The Ticket: One-on-one with Bob Rennie
Earlier this month, he delivered his latest (and last?) keynote address to the Urban Development Institute. Tonight, he sits down with Van Mag to talk about it
June 6, 2016
Give Bob Rennie credit: the man doesn’t pull his punches. At his latest—and, as he told the audience at the Hotel Vancouver earlier in June, last—keynote address to the Urban Development Institute, he took shots at David Suzuki, the City of Vancouver’s new affordable housing program, and the notion that foreign flows of capital are the key mover behind the housing market’s recent turn into parabolic territory. He even took a page out of Donald Trump’s book—or, at least, the book on Trump—in arguing that real estate developers can’t trust the data to tell their story to an increasingly skeptical public. “Emotional issues can’t be addressed with data. They can only be addressed with emotion. And there’s a lot of emotion out there about housing.”
His annual addresses have become a must-see—or, at least, must-hear-about—events, given that he speaks on behalf of an industry that appears to be single-handedly driving this city’s economy forward, for better and for worse. He wasn’t shy about wading into the conversation about what’s driving Vancouver prices to increasingly ludicrous levels, and made the case that—no surprise—it’s all about supply, not foreign flows of capital. “We don’t have to market to China because we have no supply,” he said. That lack of supply, and the relatively empty pipeline of inventory in the next few years, could mean that pressure on prices—particularly in the condo market, which has started to heat up lately—won’t abate any time soon. “Nothing will be under $1,300 per square foot,” he said of new units in the downtown core, “and if we’re not careful we’ll be at $2,000 per sq. ft.”
He also said that it’s time for younger residents to recalibrate their expectations about what they should be able to afford to buy. “Let’s admit that soon there will never be a single family home under $2 million. And let’s admit that not everyone who wants to work and live in the city will be able to.” Indeed, that recalibration of expectations was at the heart of his message last week. But it’s a recalibration we’ve already done in this city, he told the crowd, noting that there was a time not that long ago when east Vancouver felt like an entirely different city to a lot of buyers—and one they didn’t particularly want to have to live in. “One day,” he remembers saying back in the 1990s, “you’ll say you live in the city.” That’s true today, as the city’s centre of gravity continues to shift east, and he thinks a similar reorientation in perspective is on the way for places like Surrey, Coquitlam, and Langley.
That probably won’t be a popular opinion among people who think they ought to be able to live and work in the same city, and want that city to be Vancouver. But Rennie said he doesn’t see any end to the pressures that have been driving up prices—constrained supply and surging demand—and if anything they’re going to start increasing. One third of the single family homes in Vancouver are owned clear title by people over 55, and he estimates that there’s $197 billion in tax free equity in the market right now. Even $10 billion (applied as a 25 percent down payment) of that wealth, transferred to children and grandchildren, would create $40 billion in buying power. “That money is coming at you,” he said.
Rennie empathized with those whose parents didn’t have the good sense (and good fortune) to buy one of those single family homes back in the 1980s or 1990s, and noted that the inability to find reasonably-priced housing could do significant damage to the fabric of both the city and its business community. “Let’s not fail our middle class—and let’s not fail future generations.” He said that developers ought to look south to San Francisco, where their peers have forged an unusual alliance with alienated renters there who have grown frustrated with the impact that NIMBY movements are having on that market. But he was clear that the solution he envisages for that middle class and those future generations has nothing to do with restricting or taxing foreign capital flows. Instead, he said, it’s about aggressively embracing density, and he had a message for those who continue to fight against it in this city. “If you have a no-tower sign on your lawn, you have no right to speak about affordability.”
For tickets to Bob Rennie’s one-on-one conversation with Vancouver Magazine, go here.
When: June 14, 6 to 8 p.m. | Where: Brian Jessel BMW | Price: $25