Housing – Why I am leaving Vancouver and going to the US
My decision to leave was made with the following understandings: that if I stayed here I would be very unlikely to afford a place of my own, and that if I wanted to take my career to the next level I would need to work for a larger company than Vancouver houses. And with the exchange rate between Canada and US, it seems a perfect time to go to the US now.
This is my journey through reasoning why I am leaving Vancouver, BC. Of course I am not alone a Angus Reid Poll estimates that a staggering 150,000 struggling families are seriously thinking about moving away from Metro Vancouver to avoid the region’s housing costs and transportation issues.
Wages in Vancouver do not match the cost of housing
In Vancouver, BC the average wage is $76,805 per year — if you borrow three times your salary you can afford a place to live at $230,415. The average place to live in Vancouver on the other hand is $857,015. Globe & Mail reports that Vancouver is the worst place to live in Canada for difference between wages and Housing. Last year the Financial Post stated that Vancouver was the most expensive place in North America. The Demographia Housing Affordability Survey puts Vancouver, BC has the second most expensive place to buy a house behind Hong Kong.
In Vancouver, the Chinese have helped real estate prices double in the past 10 years.
Here’s how the Chinese send billions abroad to buy homes – Bloomberg Business Nov 2 1015
Controversial foreign ownership study is about money — not race: Vancouver planner
“Money is no longer connected to what you do and where you live”
In contrast, Vancouver median incomes remain among the lowest among Canadian cities, while home prices in the region are the highest in Canada. The way government structures are set up in Canada means that Canadian municipalities are relatively weak and rely on other levels of government to set policy. Business Vancouver Nov 6 2015
Shrinking housing sizes
What these figures do not show is the shrinking of the size of the place you can buy. So you could pay $500,000 for a 500 sq ft apartment. Most of the places built now have stupid small kitchens, which encourages people to eat out. What does all that salt do to your health? Let alone the psychologically impact of living in a box. I have no problem with density and I believe cities need to increase it, along with good transit. That said, an apartment should to be liveable, it has to give moments of peace away from your work, and personally I want a good kitchen and somewhere I can share food with people. The current builds are not good for people.
Down Payments on a Mortgage
I have spent most of my life working for the community, non-profits and Government. I have got by, but I do not have the savings for a house down payment, I have no family to inherit from or provide a financial security blanket. This has been my biggest barrier to buying a place.
You can get a mortgage with just 5% ($42,850.75 on the average place) of a down payment but you then need to pay mortgage insurance. Premiums can vary anywhere from 0.5% to 3.5%. A great way of taking more money from poorer people. If you have a deposit of 20% you need no mortgage insurance. So 20% of the average place $171,403 is what you need for a down payment.
The Have and Have nots
Toronto, Vancouver house prices still soaring, stats show
Benchmark detached home is $1.2M in Vancouver, while average detached runs $1.07M in Toronto
CBC Nov 5 2015
Of course one of the problems for access into the Housing market is everybody who owns a place does not want the housing market to dip, because they are making money off it. Collectively that is a lot of political power, money and votes. This from people who do not want it to get easier, if it hurts them.
In Canada it is also getting harder to borrow money even though the Interest rates are low. I have so many friends in their 20’s, 30’s and 40’s who have just given up the idea of owning a place in Vancouver. They are also torn by Vancouver being a beautiful place and they want to live here.
The Economic Divide – is it sexist?
It feel like we are about to reach a point where people will never be able to buy a place if they do not do it soon. Whilst this obviously hurts younger people, it also hurts people who work in lower incomes i.e. women and caring professions.
I have already lived (Cornwall, UK) in a place where teachers/nurses/non-profit/carers/government (still a much higher percentage of women), could not afford to live anywhere near where their jobs were based. There the average house price was £500,000 and average salary was £16,500 pa in 2008.
Any good city needs Transit. I have expressed my opinion on this in a previous blog post, when the City asked for more money (via Tax) to invest, Vancouver said no.
Beyond owning a place
The rest is my feeling and experience of the Vancouver job market after 8 years in multiple startups/technology companies.
In Vancouver there are fewer software jobs than about two years ago when there was a lot of more opportunities. The companies that are now looking for software engineers tend to be small and medium sized startups with fewer career opportunities for growth than larger corporations. That said, we have a few more global companies (e.g. Amazon) here than before, so it is possible the lack of jobs is due to the a depressed market now. With national figures showing Canada is currently in a recession, despite a recent job news showing an increase but these are mostly in the Public Administration, in Government.
I changed career after 20 years in campaigns/communications/marketing/public office/leadership/training as I felt the Vancouver market was very limited in these areas for someone in a senior position. I knew that to grow my career I would need to leave Vancouver and I was not ready to move, as I love this place.
This and my need to create again (my first degree was Computer Science, 1996) led me down a two year path of re-educating myself (via BCIT evening courses and small web contracts) in software engineering with modern languages specifically for the web. With three years additional years of web development (in full time work) under my belt, I am in a similar position of wanting to grow my career.
In Vancouver, software leadership roles are generally promoted from within (few come with quality training for the internally promoted person to gain leadership skills) or some outside “star” usually from a US company, used to working at a much larger scale. In fact I can only think of one person who received their leadership training outside of the job — and they were my best leader. I have also worked with a lot of non-technical leaders which is a different kind of challenge.
In Vancouver in eight years I have had three leaders who have inspired me out of nine. In the UK the ratio was higher, I think in part because of 360 degree Appraisals which are more common in UK, leading to a faster/tighter learning loop and higher leadership quality. It is possible my experiences have been unusual, and I simply been unlucky with my leadership in Canada. However, when I ask my friends how many of them had leaders who inspired them, most agree it is rare in Vancouver and that they had better experiences in Toronto/Waterloo/Ottawa. Other skills they shared they felt missing from ‘Leaders’ included giving feedback, risk management, change management, empathy and conflict management.
In the Vancouver job market your learning is often self directed and more often self funded. Sometimes a company will have some money available but not much. One very Global company I worked for made it impossible to claim the so called 50% off Tuition costs. More European/US companies seriously invest in training and their leaders, the UK recognized this problem a couple years back and started investing in it, in every sector.
The irony is the Canadian Federal/BC Government has made available monies for training and whilst the program is not perfect — it does not recognize online training — not a lot of companies apply for it. There is also tax credits for official education institutions and even bootcamps now. Training and Conferences are something I have had to negotiate in my contract to get them in Canada. I would like to see this as more of an active partnership than what I have experienced here.
In the technology sector the pay is a lot lower compared to US cities.
Lets take http://www.payscale.com or http://www.glassdoor.com as a comparison. In Vancouver the average Senior Software Engineer would be paid CDN $ 89.214, in San Francisco it would be US $130,00, New York US $95,000. The big differences is not so much in base salary, but in the bonus which is often 10%-20% of your base salary and then shares gifted at again 10%-20% vesting over three years. These last two are not common in the Vancouver market. In fact few companies appear to share success in Vancouver. There are even a couple that claim to be startups, but are actually family business with no scheme to buy stocks or share the company’s profits. Maybe they like the label startup, its good for marketing and recruitment.. and you can ask your people to work harder and longer.
An added bonus for working in the US is the current exchange rate whereby you would get an extra 20% to 30% when converting your US dollars into Canadian money. Taxes are also generally lower in the US.
BC & Company Benefits
A lot of small companies will do the minimal in terms of benefits and BC employment law (thanks to the BC Liberals) is so pathetic in compared to well everywhere, that some employers think they can get away with offering crappy benefits and they do.
And then there is 3 months wait for extended benefits, by some, not all Vancouver companies. Do they not care about the health of their new employees during the most stressful part of a job. All of the companies I interviewed with in the US start extended on day 1. Still Canada has a better health care system then the US.
Cost of living
Ok lets not be blind here, you need more money to live in a bigger city. Using numbeo/expatisan it rates Vancouver 34% cheaper than San Francisco, or 23% cheaper than Chicago. This seem greatly affected by exchanges rates, so I am sure they give me some indication but they are not entirely accurate.
Cost of living comparison between Vancouver, Canada and Chicago, Illinois, United States – Expatisan
- Food 8% less
- Housing 24% less
- Clothes 12% less
- Transportation 23% less
- Personal Care 20% less
- Entertainment 37% less
- TOTAL 23% Vancouver is cheaper than Chicago
- Consumer Prices in Chicago, IL are 22.63% higher than in Vancouver
- Consumer Prices Including Rent in Chicago, IL are 23.63% higher than in Vancouver
- Rent Prices in Chicago, IL are 25.43% higher than in Vancouver
- Restaurant Prices in Chicago, IL are 31.30% higher than in Vancouver
- Groceries Prices in Chicago, IL are 23.89% higher than in Vancouver
- Local Purchasing Power in Chicago, IL is 8.19% higher than in Vancouver
The United States is ranked No. 1 for most expensive healthcare per capita at $8,233. Conversely, Canada ranks No. 6 worldwide and is over $3,700 cheaper than the United States at $4,445 per capita, according to a 2012 OECD Health Data study using 2010 statistics. Americans pay over 17 per cent of their Gross Domestic Product (GDP) towards healthcare while Canadians sit at about 11 per cent.
From what I can work out I will have to something like $100 to $180 a month to get a similar service to that in Canada, with the exception that serious stuff is paid for me after a ceiling but I am still paying a percentage. Where as in Canada serious stuff is part of our Health Care system. If you have a domestic partner you will have to pay for health insurance for at the cost of $3,000 per year. If you are married, your companies health scheme would cover them at much less cost but roughly about an additional $1,600 to $2,000 per year depending on the scheme you chose.
Actual Work Culture
Every company I have worked for in Vancouver has “over sold” how good their culture is and made it sound like the best place on planet earth. They will rarely talk about the weaknesses and problems they are encountering, things they still need to fix. Maybe I am at fault here, I am from the UK and we are direct people, and not scared of conflict.
The companies I interviewed with in the US were a lot more honest about what they were good at and where they needed help. Their leaders were more vulnerable, something that engenders more trust in me.
Culture is formed from all the ways people communicate with each other, the more honesty the better. And honesty should be matched with kindness. How you start any human relationship for me says a lot, yes be proud but also be honest. You really get a sense of how good a culture is and how good the leadership is when you or the company fails in some fashion, what level of forgiveness is there? Also on the opposite side how does the company celebrate success? Values and Ethics matter.
Working for a company that is actually working at scale i.e. Billions of transactions versus Millions, is hard to find in Vancouver. A lot of the companies here are building a form of Marketing platform and/or B2B platform, often at a much smaller scale. Successful B2C is rarer in Vancouver.
In software you are out of date pretty much every three months, you have to love learning and I do. I have built a number of “social media platforms” and job sites I want something more complex.
I moved from the UK to Vancouver with a lot of stuff in 2008. It is not cheap, there are many things to be careful of and the insurance can be a killer. Advice given to me specific to a US move is that the initial offers do not match the actual cost. That technology is hard to move and expensive. And inventory everything.
Oh a really important thing to watch is they will give you an estimate based on what they think gas will charge. Then ding you for the actual amount when you arrive. And in some instances if you live where they can’t get the big moving truck and need to move items to a smaller one, they ding you with that too. Plus you need to be very careful with valuables. I think one friend ended up with an empty box instead of a playstation the last time she moved. And my move back to Chicago was $1000 more than quoted because of gas and miscellaneous charges.
Make them Saran Wrap all your furniture. All my furniture got nicked. Even though they paid for my insurance claim, I wasn’t about to replace my furniture so I just end up with ugly furniture.
If you go to the US there are a bunch of risks:
- There is no employment insurance for you in either countries
- Your TN Visa will expire and you will have 30 days to pack up and leave the country
- You pay double on Relocation, there and back again
- Trips home cost a lot more money
- If you have a Spouse or Partner they cannot earn money.. so what do they do? Do not under estimate this
- You have no credit score in the US and it will take months to a year to build one. Get a secured credit card ASAP.
- Consider how you will maintain your Canadian Credit score
The actual job that got me to move
A couple years ago I once met a guy at a software conference who was a mentor like me and was very passionate about his company. I liked him but he worked for a finance company that have a reputation of not being innovative (FinTech had not really kicked as a trendy thing). A number of years later the same company started an apprenticeship scheme and posted it online on github so anybody could use it. Wow I thought they are a company to watch, it was smart, courageous and risky. Another year that guy emailed me and asked if I could recommend any good software development managers. I did (not me).
I got contacted by a US recruiter (NeoHire North) looking to bring people from Canada. We explored an opportunity together and I started to realize that maybe I could move to the US. The TN Visa is simple enough you need a company that wants to sponsor you. You can bring a spouse into the US with you or you could get a B2 Visa for Domestic partner that has to be renewed every year.
So I reached out to the guy and said, hey do you still need any Software Development Managers? Yes we do. Two Interviews were done over the phone and seven in person.
The thing that really struck me is I really liked the people, all of them and they were so different. I asked them all the question “Why do you work here?” they all spoke with passion and vulnerability. In the end I had a number of opportunities both in Canada and the US, on the table. Whilst this company did not offer the best financial package, I wanted to work with these people, learn from them and help them be the best they can be. And the finial package is substantially better then anything I would be offered in Vancouver, and it means one day I will have a box that I can name as our own.
It fucking hurts to leave your friends, to leave the mountains, to leave the sea, and it is an exciting time in terms of Canadian Politics (I am hopeful that the Federal Liberals will do a good job and the BC NDP could revitalize BC). The emotional journey of moving country/city is a hard one and should not be under estimated.
Is it over for me and Vancouver?
Maybe not, I hope given a number of years I will be smarter, wiser and better off. Then I could come back and share what I have learned and find somewhere to live. That said, I fear if Government (Federal/Provincial and City) keeps ignoring the problem, not finding a way to collect data, to truly understand the problem and find a solution; then I will come back to find the situation much much worse. Then I will find a new home in Canada.
Brian Jackson (retiring City Planner) foresees no change in ever-upward pricing pressures on housing unless Ottawa shifts immigration policy or applies land purchase restrictions on foreigner buyers or the Bank of Canada hikes interest rates.
Possible Housing Solutions?
In my time in Vancouver I have spent about $115,200 in rent over 8 years. My biggest problem was having a downpayment. I will add more ideas to this as I learn more:
- Make it easier to pull together the downpayment, maybe larger companies could help their employees
- One idea I considered exploring was buying with a bunch of friends and living together
- Have better building regulations in making Kitchens actually useful
- Re-define what Government thinks is affordable
Checklist for moving to US from Canada
Apply for your Social Security Number – It can take 2-3 weeks for your SSN to be processed and this number really is needed for most things. Do it as soon as you have your visa, you can ask for it as part of the visa process, do this.
Open a Bank Account – Once you have a US mailing address and SSN, you should get to a bank and open an account so you have a place to deposit your US paycheques and an account to start paying bills from.
Get a US Credit Card – Apply for a prepaid credit card where you would leave a $1000 deposit for a $1000 limit on a credit card. Use this to slowly build credit over the next 3-6 months and then you can eventually ask for your deposit back. This is essential to build a Credit Score.