of absentees are becoming increasingly apparent, as Coal Harbour – with up to a quarter of its condos sitting empty or absentee-owned – begins to fight with increased vandalism and other broken window effects. While it is not in the interests of the city to begin a reputation for property expropriation, a steep increase in taxes for absentee owners may help free up these properties for residents who bring a longer-term benefit to the city. City planners must ensure that local families and long-term migrants are the focus of development, rather than short-term wealthy investors.

Canada has also been reforming its immigration and citizenship laws in order to make them more selective and increase the value of its citizenship. This is a positive step, but it has yet to address the elephant in the room of birthright citizenship and the passport tourism it incentivizes. Where migration is concerned, Vancouver depends on federal laws, but also exercises its own influence in where it chooses to market itself. As we’ve seen above, Vancouver’s interest is in migrants who will stay and invest over the long-term, and who will integrate in order to minimize the impacts of hyperdiversity studied by Putnam. Looking within Canada is of course the preferable option. The best thing Vancouver can do here is try and overcome its reputation for an impossible cost of living. As more and more Europeans consider emigration, it would be worth it for Vancouver to step up marketing in Britain and the continent as well. As English is widely spoken in many EU countries, the linguistic barriers to integration are much less of a problem. Cultural similarities among Western countries work in the city’s favour as well. British, Irish, Germans, Dutch, Ukrainians, and many other Europeans were among the first to make the city a multicultural one, all under an Anglo-Canadian umbrella. The ever-growing expat communities of Europeans will no doubt find Vancouver’s strategic economic location attractive, especially if they do business in the US or Asia. The same goes for our American neighbours, particularly if Vancouver can become a stronger presence in the West Coast’s expanding tech industry. With Vancouver’s established Asian communities, China and its neighbours will continue to find the city an attractive destination. As discussed earlier, Vancouver must increase the incentives to reside permanently and invest. It must stop marketing itself to moonlighting economic tourists and focus on skilled professionals.

The challenges facing Vancouver are complex and facing them requires moving its governors toward a long-term, low time-preference framework. Vancouver is a unique city both in Canada and on the West Coast. Its natural beauty and particular culture are prized by residents and praised by visitors. Its location gives it unique economic opportunities, provided it does not shut out those who can take advantage of them. It is in the interests of the city to develop in a way which achieves all these things. No developed country has been able to entirely overcome the fertility losses which accompany increased wealth and urbanization, but we must be honest about the impacts of these effects and try to minimize their negative aspects. Vancouver has a history of migration, but we must also be careful not to make the mistakes of other countries and cities. A Vancouver which sacrifices social trust and cultural cohesion will be a city which undermines the willingness to invest in ones’ community – precisely that which makes a city worth living in. Nevertheless we can confront these challenges honestly and respond to them prudently. Vancouver may yet be able to move from an uncertain foundation to a solid one, capable of confronting the global political and economic shifts which lie ahead.

British Columbia demographics Governance immigration Robert Putnam Tyler Cowen Urbanization Vancouver