City of Vancouver needs to focus more on growing the economy, says chief planner

Jul 8 2019, 8:17 am

Economic growth will be a key consideration in the City of Vancouver’s upcoming citywide plan, according to Gil Kelley, the municipal government’s general manager of planning, urban design, and sustainability.

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In a recent presentation to city council on the state of Vancouver’s economy, Kelley said a review of employment lands and the economy will be an “important building block” in the upcoming citywide planning work, which will fundamentally provide a better understanding of the economic drivers in the region and the right job-supporting land supply for the economy.

Another focus will be studying neighbourhood retail areas, specifically areas of select business improvement associations.

Kelley said only about 10% of the city’s land area is purely dedicated to employment space, which accounts for spaces that are 100% for retail, office, industrial, and/or services.

He said dedicated employment space allowed for Vancouver’s recent attraction of a number of major companies, such as Amazon and Microsoft.

Vancouver economy

Lands in Vancouver designated purely as job space. (City of Vancouver)

But this was not always the case; much of the Central Business District (CBD) in downtown Vancouver was developed into residential under the city’s post-Expo policy of ‘Living First,’ resulting in a new neighbourhood of luxury condo towers in previously commercial-only zoning in Coal Harbour.

In the mid-2000s, after realizing that the rapid development of condo towers in the CBD could severely constrain future job growth, the city enacted a moratorium on residential development, requiring developers to put a cap on new housing and focus more on office space.

More recently, the city’s approved False Creek Flats Plan also placed a significant emphasis on preserving the 450-acre parcel of land on job space, specifically light and creative industrial, tech and digital uses, and general office. The area’s around Great Northern Way have proven to be a major draw for major businesses, particularly the new corporate offices of Nature’s Path and possibly even lululemon.

However, Kelley noted Vancouver’s industrial spaces and jobs are at great risk, and it, in fact, has already shed over 10,000 warehousing and manufacturing jobs. High industrial lease costs due to low industrial supply and the redevelopment of industrial spaces into residential uses have been leading contributors to this negative trend, which is expected to grow without intervention.

Vancouver economy

Job loss and gains in Vancouver. (City of Vancouver)

“We are seeing displacement of industrial and lower-rent paying economic uses, and displacement of portions of the workforce who can’t afford to live here. These are trouble signs we need to pay attention to,” he said, adding that there is very high demand for workspaces of all kinds.

“The City of Vancouver is outstripping most of the higher income and innovation categories than the rest of the region. We’ve actually lost industrial and manufacturing space… [there’s] a lot of pressure on traditional manufacturing space.”

With a vacancy rate of under 2%. Vancouver’s industrial vacancy is the lowest of any major city in North America. Over the next few years, Vancouver’s industrial shortage and high lease costs could result in the loss of businesses that provide 30,000 jobs, $3.6 billion in annual revenues, and $1.2 billion in annual wages.

Importance of Cascadia Megaregion for Vancouver

Kelley, who was previously the director of citywide planning for the City of San Francisco, says Vancouver’s economic future could highly benefit from planning approaches that strategically take into consideration Metro Vancouver’s integration with the Cascadia egaregion and the spillover effect from major economic centres along the West Coast.

“Having come recently from San Francisco, what is happening there is the price of housing, the congestion and travel times, and the lack of mobility options is forcing many companies to look elsewhere. For instance, you’re seeing Amazon expressing a big interest in Vancouver, and many other companies in the Bay area,” he said.

“You’re seeing actual mobility up and down the West Coast amongst companies, and I think looking at that as a future economic entity is critical to our view of the long-term economic health of Vancouver, which is perfectly poised to really accelerate that job growth.”

Vancouver economy

Vancouver vs. the Cascadia Megaregion and San Francisco. (City of Vancouver)

Over the past decade, the number of jobs in Vancouver grew by 14% — specifically from growth in professional, scientific, technical services, retail, and a higher share in information and cultural industries.

Moreover, the local economy has seen some diversification, and ever since the start of the post-Expo era, the city’s GDP grew by 150%.

“We have not been on a rocket like NYC, Seattle, and San Francisco, but we’ve had steady growth,” he added. “We have grown rather modestly over the last three decades.”

Vancouver currently has 26% of the population and 33% of the jobs of Metro Vancouver, and an even larger share of professional and technical service jobs.

Vancouver economy

Metro Vancouver population and jobs. (City of Vancouver)

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