Thoughts on who’s to blame for Vancouver’s high and rising house prices.

Douglas Todd in Postmedia’s Vancouver Sun discusses a recent study by Professor David Ley of UBC, published in the International Journal of Housing Policy.

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The journal is paywalled, and I don’t have $41 to spare to get the PDF.  But here’s the abstract.

Abstract:  Global China and the making of Vancouver’s residential property market

This paper examines the role of international investment in the construction of a local housing market in Vancouver, Canada.

The background political economy included the attempt by Canadian governments to reboot a troubled regional economy through an infusion of activity from the growth region of Asia Pacific. An important investment tool was a Business Immigration Programme (BIP), which welcomed capital and invited capitalists to transfer their entrepreneurial skills to Canada. The BIP was very popular in Greater China, attracting wealth migration to Vancouver from Hong Kong and Taiwan in the 1980s and 1990s, and from Mainland China since 2000.

An intricate trans-Pacific real estate market developed, with off-plan sales and offshore marketing of Vancouver property in Asia Pacific, and sales to wealthy BIP migrants at or before their arrival in Canada. House prices have risen rapidly and the detached housing market is now unaffordable to most Vancouver residents. Despite public discontent about the likely role of investors in boosting prices, provincial and local governments, who value the revenues of high property prices and BIP fees, have shown little desire to intervene.

The study goes on to explain, according to Mr. Todd of Postmedia:

 

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. . . . .

. . . . .The city is undergoing massive change, Ley maintains, because Canada’s federal, provincial and municipal governments increasingly embrace the principles of globalized, free-market capitalism to welcome wealth from the Asia Pacific region.

“Their objectives were aided by neo-liberal tools that included open borders, deregulation, a place-boosting world’s fair, liberalized immigration policies and a development-ready province pushing back the gains of labour and the welfare state.”

Given their policies, Ley’s paper questions how politicians, particularly B.C. Housing Minister Rich Coleman, found it possible to argue in 2015 that Vancouver housing prices were “pretty reasonable” and that foreign ownership of property had nothing to do with government.