We need real data – not speculation – on land investment and speculation in Vancouver

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Today I was interviewed by the CBC respecting a study they had citing Chinese names as an indicator of non-resident buying.

My statement on this study was that as far as I am aware, no names are more Canadian than any others. Further, this is precisely the kind of “research” that shows how poor our data is on the subject of global investment in our domestic real estate market. These statements were not included in the news story.

I was also tempted to ask whether George Bush was a more Canadian name than Sook-Yin Lee, but figured that might not have gone over so well. My own husband has a name that many would regard as foreign and is routinely asked where he comes from. He comes from VGH and his family has lived here for almost 100 years.

This issue has nothing to do with the origin of what appears to be our global capital influx, or the people who hold it. It has to do with the nature of global capital itself, which could belong to anyone and come from Antarctica or Texas.

I do not put stock in polls showing public support for restrictions on foreign investment, and none whatsoever in the anti-immigration statements on media comment threads. It’s a mystery why credible media outlets permit anonymous comments on race of any kind, and I wish they would end the practice.

The first and primary thing we need is an independent review of the extent of non-resident and speculative investment and a determination of its downstream effect on housing prices and rents. Despite the fact that relative to median incomes our housing prices are now 56% higher than New York’s, we still don’t have even the most basic data on the subject.

Housing costs are now extreme and causing real hardship in our city, without any rational explanation. They are traumatizing seniors, constraining the ability of our corporate sector and universities to attract and retain professional talent, and undermining the ability of young families to thrive in the city.

For the record, I do not call for restrictions on foreign investment, but for study of its extent and a review of the options used by other cities to protect their local housing stock. This might lead us to restrictions, but I would also like to see options like the one suggested by Richmond City Council candidate Chak Au, who proposes finding ways to channel this capital into local business development.

Whatever the ultimate result, we do need to address housing affordability in many creative ways, all made in Vancouver.

8 Responses to We need real data – not speculation – on land investment and speculation in Vancouver
  1. Melanie
    November 18, 2011 | 9:13 am

    The Richmond City Councillor you are referring to is Chak Au – sounds like Jack but spelled differently!

    • votesandy
      November 18, 2011 | 10:11 am

      Fixed! Thank you, Melanie.

  2. Dave
    November 18, 2011 | 4:57 pm

    in complete agreement with your position Sandy, we do need real data.
    You have my vote, good luck!

  3. Chris
    November 21, 2011 | 12:39 am

    Excellent post Sandy.

    I definitely think housing is one of the biggest issues facing Vancouver, and it’s only going to get worse. I’m glad you brought it up repeatedly during the campaign.

    What troubles me, is that I’ve yet to hear a good solution. I know you promised more study and tough choices, but that’s just not compelling enough to vote for. Housing affordability has been an issue in Vancouver for a long time, you think it would have been studied enough by now.

    A foreign investor tax was the one concrete solution proposed during this campaign, but (and I’m glad you acknowledge this) it’s borderline xenophobic and strikes me as easy to by-pass (couldn’t foreigners just invest in a Canadian company that buys into the real estate?). And what if Calgary oil barons start buying up real estate in Vancouver, is that any better than a non-Canadian?

    My biggest concern is that politicians can’t address affordability, and we’ll have to wait until the market fixes it (and that will likely mean a crash). I say that because any potential solution that addresses affordability would mean a broad drop in housing prices across the Lower Mainland. First, I’m not sure what Vancouver politicians can do to affect housing prices across the region. Second, a broad drop would screw over anyone who purchased a home in the past 5 years. I’m still a renter, so I would welcome that change, but I know people who have bought in the past 5 years, and I don’t want to see them lose.

    • Sandy
      November 21, 2011 | 1:24 am

      Why do you say that politicians can’t address affordability when so many global cities, (including some of the most iconic free market capitals in the world such as Singapore and Zurich), take aggressive steps to protect their local housing stock, and have done so with good success?

      We must be much more strategic and long term in our thinking about this issue. There are both global and domestic influences at work here, but the spiral has now become destructive to our economy. It is the role of government to modulate the destructive forces of highly volatile markets, particularly those in which the public has a compelling interests such as housing.

      This is the role our banking regulations play, and they have stood us all in good stead while the globe rocked in 2008/09. That’s what government should be doing right now. Starting with examining the problem and determining the cause.

      I have not proposed specific solutions because that would be premature–we have not yet defined the problem. I’m only pointing to clear and extreme anomalies that are suggestive that an influx of capital is distorting the market, and suggesting that we look at its impact.

      • Chris
        November 21, 2011 | 11:00 am

        I meant to say ‘Vancouver politicians’ likely can’t solve the problem.

        Singapore is a city-state. Vancouver is a city of 600,000 in a region of over 2 million. Vancouver’s housing market is closely tied to the region’s, so any solution will likely have to be regional, if not provincial or federal.

        You still haven’t addressed my last concern – how do you find a solution that doesn’t throw anyone who bought a house in the last 5 years under the bus? Or are you willing to sacrifice their equity for the greater good of the housing market? I’m not saying that’s a bad idea, but it would be a bold one for a politician to make, and I have a tough time seeing a politician winning on such a bold proposal.

        You can’t have affordability without dropping prices, and you can’t have lower prices without someone losing money, and if someone is losing money they’ll probably fight tooth-and-nail to ensure that solution (whatever it might be) won’t be implemented.

        • jesse
          November 27, 2011 | 12:17 am

          There is a reasonable chance that prices will drop regardless anything done by governments. There are two issues here I see overarching any prescriptions for cures:

          1) Why is Vancouver so prone to speculative bubbles in RE and is it desirable to prevent them?

          2) Should Vancouver provide more affordable housing than it has going back generations? As measured by rents, it is far from clear the city is less affordable than it was 10 years ago. The data are not conclusive.

  4. J Gant
    November 21, 2011 | 12:40 pm

    Hey Sandy,

    Just wanted to say that I voted for you as you seemed to be the only person talking about the impact of non-resident buyers.

    I hope that you will keep raising the issue even though you didn’t make it onto council, and I also hope that you will consider running again in three years.

    Cheers!

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