…The story of this type of Canadian nationalism, which aims to make it possible for young, working Canadians to have a chance at affordable housing, is spelled out in a new study by B.C. housing experts Joshua Gordon, David Ley and Andy Yan.
Gordon is with the digital society lab at McMaster University, Ley is author of Housing Booms in Gateway Cities and Yan is director of Simon Fraser University’s City Program.
They rebut big players in the Canadian development industry and their allies, whom they dub the “growth machine.”
These powerful forces are often guilty of “playing the race card” as an “ideological tactic” to stop the public from realizing how offshore capital and wealthy immigrants have contributed to astronomical house prices in Canada, say the authors.
The trio’s paper, Crafting the Narrative: Wealth migration, growth machines and the politics of housing affordability in Vancouver, is published in The Journal of Ethnic and Migration Studies. It is a direct response to a 2023 article by two prominent B.C. researchers that was published in the same journal.
In their article, University of B.C. professor Nathanael Lauster and Vancouver statistician Jens von Bergmann defended investment of offshore capital in Canadian housing, arguing that opposition to the phenomenon is a baseless “moral panic” in the guise of “housing nationalism,” a movement they deem to be a “hammer in search of nails.”
Lauster and von Bergmann argued in their 2023 paper, which echoed the views of many in the development industry, that such economic nationalism “blames and penalizes the foreign” and, specifically, is “anti-Chinese.”
In addition to their high profiles as commentators in the media, Lauster and von Bergmann were key players in the legal attempt to force the repeal of B.C.’s foreign-buyers tax, which failed. B.C. Appeal Court judges concluded in 2019 the tax didn’t promote racism or reinforce “racial stereotypes” about people from Asia.
The new paper by Gordon, Ley and Yan compiles data showing foreign capital has indeed been a dramatic factor in raising B.C. housing values, a fact they say is often “celebrated behind closed doors by the real estate industry.”
Their paper frequently quotes business speeches by Vancouver condo marketer Bob Rennie, including when he told an audience of developers that buyers from Mainland China were at one point responsible for 90 per cent of the homes sold for more than $2 million on the west side of Vancouver.
The tremendous volume of high-end housing purchases by non-Canadians was confirmed in a 2015 study by Yan. This new paper provides further context. It notes how what was happening to Metro Vancouver was also occurring at the same time in the U.S., which, unlike Canada, keeps track of foreign investment in property.
The U.S., between 2015 and 2018, experienced a six-times surge in the volume of housing purchases made by buyers from China. The multi-billions of dollars were much more geographically spread around than in Canada, however, where the money was concentrated in Vancouver and Toronto.
While acknowledging that some people can indeed be xenophobic, Gordon, Ley and Yan say there is no evidence of that in regard to opposition to excessive foreign capital in Canadian housing. Polls, they say, show popular resistance to these global flows of capital came from across ethnic groups, including people of Chinese ancestry.
The scholars also provide evidence that B.C. residents’ grassroots opposition to “foreign ownership” — a term in which they include “satellite families” who earn most of their money outside of the country, where it’s not subject to Canadian taxation — has come largely from centrist and left-wing people.
They explain how B.C.’s foreign-buyers tax, and the speculation and vacancy tax, have been moderately successful in curbing house-price inflation.
Before the two taxes were introduced in 2016 and 2018 the west side of Vancouver had seen detached house prices jump by 67 per cent between 2014 and 2016. Prices in the same two-year period spiked by a “remarkable” 84 per cent in Richmond.
After the two taxes came into effect, the price of houses in the same parts of the city, which had drawn the most interest from foreign buyers and rich investor immigrants, fell by about one-fifth.
Reflecting on political philosophy, the authors take exception to Lauster and von Bergmann’s claim that opposition to such price jumps came from “reactionaries,” a term normally used to describe right-wing people who oppose progress or reform.
Their article says protective policies like the foreign buyers and speculation taxes have instead had “egalitarian effects, generating tax revenue from landowners, property developers and wealthy buyers that helped support government spending on lower-income individuals, including affordable housing.”
The authors, including Ley, a UBC geography professor emeritus who this week publicly endorsed the candidacy of TEAM’s Colleen Hardwick in Vancouver’s April 5 byelection, recommend a novel idea for governments to go further in limiting foreign wealth in B.C. housing.
“More aggressive action is possible,” they say, “such as property surtaxes that can be offset by income tax paid, with exemptions for seniors, which would more comprehensively tax foreign-capital-based home ownership.”
The authors readily acknowledge the “growth machine” opposes such policy ideas: It would rather continue to “instrumentalize charges of racism to support neo-liberal agendas” and maximize profits.
The trouble, suggest the authors, is that such name-calling taints legitimate debate about housing and the nature of healthy nationalism.
Multicultural Meanderings 