Sauder Business School arranges ‘Condos versus offices’ debate
Frances Bula
Sun
Vancouver’s 19th-century downtown is on the way out.
Instead, the city’s 21st-century downtown is very likely to be a mix of residences for highly skilled local professionals and second homes for rich people from elsewhere, along with a tight core of office space for high-end dealmakers and a scattering of services for all those groups of people.
That’s the provocative future UCLA economist Matthew Kahn is going to discuss this week in a debate the University of B.C.’s Sauder School of Business has put together on the controversial question of “condos versus offices” in downtown Vancouver.
“There’s certainly a possibility that there’s been a resortification in Vancouver,” said Kahn, in an interview from San Francisco. “But why is that bad?”
The city currently has a moratorium on residential development in part of the downtown next to the central business district that was put in place after rising concern from business groups and commercial brokers that office space was under threat.
But Kahn said Vancouver could be evolving into what San Francisco already is — an attractive downtown that is largely a home to the upper middle class.
“In San Francisco, no one is worried about its health.”
He also pointed out that Vancouver is experiencing the same trends that have been documented in other North American cities. As the price of land goes up, firms leave their deal-makers downtown but move the bulk of their back-office work out to the suburbs.
Some cities, like San Francisco or New York or Vancouver, are then able to attract people to live in their “consumer downtowns.”
And there’s nothing wrong with that, says Kahn.
From an urban economist’s point of view, it’s an advantage to be able to attract skilled professional people to your downtown. Those people will then either accept slightly lower wages in order to work close to where they live, and firms that can save money on wages will be willing to spend it on the cost of space downtown. Or they will reverse commute to the suburbs.
From a public-finance economist’s point of view, having about 15 per cent of residential space downtown taken up by second homes for wealthy people from elsewhere is also a benefit.
“It’s a free lunch, with these people moving in, paying taxes, and demanding no services at all.”
The businesses that remain downtown will be those that can survive with a minimum of space or the ones that keep their high-ranking people downtown while the rest of the work moves out to the suburbs.
“There’s still a demand to be downtown for the power lunch,” says Kahn. As well, there will be many jobs in the arts, culture and retail sectors that serve that downtown community.
Along with Kahn, others debating the future of Vancouver’s downtown will be UBC professor Robert Helsley and Vancouver’s planning director, Brent Toderian. It will be held Wednesday at UBC’s Robson Square campus from 5 p.m to 7:30 p.m.
Tsur Somerville, the UBC professor who organized the panel, said he decided to tackle the topic because “people are concerned about what the downtown is going to look like.” However, at the moment, the debate has been limited mostly to business groups arguing for more office space and residential developers arguing for more room to build condos.
“Urban economics tend to have a long view and a different perspective.”
© The Vancouver Sun 2007