Douglas Todd: How does Indigenous reconciliation square with big business?

Understandable on the one hand that residents are critical of the lack of consultation but ironic that settlers did not consult Indigenous communities when establishing farms and cities:
Leaders of the 4,000-member Squamish Nation, who are behind one of the most dense property developments in Canadian history, have signed an agreement with Vancouver councillors saying one of the five aims of its 11-tower Senakw project is to “promote further reconciliation between the Nation and the City.”
But to what extent will this Indigenous-controlled multi-billion-dollar skyscraper project, which is unprecedented in North America, actually contribute to reconciliation between Indigenous and non-Indigenous peoples?

Source: Douglas Todd: How does Indigenous reconciliation square with big business?

@DouglasTodd ‘People are dying’ — Canada must expose dirty money now

Longstanding issue:

In authoritarian countries, Canada has a reputation for having the weakest anti-money-laundering laws in the democratic West.

So, with the recent crackdown on Russian oligarchs who prop up Vladimir Putin, experts say it is urgent that Canada finally and rapidly make it possible to track the trans-nationals who secretly ship ill-gotten money into this country through a process dubbed “snow-washing.”

Corporate lawyer Kevin Comeau, an expert on money laundering, says “it’s terrific“ that Prime Minister Justin Trudeau has announced an agreement with NDP leader Jagmeet Singh to speed up the deadline for a publicly accessible registry to identity the real owners of companies, particularly those invested in real estate.

It was three years ago that Trudeau first promised a national corporate ownership registry, which would be searchable by name. The Liberals slated it to be up and running by 2025. Now, in the light of Russia’s invasion of Ukraine, the pledge is that the registry will be active by next year.

Even though Comeau thinks a national ownership registry, loosely modelled on one recently started in B.C., could actually be pressed into place by the end of this year, he is hopeful the federal government will meet its 2023 deadline — because “people are dying. There’s a lot of political pressure on them.”

Such registries, which reveal the true owners of corporations, trusts and property, are the only way that Western governments can follow through on their high-profile promises to sanction corrupt billionaires and others who benefit from being cronies of ruthless strongmen.

A working ownership registry that can identify and lead to the seizure of illicitly held assets in Canada — which should have been put in place years ago to stop dirty money pouring into the nation’s real estate — “will put pressure on the oligarchs and in turn pressure on Putin to stop this war,” Comeau said.

“There is a huge incentive for persons from authoritarian regimes to get their money out and send it into a western liberal democracy that has the rule of law, which protects against arbitrary confiscation” by volatile leaders, said Comeau, who has produced reports on money laundering for the C.D. Howe Institute, Transparency International and other organizations.

“Why do they pick Canada? Of the large western liberal democracies, we have the weakest anti-money-laundering rules.” Britain, the U.S. and European Union nations are far ahead in monitoring and sometimes targeting the real owners of laundered assets.

The Economist magazine has found that Russia, which last month invaded Ukraine, has the most billionaire oligarchs who are cronies of autocratic leaders. Russia is followed by China, which has a stronger presence in Canada through trade, international education and immigration. Saudi Arabia, Iran and many other regimes also have rich citizens seeking offshore havens to hide their tainted money.

Ownership registries should have been up and running much earlier in Canada, said Comeau. But somehow, many Canadians bought the idea that global money-laundering and tax evasion is a “victimless crime”, and that it’s useful to have foreign money, even the proceeds of corruption, flow into an economy.

Slowly, however, more Canadians have been realizing it is “a horrible thing,” especially for housing affordability.

“In the past few years, people have become aware there is a real problem of laundered money coming in from around the world and entering our real estate market. That has been driving up prices for Canadians, such that many persons couldn’t afford to buy a home in the cities and towns which they grew up in,” Comeau said. “It’s the first time in Canadian history that middle-class persons, as a group, cannot purchase homes in their own cities and towns.”

And taxpayers don’t have to worry about the cost of setting up federal and provincial registries that will make it possible to expose shady owners of corporations and properties. On the contrary.

A public ownership registry creates a “massive weapon” against oligarchs, kleptocrats, human traffickers and tax evaders because it is the key to seizing their assets, including properties they might have held for decades.

“It’s a huge source of revenue for the Canadian government and the provinces. It can bring in many, many billions of dollars. You’re talking millions of dollars to set up a registry. You will probably bring in a hundred-fold more by having a registry in place. Just by (seizing) 20 houses, you’ve paid for a registry many times over.”

Since Comeau is among those who are calling for a “pan-Canadian” registry system that includes the provinces, which have jurisdiction over real estate, he praises the B.C. NDP for helping lead the way by last year creating a beneficial housing ownership registry.

Even though B.C.’s registry has a few weaknesses, Comeau said they are fixable.

With a bit more spending, he said, B.C. could remove the $5 paywall for each search, provide a line for tipsters, require third-party identify verification, and make sure foreign passports written in non-Latin scripts, such as Russian, Chinese and Arabic alphabets, are translated into English.

In addition, Comeau said, people found to make fraudulent entries on any Canadian registry should be subjected not only to fines — “which are often just the cost of doing business” — but to potential prison sentences.

With such reforms, Canada and the provinces would no longer be known around the world as a “snow-washing” capital.

Source: Douglas Todd: ‘People are dying’ — Canada must expose dirty money now

The theory of immigrants and foreign investors driving Canada’s property market is about to be tested

Yes indeed although interestingly the article focusses almost exclusively on the high end of the market, not the middle class suburbs which are home to so many immigrants:

Christine Zhu, a Toronto-based realtor, has not facilitated a single purchase or sale on homes since the start of the COVID-19 pandemic. Her clientele are almost exclusively Chinese nationals whose kids are either already international students in Canadian universities and high schools in Ontario, or are looking to begin school this fall.

In a regular spring market, she would have processed at least eight sales every month, mostly condominium units that Chinese parents would purchase for their children, in addition to numerous rentals. This season she’s spending her days on the phone with landlords, negotiating on behalf of students who have gone back to China, and have no idea when they will return, leaving their leased apartments vacant.

“One of my clients went back to China for Chinese New Year, and didn’t come back because there were no flights. He’s been paying for so many months, so the mother asked me if I can help negotiate with the landlord,” Zhu said. “This landlord was nice, he gave a 30 per cent discount. That’s the best I could do.”

There are approximately 640,000 international students in Canada — over 50 per cent of them are Chinese and Indian nationals who make up a significant part of the rental market in Canada’s largest cities. In a typical summer season, tens of thousands of new foreign students, landed immigrants and non-permanent residents looking for work arrive in Canada, seeking some kind of housing, either to rent or buy.

But with international travel frozen, multiple realtors and housing experts the Financial Post spoke to over the course of the week say that the lack of the usual immigration and travel pattern is starting to have a noticeable impact on the housing markets of Toronto and Vancouver. In particular, vacancy rates are rising in downtown rental markets, pushing prices lower, while luxury homes that usually attract rich foreign investors are struggling to be sold leading to price drops or, in some cases, court-ordered sales.

“Net migration numbers have fallen off pretty sharply, and the vast majority of non-permanent resident newcomers fall into the rental market. We’re likely to see vacancy rates go back up, but more likely rents are going to flatten out even more,” said Robert Kavcic, senior economist at BMO Capital Markets.

In April, the numbers of permanent residents admitted to Canada declined by 80 per cent from the year prior — just 4,140 were processed and admitted compared to 26,900 in April 2019, according to Immigration, Refugees and Citizenship Canada.

In Toronto, condo rentals are on the decline, falling 2.2 per cent on average from April 2020 to May 2020, according to data from apartment hunting site PadMapper. In Vancouver, one-bedroom apartments decreased 5.6 per cent and two-bedroom units decreased 15.8 per cent, the largest decline across the country, May 2020 data from showed.

Kavcic believes the decline is partly attributed to immigration, but it’s still too early to quantify.

Razia Husein, a Toronto realtor whose clients comprise mostly wealthy foreigners or permanent residents residing abroad, says that she’s had trouble selling downtown condo units that some investors would buy in bulk in a typical year.

“I sell 8 to 10 units, either pre-construction or newly built, to one buyer (in different properties). Some are from India, some are from the United Kingdom, some are from Trinidad. I tell my clients to not put all their eggs in one basket.”

This year, Husein says she’s trying to facilitate sales on the phone, but it’s proving to be difficult. “They need to get on a plane and come and see a unit, or see the area. So I’m just doing a lot of rentals right now, I usually manage these investors’ properties, and find them renters,” she added.

When home prices skyrocketed in Toronto and Vancouver in early 2017, the prevailing notion was that foreign money was driving price increases, prompting provincial governments of both cities to slap a 15 per cent foreign buyers’ tax on purchases.

But a January 2019 report released by Statistics Canada using data from the Canadian Housing Statistics Program found that changes in property prices could not really be associated with any specific socio-demographic or economic factor.

Immigrants, for example, owned proportionally fewer single-detached houses than Canadian-born owners in both cities, but in Vancouver, immigrant owners had larger homes in more expensive neighbourhoods. Just 4.95 per cent of single-detached properties were owned by immigrants in Vancouver, while in Toronto that number was 4.71 per cent. In both cities however, immigrants owned more condominium units than Canadian-born owners.

“This idea that foreigners are the reason for our housing prices going up, is going to be tested out right now. There are no flights, and so the rich investors that went away for the winter, they’ve not come back. Yet, I see the market for single-detached houses is roaring right now,” said a real estate agent in Toronto whose clients are mostly high networth Iranians.

But David Chen, a realtor with the Vancouver-based boutique real estate firm Stilhavn Real Estate Services, whose clients are primarily from mainland China, notes a different trend in the wealthy community of West Vancouver that he attributes to the travel freeze — mansions worth $5 million or more are struggling to be sold because rich foreign investors are not available to go house shopping at the moment.

“Local buying and selling has picked back up and is strong. But in West Vancouver, we’re seeing the biggest price drop in years. It’s not unusual to see court sales for some of the bigger homes — it used to be maybe one in 200 homes in West Vancouver were sold through the court system, but now that’s about one in 80,” Chen said.

Between April 2020 and May 2020, the average home price in West Vancouver fell from $2.8 million to approximately $1.7 million, although it seems to have picked back up recently. Six-bedroom homes, that were worth more than $4 million just six months ago, are now averaging at $2.2 million, according to data from MLS, crunched by the real estate site

Local builders, according to Chen, build huge mansions for foreign buyers who usually make their purchases in the spring or summer months, but demand has fallen this season.

There’s scant Canadian data available on foreign buyers recent purchasing habits, but information from the Chinese-based website, estimated that in the first quarter of 2020, Chinese nationals made 26.5 per cent fewer buyer enquiries on Canadian property than in the fourth quarter of 2019. In Toronto, Chinese buyers made 34 per cent fewer enquiries on real estate in the first quarter of 2019.

Whether or not the immigration effect on Canadian real estate — though still anecdotal — will last, is a question that Zhu believes relates in some part to how the Canadian government will deal with the pandemic going forward.

She operates a WeChat account with roughly 500 Chinese parents whose kids are international students in Canada and their primary concerns have been the way in which Canada has responded to the virus.

“The mothers are scared. For many of them, this is their only child studying abroad,” Zhu said. “In China, they feel COVID-19 is being handled well, and Canada is next to the United States which for some of them causes worry.”

In terms of death count, Canada has had roughly double the number of COVID-19 related deaths compared to China, according to official numbers from both countries’ governments. While there have been new surges of the virus in and around Beijing, the Chinese government, at least based on public information, appears to have effectively controlled the spread by rapidly boosting testing and contact tracing.

Chen says some of his clients from mainland China have held off on purchasing condos in Vancouver because of concerns that a shared building ventilation system could be a COVID-19 related risk. “They are just going to wait it out for now, at least until flights from China resume,” he said.

BMO’s Kavcic believes that ultimately the housing markets of Toronto and Vancouver, Canada’s two most expensive cities, will be driven less by the behaviour of foreign buyers, newcomers and international students and more by the tension between demand and availability.

“This is a very unique shock. It has pulled people out of the market. Listings have come down as quickly as sales have. So the question is how much pent-up demand versus pent-up listings will there be when things go back to normal?”

Source: The theory of immigrants and foreign investors driving Canada’s property market is about to be tested

Douglas Todd: SFU prof spotlighted foreign ownership in Vancouver 30 years ago

A reminder of how long the issue has persisted and how the political level missed the impact:

“I’ve always had a problem with the media not following the money.”

That’s from Simon Fraser University professor emeritus Donald Gutstein, who more than 30 years ago shone a spotlight on how foreign capital was flooding into Vancouver’s real estate market.

In the late 1980s, Gutstein began poring through Metro Vancouver’s land title office and discovered a tremendous volume of capital was flowing out of increasingly wealthy Asia into B.C. real estate.

The river of money was partly a consequence of Vancouver’s Expo 86, which featured the pavilions of 54 nations and sparked boasts about the city becoming “world class.” That seemed to inspire a host of politicians to head off on “trade missions” around the world to woo investment, which, alas, mostly went into Canadian real estate.

“The investors were just doing what they were invited to do,” says Gutstein, now 81. He emphasizes that the foreign-trade-mission-crazed politicians of recent decades came from every stripe — federal Conservative and Liberal and provincial Social Credit, NDP and Liberal.

Politicians welcomed foreign capital because it “is an easy way to boost your economic numbers,” Gutstein says. But the trouble is most of the money just pumped up the cost of real estate, especially when much of it at the time was funnelled into existing buildings.

After writing Vancouver Inc. in the 1970s to reveal the power developers have over politicians, Gutstein explained the globalization phenomenon in 1990 in The New Landlords: Asian Investment in Canadian Real Estate. It was preceded by a 1998 feature in Vancouver Magazine headlined ‘Hong Kong Money.’

Both grew out of Gutstein’s exhaustive work revealing how financiers like Stanley Ho, David Lam, Charles Tang, S.H. Sung, Geoffrey Lau and others had been buying up B.C. and Canadian towers and houses.

Gutstein discovered Social Credit cabinet minister Grace McCarthy had sold the former Expo 86 lands, which made up one sixth of downtown Vancouver, to Hong Kong billionaire Li Ka-shing for what was even then an astonishingly cheap sum, $8 per buildable square foot. Gutstein also uncovered 20 major Greater Vancouver hotels had been sold in one year, and 15 involved offshore, mainly Asian money.

A specialist in teaching documentary research methods in SFU’s communications department, Gutstein says he was never accused of being “xenophobic.”

Perhaps it was because “I was just following the money to see what happens.” A few journalists, such as The Vancouver Sun’s Elizabeth Godley and the late CBC Radio talk-show host Peter Gzowski, covered The New Landlords. Godley’s piece explained Gutstein’s conviction it would have been far better if offshore investors had instead supported Canada’s manufacturing industries, which would have provided jobs and social stability.

Even though Gutstein escaped personal attack for his research, he now realizes some journalists in the 1990s who tried to cover how Hong Kong, Singapore, Chinese, Japanese and Malaysian capital was pouring into Canadian real estate were accused of being “racist” by developers and their supporters. It induced reporters and editors to move onto other subjects.

Gutstein himself also shifted onto other social critiques in the mid-1990s, after noticing a lack of mainstream interest in the real-estate fallout from Expo 86. He’s since written books about corporate propaganda, Stephen Harper and how the internet undermines democracy.

He’s never, unlike many “progressive” people today, been particularly focused on identity politics, which can emphasize the interests of ethnic, sexual and gender groups over the common good. “I’ve always been more interested in politics and economics and who benefits from the decisions governments make.”

Gutstein acknowledges some disappointment his findings of three decades ago didn’t resonate more with media outlets and what people today call “influencers,” because he is convinced foreign capital was a key reason Metro Vancouver’s housing prices are now among the most unaffordable in the world.

He credits a former UBC business professor, Michael Goldberg, with explaining how a trans-Pacific family-based culture of wealth turned urban Canada into a global real estate market in the 1980s and beyond. “Whistler was already there, and so were parts of West Vancouver and the west side of Vancouver. Local people were not in that market anymore. It was being dominated by investors from all over the world, who already owned real estate,” he says.

“They would use their holdings to buy more real estate. And that put the price of real estate out of the reach of local people in Vancouver. Nowadays, the price of Vancouver real estate is not determined, by any stretch of the imagination, by people who live and work here. It’s determined by this global market, by people who might have property in France and Hong Kong and London.”

Philosophically, Gutstein worries about how capitalism and democracy can coexist. They won’t, he says, if politicians spend their energy trying to please rich people and big business while overriding the interests of the majority of citizens.

He believes the housing crises in Vancouver, Toronto and Victoria could have been forestalled by politicians if journalists and academics had consistently followed the impact of foreign capital — and not waited until a handful began doing so about six years ago, eventually prompting the B.C. NDP and others to act.

Gutstein has no trouble with B.C.’s speculation and vacancy tax, for instance, since it’s designed in part to restrain so-called “satellite” families who invest in property with wealth earned abroad, where it isn’t subject to Canadian income tax. “The money is not really making a financial contribution to the country, so it makes sense to capture the benefit (the buyers obtain) in a tax,” he says.

Though retired from teaching at SFU, Gutstein is still in the game. His most recent book is titled The Big Stall: How Big Oil and Think Tanks are Blocking Action on Climate Change in Canada.

To Gutstein, the climate-change issue central to The Big Stall may even be bigger than skyrocketing Canadian real-estate prices. But that doesn’t mean taking action on one front cancels out doing so on the other.

Asked three decades later if he might have been a prophet without honour in his own country in regard to The New Landlord’s warnings about the dangers of mass foreign investment in Canadian real estate, Gutstein modestly answers: “Possibly.”

Source: Douglas Todd: SFU prof spotlighted foreign ownership in Vancouver 30 years ago

Why won’t Trudeau stop real estate scammers? Gary Mason

Builds on earlier article by Douglas Todd (Todd: Tax avoidance behind Metro’s disconnect between housing, income):

Prime Minister Justin Trudeau is getting a rough ride for going after doctors and small-business types allegedly exploiting the tax system to their benefit.

Perhaps Mr. Trudeau would get more brownie points pursuing those gaming the real estate sector, people who are leaving a far more critical problem in their wake than anyone sprinkling income to pay a few less dollars in tax.

The latest census information underscored once again the inexplicable divide that exists between average incomes in certain parts of the country and house prices. The median total income for households in Metro Vancouver, for instance, was $72,662 in 2015 – 15th in the country. In the city of Vancouver, it falls to $65,327 – an area in which the average house price is $1.4-million. In neighbouring Richmond, B.C., the average house price is over $1-million and the median total income is a paltry $65,241.

Only when you go further out into the burbs, where house prices are lower, do incomes begin to rise. In Surrey, for instance, the average home price is $764,000 and median total income was $77,494 in 2015, according to the recent census.

In a place such as Calgary, median household income was just under $100,000 and average house price around $460,000 – so there isn’t nearly the disconnect that you see in Vancouver or Greater Toronto, where the average home costs just over $750,000 and median household income was $78,373.

In Metro Vancouver, some of the most expensive areas for housing – Vancouver, Burnaby and Richmond – claim some of the highest poverty rates.

Richard Wozny, a real estate analyst with Site Economics, has delved into the numbers in Metro Vancouver. He says that in the world of economics there is something called the median multiple, which is the ratio of income to average house price. So, if you earn $100,000 and the average house price in the city in which you live is $200,000, than the ratio is two to one, or simply two.

A median multiple of three or under is considered affordable; five and over is considered seriously unaffordable. Hong Kong, one of the most expensive housing markets in the world, had a multiple of 19 in 2015, according to a Demographia study. Australia’s Sydney, another city with extreme house prices, had a multiple of 12.

Metro Vancouver’s median multiple exceeds 20, with some municipalities such as the city of Vancouver and West Vancouver in the high 30s. And yet, the median household incomes in some of those same ultra-expensive neighbourhoods fall below the regional average. How do you explain that?

Mr. Wozny says even factoring in the likely percentage of retirees in some of these areas, the numbers make no sense. More likely, some of those buying homes for $1-million, $2-million or $3-million are not reporting their full incomes. We know that, in some cases, wealthy offshore investors are using trusts and numbered companies as well as spouses and children to buy homes while reporting little annual income.

Meantime, people in the “outer burbs” living in homes of less value are reporting more. In other words, there are people of moderate income living in Metro Vancouver who are, through their taxes, paying a greater share of the costs of the regional services and infrastructure that others, making far more income, also enjoy.

Canada has become an Eden for money launderers and tax evaders, allowing many to freeload off of others who can ill afford it. It was disclosed this weekthat since 2015, the Canada Revenue Agency has identified hundreds of millions in taxes owing in real estate transactions. Yet only three cases nationwide have been referred for criminal prosecution.

Mr. Wozny looks at a city like Seattle that has a higher median household income than Vancouver and lower average house prices. He believes part of the reason for that is because the United States has tougher regulations, including taxing worldwide incomes. This helps prevent offshore opportunists from scamming the tax system and pillaging the real estate market to the detriment of honest, hard-working Americans.

It’s ironic that the proposed tax changes that are causing Mr. Trudeau so much grief are supposed to benefit the middle class, that fuzzy demographic the Prime Minister loves to defend.

Yet, that same middle class in parts of this country are getting absolutely hosed by some who are helping to drive up housing prices, reaping the financial rewards from it, but not paying the same costs as everyone else.

It’s not fair. And the government needs to do something about it.

Source: Why won’t Trudeau stop real estate scammers? – The Globe and Mail

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

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

Vancouver real estate speculators taking advantage of loopholes and lax oversight

Good in-depth examination of Vancouver real estate practices by the Globe’s Kathy Tomlinson, showing the depth of the policy and regulatory failure:

Mr. Gu’s [real estate flipper/speculator] three corporations all reported losses, in unaudited financial statements ending last year. Photocopies of some cheques made out to his companies – a fraction of the total – show that those companies received a minimum of $7.6-million in large payments between 2014 and 2016, many marked as “loans” from clients.

When Mr. Gu flips a property, his contracts stipulate that lender clients get back what they put in, plus a set return – 15 per cent in one instance. After the mortgage and the bills are paid, Mr. Gu keeps whatever is left, which, in some cases, appears to be hundreds of thousands of dollars.

According to legal and tax experts, this arrangement would allow him to avoid taxes, because the properties are not in his name. Mr. Gu can also maximize financing, because individual clients applying for mortgages, ostensibly to buy the homes, can borrow more money collectively than Mr. Gu could if he tried to finance properties on his own.

On the tax front, records suggest that the clients classify some of the properties as their principal residences, even though they do not live in them. That’s despite the fact that Canadian rules stipulate that a taxpayer cannot call a home a principal residence and sell it tax-free, unless they purchased it to live in it, and didn’t sell it within the same year.

“If you are buying and selling these homes as a business practice, that is business income and it’s taxable,” says Toronto-area accountant David Cramer, one of several experts The Globe consulted while reporting this story. He suggests that both Mr. Gu and his clients should be declaring that income. “If these guys paid proper taxes, these transactions would not go on as they do,” he explains. “It wouldn’t be nearly as profitable as it is.”

Tax lawyer Jonathan Garbutt estimates that the tax revenue lost through such activity is massive, particularly in pricey Toronto and Vancouver. “I think this is yet another example of non-enforcement of penalties under the law. It’s pervasive and it’s systematic,” Mr. Garbutt says. “Unless it changes, this will get worse. We will have a corrupt system.”

Source: Vancouver real estate speculators taking advantage of loopholes and lax oversight – The Globe and Mail

Rohani: Leave ethnicity out of real estate debate

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.

Opinion: Leave ethnicity out of real estate debate

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

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

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

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