SEATTLE 鈥� The first thing Chris Caculitan mentions, when asked how the Emerald City has changed in the years since he grew up here, is the tech companies. They鈥檙e everywhere now.
Local media refer to the Pacific Northwest city鈥檚 recent tech-fuelled economic boom as the 鈥渟econd gold rush鈥� to hit town.
But that wealth hasn鈥檛 lifted all boats, as Caculitan, 28, has seen first-hand. Caculitan, who studied social work at Seattle University, works for the Low-Income Housing Institute, a Seattle non-profit. Born in the Philippines, Caculitan immigrated to Seattle as a child. The support his working-class family received from the government and community members influenced his career choice, he said. 鈥淚 kind of saw what that struggle was like, so I wanted to make it a career, helping those who needed more.鈥�
As money poured into Seattle in recent years, some of Caculitan鈥檚 family and friends have been forced out. That will sound familiar to many sa国际传媒 residents, particularly renters. But in Seattle, even longtime homeowners with full-time jobs have had their property taxes soar beyond what they鈥檙e able to pay, forcing them to leave town.
Caculitan manages one of the 鈥渢iny house villages鈥� that the City of Seattle has supported in recent years in response to the city鈥檚 increasing homelessness. He works at the village in South Lake Union, a rapidly changing neighbourhood, home to expensive residential highrises and some of the city鈥檚 鈥� and the world鈥檚 鈥� largest tech companies.
The village, which was an underutilized city-owned parking lot until last year, is home for 28聽previously homeless Seattleites living in 22 wooden sheds. The homes are less than 100 square feet each, but the 鈥渧illagers鈥� are happy to have a locking door and a roof that keeps out the rain.
The day before Caculitan gave the Vancouver Sun a tour of the village last month, a different Seattle was on display a six-minute Uber ride away, in a downtown hotel ballroom.
鈥楾he opportunities are聽immense鈥�
There was no shortage of optimism among government officials and business leaders from sa国际传媒, Washington and Oregon, gathered for the Cascadia Innovation Corridor Conference. The governor of Washington and premier of sa国际传媒 sat together on stage discussing big goals they share as 鈥渁llies,鈥� and the mayors of Vancouver and Seattle met to discuss their cities鈥� shared opportunities. There was much talk of how the Cascadia 鈥渕ega-region鈥� of 10聽million people can be a bigger global competitor than any of its three urban centres 鈥� Portland, Seattle and Vancouver 鈥� could be on their own.
Brad Smith, president of Microsoft, told the crowd his trillion-dollar company has 鈥渂een so excited to see Vancouver increasingly take off.鈥�
鈥淲e at Microsoft have been so enthusiastic about our development centre in Vancouver,鈥� said Smith, adding that 鈥渋t鈥檚 not surprising鈥� so many Seattle-based tech companies are 鈥渕oving north to Vancouver.鈥�
Microsoft isn鈥檛 the only Washington giant growing in Vancouver. When Seattle-based online retailer Amazon unveiled plans last year to create 3,000 jobs in Vancouver in a 416,000-square-foot complex being built on top of the old sa国际传媒 Post facility on West Georgia, Prime Minister Justin Trudeau was there for the announcement.
sa国际传媒鈥檚 leaders have worked for years to boost the province鈥檚 tech sector. Government officials often talk about boosting the 鈥渋nnovation economy鈥� as a way to produce high-paying jobs, generate tax revenue and help move the economy away from dependence on resource-based industries and toward a more climate-friendly future.
Hours after Microsoft鈥檚 Smith sang the praises of Vancouver and Surrey, Premier John Horgan and Washington Gov. Jay Inslee took to the same stage.
鈥淭he tech sector has certainly developed here, and then as it blossoms into British Columbia, we see synergies between the two jurisdictions that are compelling to investors,鈥� Horgan said. 鈥淭he opportunities are immense.鈥�
Some of sa国际传媒鈥檚 traditional industries, such as forestry, are struggling, but the province鈥檚 technology sector has been setting records for revenue and job numbers. The latest government numbers show more than 114,200聽people are employed in sa国际传媒鈥檚 high-technology sector, with $31 billion in revenue in 2017, a 6.9 per cent increase from the previous year.
Sitting in the governor鈥檚 Seattle offices, Horgan listed Metro Vancouver鈥檚 advantages in competing for top companies and talent from the U.S. and abroad: an educated population, top research universities, good health care, multicultural cities, order and stability.And as U.S. immigration has tightened under President Donald Trump, it has become harder for American companies to bring in top international talent. But a Seattle-based company with a Vancouver office can attract foreign recruits to its northern outpost. That, Horgan said, represents 鈥渁 competitive advantage for us.鈥�
The sa国际传媒 government wants, Horgan said, to 鈥渇ocus on lifting wages. We don鈥檛 want to be the lowest common denominator.鈥�
That touches on one of sa国际传媒鈥檚 competitive advantages in the tech industry: cheap labour 鈥� or at least relatively cheap. In 2017, when cities around North America made pitches to Amazon seeking to host its second headquarters, Vancouver鈥檚 application highlighted: 鈥淲e have the lowest wages of all North American tech hubs.鈥�
Vancouver鈥檚 bid, which drew criticism locally for boasting about its low-earning tech workers, cited an average salary for a software engineer in Vancouver as $60,107 US compared with $92,380 in Atlanta and $113,906 in Seattle. That means while a Vancouver software engineer鈥檚 average salary was almost half that of a Seattle counterpart, it鈥檚 still 65聽per cent higher than Metro Vancouver鈥檚 average market income. By some estimates, the wage gap between tech workers and other occupations is even wider in Seattle.
鈥楴orth-south鈥� connections
In the wake of the Canadian federal election, Vancouver Mayor Kennedy Stewart said he hadn鈥檛 heard anything on the campaign trail about promoting economic co-operation and development in Cascadia.
鈥淚 haven鈥檛 heard it mentioned once,鈥� Stewart said after the Cascadia conference. 鈥淚t would be my job to make this Cascadia corridor idea clearer to the feds. The province and John Horgan are all over this. 鈥� I think one of the things that I鈥檒l be talking to [the federal government] about is that we鈥檝e got to take this more seriously.鈥�
鈥淚鈥檓 a passionately proud Canadian,鈥� Horgan said, 鈥渂ut I see there are obstacles because our east-west linkages often times get in the way of expanding our north-south relationship. 鈥� Ottawa is 3,000 miles away from British Columbia physically, and sometimes, it feels like they鈥檙e a couple of light years away. So we have more in common north-south, quite often, than we do east-west.鈥�
As a former NDP MP representing Burnaby, Stewart knows about that distance between sa国际传媒 and Ottawa. His first term was under Stephen Harper鈥檚 Conservatives and his second under Justin Trudeau鈥檚 Liberals, and both parties, he said, seemed 鈥淥ttawa-centric鈥� and 鈥渙ut of touch鈥� with the West Coast.
International companies are 鈥渓ooking at us in a serious way, and I don鈥檛 think we鈥檙e ready for that,鈥� Stewart said. 鈥淚鈥檓 getting ready for it, but we have to have a real conversation as a community about what we want this city to be. Because I think the opportunities are there, but it鈥檚 just we鈥檝e got to make sure we take the right ones.鈥�
Dark side of the boom?
Leaders on both sides of the border acknowledge concerns about the dark side of the boom.
Metro Vancouver has grappled for years with a housing affordability and homelessness crisis. But the Seattle-King County area, with a similar overall population, has almost four times as many homeless people, including many full-time workers and families with children. Researchers have found Seattle鈥檚 recent surge in homelessness is not linked to increases in either population or poverty in the region, but instead to rising housing costs and wealth inequality.
Vancouver鈥檚 chief planner, Gil Kelley, made a prediction on the subject of local wealth inequality in 2017, when he presented the city鈥檚 new 10-year housing strategy to the previous mayor and council.
Kelley, who had arrived in Vancouver a year earlier from San Francisco, where he was director of citywide planning, said both cities faced housing challenges, but there were notable differences. One key element of San Francisco鈥檚 housing crisis, 鈥渢hat hasn鈥檛 quite hit Vancouver yet, but likely will, with its growing high-tech economy, was the growing wage gap between high-technology workers and regular folks in San Francisco,鈥� Kelley said.
Vancouver had high housing prices but not very high wages, and its housing affordability woes were instead largely driven by a 鈥渧ery extreme level of speculative investment in real estate,鈥� he said.
To deal with Vancouver鈥檚 near-zero rental vacancy rate, Kelley鈥檚 housing strategy sought to boost construction of rental housing, a direction broadly supported by the current mayor and council.
Over the past decade, 77 per cent of homes built in Vancouver were condos and houses. Only 17聽per cent were market rental homes and five per cent were social housing. That includes the uptick in rental housing in recent years, as Vancouver adopted policies to encourage private-sector apartment construction.
It鈥檚 a dramatically different picture from Seattle, where the 鈥渙ne saving grace has been the immense amount of apartment construction,鈥� said University of Washington professor Margaret O鈥橫ara.
Policies in Seattle have been welcoming for big rental projects, while Vancouver developers have long complained their city鈥檚 onerous approval process threatens the viability of such projects. A Seattle planning official recently gave a presentation to a room full of Vancouver developers, the Province reported in August, that 鈥渆licited envious sighs when he talked about approving a proposed Seattle apartment tower in about a year.鈥�
Vancouver developers 鈥� many increasingly active in Seattle 鈥� point to Seattle鈥檚 rental construction boom and say Vancouver must build its way out of its own housing crisis. While Vancouver鈥檚 rental vacancy rate remains below one per cent, Seattle鈥檚 vacancy rate is aboutr 10 per cent, and rents in some Seattle neighbourhoods have started to drop.
But while Seattle鈥檚 rental supply increase has helped, somewhat, to ease the tight market, those apartments are still too expensive for many locals. And the fact that thousands of Seattleites are homeless while one in 10 apartments sit empty suggests a rental construction boom is not, on its own, the solution to the housing crisis.
鈥淚t鈥檚 market-rate housing, it鈥檚 meeting the tech workers鈥� needs, not the needs of a lower-income population,鈥� O鈥橫ara said. 鈥淭hat鈥檚 been the knock on Seattle.鈥�
In the years since Kelley鈥檚 2017 presentation, government interventions such as Vancouver鈥檚 empty homes tax and sa国际传媒鈥檚 speculation tax have been credited with helping cool the housing market.
In that context, it makes sense that a large enough influx of new people earning far above median local incomes could potentially undo the recent efforts to moderate the housing market, said Trevor Barnes, a professor of geography at the University of sa国际传媒
San Francisco and Seattle provide examples of what a tech gold rush can do 鈥渋f it gets big enough,鈥� Barnes said. Vancouver鈥檚 tech industry, he said, 鈥渋s not big enough, I think, at the moment to have that kind of effect, but it is a fast-growing sector, so I don鈥檛 know how long it鈥檚 going to be before the tide turns.鈥�
sa国际传媒 also has many locally born and bred tech companies, many of which have criticized the federal government for failing to give priority to the country鈥檚 homegrown digital economy. This month, more than 100 Canadian tech CEOs signed an open letter to the leaders of the federal Liberals, Conservatives, NDP and Greens, urging them to 鈥渄evelop economic policies that advance innovative Canadian companies,鈥� claiming 鈥渟a国际传媒鈥檚 productivity is lagging.鈥�
There are concerns, too, about foreign tech companies coming here to exploit our comparatively cheap labour and take home most of the benefit.
鈥淥f course, that鈥檚 the story of sa国际传媒, historically,鈥� Barnes said. 鈥淔oreign companies that have come in to exploit resources here, lumber and minerals. 鈥� Maybe this is another version of that. Except it鈥檚 our talent that鈥檚 being exploited.鈥�
It鈥檚 up to our governments, Barnes said, to ensure enough of that prosperity benefits regular Canadians, and not only a small number of tech executives in the U.S. He isn鈥檛 sure those governments are up to the task, noting 鈥渋t鈥檚 certainly not been a major issue in the federal election.鈥�
鈥楢 bucket of ice cream鈥�
sa国际传媒 Finance Minister Carole James is aware of concerns around upward pressure on housing prices. Indeed, she said, she hears 鈥渄irectly from the tech sector about the importance of creating affordable housing options to attract and maintain skilled workers.鈥�
鈥淕ood jobs and affordable communities go hand-in-hand and we are committed to delivering both,鈥� James said in an emailed statement.
鈥淥ur government has made tech and innovation a priority for economic growth across the province, from Surrey to Victoria to Kelowna, because we recognize British Columbia鈥檚 potential to be a global hub of innovation 鈥� My ministry continually monitors the housing market, and so far I am cautiously optimistic the measures implemented by our government are beginning to bear results, with strong indications that moderation and stability are returning to sa国际传媒鈥檚 housing market.鈥�
Amazon鈥檚 presence in Seattle is especially large, as that鈥檚 where it is headquartered. But even if Vancouver becomes home to a number of branch offices for tech companies, it could be enough to bring unintended consequences, Stewart said, adding it could actually 鈥渂e more of a risk because the company has less of a connection with the community.鈥�
Microsoft touted its deep connection with the Seattle when, earlier this year, it announced an unprecedented commitment of $500 million US in loans and grants to support middle- and low-income housing in the area.
Of course, Stewart said, his cautious approach doesn鈥檛 mean he doesn鈥檛 want economic growth and job creation in Vancouver.
鈥淭hese opportunities might be the best that ever happen to us. We just have to be able to evaluate this, as a community,鈥� Stewart said. 鈥淲hat can we learn from Seattle and San Francisco? What鈥檚 happened to them, both good and bad?
鈥淚 like a bowl of ice cream. But I don鈥檛 want to eat a bucket of ice cream. And I think that鈥檚 what this kind of growth can be: It can have detrimental effects if you get too much of a good thing all at once.鈥�
