BCBusiness

38 BCBusiness jULY/AUGUST 2018 "People assume that the Chinese community is 'vaccinated' from the e•ects, but they're just as exposed." His perspective has been reinforced by appearances on local Chinese-language radio call-in shows. "I may not speak Cantonese, but I do know what pissed-o• Cantonese sounds like." So, record-low interest rates + huge amounts of speculative capital + local enabling systems for global money = housing prices that could conceiv- ably keep rising, creating a social, class and psy- chological disconnection between those who own and those who don't. People just starting to hit their career stride—and those who come after them— will be most a•ected. If prices continue to climb, many will leave, taking their youthful ener'y, drive and creativity with them. Others, regard- less of age, won't come; today, recruiting talent for UBC and SFU is very di–cult, mainly thanks to cost of living. Business talent shuns us, too. "I don't think mid-40s executives ever move to Vancouver," Davido• says. The hollowing-out of Vancouver has begun, and if prices continue to skyrocket, the impact will be ampli›ed. The only salvation? Vancouver becomes so expensive that the factors that once made it attractive no longer exist, and property values collapse—belatedly triggering the Home- pocalypse and forcing a hard reboot of residential real estate. The light at the end of the tunnel is the proverbial oncoming train. S C E N A R I O N O . 3 Shave and a Haircut the upshot: Rising interest rates and government interventions finally start to work. Inventory rises, sales stagnate, prices flatline—and then begin to drop Who's CaLLing it: finance minister Carole james, whose first budget was designed to modify prices; UBC and SfU economists (including Tom Davidoff) behind the B.C. Housing Affordability fund; every renter you know proBaBiLit Y: The most likely outcome "R eal estate is Vancouver's true passion, its real blood sport," writes author and urban planner Lance Berelowitz in his 2005 book Dream City: Vancouver and the Global Imagination. He's right. From the Canadian Paci›c Railway barons who built Shaughnessy Heights to the current crop of carpetbaggers who go door to door pitching the virtues of land assemblies, B.C.'s post-colonial history revolves around trying to sell, resell and squeeze value out of land. This is the economic story of a province where extraction has always trumped production. Even when we're engaged in production, the story is complex. Over the past decade, says SFU's Andy Yan, the real estate industry grew by almost 50 percent; the sector bests ›shing, log- ging and mining as B.C.'s most critical economic engine. (Real estate accounted for 18.36 percent of the province's gross domestic product in 2016, Statscan reports. In Alberta, oil, gas, mining and quarrying combined for just 16.98 percent of GDP.) Yet over that same period, according to Yan, the number of construction workers only grew by 10 percent. Other industry subsets—real estate agents, for instance—grew disproportionately. The bottom line: when it comes to real estate employment trends, we're more about transac- tion than creation. Still, if prices modestly decrease—or even «at- line—it could help. "I think that's a great scenario," Davido• says. "If you have nominal growth, or minus–1 percent a year for ›ve, 10, 15 years—the longer we take a pause, the better." But can a pause be orchestrated? In a climate where rever- sion to mean has become old thinking, many agree that something needs to be done to restore sanity to the market. One way is to build. "We need more supply" has been the longstanding refrain, sung by everyone from social housing activists and urban planners to the development community. The reasoning is ostensibly bulletproof: with the right mix of sup- ply and demand, the twin chakras of housing, bal- ance is attainable. But are we building the right supply? "Yes. We're building housing and, in fact, we're building tiny little one-bedrooms, which is exactly what the market wants," Davido• asserts. Others aren't so sure. "We've been relying on supply side as an a•ordability solution for a decade now, and it's completely failed," says Charles Montgomery, who heads a Vancouver-based consulting ›rm that helps property developers

• Cover