On the eve of a comprehensive, 10-year housing strategy going before Vancouver city council, Gregor Robertson reflected on the impact of offshore money in local real estate over his three terms as mayor of Canada’s most-expensive city.
“In my travels this year in Sydney (Australia) and New York, my sense is that Vancouver’s seen the most rapid impact of global capital of any big city globally,” Robertson told Postmedia News on Monday. “We’re among a group of big cities that have attracted hundreds of billions of dollars each in investment, but Vancouver has seen that hit in less than a decade, where it took several decades in many of those other cities, so they had more time to adjust.
“But it’s hit us like a ton of bricks.”
During the last nine years while Robertson has been mayor and his Vision Vancouver party has had a majority on council, Vancouver’s affordability crisis has deepened and the gap has widened between local incomes and home prices. But, Robertson stressed Monday as he’s said in the past, it’s not a problem that city hall can solve on its own.
Now, with less than a year until Vancouver’s next general municipal election in which housing is expected to be, by far, the dominant issue, city staff will present the Housing Vancouver strategy to council Tuesday. The strategy, more than a year in the making, touches on several different facets of housing, with proposed measures intended to address both the supply and demand sides of the current crisis. The strategy, particularly on the “demand” side, calls for collaboration with the provincial and federal governments.
The 248-page strategy package includes proposals for working with senior governments to explore measures such as reforming regulations for capital-gains taxes and closing “loopholes,” introducing a “speculation and flipping tax,” and increasing the provincial luxury tax.
And in a city where the topic of foreign real estate investment has been perhaps the most hotly debated issue in recent years, one particularly eyebrow-raising proposal seeks to explore “restricting property ownership by non-permanent residents.” The city, provincial, and federal governments have all drawn criticism in recent years for their handling of the foreign ownership of property, especially in red-hot housing markets like Vancouver and Toronto.
But, Robertson said Monday, “there’s no question that capital from beyond Vancouver’s borders has dramatically affected our real estate market.
“Where in the world it comes from is not the issue, and what nationality an offshore investor is doesn’t matter,” he said. “This is all about regulating the flow of capital and ensuring that it’s taxed appropriately, and taking care of Vancouver’s housing and ensuring it’s available to people who live and work here.
“It’s not about race or nationality,” he said. “We can’t have a real estate market that is completely disconnected from local incomes, and that’s what we’re trying to rectify.”
Vancouver has already taken some steps aimed at reducing the “commodification” of housing, including the country’s first Empty Homes Tax and a proposal requiring condo presales to be offered to locals first before being sold overseas. These measures have been criticized by some for going too far, and by others for not going far enough.
In May 2015, Robertson wrote a letter to then-B.C. Premier Christy Clark, seeking “urgent discussions” on housing, stating there was a “strong case for the province to curb unwarranted speculation.” In the letter, which was subsequently released publicly, Robertson wrote: “The escalation in housing prices coincides with increasing reports of Vancouver’s housing market being treated as a commodity for the world’s wealthiest citizens, with people parking their money in Vancouver real estate simply for profit.”
This week, Robertson said his 2015 letter to Clark “was met with denial and ridicule for another year before they took action with one step, with the foreign-buyers’ tax,” referring to the 15-per-cent tax on foreign-property buyers in Metro Vancouver implemented by the province in summer 2016.
“We can’t fix this on our own in Vancouver. We don’t control offshore investment or the real estate industry. So we’ve got to keep the pressure on Victoria and Ottawa to follow through on their responsibilities,” Robertson said Monday, adding he has “far more confidence now” in the senior governments compared with their respective predecessors.
Robertson said he had recently spoken with B.C. NDP Attorney-General David Eby, who previously served as the opposition party’s housing critic, to discuss “next steps” on new measures, though Robertson declined to provide further details Monday.
“The big problem we’ve had is that provincial and federal governments didn’t do their job regulating the influx of global capital and the real estate industry, and ensuring that taxes were being paid and speculation and flipping was under control,” Robertson said. “We had years of this being a free-for-all, and that drove up real estate prices.”
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