Sul­li­van cites economists

Van­cou­ver’s for­mer mayor claims that an­ti­hous­ing poli­cies are driv­ing up prices Real Estate Char­lie Smith

The Georgia Straight - - Housing -

In a new video, Van­cou­ver–false Creek MLA Sam Sul­li­van has framed the de­bate over high hous­ing prices as a bat­tle be­tween Van­cou­ver aca­demics and Ot­tawa economists.

“One side blames Chi­nese im­mi­grants and for­eign­ers; the other says lack of sup­ply is ex­ac­er­bat­ing lo­cal forces,” the B.C. Lib­eral leg­is­la­tor says in the video. “Van­cou­ver me­dia have ded­i­cated over 100 ar­ti­cles to the Van­cou­ver stud­ies. The Ot­tawa re­search, only five.

“One side rec­om­mends de­mand sup­pres­sion, es­pe­cially against out­siders,” Sul­li­van con­tin­ues. “The other says in­crease sup­ply by re­peal­ing gov­ern­ment an­ti­hous­ing poli­cies.”

He claims that nowa­days, 69 per­cent of res­i­dents blame for­eign­ers for high prices, whereas only 18 per­cent “be­lieve an­ti­hous­ing poli­cies are to blame”.

“Many me­dia sup­port the pop­u­lar the­ory that China’s wealthy have had more im­pact than any­thing on af­ford­abil­ity—even after CMHC re­vealed that less than five per­cent of homes are owned by non­res­i­dents,” the for­mer Van­cou­ver mayor adds. “The B.C. gov­ern­ment has en­dorsed the the­ory that out­siders are to blame.”

Sul­li­van goes on to take the side of the “Ot­tawa economists” as op­posed to the “Van­cou­ver aca­demics”.

He notes that 30 of th­ese economists, all with Phds and us­ing mas­sive data sets from Statis­tics Canada, crunched the num­bers for al­most a year.

“They found that by plug­ging in just three vari­ables—in­come, pop­u­la­tion, and mort­gage rates— their model pre­dicted 75 per­cent of Van­cou­ver’s ris­ing house prices,” the MLA says.

Next, he adds, th­ese Ot­tawa economists went look­ing for an ex­pla­na­tion for the other 25-per­cent rise.

“They found it in the elas­tic­i­ties of hous­ing sup­ply,” Sul­li­van re­veals. “Van­cou­ver has a shock­ingly in­elas­tic sup­ply curve, the worst in Canada. Ed­mon­ton, Montreal, and Cal­gary have healthy elas­tic­i­ties. Toronto is de­fi­cient at 0.5. But Metro Van­cou­ver is abysmal at al­most 0.25.”

There­fore, he con­cludes, “geog­ra­phy and an­ti­hous­ing sup­ply poli­cies are re­spon­si­ble for most of the rest of the prices rise. Gov­ern­ment can­not con­trol geog­ra­phy, so gov­ern­ment poli­cies are to blame.”

The video con­cludes with an ex­am­i­na­tion of his­tor­i­cal dis­crim­i­na­tion against peo­ple of Chi­nese an­ces­try.

He em­pha­sizes that peo­ple were con­demned 100 years ago for mak­ing money in B.C. and send­ing it back to fam­i­lies in China.

In an ironic twist, Sul­li­van says that in the 21st cen­tury, Chi­nese peo­ple are be­ing blamed for mak­ing money in China and send­ing it to their fam­i­lies in B.C.

“Most trou­bling is that gov­ern­ment hous­ing poli­cies ap­pear to be based on re­search that scape­goats eth­nic mi­nori­ties and is demon­strated to be false,” the MLA main­tains. “It does the very things the economists rec­om­mend against.

“How for­tu­nate we are that so many skilled economists…have shed light on this is­sue that is so im­por­tant to our econ­omy, qual­ity of life, and com­mu­nity har­mony,” Sul­li­van con­cludes. “Now it is up to us to act on their ad­vice.”

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