Rohani: Leave ethnicity out of real estate debate

2016/08/10 2 Comments

Farid Rohani on Vancouver housing prices and foreign buyers.

His arguments, while superficially appealing, suffer from two major weaknesses:

  • He does not sufficiently distinguish between Canadian residents, whether citizens or permanent residents, and foreign investors and non-residents. The issues are largely with the latter group, where the scope and nature of needed policy interventions is greatest and needed. One cannot simply conflate the two; and,
  • One cannot, and I would argue, should not ignore the elephant in the room that the vast majority of foreign investors are from China (I suspect that Toronto numbers would show a greater diversity of source countries). These investors affect all Canadians whatever their ethnic origin. The question is how to have a more open discussion without being xenophobic. A mature multiculturalism should allow for more open frank discussions without descending into xenophobia or accusations of xenophobia. Much of the discussion and debate has not been xenophobic in nature. Particularly revealing has been increased coverage of second-generation immigrant concerns regarding foreign real estate investors, highlighting that while the origin of the concerns comes largely from one country and ethnicity, the impact is felt across all ethnicities.

A more interesting contribution from community leaders like Rohani would be how best to have these open discussions. Again, following many of the articles and commentary, I think this is happening and is possible.

…We accept the free market principles of supply and demand and we deal with price fluctuations as best we can.
So why do we blame immigrants, and specifically the Chinese, for spiking real estate prices when the real problem is lack of supply and increasing demand?

It’s a dangerous tendency, and one that threatens to undermine the very ideals of citizenship and plurality that have made Canada so admired around the world. Our country’s heritage includes every ethnicity on earth. The principles that define us as Canadians include those of dignity and kindness, tolerance and compassion. The elements that underpin our democracy include a respect for liberty, for freedom of movement and for the potential of a market driven economy under the rule of law.

But these principles and values are not guiding the current discussion. Instead we see outbursts of ignorant emotionalism and incipient racism.

It’s important, first, to define the immediate problem. The economic power of recent immigrants and foreign purchasers has showcased excessive economic advantage while denying many the ability to be part of a vibrant, growing cosmopolitan city. Many of the young people and professionals who make up our city’s core are feeling frustrated by our failure to find a solution to affordable housing.

Yet, instead of working together to address the challenges of inequity, many are retreating to the more familiar ground of racial accusations. They use the seeming intractability of these problems to build scapegoats. Even people who may have been acting in goodwill have been guilty of launching dubious studies that rely on selective facts and the dangerous sweep of ethnic stereotyping.

In an age when terrorism is also a serious social issue, and when certain people have chosen to target ethnicity or religion in that conversation, this raises a risk that I feel personally. I, who have been proud to call Canada my home for more than four decades, have an Arabic name — one that might easily become part of a database of potential security targets, not for anything I have done, but merely because of my heritage.

This is a perversion of the Canadian experiment, and one we must deal with quickly, and together. We cannot promote prejudice against any racial or ethnic group without betraying ourselves. The vitriolic accusations against “others” can lead only to hate and a division that will harm us all.

We need a solution, of the sort that can only be found through joint action. We cannot continue to speak from both sides of our mouths, on the one hand promising economic hope and jobs, while at the same time isolating recent immigrants and visitors from normal social intercourse based on mutual respect.

Certainly, government must be forceful in addressing issues such as the disruptive influence of laundered money. At the same time, we must all stay focused on the economic principles of a liberal democracy, of supply and demand. We must remember the values of immigration and the benefits of building a progressive society in which people of diverse backgrounds can live and prosper together as members of one city and country.

This responsibility rests upon all levels of government, as well as upon community leaders and the media. All must work together to refresh the spirit of optimism, while rejecting any narrative where facts are manipulated to become food for racist agitators or dismissive special interest groups.

The only way to resolve deep social and economic problems is by forging a unity of purpose.

Racism has deep roots. Without a conscious, deliberate, and sustained effort, we are all at risk from its destructive influences. It can only be overcome through open dialogue and close association among those of opposing points of view.

So, I address this appeal to all — politicians, pundits and community leaders: the realization of our collective potential depends on the character and initiative of every individual. No action plan can succeed if leaders fail respond in their own capacity. I respectfully and urgently call upon my fellow Vancouverites of whatever background to look at current real estate situation with new eyes and with a new resolve to set ethnicity aside — to embrace all of your neighbours, new and old, in the search for a lasting solution.

http://vancouversun.com/opinion/opinion-leave-ethnicity-out-of-real-estate-debate 

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Meet the wealthy immigrants at the centre of Vancouver’s housing debate

2016/08/01 Leave a comment

Good in-depth profile of some of the background and stories regarding mainland Chinese immigrants:

The mainlanders are the most recent of several waves of Chinese immigration to Vancouver. But they are not from the places familiar to Vancouverites for the past 160 years, like rural Guangdong, Hong Kong, Singapore and Taiwan.

The 139,890 who have arrived since 2000, according to federal statistics, are from Nanjing, Shanghai, Harbin, Beijing, Guangzhou, Qingdao.

And they are a kind of immigrant Canada has not seen before, at least not in these numbers. They are here with money and confidence after surfing the wave of one of the world’s biggest economic booms, the result of people from Regina to Rome buying stuff stamped “Made in China.” The boom produced 3.6 million millionaires by 2014, up from 2.4 million in 2013.

…But they wonder why Canadians are ready to take their money for their houses – perhaps more money than they thought they would ever get – and then complain.

“A woman I know, her house cost $400,000 19 years ago and she sold the house for more than $2-million. She was happy, she has a studio now for her painting,” Sherry Qin said over coffee at UBC’s Old Barn Community Centre with three of her friends, including Ms. Yin. They like to gather here because one member of the group lives in a townhouse nearby.

And they do not understand why, if Canadians do not like the way things are, their governments will not change the rules – for investment, for preserving old houses, for citizenship, for paying taxes, for charges on vacant houses – instead of blaming newcomers.

And they were as divided as others over B.C.’s new tax for foreign buyers. Sherry Qin said B.C. should remain a free market. Anita He said it will send a message to all Chinese: “We don’t like you.” Alan Yu said it was a good idea. “I think it’s good to suppress the speculation in the real-estate market and it helps to fulfill the needs of affordable housing. I hope it could lower the housing price in Vancouver.”

But such government regulation is not new to them.

Chinese cities, which control who can be defined as a legal resident, are imposing their own restrictions. Shanghai has strict rules. In February, after house prices had jumped by 21 per cent in the previous years, it tightened the approvals for non-resident buyers even more.

Vancouver’s new arrivals also are puzzled why Canadians complain about wealthy people moving here when their government decided which kinds of immigrants it wanted.

“The government just chose rich people so they have lots of money,” said Mr. Liu, who immigrated to Canada in 2005 through the skilled-worker stream, not as an investor, even though he owned a chain of Best Buy-like stores in China. He is doing well, with a home he bought in Kerrisdale so the family could be close to Crofton House, where his daughter went to school.

(The proportion of immigrant-investors to Canada never exceeded more than 4.1 per cent of the total number of permanent residents. About 8,500 immigrant investors came from mainland China to B.C. between 2000 and 2015, along with 23,000 family members. In the same period, B.C. accepted 23,000 skilled workers and their 33,000 family members.)

Source: Meet the wealthy immigrants at the centre of Vancouver’s housing debate – The Globe and Mail

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Vancouver’s housing debate not about race, it’s about public policy: Todd

2016/07/18 Leave a comment

Good long column by Todd:

I had coffee this week with three Canadian friends — one of us was born in Egypt, one in Hong Kong, one in Iran and one in Canada (me) — and the subject arose: Is there a relationship between Metro Vancouver’s out-of-control housing prices and racism?

We battered around a few arguments, including that the hundreds of thousands of transnational migrants and investors who have discovered Metro Vancouver in the past decade cannot be morally blamed, individually, for the city’s astronomical housing costs. That is, except for those involved in corruption or tax evasion.

In most cases, transnational migrants, many wealthy and with dual citizenship, are simply doing what anyone in their situation would do if they could afford it: Investing in Canadian real estate to create a safe economic landing for their families outside their often-troubled countries of origin.

While our coffee group recognized some people might scapegoat migrants from certain countries, especially Mainland China, we acknowledged the most crucial thing is to get up to speed on the multiple factors behind runaway housing prices — so we can encourage governments to finally do something to ease them.

Our discussion led me to conclude that the debate over housing affordability does not need to be dominated by race or ethnicity.

It needs to focus on public policy.

It should zero in on public policies that will help Metro Vancouver be a real community — a place not only of ethnic diversity, but of economic diversity, where power is mostly in the hands of the people and the gap between the poor, middle class and rich does not widen more than it has already.

That means discussing policy options, such as whether and how to impose a tax on foreign speculators, tax empty houses, stop international money laundering and tax avoidance, curtail Quebec’s immigrant-investor program, enforce rules in the real-estate industry, add social housing, increase zoning density, adjust immigration levels, shift interest rates and stop foreign donations to B.C. politicians.
But many Canadians don’t seem comfortable with such debates, unlike many in Europe and elsewhere, where it’s generally expected one will be up for a rousing dinner-table discussion about politics, money and power.

Rather than talking about overriding issues such as economic equality and justice, Canadians seem to find it easier, more socially acceptable, to talk about so-called identity politics; which emphasizes ethnicity, gender and individual freedoms.

As a result, in Canada, racial discrimination, or the possibility of it, is often the go-to topic. That’s so even while international agencies continue to rank Canada the most “tolerant” country in the world in regards to immigration. See the recent global surveys by Britain’s respected Legatum Institute and the Social Progress Imperative, a U.S.-based non-profit.

When it comes to housing, why do a relative few British Columbian voices remain fixated on racial issues?

It’s easy to dismiss real estate industry lobbyists who accuse those worried about high housing prices as racist or xenophobic — since their vested interest for the past three decades has been to distract politicians from imposing policies that might cool the flow of foreign money into the market.

Some other Canadians concerned about racism don’t have such dubious motives, but I’m convinced much of their super-vigilance arises out of a misunderstanding of the definition of racism.

The Oxford Dictionary understanding of racism is quite specific. It’s not as sweeping as believed by some people, including the liberal arts academics who build their careers on alleging that “undertones” of racism exist where they may not.

The Oxford Dictionary defines racism as: “Prejudice, discrimination or antagonism directed against someone of a different race based on the belief that one’s own race is superior.”

While the housing crisis may trigger some hard-core racists — people who actually do discriminate based on the belief their ethno-cultural group is superior — there is no evidence such behaviour is widespread in Canada or Metro Vancouver.

Residents of Metro would have a right to be morally concerned no matter where the billions of dollars flooding into the city’s housing market was coming from.

If, theoretically, it were pouring in from tens of thousands of Caucasians based in Kelowna, strong feelings, including resentment, and ethical concerns, including in regards to equality, would be justified.

A number of prominent Canadians who are committed to ethnic diversity and social justice tend to agree.

Vancouver’s housing debate “is not about racism. It’s about a difference in economic power,” said Clarence Cheng, former chief executive officer of B.C.’s SUCCESS Foundation, which supports program for immigrants. “It’s about the rich becoming richer and the poor becoming poorer.”

Albert Lo, head of the Canada Race Relations Foundation, says there’s nothing wrong with collecting information on the national origins of people buying and selling houses in Metro Vancouver, in part because it could combat tax evasion.

“In Canada, we are so used to the idea of tolerance that we sometimes find it odd to look at nationalities. That causes some people to jump up and start using the word ‘racism.’ I don’t think it’s helpful,” says Lo.

Ujjal Dosanjh, a former federal Liberal cabinet minister, lambastes politicians and property developers who misuse the word “racist” to stifle debate over important issues. He says people have to acknowledge the great distance Canadians have come in overcoming bigotry of the early 20thcentury.

UBC planning professor emeritus Setty Pendakur, who has advised the Chinese government, says hyper-vigilant worries about inter-cultural tensions provide a convenient coverup for wealthy investors, whether Canadian-born or from abroad, who “park illegal money here or avoid Canadian taxes.”

Vancouver’s Justin Fung, a member of Housing Action for Local Taxpayers or HALT, says “cries of racism” sidetrack British Columbians from facing the hard policy decisions that will be necessary if we are to ever again link Metro Vancouver wages to housing costs.

So, if as a society we can manage to stay focused on the central issue, how do we institute policies that will help Metro Vancouver become a place where average families can afford to buy or rent decent housing?

Even though it’s ethically fine to collect data on the nationalities of buyers and sellers — and, more importantly, on the country in which they are “residents for tax purposes” — any policies to cool down the housing market must, of course, be universal.

We should expect colour-blindness in all policies designed to counter runaway housing prices — including those that deal with speculation, empty houses, international money laundering, real estate trickery, social housing, political party financing or immigration policy.

The problem is that some hyper-vigilant peoples’ understanding of racism is so sweeping that even after I wrote last week about how B.C. politicians should stop being among the few in the world to accept political donations from foreign companies — someone suggested such a ban may be “xenophobic.”

If that’s the case, virtually the entire world is xenophobic. That includes those who operate The Organization for Economic Cooperation and Development, which covers 35 countries, including Canada.

The OECD, a defender of democracy and sovereignty, recently made it clear that citizens of a nation have a perfect right to protect themselves from transnational powers and money.

As a February OECD report plainly said: “Political parties need to be responsive to their constituents and not influenced by foreign interests.”

Source: Vancouver’s housing debate not about race, it’s about public policy | Vancouver Sun

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Vancouver: Is racism part of the housing issue? Of course it is

2016/07/12 1 Comment

Not sure really what Pete McMartin really wants to say here beyond that yes, part of the reaction has racist overtones, but that does not diminish the underlying economic issues and concerns regarding the affordability of housing:

But what this most recent offering by the government has done, and the critics’ and public reaction to it, is bring us closer to a truth of a different kind. Finally, we’re getting to the crux of the matter. It’s about the nature of the remedy to our housing “crisis” as the critics and many members of the public see it. It’s not a vacancy tax they want, or a tax on foreign ownership, neither of which would do much to cool the market, anyway. They want to rewrite the rules of immigration and tax law, and close the door. (Or as they put it: It’s Chinese money, not Chinese immigrants, that has created this market. Which makes me wonder exactly how they would go about separating the two.)

Is that racist? 

Of course it’s racist. And if it didn’t begin as racist, as housing and real estate critics insist it did not, that it was purely an economic issue, that it’s not the colour of the homebuyers’ skin that mattered but the colour of their money, then the prolonged and lop-sided take on the matter in the media and in public opinion has made it racist.

It speaks for itself that we regard this huge infusion of capital into Metro Vancouver’s real estate market as a disaster rather than an unprecedented creation of wealth for British Columbians and the B.C. economy — which is now, not coincidentally, the best-performing in Canada. We have cultivated an Us Against Them dynamic — Them being the devious, dirty-monied, tax-avoiding, Maserati-driving, heritage-home-destroying, self-ghettoizing Chinese who steal into Canada through our immigration loopholes, outbid us for our housing, and abuse the social welfare state that we have created. We, of course, cast ourselves as innocent bystanders in all this rather than accomplices, despite the fact that not 20 or 30 years ago we were doing everything we could to attract Asian money to B.C. because of our hope to become world-class and globally competitive, and to lift us out of the cycles of boom and bust that British Columbians had suffered. How soon we conveniently forget. What did we think Expo 86 was, if not a door swung wide open?

Now? It’s no longer a matter of housing. It’s a matter of culture and race in an increasing climate of mutual resentment — or perhaps you haven’t noticed the flood of spittle-flecked comments at the end of media stories about how we’ve been selling Canada off to the Chinese. And the remedy — one that is finally beginning to coalesce and make itself clear — is one not unlike the Chinese head tax of 1885. It’s the head tax stood on its head. In 1885, we wanted to keep the Chinese out because they were too poor and too numerous and would steal our jobs. Now, we want to keep them out because they are too rich and too numerous and would steal our homes.

We should admit to that. We should own up to that racially tinged resentment. I certainly will. I’ve felt resentment when I see an 18-year-old Chinese kid driving a Ferrari down the street with an “N” on its back bumper, and I’ve felt resentment at the thought of wealthy immigrants living in Point Grey mansions who declare incomes low enough to qualify for GAIN payments. 

But then, I’ve also felt resentment at the many born-in-Canada professionals who, long before the wealthy Chinese got here, avoided paying taxes by incorporating themselves or by hiding their money offshore, while I ended up owing more taxes at the end of the year. And I’ve felt resentment, too, for an old-stock wealthy class which in the past didn’t give a damn whether or not I could afford to live in Vancouver until they saw their own neighbourhoods besieged by an even wealthier class.

Small of me? You bet. But I’m trying to honest here.

Source: Is racism part of the housing issue? Of course it is | Vancouver Sun

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Study says foreign buyers spend more on B.C. homes, but some dispute data

2016/07/12 Leave a comment

More on Vancouver housing and immigration:

Critics argue there are larger holes in the data than the small window of time it encompasses.

Richard Kurland, a Vancouver immigration lawyer who works with wealthy clients from China, said the government should break the statistics out into postal codes so foreign ownership of high-end homes could be better tracked, and ultimately taxed. Four per cent of Vancouver sales were registered to foreigners, but Mr. Kurland said those likely occurred in a select number of tony west side neighbourhoods.

“It would be useful, because this is a problem that should not be attacked by a mallet, but a surgeon’s scalpel,” he said. “The driver is at the high end of the property market.”

Richmond and Burnaby saw the highest levels of foreign ownership in the region, at 11 per cent and 14 per cent respectively, but there is no indication of where that investment occurred, he said.

Mr. Kurland said the government’s metric is not gauging the true level of foreign participation in the local housing market because it is classifying tens of thousands of wealthy “investor immigrants” from China as permanent residents despite earning all of their income abroad and, in some cases, continuing to live abroad while owning properties in B.C.

From 2002 to 2013, about 1,000 millionaire migrants flocked to Vancouver each year under a federal government program that was ultimately shut down after Mr. Kurland raised concerns over its effectiveness at generating local economic growth.

This net migration has made a large impact because when these families bought a home in B.C. another unit of housing was not relinquished into the market.

“With domestic people it’s [often] a push: one bought, one sold,” he said. “With an immigrant investor, it’s one bought, none sold, and that’s what restricts supply.”

Tom Davidoff, a professor at the University of British Columbia and economist leading the charge for a targeted property tax, said the government should not “drag nationality” into the housing debate, but rather focus on whether people owning homes in this frothy market also earn their money in the region.

If not, then those owners should be charged a surtax for enjoying government services paid for through income tax, he said.

“When you’re using something scarce you should pay the true cost,” he said.

Source: Study says foreign buyers spend more on B.C. homes, but some dispute data – The Globe and Mail

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Housing prices: Singling out ethnicity of buyers is unhelpful | Yuen Pau Woo

2016/07/06 Leave a comment

While his first and third points are largely valid, the nature of Vancouver ethnic demographics and that those from China are the main source of foreign investment is a reality.

Similar to having a conversation about extremism and terrorism without making any reference at all to the link with religion and Islam in particular.

Finding a vocabulary to have an open discussion, and finding a way to respectfully but honestly debate the issues, is always a challenge.

But silence on the ethnic origin ignores the main driver:

First, most accounts of the role of Chinese buyers do not distinguish between non-residents and residents, or indeed between Canadian citizens, landed immigrants and foreign nationals. The vast majority of homes owned by Chinese people in the Lower Mainland belong to folks who have residency status in Canada — in other words, they are Canadians, not foreigners. There are hundreds of thousands of people with last names spelled in the fashion of mainland Chinese who are Canadian citizens or landed immigrants. [note I would not call those with Permanent Residents status Canadians, that term should be reserved for citizens]

Second, even if one is able to identify Chinese buyers who are truly “foreigners”, there has been little consideration given to their economic contribution to the local economy. Housing affordability, after all, is a function of both prices and income. Are these buyers connected to the international student population in B.C. that contributes about $1.5 billion a year to the local economy? How many local businesses have benefited from the investments of these high net worth individuals? The much-cited study identifying Chinese buyers of local condos looks at the numerator in the affordability equation, but totally ignored the denominator. Where is the equivalent study of their impact on jobs and incomes?

Third, and most importantly, singling out Chinese buyers is irrelevant when it comes to a public policy response. There may be a case for surcharges on foreign purchases of residential real estate and on property speculators, but any such policy would surely apply without regard to country of origin or ethnicity. After all, while China may be this year’s source of hot capital outflows, some other region could assume that role next year. Indeed, that may already be happening with the tightening of capital controls in China, the appreciation in the U.S. dollar, and heightened political uncertainty in much of the rest of the world.

So why this parlour game of pointing the finger at Chinese buyers? I don’t doubt that many researchers and writers on the subject have good intentions, but they are naive to think that singling out an ethnic group is nothing more than dispassionate analysis and a crusade against political correctness. On the contrary, they are unwittingly giving voice to darker sentiments in the populace and normalizing the language of chauvinism.

You see, I find out about their well-meaning articles and quotes when I get nasty spam messages from groups that actually don’t like Chinese people, or immigrants in general, and who gleefully hold up these articles as vindication of their beliefs. In the same way that the Brexit vote has given voice to racists in the U.K., the incessant focus on Chinese buyers as villains in Vancouver’s affordability crisis is propagating prejudice and promoting distrust.

None of the above is a dodge from discussing and dealing with the challenges of housing affordability in Vancouver. But there are no solutions to be found in singling out the ethnicity of buyers, and no winners in the divisive game of race baiting.

Source: Opinion: Singling out ethnicity of buyers is unhelpful | Vancouver Sun

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Douglas Todd: Ten ways to ease Metro Vancouver’s housing crisis

2016/06/27 Leave a comment

The two immigration-related suggestions by Todd. The first and second ones are easier than the third one, given mobility rights:

Press to end Quebec’s immigrant investor program

Even though the Conservatives stopped Canada’s egregious immigrant investor program in 2014, a form of it still exists in Quebec. But the vast majority of rich immigrants who buy their way into the country by modestly “investing” in Quebec never live in la Belle Province. Most move to Metro Vancouver.

 Combat money laundering, including the property transfer system

Canada’s naive honour system has failed to tax billions of dollars in trans-national property deals. Information sharing agreements between real estate officials, Revenue Canada and the immigration department are desperately needed to catch buyers and sellers who lie about whether they are residents of Canada for income tax purposes. UBC geographer David Ley says a host of money-laundering and tax-evasion schemes, including faking that a property is one’s primary residence, are  getting exposed in London and New York.

Reduce or redirect immigration patterns

In regards to the big picture, Britain and other countries are reducing immigration rates. Studies, like that of UBC geographer Dan Hiebert, show well-off immigrants are a key driver of increases in urban house prices. Nine out of 10 immigrants to B.C. choose Metro Vancouver. Some countries have found ways to encourage immigrants to move to less populated regions.

Source: Douglas Todd: Ten ways to ease Metro Vancouver’s housing crisis | Vancouver Sun

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Opinion: Mass immigration cause of demand for housing

2016/05/30 Leave a comment

Herbert Grubel on the impact of immigration on the Vancouver housing market (overall immigration not just the wealthy).

While I agree with his characterization of many of the interest groups supporting continued high levels of immigration, his reference to the “silent majority” is left undefined: is it code for ‘old-stock’ Canadians or a more inclusive concept that includes many second generation new Canadians who face similar affordability issues (see Chinese real estate investors are reshaping the market):

The other alternative is curtailing mass immigration, which is the responsibility of the federal government. Such curtailment will not take place since federal politicians are pressured to maintain present policies by the many beneficiaries of mass immigration: the construction industry, real estate agents, employers hiring immigrants to keep labour costs low and increase profits, retailers benefiting from increased sales, the owners of land and homes whose capital gains depend on high demand by immigrants, the members of the immigration industry (lawyers, consultants, providers of adjustment assistance, teachers of English as a second language and others who are paid by government to serve immigrants), members of immigrant communities wanting to increase their economic and political influence, and immigrants who want to have their parents and grand-parents join them.

There are also Canadians who enjoy more abstract benefits from mass immigration: socially conscious people who want to do good and get satisfaction from seeing immigrants escape poverty in their home countries, and making Canada a globally admired multicultural society. Politicians whose re-election chances are increased by catering to these do-gooders and who, ironically, gain status and self-esteem by designing and financing at taxpayers’ expense policies for the assistance of those suffering from the high costs of housing.

Because of the politics surrounding building rules and immigration policies, Vancouver’s young will continue to suffer from the high and increasing costs of housing. Many will leave Vancouver. Some will live in the basement of their parents’ home or share accommodations with others, postponing and often forgoing marriage and having children.

However, eventually the silent majority of Vancouverites who do not benefit from mass immigration may vote for changes in federal policies. This will happen once this silent majority becomes aware of the negative effects on their own well being caused by mass immigration: fiscal deficits resulting in higher taxes; lower wages and incomes per person; traffic congestion, pollution, scarcity of family physicians, hospital beds and university places and diminishing returns from multiculturalism.

Source: Opinion: Mass immigration cause of demand for housing | Vancouver Sun

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The Asian force behind Vancouver’s housing boom

2016/05/28 1 Comment

More on immigration and the over-heated Vancouver housing market and the related analysis by David Ley:

If he wanted to, geographer David Ley could consider himself a data point in his own research. It was back in 1996 that he was named UBC director of the Metropolis Project, an international inquiry into immigration and diversity. By that time, he’d seen his own Kerrisdale neighbourhood being remade by rich immigrants from Hong Kong and Taiwan who’d sent house prices soaring.

Ley’s 2010 book, Millionaire Migrants: Trans-Pacific Life Lines, displayed empathy for the immigrants while also identifying problems that their mass arrival wrought. By the time it was published, a new wave, this time from mainland China, had begun turbocharging Vancouver property markets yet again. For concerned officials and researchers, Ley’s book was one of the few resources available, even though it described an earlier time and a different group.

Today, a continuing lack of research and official data about the role of Chinese immigrants and investors in Vancouver’s housing insanity* remains, for some in government and the real estate industry, a rationale for doing nothing. “The interesting question is why there are deniers,” Ley says. “Often you find a vested interest.”

Ley’s latest research describes an influx of foreign capital turning Vancouver’s housing market into a Wild West land rush. He pins much of the blame on governments for whom rich Asian immigrants have become an easy fiscal fix.

In the early 1980s, Canada and especially British Columbia were in deep recession. One cure, governments in Ottawa and Victoria hoped, would be programs encouraging high-net-worth individuals from Asia and elsewhere to immigrate.**

While the immigrants did come, the economic benefits did not. It hardly mattered that Canada’s visas had less demanding standards than most other countries’, Ley says, because we didn’t uphold them anyway. Originally, aspiring business-class immigrants could choose from two main streams. In the investor stream, Canada required a lower net worth and minimum investment than did the United States – and, in the end, while banks and governments definitely got a take, there was never much in the way of actual investment.

Meanwhile, “with the entrepreneur stream, after two years you had to have hired one Canadian,” says Ley. “In the equivalent American scheme, you had to hire 10 Americans.” But in B.C. – where more than half of all business immigrants eventually landed*** – evaluations were minimal or were waived. “And this was because there was half a dozen people in the Vancouver office tasked with following up on the thousands of cases, which simply wasn’t possible.”

The Canada Revenue Agency has been similarly ineffective. The declared income of business immigrants is lower than any other category of immigrants, including refugees, Ley points out. Nor did we bother tracking property markets. The B.C. government did keep records of home buyers’ nationalities but stopped during the 1990s. “The reason I’ve heard is that there was a storage issue,” he says. “I’m passing that along while raising my eyebrows.”

Then there is the federal agency Fintrac, which is supposed to stop money laundering. Anecdotal information suggests that a large portion of Chinese buyers pay in cash (in the U.S., there is data).****  “The property market is one of the easiest ways to dispose of hot money,” Ley notes.

Ottawa abruptly eliminated both the investor and entrepreneur streams in 2014, but many of the 50,000 Chinese lined up at the time opted instead to use a new 10-year come-and-go visitor visa that does not lead to citizenship. Of the more than 300,000 Chinese come-and-gos that year, most were tourists, but a significant number employed it as an inexpensive, low-hassle mobility tool, in many cases to buy a second home occupied by student children.

In 2014 China had more than one million people with liquid assets of over $2-million. Up to 60 per cent were weighing or pursuing emigration, with Vancouver among the three top intended destinations. It’s hardly surprising that several surveys and estimates (none of them officially sanctioned, of course) place the proportion of Chinese buyers of detached homes on Vancouver’s west side at about 70 per cent and growing. “The top end of the market is not being supported by local conditions,” says Ley. “We’ve got a housing market that is totally out of whack with the labour market.” That is, people who actually hold jobs in Vancouver increasingly cannot afford to live there.

Some of the additional machinations that are throwing that market out of whack have only recently come to light. New Coast Realty stands accused of both shadow flipping and predatory pricing, following a Globe and Mail investigation.

Of course, there are beneficiaries besides the real-estate industry: namely, Vancouver homeowners. But not Ley. “My wife and I are steadfast stayers. But the craziness of the last six months has shifted a lot of people.”

Source: The Asian force behind Vancouver’s housing boom – The Globe and Mail

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Blame politicians for Metro Vancouver’s housing price crisis

2016/03/22 1 Comment

More analysis by David Ley on the roots of Vancouver’s housing prices (likely some similarities in Toronto’s overheated housing market although the pressures likely come from a more diverse group):

Canadian politicians, keen to stimulate B.C.’s economy, are responsible for creating the conditions that created Metro Vancouver’s housing affordability crisis, according to a new study.

Politicians decided to “reboot a troubled regional economy through an infusion of activity from the growth region of the Asia Pacific,” UBC geographer David Ley says in a peer-reviewed paper published in The International Journal of Housing Policy.

Largely as a result of governments’ efforts to attract wealthy immigrants and investment from East Asia, “house prices have risen rapidly and the detached housing market is now unaffordable to most Vancouver residents,” writes Ley.

Given that federal, provincial and municipal governments have shown a “minimal response” to Metro residents’ housing difficulties, Ley concludes most politicians have accepted that astronomical prices and mortgage debt are just the “collateral damage” from expanding the B.C. economy.

One of the federal government’s key policy tools for attracting Asia-Pacific money to Metro Vancouver real estate was the business-immigration program, says Ley, a leading expert on how the world’s “gateway” cities are changing because of high in-migration.

The program, which gave preferential treatment to wealthy migrants, proved extremely popular in Hong Kong and Taiwan in the 1980s and 1990s and in Mainland China since 2000.

More than four out of five of the affluent people who took advantage of Canada’s business-immigrant program have arrived from Mainland China, Hong Kong and Taiwan, Ley found.

And roughly 200,000 of them moved to Metro Vancouver, where they account for almost nine per cent of the population, Ley estimates in his study, titled “Global China and the making of Vancouver’s residential property market.”

Repeated government trade missions to Asia in recent decades also effectively generated East Asians’ desire to invest in Metro Vancouver real estate, where Ley says deregulation meant local citizens would have virtually no legal protections from runaway housing costs.

Vancouver’s Expo 86, which took shape during the 1980s’ recession as a transportation fair, was a key event in Canadian governments’ strategy to market the city to Asians, Ley maintains.

The fair’s promotional power for enticing Asian money to Vancouver real estate, Ley said, boosted even higher when B.C.’s Social Credit government sold much of the Expo lands, at a low cost, to Hong Kong’s richest man, billionaire Li Ka-shing, owner of developer Concord Pacific.

The huge volume of Mainland Chinese multimillionaires who are coming to Metro Vancouver to buy property is out of proportion to the city’s relatively small size, Ley says.

“Vancouver, the closest major city to East Asia and with a high quality of life, is the most popular destination, especially for the wealthiest investor newcomers,” the vast majority of whom concentrate on real estate.

Source: Blame politicians for Metro Vancouver’s housing price crisis

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