The festering debate about whether Vancouver should continue its open-house welcome to global investors has boiled over – again.
This time there are three new – and useful – twists to the conversation, if I can call it that. We are so overdue for a real conversation about what we want our housing stock to be: a parking place for global investors or affordable homes for contributing members of the community.
The first new twist is that civic elections are on the horizon, and this is the central issue in at least Vancouver, Richmond and West Vancouver. “Livability” is a hoax if ordinary citizens who want to buy a home can't afford to live here. This elephant in the room has big legs.
The second twist is that talk about absentee offshore investment is frequently sidetracked by accusations of “racism.” It's a bogus reason to stop talking. Racists regularly undermine important public debates, but we don't let them stop those debates from continuing among people of nobler intent.
The racist tag was vigorously resisted by Ian Young, a Hong Kong resident of ethnic Chinese descent posted here as the South China Morning Post correspondent. He says the distortion of the local housing market – especially in Vancouver and Richmond – by an estimated 60,000 mainland Chinese millionaire immigrant investors bringing in outside money is a subject of intense concern to local Chinese readers.
He filled the widely touted data gap with federal government statistics on immigrant investors. He also pointed out that “the issue isn't whether a buyer is foreign, but whether their money is foreign.”
That implicates all of us who directly sell to non-resident buyers or who enjoy a subsequently bigger piece of the $163 billion pool of real estate equity recently identified by condo marketer Bob Rennie. Those valuations are higher because of Vancouver's role as a “hedge city” for global investors looking for a clean, livable, safe, climate-protected place to park their money.
“There aren't that many of those places,” Bing Thom Architects planner Andy Yan told The New Yorker. “So let's raise the parking fees.”
The New Yorker article on Vancouver's role as “the most expensive housing market in North America” relied on Conference Board of Canada data. Then there's the Landcor Data Group finding that in 2008 and 2010, somewhere between 46% and 74% of buyers of condos over $2 million and homes over $3 million were persons they identified as mainland Chinese investors – not to mention affluent buyers from 89 other countries.
It's inconceivable that an industry that spends millions of dollars marketing to offshore buyers doesn't have reliable data on who's buying property in Vancouver. Please check that database again.
Young's conclusion is that “Vancouver is the most popular destination city for wealth-based migrants and would-be migrants in the world.”
Does the resulting housing unaffordability matter? Yes.
Among other impacts both positive and negative, it severely undermines the local economy.
Enter the third new twist, a BC Chamber of Commerce resolution at its May AGM. It dances through the thickets of potential racism in search of a better Property Transfer Tax that lowers the price of housing for B.C. residents and raises it for non-residents.
Buyers filling out the Property Transfer Tax return could declare themselves a B.C. resident to get a tax reduction similar to the current exemption for first-time buyers. Provincial revenue would stay intact by raising the Property Transfer Tax for non-residents.
Anyone running for municipal office in November would do well to engage this discussion – and even dare to propose some solutions.
