Going Deep with Jens von Bergmann | VREP #92

We see statistics every day in our social media feeds, in news articles, at the dinner table, etc. They can be extremely helpful when used to understand certain aspects of the world around us, but they can also be manipulated and sensationalized to fit the storyline of the person or organization quoting them.

So why don’t we just look the stats up and do our own fact-checking? The problem is that raw statistical data is not easy for the average person to understand. That’s why Jens von Bergmann has developed his open-source statistical mapping interface, CensusMapper.

This week, Matt and Adam chat with Jens about how to use his software to understand our market better, as well as some observations he has made regarding general population trends taking place in Vancouver.

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Episode Summary

Can you tell us about yourself?

I moved to Vancouver about seven years ago and set up my own company to do a variety of things. In the past two to three years I got interested in data, especially census data but also public data sources. I moved the company in the direction of data analysis and visualization. I’ve built a couple of products around this, one called Census Mapper. I like to say it puts the “open” into StatsCan Open Data in a way that it makes it accessible to a fairly large audience, when before it was really open to a couple of people who had the time and expertise to load this into their GIS software and do things with it there.

That’s why we asked you back. A lot of people are talking about Census Mapper. Why did you create this?

A couple of years ago, I had some free time and a friend of mine emailed me a census data set. This was just the City of Vancouver data and I didn’t know how to look at it, so I needed a web map. It was automatically online, a journalist picked up on it, and I started to get questions about census data. I looked it up and it took a surprising amount of time to get fairly simple answers from census data, which wasn’t right. I decided there was definitely a need for easier ways to access census data. It started as an interest, a public service idea. It spiralled a bit out of control!

It’s open source, right? Now people can go on Census Mapper and create their own maps?

Yes, its undergone several stages. Initially, it was just me making maps but now I’ve opened it up so anyone can go in, create an account, and make their own maps. An account is only required if you want to save and share the maps with other people. There’s quite a bit of stuff that’s blocked off that people don’t see, that I use internally for consulting work and a range of things. Sometimes it’s visible and more complex maps that I would make.

Interesting. What does Census Mapper and this data tell us about Vancouver? What are the most important trends?

With the new data coming in, I find it quite fascinating to view our city to time. Census Mapper doesn’t have the whole range of all the censuses but it has 2006-2011, and 2016 data as much as is available. This allows us to look at how things change through time. One thing we’ve seen in Vancouver in terms of real estate is a change in single-detached (a census category referring to an unsuited single-family home). This has been on a steep decline over those years and taken up by other forms (e.g. suited, duplex/semi-detached homes). This is something where Vancouver has overtaken Montreal as the metropolitan area with the least amount of single detached homes.

It’s interesting that this has been over the past 10 years, when everyone is calling for more density, more density, but it sounds like there’s been a considerable increase in density on its own.

Some of that is the census is getting better and better at finding suites. BC Assessment has a number of legal suites which is considerably lower than the number of suites that the census finds. Year-over-year, the census gets better at this. There are also geographical variations: the suites distributed throughout the city of Vancouver cluster on the east side as compared to the west side. Looking at building permit data, just over half of all new single-family homes come built with a suite. When you look at census data, just under half of all new single-family homes have a suite. Still, there’s a lot of movement: some homes just come with the rough in for the suite and it gets added later; some get torn down and replaced by homes without suites and vice versa; some people have suites that they take offline and incorporate again as part of the main house, depending on people’s needs. Vancouver stands out as a place where census duplexes (single-family homes with suites) take up a big chunk – much bigger than in any other metropolitan area in Canada.

What does that tell us about the city and its relationship with real estate?

In many ways, Vancouver has been on the forefront of this kind of first steps of gentle density by not going after suites, then legalizing suites that were previously unauthorized, then adding the laneway home. Vancouver has quite a leadership role in north America, and partially that’s offset with the increase of real estate prices. We often hear people talk about these suites – I’m feeling a bit ambivalent about it. There are households where the kids move out, the couple still lives there and they decide they don’t need that much space, so they carve out a suite in their home for other people to live. I think that’s great; that helps everybody. But if you start to think about how its often portrayed in the news, you see that suite advertised as a mortgage helper. I’m not sure how constructive that is because once you think of suites mainly as mortgage helpers, the best mortgage helper is a smaller mortgage. People could think of this differently – maybe they need to stratify, or subdivide, or something else. People don’t want the whole house, just a part of it. Maybe we need to find better ways to enable that. It’s time to focus more on people and not the buildings – figure out what is that new thing that Vancouver families are comfortable with living in? That can maybe replace the single-family home that’s financially out of reach for most people and for over half of families with children, because there are not enough single-family homes to go around.

One of the maps that struck me showed that it seems a lot of people in Vancouver (20s, 30s, 40s) are living alone and without kids. Was this one of the more surprising trends you came across?

There is a life trend to delay childbirth and families start later nowadays than they used to. One thing I looked at, which was also inspired by the work Nathan Lauster did, was there’s an ongoing theme in the news about the lifeblood, or millennials, leaving Vancouver. This was something I wanted to look at between the 2011 and 2016 censuses – where are those people moving? If you divide up the population by age groups and take, for example, the 20-24 age group in 2011 in a particular area, and then five years later in the 2016 census compare the 25-29 age group, you can think of the difference as the net migration. Did these people, in general, leave a certain region? Or did they pool into that region? How does that work?

Yes, this is always in the media, but are people, young millennials, actually leaving Vancouver?

There is really no evidence that millennials are leaving Metro Vancouver. It’s not something visible in the census numbers. If you look at the actual city of Vancouver, it’s a bit more complex. One thing is you see a “generational pulse” of the city. This means if you go through the net migration by age groups, you realize a family formation happens in the central areas of the city i.e. the downtown core, Kits, the belt around downtown. A lot of under five-year-old children are there, but if you look later to see if those children are still there when they’re 5-9 years old, about 20% of them are no longer. In some areas it’s more, in some it’s less.

It sounds like they’re not leaving Metro Vancouver; they’re leaving the core of the city for Port Moody, New West, Burnaby, etc.

Yes, and it’s interesting – one place they show up is the west side. The east side, not so much. Then the outskirts and Surrey, White Rock, even West Vancouver.

The data seems strange – like it’s going against conventional wisdom. People constantly talk about how the west side has empty homes and older folks, whereas neighborhoods like Cedar Cottage and Commercial Drive on the east side are very dynamic. But the census data isn’t drawing that out?

No, I don’t think that’s quite right. The number of children overall is still higher on the east side than the west side. But I look at net migration and compare the different age groups through the years, using the 0-5-year-olds as a proxy, and ask what do I expect to see in terms of 5-9-year-olds five years later? Do I see more of them than expected, or fewer? On the west side I see more, which means that these children might not be born there but they move in later. The numbers might not be quite as high, but there are significantly more than I’d expect. It’s somewhat surprising that a young family moves into a west side home, whereas on the east side there isn’t much net migration, which could mean simply that these children stay there. The downtown core and surrounding area (north of 16th) loses children over that time frame. The 5-9-year-old families remain stable; they stay where they are. Then, as you get into the age groups of 15 to college age and around the twenties, everything around the city of Vancouver is losing them. They’re pouring into the central areas. They’re still in Burnaby, Surrey, and around the transit corridors, but you can see these people just rush in in their early twenties. It’s really clear if you look at the 20-24 cohorts in 2011; in 2016, they’ll be 25-29 and things mellow out a bit. When they get into their thirties and late thirties, you see a slight drain again from the downtown core, which probably corresponds to those children.

Do you have any data that links the two? Generally, the people who don’t have those kids stay in the downtown core?

No, but there’s something I can probably do about this. It’s an interesting question.

In the real estate market right now, smaller units are very high in demand. Part of that is due to affordability, but part of that is due to people living alone. I’m wondering if the general trend of fewer people having kids means we’re seeing the demand for smaller units in real time right now. And of course, the City of Vancouver is always pushing for more family housing, but is the census data heading in the other direction?

We have a lot of indicators that say smaller, studio, and one-bedroom units are something the market really wants. If you look at rents, they’ve increased for these much faster than for two-bedroom units. The City of Vancouver has always had a high number of one-person households. Compared to Toronto for example, Vancouver has a much higher number. This leads to another finding from the census I find fascinating: the median household income in Vancouver is lower than the median household income in Toronto. But, this is quite misleading because if we split up households into median income for one-person households and median income for two or more-person households, it is much higher in Vancouver for both categories.

That’s fascinating. This is a story that has not been told.

So yes, the median income for Vancouver overall is lower, but that’s only because we have a higher proportion of one-person households, which have lower incomes overall. We have some data in the census that clearly tells us if we had one-person units renting at a rate people find attractive, a lot of people would want these. There are about 110,000 people over the age of 25 currently living with their parents. In many cases it might be by choice, but I would think the majority of them are doing it to make ends meet. Maybe the parents live in larger homes and the idea of having a larger space and making low or no rent payments is overriding the really expensive available units that people could rent. Adding to that stock could relieve some of that.

Do you ever look at houses that are occupied by either owners or tenants and what the breakdown is in Vancouver?

That data for 2016 is actually coming out next week, along with the housing data – things like affordability, migration of households, and units.

We constantly see articles in the news about the debt-service ratio and that incomes are far too low for the home prices. It would be interesting to see who are the owners and what is their income, vs. who is the tenant.

The metrics that we usually see in the news these days are generally the median multiples. You take the median income in certain regions, such as the city of Vancouver, and compare that to median home prices; sometimes it’s geared to single-family homes or just the general home price index. It’s very tough to explain anything about affordability – 50% or just over are renting in the city, so the median household is actually a renter, not an owner-household. We have a very high number of one-person households, so the median household is barely two-person. You really need to break things down into finer categories to make sense out of this. We’ve noticed in the city of Vancouver, the median income has increased but there are many ways this can happen: for instance, by adding people who make just above the median income, or if everyone comes out on the top income bracket. This is what’s happening, if you look at the proportion of people in the over-$100,000 income bracket and divide that by the change in the number of households that have grown, you see it’s bigger than one. Essentially, we have lost lower-income households. 2011 [national household survey] data is a bit more difficult to work with, but at the city-level it’s quite good. People pile up in the $150,000 top bracket and we’ve been losing those under $50,000. The income situation in Vancouver is shifting much faster than in the rest of Metro Vancouver. Those are the people that set the marginal price when they buy condo units or bid for the next rental building. This can explain some of the movement we’ve seen, but clearly not all. There’s no denying that wealth plays an important role in our property market. Looking at these median incomes is quite misleading when trying to relate them to the property market.

Interesting. Based on your reading of the census data, if you were looking to buy an investment property, what would you buy and in what neighbourhood?

This is really something I have not looked at. I can’t give you any advice on that.

You mentioned people pooling – which areas in Vancouver are growing the quickest in the past 10 years?

The overall growth is driven by the number of units we build in Metro Vancouver. For example, for reference if you look at the regional growth strategy that outlays where we should build to accommodate the people we expect to come, you can compare to the 2011 census, map out for 10 years, and look at the halfway mark to see how we performed. Different regions in Metro Vancouver underperformed or overperformed. Wherever we built more, we got exactly that amount of more people. Where we had less buildings, there were that many fewer people. We have the highest job vacancy rate in the country; there are a lot of people and a lot of jobs, and we see stories where people can’t fill these jobs. Maybe they need higher salaries to live here, but in many ways if we don’t create more space and units to live in, essentially it means someone else must leave. The rate at which we’re building isn’t keeping up with job growth. We completely blew the job growth target, plus we have the highest job vacancy rate. We underbuild, and accordingly have lower population growth than was projected. That relationship is very tight. It’s interesting how different types of development changes demographics of population. The downtown core and belt around it has gained children (as well as the share of children in the population has increased), whereas the rest of Vancouver has dropped children.

I wonder if there’s also a question of school catchments over product type?

There’s been miscalculation about the development we’ve seen, and this area I’m talking about has seen a big part of the development pressure in the city, so population growth has been big there. There was some misleading in the planning and those schools haven’t been properly planned out. Olympic Village has filled up with a lot of children; this has been in the news. The downtown schools are full, even the new ones. We see similar things up at UBC with the type of developments (condos and rental housing); they have led to an explosion of children again. The schools are already reaching capacity, although they’re fairly new. In terms of where families will live – they have to go somewhere – 20% of single-family homes are one-person households; many are seniors. We really see families have to find another product type to live in.

This conversation, though interesting, is not making me very optimistic about affordability in Vancouver. It seems like it’s a case of “if we build it, they will come”. If an area gets a lot of new product or inventory, there will be migration to that area. What, in your mind, is the solution here? Is it build more, change zoning, increase density?

I think it’s all of the above. Some of that we’re doing; we have records under construction in the region, which is positive. We deal with some of the issues around the edges of this: empty homes tax, regulation for Airbnb going in that direction. To me, key to the right kind of supply is rentals. We have been overly relying on the secondary market for rentals, and I think the security of tenure, especially for a family that’s lived in a rental building for awhile, knowing they can just stay there and having security is very important. The Cities of Vancouver, New Westminster, and North Vancouver are at the forefront of trying to push for more rentals – the rest of the region, not so much. Even that I don’t think is enough for the rental need we see in this region. I think zoning is a huge impediment to really deliver the type of housing that families are looking for. When I look at Nathan Lauster’s Death of the Single-Family House, the numbers don’t add up – we have way too many families for the number of single-family homes. But what could replace that? I’m thinking some denser, ground-oriented units, say a four or six-plex on a single-family lot could do so. Opening up zoning on a wholesale, grand scheme, to build as many homes as we might want on these lots. Right now, we have on average 1.5 units per single-family lot; if we allow up to six, we can probably realistically get to three units per single-family lot within a couple of decades, which is a significant increase.

Both times we’ve had you on, it got me thinking in different ways, challenging the conventional wisdom about Vancouver. Is the City using this data as effectively as they could be?

The City is definitely looking at this data, other people are as well. I’m not sure if my way is smarter than anyone else’s. One thing I’ve done quite recently is started to see that we actually do have a lot of data; what’s missing is analysis. I’ve expanded Census Mapper to give people a way to easily extract data for analysis purposes. I’ve started to write a wrapper in a statistical language that people use to do this analysis, and immediately two other people jumped in to help out. People now use more rigorous statistical analysis to deal with the census data. We have a lot of talent in Vancouver; what I’m hoping for is more and more people will contribute to this. My more recent blog posts are literally the code that runs the analysis, embedded in the post; you can just download it on your machine and start to play with it. A more collaborative approach is needed here [to share ideas and methods]. Everyone is trying to solve problems and make things better, but everyone’s time is limited, too.

Hopefully somebody listening to this joins you Jens; you’re doing god’s work.

This is my answer to the “he said, she said” expert type-things we often see.

 

 

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