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The market

The Vancouver markup

From Friday's Globe and Mail

For Vancouverites, the high cost of real estate is no joking matter.

In a city where half the population rents, the option to buy a home and lay down some good old-fashioned roots is simply not available to a lot of people.

That option isn’t currently available to high-school teacher Petr Pospisil and girlfriend Ola Rogula. To illustrate the high cost of property in Vancouver, they created a website game called Crack Shack or Mansion? that has, over the last three weeks, become a hugely popular online quiz for Vancouverites and beyond. The quiz is a tongue-in-cheek critique of what $1-million will get you in Vancouver. More often than not, it gets you a house in serious need of repair.

Mr. Pospisil and Ms. Rogula, a lab technician, created the game for their friends, but didn’t expect it to grab so much attention, including media overseas.

282 West 44th Ave., Vancouver. Listed for sale at $1,499,500

It seems simple enough. The user clicks through a slide show of houses and has to decide which one is a drug house and which one is a Vancouver home with at least a $1-million price tag, based on mid-April listings. Most users quickly realize that they can’t tell the difference.

“I went on MLS [Multiple Listings Service] and I wanted to see what $1-million gets you,” says Mr. Pospisil, who is 26. “I couldn’t believe it. You couldn’t tell the difference between the $1-million places and rundown places in Detroit,” he said.

Finding accurate images of drug houses in the United States was the hard part. Finding Vancouver homes for more than $1-million was easy. One drab Vancouver house with crab grass and a concrete pad for a backyard comes with a price tag of $1.78-million.

19 West 17th Ave., Vancouver. Listed for sale at $1,100,000

The quiz started on a blog and was bouncing around Facebook within hours. By the end of the first week, it had received more than 300,000 views.

“After many years of just accepting that prices have gone up and up, it got people talking about it, and reflecting on what’s going on,” says Mr. Pospisil.

Point taken. Vancouver’s so-called $1-million babies are another city’s junkyard dogs.

“What it actually teaches you is the reason things are expensive is because of their land value, not the structure,” says Tsur Somerville, a University of British Columbia professor who studies real estate.

Our high land value explains why Mr. Pospisil had to go looking in American cities for pictures of low-cost drug houses, says Prof. Somerville.

Even Vancouver’s real drug houses are sitting on expensive land.

1462 East 1st Ave., Vancouver. Listed for sale at $1,088,000

It isn’t easy to be a middle-class landowner in Vancouver. While most cities’ house prices in the last year underwent a correction, Vancouver prices rose again. And although the market is expected to soften once interest rates go up this year, the Vancouver market isn’t expected to fall off enough to make houses suddenly affordable to the majority. With its scenic backdrop, mild climate and central location, Vancouver is always at risk of becoming a rich person’s playground.

The city’s lack of affordability also caught the attention of Illinois-based Wendell Cox, who once sat on the Los Angeles County Transportation Commission and who now compiles studies on land-use policy. He’s made a career out of opposing “smart growth,” and “New Urbanism,” and has a lot to say about Vancouver’s house prices. Mr. Cox is employed by private and public companies, and has done consultant work in Canada.

“I guess you could consider me being on the right side of the political spectrum, at least with respect to urban planning,” he says.

He too saw the Crack Shack or Mansion? quiz online. He blames the high cost of real estate on efforts to contain sprawl and dwell on urban density.

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