Andy Yan, the analyst who exposed Vancouver’s real estate disaster: Terry Glavin

2018/02/16 Leave a comment

A Glavin rant, not without reason. The interactive graphic is particularly effective:
Andy Yan is a 42-year-old East Vancouverite who came up out of the proud working class ranks of Van Tech high school, toiling on weekends in the kill tank at the old Hallmark Poultry Factory on Clark Drive. He set out on a career in urban regeneration and applied demographics that took him to projects in New Orleans, New York City and San Francisco.

Nowadays he’s the director of the City Program at Simon Fraser University, and while he’s too modest to boast about it, along the way he’s picked up a couple of exceedingly rare civic distinctions.

The first is the enduring enmity of all the politicians, real estate speculators, white-collar currency pirates and money launderers who have turned Vancouver into a global swindler’s paradise for real estate racketeering, a city that is now also one of the world’s most hopelessly pathetic urban landscapes of housing affordability. The second thing Yan has earned is an unfettered and unimpeachable right to say “I told you so.”

Three years ago, Yan was anxious to get a handle on the role foreign capital was playing in Vancouver’s weirdly convulsing real estate market. At the time, Yan’s main gig was his work as an urban planner with Bing Thom Architects, on contract as an urban planner. When Yan published the results of his research in November, 2015, it came as a shock, for two main reasons. It seemed to conclusively prove what everybody knew but nobody was supposed to say out loud. And it broke a taboo that was enforced so absurdly that Vancouver mayor Gregor Robertson resorted to dismissing Yan’s research as racist.

Yan found that buyers with “non-Anglicised Chinese names” had picked up two-thirds of 172 houses sold over a six-month period beginning in September 2014 in Vancouver’s posh west side neighbourhoods. Contrary to public perception, however, the buyers weren’t just showing up with “bags of cash” to make their buys. Some of Canada’s biggest banks were in on it. Roughly 80 per cent of the deals involved a mortgage, and half of the mortgages were held by two banks – CIBC and HSBC.

Canada’s banks have mastered the manipulation of clandestine back channels around China’s currency control regulations—the same routes that well-connected Chinese multi-millionaires have been using to shift up to a trillion dollars’ worth of yuan out of China every year. What wasn’t clear about what was happening on Vancouver’ s west side, however, was who the real buyers were, exactly. The new homeowners’ most commonly stated occupation: housewife or homemaker.

Fast forward three years. The weirdness that Yan documented in Point Grey, Dunbar, Kerrisdale and Shaughnessy has rapidly spread southward and eastward, decoupling the bonds linking incomes with housing values across Burnaby, Richmond, Coquitlam, all the way out to Surrey and White Rock on the Canada-U.S. border. Metro Vancouver’s real estate market is now a dystopian tableau of panic buying, tax fraud, property flipping, overseas pre-construction condominium sales, stone cold speculation and elaborate, multiple-account money transfer rigmaroles that are the conduit of choice for drug cartel tycoons. Not even the heaviest regulatory hands at the controls of the Chinese Communist Party’s surveillance state seem capable of shutting the networks down.

It’s not just about shady Chinese money—not by a long shot. Vancouver’s old establishment property developers and real-estate companies fed the frenzies and made a killing. Along the way, they greased the skids by pouring buckets of money into Gregor Robertson’s now-dying Vision Vancouver civic party and Christy Clark’s Liberal Party. Robertson is now a sad figure, his legacy a shambles, his term up in October, and even his celebrated relationship with his glamorous girlfriend, the Chinese pop star Wanting Qu, fell apart last year. Qu’s mother, a Communist Party official in Harbin, remains on trial on charges of embezzling $70 million in a land swindle. Christy Clark is history, too. Her government was toppled last year by John Horgan’s New Democrats. With at least 60,000 Chinese immigrant investors sloshing their money around Metro Vancouver real estate over the past few years, federal politicians, too—Liberals, mainly—have been more than happy to rake it in at cash-for-access soirees and in generous donations to election campaign war chests.

In these ways, in Vancouver’s political circles, and in polite company, one simply didn’t mention the way the city’s housing market was being restructured to serve as an offshore investment bolthole for billions of dollars’ worth of shadow currency being spirited out of China, Iran, Russia and other such kleptocracies. But back in 2015, when the profoundly caucasian Mayor Robertson attempted to dismiss Yan’s findings—“I’m very concerned with the racist tones that are implied here,” Robertson said—it was a smear too far.

Yan’s great-grandfather was allowed into Canada only after being obliged to pay the infamously racist head tax Ottawa put in effect to keep out working-class Chinese immigrants. Students, merchants and diplomats were exempt. The head tax was in place until 1923. Yan wasn’t going to put up with Robertson’s backchat, and by that time, Vancouver’s ethnic Chinese community leaders had similarly lost their patience. White real estate moguls and politicians like Robertson persisted in proclaiming their anti-racist bona fides and purporting to be the champions of Vancouver’s Chinese community by shutting down public debates about the region’s housing catastrophe. Brandon Yan, a civic activist and volunteer on Vancouver’s planning commission, put it best: “Let’s leave it to the rich white dudes to decide what’s racist, right?”

Vancouver’s “condo king” Bob Rennie—a primary financial backer of Robertson’s NDP-tilting Vision Vancouver team and also the chief fundraiser for the NDP’s adversaries in Christy Clark’s Liberals—had cultivated a particularly brazen habit of it. “So you had these whispers about racism being used to shut down a dialogue about affordability and the kind of city we want to build here,” Andy Yan explained. “It’s a kind of moral signalling to camouflage immoral actions. It’s opportunism, and it’s a cover for the tremendous injustices that are emerging in the City of Vancouver and across the region. It’s a weird Vancouver thing. It’s very annoying. It’s kale in the smoothies or something.”

While the politicians and their friends in the property industry were making speeches about diversity and the importance of having sensitive feelings, foreign ownership grew to account for more than $45 billion dollars’ worth of Metro Vancouver residential property. Within Vancouver city limits, 7.6 per cent of all residential properties are now owned directly by individuals “whose principal residence is outside of Canada,” by the definition of the Canada Mortgage and Housing Corporation. Roughly one in ten Vancouver condos are owned by non-residents. And that’s just the owners we know about.

Transparency International reckons that perhaps half of Vancouver’s most expensive properties are owned by shell companies or trusts, with the nominal owners commonly listed as student, housewife, or homemaker. Roughly 99 per cent of the single detached houses within Vancouver’s city limits are now valued in excess of $1 million. More than 20,000 Vancouver homes are vacant, year round. Vancouver’s rental vacancy rate is hovering just below one per cent.

“I’m always careful about using biomedical analogies,” Yan told me the other day, “but what was like a little skin ailment, if you will, over the last 10 or 15 years, has become a full fledged cancer.” Over just the past four years, throughout Metro Vancouver, homes worth $1 million or more have risen from 23 per cent of the housing market in 2014 to 73 per cent of the market now. Yan has been putting together a series of maps that show how the $1 million “red line” has been moving inexorably across the region, deep into the suburbs. “But what those maps don’t do is they don’t factor in transportation costs,” Yan said. “The top two expenditures of any Canadian household is shelter and transportation. God help you if you factor in child care. The whole map might as well be red. A number of factors have all come together to produce this catastrophic situation, but what was a small concentrated pattern in the west side of Vancouver has now metastasized to hit every single part of the region, and it’s similarly metastasized into the rest of the economy.”

As for where things are headed, Horgan’s NDP government has raised expectations, mainly because of Attorney-General David Eby’s avowed determination to chase dirty money out of Vancouver’s housing market and bust up the gangland playground B.C.’s provincially-licenced casinos have become—money laundered through casinos has also been pouring into residential property acquisitions. In Tuesday’s throne speech,  delivered by Lt.-Gov. Judith Guichon, Horgan’s government directly addressed tax fraud, tax evasion and money laundering in the real estate market, hinting that a speculation tax is in the works. Next week, the New Democrats release their first full budget. The housing file, however, falls mainly to the more timid Carole James, former NDP leader and now deputy premier and finance minister. Preliminary indications aren’t particularly promising.

With short-term AirBnB rentals swallowing up long-term rental inventory, Yan was less than impressed with James’ solution, announced last week: short-term rental outfits will now pay the eight per cent provincial sales tax, and two or three per cent in municipal taxes. “That’s like taxing cigarettes to pay for lung cancer treatments,” Yan said.

Developing appropriately punitive taxes to discourage property-flipping and offshore pre-construction sales – those are obvious fixes. But knowing how to fix things requires a clear understanding of what’s wrong, Yan says, and closing the “bare trust loophole” that allows property owners to hide their holdings is a must-do. Ontario closed the loophole back in the 1980s. Clark’s Liberals promised to close it, but they never did.

In the meantime, Yan is focusing on converting hidden-away data into publicly comprehensible information. Some key information Yan has drawn from a trove recently released by Statistics Canada’s Canadian Housing Statistics Program, for instance, shows that simply building more condominiums won’t do. A condo building boom in Metro Vancouver has kept the property developers happy, but there’s no evidence that the boost in supply has lessened demand or beaten back prices. Nearly one in five condos built in Vancouver since 2016 were snapped up by non-residents.

To a certain extent, there’s nothing new here,” Yan said, pointing to the Guinness family’s financing of the Lion’s Gate Bridge in the 1920s, and the opening up of the British Properties on Burrard Inlet’s north shore. “But what is new is the hyper-commodification of residential real estate, mixed in with an intensification of global flows of people and capital. It’s just a statement in fact. We’re talking about the globalization of the Chinese economy and its impacts.”

Yan says there may be some solution—a mix of remedies, new laws, purpose-built rental housing, tax adjustments and so on—that does not mean a collapse in Metro Vancouver’s real estate prices. Channelling foreign investment in such a way as to serve the public interest might be possible. “But whether this comes out as a bubble-popping isn’t the point. That’s a secondary concern to the kind of society we want to build. “We need to go back to civic virtues.

“We need to talk about the sacrifices we are willing and we need to make for the greater good of the community. We need to have a discussion about what the public good is, and what we are willing to sacrifice to make it happen.”

Source: Andy Yan, the analyst who exposed Vancouver’s real estate disaster

Filed under Immigration Tagged with , , ,

Douglas Todd: Here’s how to end migration scams by the global rich in Canada

2018/01/22 Leave a comment

Todd continues his series of articles on immigration scams involving wealthy immigrants, including the issue of taxation, particularly those who ‘park’ their family in Canada while continuing to live and work in their country of origin.

I am currently analyzing citizenship take-up by immigration category and business immigrants (entrepreneurs, investors) have the largest gap between relatively low principal applicant naturalization (mainly men) and secondary applicants (their families):

Canada could crack down in many ways on the scams performed by “ghost immigrants” who avoid paying their share of Canadian taxes while driving up housing prices in Vancouver and Toronto.

Immigration and tax specialists are pressing Ottawa to adopt numerous proposals they believe would put an end to widespread illegitimate migration schemes, such as those employed by two rich families from China, whose tactics were exposed this month in B.C. Supreme Court.

The case of Fu versus Zhu revealed how the wealthy families, who had together bought three expensive homes on the west side of Vancouver, had been engaging in illicit plots involving Canadian real estate, tax avoidance and lying about their immigration status.

“The problem is that there is large-scale immigration of relatively wealthy people to Canada who are not contributing significantly, if at all, to the Canadian tax base,” said David Lesperance, a specialist in Canadian tax and immigration law.

“They have bid up the housing markets in Vancouver and Toronto. They are also receiving the benefits of Canadian permanent resident status, including excellent schooling, free medical care, security and (eventually, as citizens) an excellent visa-free passport.”

Noted Vancouver immigration lawyer Richard Kurland shares much of the unease of Lesperance – including frustration that Canadian authorities are not enforcing the country’s rules when would-be immigrants fail to declare their worldwide income, pretend to spend time in Canada and obscure the real owners of their properties.

The two specialists have appeared before politicians in Ottawa to offer their ideas on fighting such scams. They agree problems have been created by Canada welcoming so many investor families, in which the breadwinners often become “ghosts immigrants” with little connection to Canada other than engaging in property speculation.

A recent investigation by the South China Morning Post, for instance, found that more than 40 per cent of the breadwinners for recent millionaire migrant households in Canada appear to have left Canada, although some left family members behind. It’s a widespread phenomenon, said the newspaper, among rich Hong Kong and Mainland Chinese migrants.

Lesperance and Kurland maintain their proposals would be especially helpful in dealing with the increasing number of trans-national “astronaut” migrants who use Canadian real-estate primarily as a place to park their capital and sometimes their offspring.

The specialists would especially target the rapidly growing number of would-be Canadians who are renouncing their permanent resident status, which some are using as a way to avoid paying taxes in Canada while still visiting often on 10-year visas.

“Unfortunately, the perception of too many (wealthy) immigrants is that cheats are not sought after or detected” by Canadian tax or border officials, said Lesperance. To eliminate the problem of ‘ghost immigrants,’ the Canadian Revenue Agency must change this perception.”

Both experts emphasize how important it is for the CRA to do far more tax audits of investors, domestic and offshore, who buy up numerous properties. Authorities should particularly focus, they say, on the dubious techniques accountants have cooked up for avoiding paying taxes on their capital gains.

In the complex world of immigration law, perhaps the most radical idea for reform comes from Lesperance, who says it would reduce foreign speculation in Canadian real estate and curtail the tax evasion illustrated by clothing manufacturing mogul Quoqing Fu in the B.C. Supreme Court case.

The judge mocked Fu’s testimony after learning he had told the CRA his worldwide income, which is subject to taxes in Canada, was just $97.11.

Instead of authorities trying in vain to determine whether would-be immigrants are physically present in Canada, Lesperance recommends rating them mostly on whether they pay significant income taxes in Canada — regardless of which country in which they spend most of their time.

There is not much wrong with rich people travelling the world to work, invest and run businesses, argues Lesperance, who is based in Europe. Many would be satisfied, he says, to hold two passports while still paying their share of taxes on their global incomes to Canada, in return for “a stable and safe place for their global operations” and their children.

Canada is losing out on these entrepreneurial newcomers, he says, because its immigration policy focuses on migrants having a sustained “physical presence” in the country. The major resistance to this idea, Lesperance said, comes from those who believe newcomers “must rub elbows at Tim Horton’s to become Canadianized.”

The trouble with Canada’s current residency-based approach to immigration, said Lesperance, is that it often doesn’t work and “we get people like the Fu family abusing the tax system, but we scare away the Mark Zuckerbergs of the world.”

Even though Kurland strongly believes Canada needs to stop exploitation of the country by high-net-worth tax-avoiding newcomers who speculate in real estate, the Vancouver immigration lawyer continues to believe there is value in immigrants integrating into the country by “rubbing shoulders” with Canadians.

Kurland, author of the Lexbase newsletter, also worries that, unless wealthy would-be immigrants who are not often present in the country simply write Canada a big cheque in exchange for citizenship, too many would have their accountants find ways to hide their riches in a trust fund.

Alternatively, one of Kurland’s more innovative recommendations is for the federal government “to very visibly invite Chinese tax collectors to Vancouver,” a move which would dramatically remind cheaters to submit to the rigours of Canada’s tax and security treaties with China, which is launching its own crackdown.

Kurland also believes that, in this new era “in which global computer systems can carefully track individuals’ travel,” it is fast becoming easier and less costly for Canadian authorities to catch people who are not following the country’s immigration and tax rules.

Ultimately, however, like Lesperance, Kurland believes the following is the most important thing that will lead to a clampdown on migration scams in Canada involving false tax claims and real-estate speculation:

“It’s a pure question of political will.”

Source: Douglas Todd: Here’s how to end migration scams by the global rich in Canada

Filed under Immigration Tagged with , , , ,

Douglas Todd: Vancouver’s ethnic Chinese irked by inequality, tax avoidance

2017/10/11 Leave a comment

More good reporting on under-reporting of income in Vancouver. Not surprising that Chinese Canadians, likely particularly second generation, are as concerned as any one:

When urban planner Andy Yan spent an hour last week on a Fairchild radio talk show, every Cantonese- and Mandarin-speaking person who called was irate about growing housing inequality and tax avoidance.

“It really surprised me. The biggest lesson out of it was that Chinese-speaking people are as concerned as everyone about fairness and transparency and accountability,” Yan said.

The housing researcher said Chinese-Canadians appear as worked up as others about the growing gap between the house-rich and the rent-poor in this metropolis of 2.4 million people, in which one in five people have Chinese origins.

Yan, director of Simon Fraser University’s City Program, found in a study of the 2016 census that Metro Vancouver led the 10 most-populous cities in Canada in having the highest percentage (16.5 per cent) of residents living in low-income households.

Yan’s study, in addition confirming there are genuinely low-income city neighbourhoods, also added evidence to rising worries about Lower Mainland households that appear to under-report income.

“It’s a total mind-spin,” Yan said. “In Richmond, it seems to be a special concern,” he said, explaining how residents of the municipality, who are 50 per cent ethnic Chinese, are concerned many households may be under-reporting incomes to avoid taxes.

In a large swath of northwest Richmond, centred around Westminster Highway and Gilpin Road, which is replete with new high-end condos, 33 to 50 per cent of residents report living in low-income households. The Canadian average is 14 per cent.

Yan said his study revealed parts of West Vancouver and the west side of Vancouver are also sharp anomalies, with 25 to 33 per cent of individuals in households declaring poverty-like incomes, despite the stratospheric housing prices in those areas.

Yan’s study echoes two reports by veteran real-estate researcher Richard Wozny and UBC geographer Dan Hiebert, which show that residents of core Metro municipalities, where housing is extremely expensive, are often paying less taxes than people in the suburbs, where real-estate values are more modest.

In light of the study by Yan and others, three major factors appear to be contributing to why Metro Vancouver outstripped other major Canadian cities in having the most low-income households.

One factor is the region’s unusually large cohort of poor and working poor, a result in part of tepid wages compared to other Canadian cities.

A second cause relates to neighbourhoods with high-end housing in which some families appear to not be declaring their full worldwide incomes.

A third reason came to light this week, when immigration lawyer Richard Kurland released a Statistics Canada report showing contrasting financial outcomes among foreign-born residents — who make up 45 per cent of Metro’s population.

The report by Garnett Picot and Yuqian Lu showed that immigrants from Asia, who are predominant in Metro, are much more likely to report “chronic low incomes” than the Canadian-born and immigrants from elsewhere.

The disparity was most pronounced among immigrant seniors, who were 15 times more likely than Canadian-born seniors to declare poverty-like conditions.

After Yan pored over the results of his study, he was not surprised to see that more than half the residents of Vancouver’s Downtown Eastside are on low incomes. It is a struggling zone notorious for high rages of drug addiction and mental illness. It is the most extreme example of several low-income zones dotted through Metro, where old rental apartments are the norm.

The unsettling neighbourhoods to Yan, and others, are those dominated by costly houses and highrise condos, but have 25 to 50 per of households claiming low incomes.

In addition to northwest Richmond, such tony neighbourhoods include Ambleside, Sentinel Hill and Cedar Dale in West Vancouver, and Kerrisdale, Arbutus Ridge and Oakridge on the west side of Vancouver.

Detached homes in these neighbourhoods typically sell for $2 million to $6 million, with condos going for $500,000 to $1.3 million.

“It used to be that income was a driver of real-estate values,” said Yan.

But a phenomenon is occurring in which the riches of many rely on heavy borrowing and are buried in assets such as real estate that are not taxed like income. Yan said President Donald Trump, an international real-estate mogul, is a prime example.

Although Yan said “under-reporting of income is hard to measure,” the fact many Metro neighbourhoods with expensive housing are reporting low incomes may relate to “the perils of wealth-based immigration.”

Immigration lawyers and scholars concur. They emphasize it is too easy for many trans-nationals to buy stylish condos or mansions in Metro Vancouver and Toronto, often in the names of their spouses or children, while reporting tiny or non-existent global incomes to the Canada Revenue Agency.

Yan was heartened by Chinese-speaking callers’ reactions to his report on income and housing disparity.

“Many Chinese people are aware of how income inequity has shown up in China through 3,000 years of history. They understand the instability that goes with it,” he said.

“Some Chinese people are not doing that well in Metro Vancouver. And many are concerned about having a real community. So they want to see fairness.”

Source: Douglas Todd: Vancouver’s ethnic Chinese irked by inequality, tax avoidance | Vancouver Sun

Filed under Immigration Tagged with , , ,

Todd: Tax avoidance behind Metro’s disconnect between housing, income

2017/09/18 1 Comment

Another good piece on Vancouver’s housing prices and the underpaying of tax:

After census figures this week revealed alarming gaps between housing costs and average incomes in Metro Vancouver, veteran real-estate analyst Richard Wozny is preparing a speech for B.C. politicians that blames the disparity is in part on tax avoidance.

A reason why residents of Metro Vancouver municipalities with expensive housing tend to report lower incomes than people in less-costly municipalities is that many of the former avoid declaring their total wealth, said Wozny, whose company has produced 1,200 studies on real-estate trends in Canada and the U.S.

“Canada has become a freeloader society” in which some mansion owners have found ways to avoid reporting their total incomes to the Canada Revenue Agency, said Wozny, who will speak on Sept. 25 at the convention of the Union of B.C. Municipalities in Vancouver.

Census figures released this week show Metro Vancouver, which has one of the world’s most expensive housing markets, lags behind 14 other Canadian cities on average wages.

The census also exposed an apparent contradiction: Residents of Richmond, Burnaby, the city of Vancouver and West Vancouver — which have the most expensive housing costs in Metro — also have on average the highest rates of poverty.

The census data highlights “inappropriate reporting of family incomes” by many property owners in Metro Vancouver’s well-off neighbourhoods, says Wozny, head of Site Economics Ltd., who said governments need to crack down on residential property speculators.

Inadequate Canadian tax laws have allowed owners of houses that sell for more than $2 million or $3 million “to report unusually low taxable median family incomes,” Wozny said in a detailed report titled Low Incomes and High House Prices in Metro Vancouver.

“It is not logical that so many low-income residents buy expensive houses. The analogous situation would be people reporting minimum wage routinely buying Rolex watches and luxury limousines,” Wozny said.

It’s also not fair, Wozny said, that the burden of paying for Metro Vancouver’s transit systems and schools is largely borne by residents of the suburbs, such as Port Moody, where house prices are only average, yet residents have the highest taxable incomes in Metro Vancouver.

“Irrationally high-priced real estate is not harmless,” Wozny said. “There are plenty of victims, from the environment to the middle class. Simply stated, Metro Vancouver is worth more than it charges in property taxes and fees.”

When Wozny speaks to politicians at the UBCM, he will urge better regulations to target real-estate speculators, both domestic and offshore, many of whom shield their wealth from Canada’s tax officials.

“The Americans would never tolerate such free riders. Canada has become a money-launderer’s paradise,” Wozny said in an interview.

“Seattle’s incomes are far higher than those in Metro Vancouver, and its economy is many times larger, yet its housing prices are far lower than they are in Metro Vancouver. The difference is that Seattle is governed by laws that tax worldwide incomes, and which don’t allow un-monitored capital flows.”

Wozny disagrees with real-estate lobbyists who attempt to explain the radical gap between housing prices and wages by saying many mansion owners in Richmond, Vancouver, Burnaby and West Vancouver are seniors getting by on low incomes.

That rationalization doesn’t make sense, Wozny said, because most neighbourhoods in North America have similar levels of what he called “old Mrs. MacKenzie who has lived in her house since the Second World War. There are old Mrs. MacKenzies in every city.”

Wozny’s analysis also doesn’t support remarks made Wednesday by economist Iglika Ivanova of the Canadian Centre for Policy Alternatives, who speculated the reason municipalities with soaring housing prices also have unusually high percentages of people living below the poverty line ­is the latter want to live near transit lines.

Instead, Wozny’s report supports former Richmond mayor Greg Halsey-Brandt, who was the first to publicly flag how some of his city’s pricier neighbourhoods had almost as many people reporting poverty-level incomes as in Vancouver’s destitute Downtown Eastside.

University of B.C. geographer Dan Hiebert has also discovered a correlation between neighbourhoods with largw foreign-born populations and neighbourhoods that appear to have unusually low taxable incomes, despite their inflated housing prices, such as Richmond and Vancouver’s west side.

Wozny, a real-estate business insider, appreciates the analyses of immigration lawyers Sam Hyman and Richard Kurland, and SFU professor Josh Gordon, who have pointed to loopholes in tax and real-estate laws.

They say unenforced laws allow wealthy speculators to avoid taxes by using trusts or companies to purchase real estate, by falsely claiming they are not “residents of Canada” for tax purposes and by buying residential property in the name of “proxies,” such as low-income spouses or children.

Even though Wozny considers himself a fiscal conservative, he said B.C. and Canada desperately need tax-code updates so that investors who buy multiple residential proprieties contribute more to their communities.

“The public has been cynically abandoned by governments. Real-estate is an essential building block of the middle classes,” Wozny said. But hard-working people are being squeezed out of ownership, he said, by speculators who put too much demand on Metro’s real-estate market and who aren’t carrying their social weight.

“Everybody should be paying taxes,” Wozny said. “Taxes should be a privilege. We should enjoy paying them.”

Source: Todd: Tax avoidance behind Metro’s disconnect between housing, income | Vancouver Sun

Filed under Immigration Tagged with , , ,

The real housing boom: The suburbs are where we want to be – Yakabuski

2017/05/30 Leave a comment

Not just want: affordability. Yakabuski on the demographic trends towards the suburbs, particularly the 905 and BC’s Lower Mainland:

The raw numbers are even more revealing. More than two-thirds of Canadians already live in some form of suburb, according to research by Queen’s University’s David Gordon, who divides Canada’s urban population between those who live in the “active core” of cities, in “transit suburbs” with ready access to public transport, and in the “auto suburbs” where the car rules.

Between 2006 and 2011, the active cores added 89,000 souls; the transit suburbs grew by 70,000. The auto suburbs added 1.3 million people, with 380,000 more in suburban Toronto alone. “We’re a suburban nation,” says Prof. Gordon. “That trend is not soon going to change.”

Luckily, Canada has not seen the kind of “sorting” of its population that has made the political divide between U.S. suburbs (largely white, middle-class and Republican) and inner cities (ethnically and socio-economically diverse and overwhelmingly Democratic) so unbridgeable. In Canada, it’s in the suburbs where elections are the most competitive.

The reason, Prof. Gordon notes, is that our suburbs are far more diverse.

Though we have “ethnic enclaves” such as Brampton, Ont., and Surrey, B.C., they are neither exclusive nor cut off from the surrounding community or society. This helps explains why suburban politics is so fluid here.

“There’s hope in Canada; we’re not as dug in as the Americans on the blue-red thing,” Prof. Gordon says. “It’s possible for any centrist politician to craft a platform to win in the suburbs.”

Source: The real housing boom: The suburbs are where we want to be – The Globe and Mail

Filed under Immigration, Multiculturalism Tagged with , ,

Douglas Todd: How to ensure non-residents pay tax on Canadian real-estate profits

2017/04/03 Leave a comment

Hard to understand the blindness or unwillingness of the British Columbia Liberals on this issue. Too many donations from those who benefit from the this lack of regulation and appropriate policies?

It should be easy to ensure that offshore property speculators pay capital gains taxes on their Canadian sales, but the B.C. government has given no sign it’s prepared to make the fix.

Immigration lawyers and Opposition politicians are pressing the province to start an information-sharing system that would make it much harder for house sellers to evade capital gains taxes by claiming they are “residents of Canada for tax purposes,” when they are not. Some critics estimate the tax loss at hundreds of millions of dollars.

This tax avoidance was at the centre of a recent B.C. Supreme Court ruling. Justice Kenneth Affleck ordered notary Tony Liu to pay $600,000 to a house purchaser he had represented.

That was to cover the capital gains tax the Canadian Revenue Agency demanded from the buyer, which should have been paid by the non-resident seller of a $5.6-million Vancouver mansion.

A property seller who does not pay income taxes here is required to pay a capital gains tax on 25 per cent of their profit on a house sale. Theoretically, the law is designed to advantage domestic buyers and sellers over speculators, particularly from offshore.

In practice, the capital gains rule is rarely enforced, in large part, lawyers say, because B.C. doesn’t collect or share up-to-date information on whether property sellers pay income taxes in Canada.

That task is inexplicably left to a real-estate industry “honour system”involving buyers, sellers and their agents, says Vancouver immigration lawyer Sam Hyman, who is among several experts offering a simple solution.

“How complicated is it to require a seller to produce proof they paid their income taxes as a Canadian tax resident?” asked Richard Kurland, a lawyer who produces the immigration newsletter Lexbase.

“This really spotlights B.C.’s unchanging position, which is that it refuses to include on government (property-transfer) forms the question: ‘Are you a tax resident of Canada?’” Kurland said.

“B.C. fails to create data that can be checked by Canada Revenue Agency, by not asking the right question. Instead, the B.C. government has begun asking, ‘What is your citizenship?’ But that’s irrelevant.”

In a city in which 45 per cent of the population is foreign-born, Kurland said, it would be straightforward for CRA to run a data match on people who claim they are tax residents of Canada to see if they are really paying income taxes.

“But if B.C. doesn’t go after the data, CRA can’t do its job.”

When B.C. Finance Ministry spokesman Jamie Edwardson was asked Friday if he thought there were problems associated with B.C. buyers being unable to prove sellers pay income taxes, he declined to answer and said the question should be directed to the Canada Revenue Agency.

Source: How to ensure non-residents pay tax on Canadian real-estate profits | Vancouver Sun

Filed under Immigration Tagged with , , ,

CMHC head says foreign buyers a ‘scapegoat’ for high Vancouver prices

2016/12/02 Leave a comment

Although he is right to point out that other factors are involved, I am not completely convinced by the data he uses to downplay the role of foreign investors,  compared to the data used by others such as David Ley (see The Asian force behind Vancouver’s housing boom, Blame politicians for Metro Vancouver’s housing price crisis):

High housing prices in the Vancouver region stem from a variety of factors, with foreign buyers shouldering a disproportionate amount of blame, says the president of Canada Mortgage and Housing Corp.

Evan Siddall said he is concerned about “unhealthy tensions” pitting existing residents against recent arrivals, and also older homeowners against younger families priced out of the market.

“Who is to blame for Vancouver’s affordability problems? To some, the scapegoat is obvious – blame foreigners,” Mr. Siddall said Wednesday in prepared remarks to the Greater Vancouver Board of Trade.

“While it would be convenient to hang all of the blame for high prices on others – offshore buyers – it’s just not that simple. Sure, it makes for a tempting narrative. Them, not us. And while foreign investment clearly is a factor, it is not the only one.”

Mr. Siddall listed a wide range of factors that he sees as contributors to Vancouver’s expensive real estate: domestic residential investing, population and economic growth, low interest rates and housing supply constraints.

Some industry observers argue that buyers from China are the primary drivers behind Vancouver’s housing boom that spilled into the suburbs.

Mr. Siddall said evidence points to housing investor activity in Canada originating from predominantly domestic sources, yet foreign investment is often seen as the culprit in Vancouver. Going off script, he added: “When a white person buys a house, we don’t notice. If somebody of a different colour does, we do. And that’s not good economics.”

During a news conference after his speech, Mr. Siddall said the debate over housing affordability is contentious. “This contrast between us and them is a factor. We notice things that are different better than we notice things that are similar,” he said.

The CMHC president added that the federal government has policy tools, with the Minister of Finance knowing not to use economic stimulus to unduly influence the real estate market.

“Our analysis confirms that the most important factors accounting for house price increases over the long term are economic,” Mr. Siddall said in his prepared speech. “We believe two income-related factors are at play: An increase in high-paying jobs and a tendency of these jobs to concentrate in cities. This is an important and statistically robust factor in Toronto, less so in Vancouver. The impact in Vancouver may differ because wealth, rather than income, could play a much more pronounced part here.”

The B.C. government implemented a 15-per-cent tax on foreign buyers in Metro Vancouver in August. On Tuesday, the province said purchasers who are not Canadian citizens or permanent residents accounted for 7.1 per cent of the total deals in Metro Vancouver closed between June 10 and Oct. 31.

British Columbia, which began collecting data on June 10 on foreign purchasers, noted that in the seven weeks leading up to the tax’s implementation on Aug. 2, foreign purchasers accounted for 13.2 per cent of the region’s total. The regional statistics, including transactions that involve buyers from China, are based on closed deals registered with the province’s land title office.

The price for detached houses sold in October within the City of Vancouver averaged more than $2.6-million, or double the average price for detached properties in the City of Toronto. The market in and around Vancouver remains the most expensive in Canada, despite prices dropping recently for detached houses, condos and townhomes.

“Our attachment to low-density single-family housing in many neighbourhoods represents regressive urban planning and makes the problem worse. This is basic economics. The more we hold back supply, the faster prices will rise in response to increased demand. And Vancouver’s supply response is among the weakest in Canada,” Mr. Siddall said in his speech.

In a new survey released on Wednesday, CMHC said the share of foreign buyers in Canada’s major markets is still low. The federal housing agency said foreign condo ownership in the metropolitan area of Vancouver has declined to 2.2 per cent in its latest survey of property managers and condo boards, compared with 3.5 per cent in the fall of 2015. In the Toronto region, the proportion of condos owned by people whose primary residence is outside of the country decreased to 2.3 per cent from 3.3 per cent, while dropping to 1.1 per cent from 1.3 per cent in the Montreal area.

Beyond the three largest markets, CMHC found that the share of international condo buyers has remained small in places such as Saskatoon, Regina, Edmonton, Calgary and Halifax.

Source: CMHC head says foreign buyers a ‘scapegoat’ for high Vancouver prices – The Globe and Mail

Filed under Immigration Tagged with , , ,

Ashley Csanady: Indigenous prayers in the classroom and all-Muslim suburbs are equally dangerous attacks on our secular society

2016/11/19 2 Comments

Good column by Csanady although I do think there is a place, in a secular system, for comparative religion courses to help students understand the diversity of cultures and beliefs (as in Quebec):

Teaching kids about smudging ceremonies, and giving them the chance to participate in one, is a fine idea. As a fence-sitting agnostic, I have and it was great and calming and I really appreciated the openness of the First Nations community that offered it. But I also have friends who grew up in much more dogmatic households than mine, who would have broken into tears at being asked — nay forced — to do something against their religion. I considered the ceremony more spiritual than religious, but not everyone feels this way, and to suggest it’s not religious is actually an insult to its indigenous culture.

 The most infuriating thing about this debate in B.C. isn’t the details of the challenge itself, however, but the maddening knee-jerk left-wing reaction. The argument is less about religious freedom and secularism, but about a mother supposedly trying to “ban indigenous ceremonies in schools,” as a Guardian headline screamed.

Just as kids shouldn’t be required to all sing religious Christmas carols, nor should they be forced to recite another religions prayer or be anointed under its practices.

The mother isn’t trying to ban the ceremonies. Again, the issue is choice. Creating a prayer room for Muslim students, or ensuring Jewish students can miss class on Yom Kippur, or letting Hindu kids bring in treats on Diwali, are reasonable measures. But just as kids shouldn’t be required to sing religious Christmas carols, nor should they be forced to recite another religion’s prayer or be anointed under its practices. A multicultural society means freedom of religion and balancing competing rights.

Which brings us to the other troubling story in the news this week: a proposal to build a Muslim-based community in Quebec.

The organizer, Nabil Warda, has said his intent was to give Muslim families a chance at homeownership without paying interest, something that’s forbidden under certain interpretations of the Quran. And he has admitted maybe he should have called it “humanistic” instead of “Muslim,” to avoid the backlash.

Given there are many Orthodox Jewish communities in the U.S. and other predominantly Muslim suburbs in Ontario and Alberta, this should end the debate. Cultural communities have always taken space for their religion and people. Ethnic, religious and cultural communities that evolve over time are part of a diverse country.

What makes the Muslim community proposal offensive is the strictures that would be in place. As my colleague Graeme Hamilton notes, Warda has been explicit that Muslim cultural norms would be imposed, even in the public spaces in the community: “You don’t drive drunk on the street. If you want to drink alcohol, you drink it in your house,” Warda said.

“Women could choose whether to wear the headscarf but they could not walk around in a halter-top and shorts,” Hamilton reports.

There are already public intoxication and anti-drunk driving laws in Canada. And last time I checked, indecency under the criminal code only requires the teensiest bikini to pass muster. Since when does “humanism” not include women?

Imagine if this were an orthodox Christian community, like the ones in B.C. and Utah where women are forced to cover up and daughters are traded like chattel. For some reason, I think there’d be more outrage from the left. But the second it’s a Muslim community, it’s immune to criticism from the far-left, lest a rational secular argument be deemed Islamophobic.

Women in Canada should be able to wear whatever they want in public. I support a woman wearing a burqa on a public beach just as much as I do a bikini. If a temple or a church requires them to cover up or undress upon entry, that’s their right. But it’s also women’s right not to have religious requirements imposed on them in public spaces — including the municipal roads and sidewalks in a proposed suburb.

So too do children have a right to be free from religion during their public education. A religion is a religion is a religion. It doesn’t matter if it’s indigenous or Abrahamic in origin— it has no place in the public sphere or in the public classroom.

Source: Ashley Csanady: Indigenous prayers in the classroom and all-Muslim suburbs are equally dangerous attacks on our secular society | National Post

Filed under Multiculturalism, Religion Tagged with , ,

Developer behind ‘Muslim housing project’ in Montreal says anyone with shared values welcome

2016/11/17 Leave a comment

The latest political debate over integration in Quebec, where PM Couillard has appropriately rejected such separate housing developments:

At a time when restricting religious attire is a recurring theme in Quebec political debate and when some municipalities have blocked proposals for new mosques, the proposed housing project could be seen as a defensive gesture.

But Warda said that is not the case.

“I didn’t hear people say, ‘OK, we have to go and defend ourselves against these nasty Québécois by going and living alone.’ That is not at all my motivation,” he said in an interview.

What he has heard are people who have been renting for 30 years and wish they had something to show for all the money. Although views differ about what Shariah law dictates for Muslims living in a society where mortgages are the norm, many refuse to take out loans that charge interest.

“A lot of Muslims have problems with the idea of interest, which in Arabic is called riba,” Warda said. “That means if you pay more than you were loaned, you are doing something that is very, very, very, very bad from the Muslim point of view.”

He said interest can be circumvented thorough an arrangement in which a house is bought by the bank and then the resident buys it back over time, paying a premium that is considered the bank’s profit, and not interest.

“Let us call it a technicality, for me as an accountant, but for the believers it is not a technicality,” Warda said. Similar arrangements have been used at Muslim housing developments in Ontario and Alberta.

We are here in Canada. We came of our own will. Our intention was not to come to isolate ourselves from society

He said non-Muslims would be welcome to move into his project of prefabricated homes, but they would have to share the values of their Muslim neighbours.

“You don’t drive drunk on the street. If you want to drink alcohol, you drink it in your house,” he said. Women could choose whether to wear the headscarf but they could not walk around in a halter-top and shorts.

“There must be some modesty in the way you dress. We don’t want women living there going half-naked down the streets. We don’t like that,” he said. “If they want to do that, let them go and live in downtown Montreal.”

He has scheduled a meeting Friday evening at the Brossard mosque, the Islamic Community Centre of South Shore, to see if there are enough takers. He said he needs a critical mass of 50 potential buyers before the land can be purchased.

But he has heard opposition closer to home, including from the imam of the Brossard mosque, Foudil Selmoune.

“We are here in Canada. We came of our own will,” Selmoune said in an interview. “Our intention was not to come to isolate ourselves from society or from the community.” He said it would be more constructive for Warda to use his financing proposal to help Muslims buy existing homes rather than creating a Muslim neighbourhood.

The social climate in Quebec can be difficult for Muslims, Selmoune acknowledged.

“It doesn’t mean we have to hide ourselves and get away from the challenges we are going through,” he said. “We have to face them.”

Filed under Multiculturalism, Religion Tagged with , ,

Race, School Ratings And Real Estate: A ‘Legal Gray Area’ : NPR

2016/10/12 Leave a comment

Not surprising that neighbourhoods become a proxy for race:

With her infant son in a sling, Monique Black strolls through a weekend open house in the gentrified Shaw neighborhood of Washington, D.C. There are lots of factors to consider when looking for a home — in this one, Monique notices, the tiny window in the second bedroom doesn’t let in enough light. But for parents like Black and her husband, Jonny, there’s a more important question: How good are the nearby schools?

It’s well-known in the real estate industry that highly rated schools translate into higher housing values. Several studies confirm this, and even put a dollar figure on it: an average premium of $50 a square foot, in a 2013 national study.

In Chappaqua, N.Y., an affluent bedroom community for New York City, the town supervisor recently went so far as to declare that, “The schools are our biggest industry — whether you have kids in the school or not, that’s what maintains our property values.”

But some advocates for fair housing see a potential problem with the close ties between school ratings and real estate. They say the common denominator, too often, is race. And they argue that the problem has intensified in the last decade with new web platforms bringing all kinds of information directly to homebuyers.

“A school rating map mirrors a racial dot map,” showing patterns of segregation and diversity, observes Sally Santangelo, the executive director of Central New York Fair Housing, a group that provides education and legal assistance to oppose housing discrimination.

Which, in turn, raises some complicated questions about how factors like test scores and school ratings are used to influence home-buying decisions.

Characteristics like safety and parent involvement — the qualities Monique and Jonny say they value in a school— can be hard to quantify. Most states base their school ratings primarily on more easily measured factors, like standardized test scores and graduation rates. And these indicators, in turn, are heavily influenced by inequities of race and class.

There’s a large, persistent, and well-documented gap in test scores between black and Hispanic students and their white and Asian peers. There are many reasons for these disparities: income and wealth gaps, disciplinary policies that “push out” black students from school systems, less experienced teachers, the early-learning gap between high- and low-income children. But they all end up reflected in one number: a school rating.

“A lot of time, with schools that serve majorities of students of color, you get a negative rating because the test scores are low,” says Genevieve Siegel-Hawley, an assistant professor who studies race and housing at Virginia Commonwealth University. But, she says, “most of the variation in test scores is explained by the kids’ own poverty or the poverty of their school.”

Housing patterns and school ratings, of course, also reinforce each other. In most places around the country, school budgets are partly linked to local property taxes. Highly rated schools beget higher housing values, which in turn beget more richly resourced schools.

It’s a virtuous cycle for a town like Chappaqua, but a vicious cycle elsewhere.

What does all this mean for potential homeowners like Monique Black? Or for realtors who see school quality as a selling point?

For a realtor, directly discussing the racial composition of a neighborhood with homebuyers is against the law. In 1968, the Fair Housing Act outlawed the practice of racial “steering” by realtors. This can mean showing different properties to a white family and a black family who have the same requirements, or telling them different things about the desirability of a given property or neighborhood, in a way that tends to maintain segregation or perpetuate discrimination.

The National Fair Housing Alliance, an advocacy group, conducts “mystery shopper” sales tests, sending out people of various backgrounds to pose as house hunters and determine whether they hear different messages.

In a 2006 report, the NFHA documented some form of steering in 87 percent of these encounters. And, says Morgan Williams, the organization’s general counsel, this steering included discussions of school quality.

“A striking pattern regarding schools emerged from these sales tests,” the report states. “Instead of making blatant comments about the racial composition of neighborhoods, many real estate agents told whites to avoid certain areas because of the schools. It is evident from the investigation that schools have become a proxy for the racial or ethnic composition of neighborhoods.”

For example, white testers reported that they were told to avoid the Tarrytown, N.Y., schools, which are predominately Hispanic. In several cases, the report says, agents there told whites that the schools were “bad,” but Latinos were told that the same schools were “good.”

In Philadelphia, an agent told a white tester that the schools in a particular town were very good, then added, “But don’t tell anyone I told you that.”

Source: Race, School Ratings And Real Estate: A ‘Legal Gray Area’ : NPR Ed : NPR

Filed under Multiculturalism, Racism Tagged with , ,

← Older posts

Newer posts →