Daily Durning: How Seattle should avoid Vancouver’s crisis

We seem to have missed this when it first came out in Seattle’s “The Stranger.”  Fortunately, Durning picked it up.


A City of Empty Towers 

Amos Latteier, a tech worker in Vancouver, British Columbia, is talking about what everyone in Vancouver can’t stop talking about: the city’s skyrocketing property values and its seemingly endless construction boom, where one luxury condo after another has been built, is being built, will be built.

It is a story that should now sound familiar to Seattleites.

“All property holders in Vancouver literally won the lottery,” Latteier says, sitting in a restaurant called Havana, with decor meant to reproduce the four-decade-long architectural decay that defines the Cuban capital. “This has created a huge divide between property owners and renters.” …

“It’s not just that you are locked out of the middle class, but it turns out that being a renter sucks in Vancouver,” Latteier says. “There are few renters’ rights. Evictions are common, and there is very little social awareness that this is a problem. I’ve had multiple property owners tell me that it’s not bad to be evicted: ‘Hey, change is good.'”

Latteier describes the general mentality of Vancouver’s landowners as that of resource extractors. They may be fine with paying extra money for fair-trade products in the grocery, but they are totally cold when it comes to the lives of their renters and making big deals on their properties. They want to get paid as much as possible and as soon as possible. And what’s of little or no consequence is how their rapacity might affect the city or the people who live in it. …

But how did the property market get so bad? Local market urbanists like Roger Valdez, the director of Smart Growth Seattle, and real-estate developers often place the blame on a lack of supply. Like San Francisco, the city is not building enough homes and apartments to meet demand. If the market becomes less restricted by rezoning certain sections of the city, it could meet this demand, prices would fall, and everyone (developers, the rich, the workers) would be happy.

The supply-and-demand model seems so reasonable, so logical, so rational. But the forces at work in Vancouver seem anything but that. Something totally insane and even monstrous is happening in this city.

In 2005, according to Yan’s research, around the time Vancouver’s housing market started heating up, just 19 percent of single-family homes were worth C$1 million or more in Greater Vancouver. Ten years later, 91 percent of single-family homes are worth more than that.

Yan’s research shows Vancouver’s real-estate market has growth rates far beyond what is normal. …

Vancouver is not unique. It is only exceptional in the speed at which it has been transformed. Vancouver is the neoliberal city we are all structured to become.

What is the solution? How can Seattle avoid the same fate? Kerry Gold recommends muscular regulation by the government of the real-estate market. She says that Christy Clark, the premier of British Columbia, has, though belatedly, begun moving in this direction. Clark and Vancouver mayor Gregor Robertson, recently proposed taxing vacant apartments. And in late July, she surprised everyone by imposing a 15 percent tax on foreign home-buyers (the tax does not apply to immigrant residents).

Lastly, Gold thinks there should be much higher taxes on international capital flows, transactions, and events—a recommendation most likely to be efficacious. Without capital controls, all is lost in our globalized world. Why? Because if capital can go where it pleases, leave when it pleases, it can and will evade democratic accountability.

Full story here.

6 thoughts on “Daily Durning: How Seattle should avoid Vancouver’s crisis”

  1. Ooh Yay, something to look forward to!

    “…for three decades, London has been very popular with investors looking for a place to store surplus cash… Those two things are now in doubt with Brexit—the UK is leaving the EU. And property values in London have begun to fall, and a property-market crash will send shock waves around the world’s major real-estate markets. “If you live in Vancouver, New York, LA, or Seattle,” writes Doctorow, “get ready for an all-out assault on your housing stock!”

  2. Is it really any surprise that a city being targetted by Chinese developers is churning out their patented brand of credit bubble driven ghost city? It is not density if it is empty.

  3. Thomas Beyer said:

    With the 15% foreigner tax on real estate offshore money is now moving to Seattle.

  4. A little over a post-tax month in and the smugness is as thick as the Richmond compost plant fumes. I certainly hope Kerry “Vancouver is Monaco” Gold reports on the actual foreign speculation-driven price drop in a year. For now she’s wringing that angle for everything she can get.

    Don’t be surprised if it’s not enough to justify her famous, name-making magazine selling hubris that the simple geometry of demographics, zoning and land supply are to be cavalierly dismissed as proven facts that influence housing prices as much or more than foreign / local speculation.

    According to Mountain Math thirty per cent of the housing supply still occupies over 80% of the land in this town, and that supply is still low density single family detached. There is a huge ‘missing middle’ in housing that uses land more efficaciously and would be much lower in price if it came on stream in sufficient quantities, mainly because the value is in the land, unless of course the home has a screaming view.

    Land and housing type. These should surely become The Story now that Christy slew the hollow dragon to gain votes. But that is boring compared to the exoticism of foreigners invading — and now abandoning — town.

    • Thomas Beyer said:

      No foreigner already here is evading. Just less new money coming in for residential real estate in MetroVan as better real estate with more upside can be had elsewhere if all you want is to park your foreign money: Seattle, Okanagan, Sunshine Coast, Whistler, V Island, GTA, commercial or industrial real estate in MetroVan .. the 15% is EXACTLY working as intended: locals get a 15% discount to foreigners and less foreign money is distorrting residential real estate in MetroVan .. it is now starting to distort Seattle, Okanagan, Sunshine Coast, Whistler, V Island, GTA, commercial or industrial real estate in MetroVan …

      As such it would not surprise me if all of BC or even all of Canada’s real estate, in all asset classes, will get this 15% eventually.

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