The Globe and Mail‘s Vancouver real-estate writer, Kerry Gold, has been doing some of the best analysis on our housing dilemma, notably in her most recent column, based on an SFU Urban Studies forum:
If a city defines itself as interdependent communities that are connected, funded and guided by a taxpaying base of businesses and full-time residents, then Vancouverites are now finding themselves on the sidelines.
They’re often not even on the radar of real estate marketers, especially where purchases of high-end properties or bulk-sale condo presales or land assemblies are concerned. Those high-stakes buys drive the market from the top down, pushing prices up across the entire region. And yet a good many of those purchases are made by the mysterious international investor, a nebulous “other” who has all this power and yet so much anonymity. Who are they? What are their primary residences? How many properties do they own? Which properties do they own? …
Considering that the median family income in Vancouver is $66,000 – and we carry household debt that exceeds the national average – that demand isn’t coming from anywhere inside the province.
It’s not even coming from inside the country, according to geography professor David Ley, who gave a presentation last week at Simon Fraser University’s HOUSE: Rethinking the Affordability Crisis symposium.
Dr. Ley has been studying the unaffordability crisis in Vancouver and cities such as London, Sydney, Hong Kong and Singapore for several years. He has found a direct correlation between net immigration and Vancouver housing price increases over a 30-year period. As house prices continue to climb crazily while incomes stagnate, there is a decoupling under way between the local economy and the housing market. As one local pundit put it, the market is no longer income driven – but capital driven.
“Incomes are low, and there is very negligible net migration into Vancouver from the rest of Canada, and those are the two leading indicators that usually tell you something about a housing market,” says Dr. Ley. “In this case, the capital that’s coming to the market is clearly not from the people with those low incomes, and the new people are coming in as immigrants.”
He sees no end in sight for the insatiable demand by foreign investors. In fact, he sees prices only intensifying – as does University of Melbourne urban geography professor Kate Shaw, who was in Vancouver this week. And the weakened dollar is stimulating the demand, offering the foreign buyer a price reduction of 20 per cent.
“I don’t think it’s a bubble,” Dr. Shaw says. “I can’t see Vancouver and Toronto and Melbourne and Sydney becoming unsafe places to invest. I think it could go on for a very long time.” …
Both academics see government intervention as mandatory in Canada and Australia, if the average-income resident is going to manage for the coming decades.
“The solutions are pretty easy,” says Dr. Shaw. “Taxation is a very powerful mechanism and you can absolutely disincentivize as much as incentivize. So it’s not that we don’t have solutions. The politics around it are an entirely different matter. Possibly the biggest problem is the political class in Australia is one of the largest beneficiaries of the taxation regime, so there’s not a lot of appetite.”
But judging from this week’s jail-time announcement, Australia’s political class is clearly having to respond to its voters. The only way there will be government intervention here is if people demand it, Dr. Ley says. “The only reason I could see for government interest is if there is a political push-back by people, that this becomes a political issue.” …
“I’m quite surprised that there has not been a politicization around this,” Dr. Ley says. “I think the fact that we suppress data means they can’t be well informed. The kind of data that is normal in other cities, we just don’t have here.”
So why hasn’t this issue become ‘political’? – in the sense that the political class at least has to talk about it.
While the city of Vancouver has relatively modest resources, the federal and provincial government, in particular, could take action, Dr. Ley says.
“I think it is negligence. There is just no interest in dealing with these questions at the provincial level. It is just a non-issue.”
Indeed, the two most critical issues that shape a city – housing and transportation – are either not agenda items for our provincial representatives or have been shifted onto the region with the intent to remove them from provincial responsibility. Whether it’s about transit funding or housing interventions, the Liberal MLAs for Vancouver have been almost totally silent.
Silence is a good defensive strategy – until that point when the electorate is catalyzed into action.
Trish Kelly in Metro thinks it could happen among ‘Generation Squeeze’.
Recent university grads went into their degree programs expecting they’d obtain good jobs upon graduation, maybe better jobs than their parents had. Now, after busting their butts in school, they’re sitting down to do the math on how long it will take them to get the white picket fence their parents had, and the answer is: probably never. Not in Vancouver.
The #DontHave1Million campaign is getting lots of attention and retweets, but will it result in any change for this generation? Not unless it finds a vehicle for this discontent in the real world. These frustrated young people better figure out a way to channel their concern from social media hashtagging to actual political advocacy, because politicians don’t listen to Twitter users, they listen to voters. Organized voters.
Here’s one idea: UBC’s Paul Kershaw has launched Generation Squeeze, a national lobby group aiming to, among other issues, improve affordability for Canadians in their 40s and younger.
The project is modelled on the success of the Canadian Association of Retired Persons — we all know how politicians prick up their ears when Boomers declare what they want.
Kershaw’s organization wants to make the federal government pay attention to obstacles faced by younger Canadians, such as the high cost of housing and child care, stagnant wages, and high debt loads.
How bad things are can be seen in a video called What Is Generation Squeeze? at gensqueeze.ca. One profound image shows just how little family incomes have grown since 1976 and why all of us who can’t see a future in our city need to stand together.
As Kelly says, getting government to pay attention will require way more than a hashtag campaign or a petition at change.org. Social media may actually be part of the problem, giving the illusion of action while avoiding the organizational effort that really makes a difference.
(For some insight into real-world examples of the difference between how effective political organizing works and how it trumps social media – drawn from the Arab Spring – go the TED Radio Hour’s April 24th podcast, Getting Organized – and start at 21.20.)
Still, given the amount of media discussion that reflects a general public anxiety if not anger about the way the city seems to be changing and the resulting inequity, it may be just a matter of time before politicians have to catch up with the public and propose some effective interventions. Why it hasn’t happened yet is actually a bit of a mystery.