Mayor needs to counter myths on hous­ing cri­sis

The Georgia Straight - - Opinion - By

Char­lie Smith

Peo­ple have good rea­son to feel en­cour­aged by the in­au­gu­ral speech of Van­cou­ver’s new mayor, Kennedy Ste­wart. At the swear­ing-in cer­e­mony on Novem­ber 5, he demon­strated an open mind, an open heart, and a willing­ness to work with peo­ple from across the po­lit­i­cal spec­trum.

But here’s the prob­lem fac­ing Ste­wart as he ful­fills his pledge to turn Van­cou­ver into a “glob­al­ist city”, as op­posed to a “glob­al­ized city”: the pub­lic be­lieves that for­eign buy­ers are the main cause of high home prices.

This was re­flected in an In­sights West poll in Au­gust ask­ing re­spon­dents to eval­u­ate a list of fac­tors af­fect­ing the real-es­tate mar­ket.

The top four “pri­mary causes”, ac­cord­ing to the poll, were for­eign home­buy­ers (84 per­cent), pop­u­la­tion growth (80 per­cent), shadow flip­ping (76 per­cent), and money-laun­der­ing (73 per­cent).

Other fac­tors lagged far be­hind. Mu­nic­i­pal zon­ing laws were only cited by 63 per­cent of re­spon­dents. Im­mi­gra­tion was iden­ti­fied by 58 per­cent. Lack of avail­able land checked in at 53 per­cent. In­ter­provin­cial mi­gra­tion was cited by 46 per­cent.

The polling com­pany failed to ask about such things as sus­tained low in­ter­est rates, quan­ti­ta­tive eas­ing by the cen­tral bank, the mil­len­nial house­hold for­ma­tion rate, the trans­fer of eq­uity from baby boomers to younger gen­er­a­tions, B.C.’S strong econ­omy, and the ris­ing cost of con­struc­tion.

What sen­si­ble hous­ing an­a­lyst be­lieves that shadow flip­ping is the third-big­gest con­trib­u­tor to high hous­ing prices? It’s ab­surd. But this wide­spread be­lief is pos­si­bly a fac­tor in why no­body of Chi­nese an­ces­try was elected to coun­cil—some­thing that clearly con­cerns Ste­wart.

The last mayor and coun­cil did a woe­ful job in coun­ter­ing pub­lic mis­con­cep­tions about what’s driv­ing up hous­ing prices in Van­cou­ver. They didn’t want to ex­pend any po­lit­i­cal cap­i­tal in go­ing against of pub­lic opin­ion.

Ac­cord­ing to a study by the Canada Mort­gage and Hous­ing Cor­po­ra­tion, about three-quar­ters of the cause of Van­cou­ver’s high prices was at­trib­ut­able to three fac­tors: in­come, pop­u­la­tion, and mort­gage rates.

Those are out­side the ju­ris­dic­tion of Van­cou­ver city coun­cil. The re­main­der was re­lated to the in­elas­tic­ity of hous­ing sup­ply in Van­cou­ver. This is linked to the short­age of land and mu­nic­i­pal zon­ing—two fac­tors that are well within the purview of city coun­cil.

Coun­cil can also at­tach con­di­tions to re­zon­ing ap­provals to in­flu­ence af­ford­abil­ity. The city can re­quire all projects to be mar­keted first to lo­cal res­i­dents. In ad­di­tion, coun­cil can af­fect the per­mit­ting process, which in­flu­ences the cost of con­struc­tion.

Ste­wart is cor­rect when he says that Van­cou­ver can be a glob­al­ist city with proac­tive strate­gies in shap­ing its des­tiny. But it’s go­ing to re­quire the mayor and coun­cil­lors to do far more than their pre­de­ces­sors in coun­ter­ing wide­spread myths about hous­ing mar­kets.

Pub­lic ed­u­ca­tion about real-es­tate eco­nom­ics should be near the top of the mayor’s agenda. Oth­er­wise, Ste­wart and the coun­cil­lors will re­peat­edly en­counter op­po­si­tion from those who blame for­eign­ers ev­ery time the city tries to ad­vance so­lu­tions.

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