Mortgage Broker

22 | fall 2016 cmba-achc.ca CMB MAGAZINE blamegame Canadians, who oen established themselves with a house and yard prior to attaining residency through the Investor Immigrant Program, brought substantial spending power, arguably helping Vancouver weather the 2009 recession much better than many other North American cities. It was also around that time that the subtle shi in demographics in Vancouver's traditionally white westside neighbourhoods became more pronounced. In a survey of house sales from 2008 through 2009, researchers at Landcor Data Corporation found that buyers with a non-anglicized Chinese name (a highly problematic, if effective, heuristic) accounted for 46 per cent of luxury sales in 2008, 68 per cent in 2009 and 74 per cent in 2010. It was a blunt device, reliant on race in lieu of citizenship, but the message was clear. Meanwhile, the affordability crisis was only becoming more acute. Incomes in Vancouver have always lagged disproportionately behind local housing prices, but the differential between the two was starting to raise red flags. According to the City of Vancouver, more than 94 per cent of household income was required to cover the cost of a house, and while real household incomes had increased by nine per cent since the 1970s, the required buying power for a condominium increased 280 per cent. When Meena Wong, a candidate for the leist COPE party in the 2014 mayoral race, posed the idea of a foreign buyer's tax, competing party Vision Vancouver tasked research company Insights West with testing its popularity among the electorate. "It was a big surprise. Two-thirds of respondents supported the idea," says Mario Canseco, VP of Insights West. Even if Wong herself stood outside of the political mainstream, her idea had popular resonance. Clearly, people were frustrated. And the response to that frustration – among academics who have studied the topic, several politicians and many in the real estate industry – was, at best, muted. e debate over foreign ownership was "this decade's version of the Yellow Peril," said Tsur Sommerville, a professor at the University of British Columbia's Sauder School of Business, at a roundtable in 2013. His reasoning for rising home prices was more nuanced: Vancouver, despite having doubled its population in two decades, still contained tracts of low- density single family houses; interest rates were low and appeared likely to remain so in the long-term; and Vancouver remained an expensive city in which to build (an argument the provincial government also made). In July 2015, Premier Christy Clark said that a risky "unintended effect" could arise if it restricted such investment, and that it had no desire to "compromise government efforts to welcome foreign investment." At the Angus Reid Institute, pollsters began noticing the dominance of the foreign-buyer assumption, says Ian Holliday, a research associate at the institute. "It was a real eye- opener to find how many people gravitated towards this narrative, despite a plethora of other factors. is seems to be a meme that got in place early. And once it was there, it stuck." How did this meme take hold? In a 2015 paper on Vancouver's foreign-buyer debate, Kerry Sun, a researcher at the University of Alberta's China Centre, described housing as an issue susceptible to falsehoods because of its intimate importance to the public at large. "Housing issues are highly personal matters and, as such, they can be susceptible to highly effective narratives that engender controversy," he concluded. It was also potent with symbolism. It had gravitas because housing is such an emotional issue. In 2016, those emotions reached fever pitch. Late in the previous year, the Globe and Mail deployed investigative reporter Kathy Tomlinson to focus on the Vancouver real estate market, while the South China Morning Post's Ian Young honed in on the immigration programs that had facilitated its rise. e case was also taken up by David Eby, the NDP MLA for Vancouver-Point Grey, who proved himself adept at publicizing the excesses of the industry as well as some of its most egregious absences of oversight. In March, aer a series of pieces in the Globe and Mail about "shadow flipping," Eby convened a town hall of 600 locals at a community centre in Kerrisdale. e anger in the room was palpable. e provincial government had already committed, in its February budget, to start tracking foreign ownership by springtime. But that wasn't enough. Later, aer a record-breaking April and May in which Metro Vancouver's benchmark house price surpassed $1.4 million, the provincial government announced that it was going to act immediately to better restrict foreign ownership – specifically, the above-mentioned foreign-buyers tax. It was a remarkable pivot. NONE OF THIS GOES TO PROVE that foreign ownership is to blame. Despite the overwhelmingly positive response to the change in policy – in a poll conducted the weekend aer its introduction, 90 per cent said they were in favour of the tax– even respondents remained skeptical as to whether a foreign buyer's tax would increase affordability. "When we ask whether you think this will help B.C. residents afford a home, get first crack at the market, or that the money will go into affordable housing, less than 40 per cent say such [things] will happen," says Canseco. As for Garrossino, her original argument – that the people of Vancouver were at an inherent disadvantage in the housing market and that "offshore buyers" were to blame – made her a target for accusations of racism and xenophobia, consequently confining her critique to the margins of mainstream political conversation for years to come. "As an independent candidate, I do not have the answer to this problem," she wrote in 2011 in the Georgia Straight. "But win or lose, I pledge this much: We are going to start this conversation." And so it continues. Incomes in Vancouver have always lagged disproportionately behind local housing prices, but the differential between the two was starting to raise red flags

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