Saturday, December 31, 2016

How Ottawa Ruined Vancouver


The federal government utterly ruined Vancouver. That's the conclusion of three former British Columbia politicians who, together, represent the breadth of mainstream politics - a Liberal, a New Democrat, and a Social Credit (conservative), all three of whom served as Lower Mainland mayors, two of them eventually becoming premiers of British Columbia. They are, respectively, Art Phillips, Mike Harcourt and our very own Bill Vander Zalm.

The federal governments responsible go back to Pierre Trudeau's and continue to this day, including Pierre's lacklustre son, Justin.

Four decades ago, even when the gap between local wages and housing prices was not nearly as severe as it is today, economist Gordon Soules published an eye-opening book titled The Housing Crisis: Causes, Effects, Solutions.

In it, Art Phillips, Bill Vander Zalm and Mike Harcourt detail a fist-full of reasons that house prices were so high in Metro Vancouver, including lack of zoning density and inadequate social housing.

The politicians did not shy away from how high immigration rates and foreign capital were among the biggest contributors to the city’s rising prices — phenomenons re-confirmed this year by UBC geographers David Ley, Dan Hiebert and other scholars.

What follows is an historical perspective on how Metro Vancouver came to 2016, which has been arguably the most dramatic year in the city’s ongoing housing crunch. It also offers a look at the future.



Mike Harcourt:

Then-alderman Mike Harcourt, who would go on to become Vancouver mayor and NDP premier, listed several causes of high prices, but also focused on rapid in-migration.

“First, it is essential that we relate both the local and the national housing problems to our immigration laws. Are we in fact merely trying to create new housing, as well as new employment opportunities, just to keep pace with the yearly average of 200,000 immigrants that Canada is admitting every year?” Harcourt said.

“Perhaps we should seriously consider whether we can continue to admit so many immigrants. Further, maybe we should make it less desirable for people to migrate to Vancouver from other areas of Canada by making it more attractive for them to remain where they are.”



Art Phillips:

In the mid-1970s, then-Vancouver mayor Phillips, one of the city’s most progressive leaders, wrote in The Housing Crisis:

“I maintain that the primary approach to solving the housing problem in the Greater Vancouver area lies in the immediate reduction and future control of immigration.”

A decade before Expo ’86, when Canadian politicians began concerted wooing of East Asian investment and migrants, Phillips said, “We can and should control that proportion of our population pressure that is represented by the influx of foreigners.”



Bill Vander Zalm:

Despite declaring he was “not a socialist,” Vander Zalm said the “ideal” response to the housing crisis would be one in which “most land would be owned by the government and leased to the people.”

Known for his frankness, Vander Zalm later, as premier in the late-1980s, zeroed in on immigration, taxes and rising prices by instituting the property-transfer tax.

“Foreign investors, many speculatively, are driving up home prices beyond the reach of British Columbians. These people paid no tax and most have never paid a B.C. tax of any kind,” Vander Zalm said.

  
In the 1970s, when The Housing Crisis was published, “unaffordability” — which can be measured by the ratio of real-estate prices to local earnings — was about 3 to 1.

By 2016, it had expanded to 13 to one.


According to Demographia, Ottawa's immigration malfeasance has now transformed Vancouver into the third least affordable English-speaking city on the planet.


Closing the Barn Door:

What have governments done in the face of foreign capital and an estimated 400,000 millionaire immigrants and their family members moving to Metro Vancouver?

The B.C. government’s 15-per-cent tax on foreign buyers was the first big surprise of 2016, proving popular.

The City of Vancouver, meanwhile, began imposing a tax in 2016 on empty houses, and most suburbs increased zoning density.



Browbeaten:

Back in 1976, Harcourt predicted that Metro’s housing crisis would be largely solved by the federal government reducing immigration levels “by the early ’80s.”

But the opposite happened. The last prime minister to lower immigration rates was Pierre Trudeau.

After Brian Mulroney was elected in 1984 — expanding free trade and creating more open borders — politicians began suggesting anyone who wanted to lower immigration levels was xenophobic.

Justin Trudeau says he has no intention of following his father’s lead. This year, he bumped up the country’s immigration rate to the highest it’s ever been, more than 300,000.

“Far be it for me to question a decision my father might have made in the late-1970s,” Trudeau told the Vancouver Sun and Province editorial board on Dec 20, “but we’re on a track to welcome more immigrants over time as our population ages.”

The prime minister recognized 45 per cent of the population of Metro Vancouver, and almost 50 per cent of Toronto, is foreign-born, adding that B.C.’s major urban centre is facing a more “extreme” housing crisis than the Ontario hub.

“We are going to continue to monitor and make sure that as a fundamental core principle people can afford places to live, whether it be in great cities like Vancouver or in smaller communities across the country,” Trudeau said.


Remember, this is coming from the same hustler who maintains that the path of a green economy for Canada is to export ever more bitumen to Asia. That's someone who'll say anything.

Looking Ahead:

Harcourt has many ideas about how Metro Vancouver could move ahead.

The former premier said governments need to respond to how “international capital, a lot of it Chinese,” is flooding into Metro Vancouver, Toronto and other gateway immigration cities.

“Foreign capital regards housing like bricks of gold. It’s considered a safe investment. But it’s massively inflating the markets at the higher end. It’s also impacting other parts of the market, because local people who are professionals and reasonably higher income can’t afford single-family ownership.”

Harcourt believes the B.C. government’s 15-per-cent tax on foreign buyers, and the City of Vancouver’s one-per-cent tax on empty homes, “are bringing down the overheated market in terms of international demand.”

But Harcourt cautioned that Metro’s housing supply, as well as health and educational services, are being over-stretched because 90 per cent of immigrants to the province move to Metro municipalities, which have limited abilities to levy taxes.

My Thoughts:

It infuriates me that my children and my friends' kids will never be able to afford to live in the same neighbourhoods where they were born and raised, especially because that was ordained by my own federal government. This is Ottawa's doing.

Under Mulroney, Canadian residence and citizenship was fire-saled for a short-term investment of $300,000. What we learned in British Columbia was that the newcomers were moving here but that investment was mainly going to Ontario and Quebec. We got to pick up all the costs - municipal services, education, healthcare and such - while what meagre benefit did accrue went to other provinces that didn't bear those costs. At the same time we saw our housing market explode and there wasn't a goddamned thing we could do about it. That was Ottawa's doing.

Vancouver, today, is a complete mess. It's municipal utilities and roadways are grossly overburdened. I remember a day when I could drive from my first home, just off Arbutus, to my downtown office at Alberni and Butte in just over ten minutes on a good day. Now, I'm told, congestion is so bad you can spend half an hour just getting across the Burrard bridge. 

A friend had a helluva time getting a doctor. Her previous family physician finally closed shop at age 80. For years he had been doing whatever he could to recruit a new doctor to take over his practice, even offering thousands of dollars in cash as an incentive. No takers. This same friend has been waiting more than three years for knee surgery.

By contrast, I recently had to see a thoracic surgeon only not in Vancouver, in Nanaimo. It turns out she was a fresh faced young woman who had received her medical degree from UBC and her internship at Vancouver General. I didn't have to wait at all. When I asked her why she chose Nanaimo when she could have a thriving practice in Vancouver her response took me by surprise. She said she looked around, realized how hard she would have to work for so many years just to afford an ordinary house in Vancouver while she could easily  afford a new "view" home in Nanaimo and still have a life. She let on that the choice was not at all hard to make.

It can take years, even decades, but eventually we have to realize that, when it comes to Ottawa, Vancouver and, for that matter, British Columbia are expendable. Ottawa, on behalf of the "rest of Canada," is not to be trusted to act in our best interests.

This might explain why we're not buying Harper/Trudeau's bullshit stories about how safe they're going to make their pipelines and the armada of supertankers that will soon be plying our coastal waters. What's that line that Bush screwed up? Oh yeah, "Fool me once, shame on you. Fool me twice, shame on me." Well we've been fooled, more than once, by Ottawa and we've paid dearly for it.

It's time to drive the Liberals and their Tory alter-egos out of British Columbia for good. And, if we can't do that, I and a lot of other British Columbians seem willing enough to consider just leaving this rotten federation.


15 comments:

Bill said...

Yes this succinctly states our hosing nightmare.

Bitumen, pipelines, opaque trade deals for corporations, unchecked immigration and run away housing prices... that's a least strike four for our Prime minister and government. Seems like a simple plan - using bad growth to make matters worse rather than better.

It is hard to be optimistic going into 2017, nonetheless we need to keep as positive as possible to address all these issues. It is our only option. Alll the best in the New Year Mound.

The Mound of Sound said...

And the same to you, Bill. We do, indeed, have a "housing nightmare" as you put it. I've lost all confidence in our prime minister. He makes promises he has no intention of keeping but, in fairness, he's just the latest iteration of Ottawa politicians for whom British Columbia is out of sight/out of mind.

You're right. We must stay as positive as possible to meet the challenges of 2017 but shying away from them is anything but possible. I used to consider myself Canadian first and British Columbian second. Somehow that polarity has become reversed.

Happy New Year.

Anonymous said...

The Liberal party ruined Vancouver starting with Campbell.
Campbell was/is real estate centred./ driven.


TB

The Mound of Sound said...

Trail Blazer, the Liberal Party BC ain't liberal. It's the reincarnation of Social Credit.

BTW, Happy New Year.

rumleyfips said...

Another Kelly Lietch article.

Purple library guy said...

One thing I'd like to note is the distinction on the right between rhetoric and reality. The basic ideas of the left tend to be very internationalist and of course anti-racist, so it's not surprising that it's very hard for the left to deal with situations in which pragmatism might call for slower immigration. The left wing instinct would be, rather than limiting immigration, to build enough social housing and create enough jobs to compensate. Exceptions might be made if it's about rich immigrants, though.

But right wing politicians are always talking about the dangers of immigrants and immigration, and they do push to make the whole process more intimidating and precarious, but they never seem to actually lower immigration rates. The dirty secret is that the right at the elite decision-making level actually favours plenty of immigration. They're fine with rich people immigrating or fake-immigrating or whatever because they're firm believers in rich people being able to do whatever they want wherever they want, no matter what country they may nominally come from. And they like poor people immigrating because it provides more poor, desperate people and better yet, poor desperate people who can be divided against the other portions of the underclass. Makes the workers overall easier to exploit. But they want to keep those immigrants demonized, fearful, and lacking rights, hence all the rhetoric.

Purple library guy said...

Not all countries allow this sort of nonsense. German property is cheap because they aggressively keep it that way, with government agencies whose job it is to regulate and even bargain downwards the price of homes. In France, if you're a foreigner and you want to buy property there, you have to jump through hoops that can take years.

As to doctors--frankly, Canadian medicine still has too much of a private component. The "doctor as small business" model is failing us, as is the "fee for each bit of piecework" model. They should have a system of clinics placed where they are needed, with the staff on salary. Salary wouldn't build in an incentive to maximize the number of tests and prescriptions; clinics should be integrated, with a few GPs, some specialists, a dietitian, physio etc. and facilities for tests and scans all on the same site, so you can take care of a patient all in one go and make general plans for improving and maintaining people's overall health.

Also, the pay differential between GPs and specialists in BC should be considerably lower--nobody wants to be a family doctor because you can take 2 years more school to get a specialty and come out making 3 times as much. Even if you're not greedy, just considering the student loans you probably have to pay off it makes more sense to get a specialty so you can pay them off faster.

The Mound of Sound said...

I'm old enough to remember the wave of immigrants Canada received from Hungary and Czechoslovakia during the Russian crackdowns. If there was ever a successful immigration experience I think that's it. Many of them came with little to nothing eager to find their place in Canada, make something of themselves and become fine Canadians. I knew several and those I met, without exception, were excellent citizens.

Now immigration, of the sort we get in Canada, is a vehicle for wealthy newcomers to park their money. My old neighbourhood in the Arbutus area was once a place of modest but well tended bungalows. They're all gone now, displaced by McMansions with three, four or five car garages. Prices for what are now "tear downs" start in the 1.5-million range. But here's the thing. Research done by the Vancouver Sun found that my old neighbourhood is the poorest in Vancouver based on declared incomes. Many of those who now own those houses seem to have next to no income for tax purposes. About a third of them are said to stand vacant. For the community and the city that's devastating.

I'm sorry, Rumley, if you think that sounds like a Kelly Leitch rant. It's anything but. This isn't about ethnicity except, perhaps, in your mind. It wouldn't be any different to me if these were a swarm of blonde-haired, blue eyed Swedes.

Gyor said...

The idea that BC was completely powerless is bullshit. Premiers in Canada has extraordinary power, their Kings/Queens to the Prime Ministers High Kings/Queens.

The BC government had plenty of tools to deal with the housing situation in Vancouver, from price controls, building affordable housing, and other options. Heck it could have taken control of it's own immigration program like Quebec did.

So yeah Ottawa (government not the ordinary people of Ottawa) has been useless on the issue, but it's useless in most things, BC isn't special on that. The federal government usually doesn't intervene in municiple issues, that's the domain of Premiers.

And while the issue is out of control in Vancouver, don't think its not a major issue in Toronto as well, its not at Vancouvers level, but its working its way there.

So central Canada doesn't hate Vancouver, or BC, so stop passing the buck.

This is not an unsolvable problem, and honestly eventually the housing bubble will burst and all those assholes speculators whose selfish greed caused this nightmare will get what they deserve.

So this problem is not forever, either the BC gov or Ottawa will fix it, or more painfully a housing price bubble will burst it.

Gyor said...

The idea that BC was completely powerless is bullshit. Premiers in Canada has extraordinary power, their Kings/Queens to the Prime Ministers High Kings/Queens.

The BC government had plenty of tools to deal with the housing situation in Vancouver, from price controls, building affordable housing, and other options. Heck it could have taken control of it's own immigration program like Quebec did.

So yeah Ottawa (government not the ordinary people of Ottawa) has been useless on the issue, but it's useless in most things, BC isn't special on that. The federal government usually doesn't intervene in municiple issues, that's the domain of Premiers.

And while the issue is out of control in Vancouver, don't think its not a major issue in Toronto as well, its not at Vancouvers level, but its working its way there.

So central Canada doesn't hate Vancouver, or BC, so stop passing the buck.

This is not an unsolvable problem, and honestly eventually the housing bubble will burst and all those assholes speculators whose selfish greed caused this nightmare will get what they deserve.

So this problem is not forever, either the BC gov or Ottawa will fix it, or more painfully a housing price bubble will burst it.

Purple library guy said...

I suppose it's actually about class--and for that matter partly about the distinction between immigration and just buying property to live in part time. Let's talk about the Syrians, for instance--I don't think they're causing any real problems; they're hard working middle to working-class folks. But if we had instead a bunch of parasitic Kuwaiti millionaires they'd be causing the same sort of trouble as the Chinese ones.

As to this sort of buying property in which one hardly ever lives . . . Venice, for instance, has been totally hollowed out for ages because of all the rich tourists, mostly North American and European, who have bought up most of the property. It's become not so much a city as a tourist trap, sad fate for La Serenissima.

Hugh said...

What they're doing seems to fit with their endless growth priority.
As if GDP and population can grow every year, infinitely.

Vancouver traffic congestion is bad, yet you hear about plans to increase its population by 1 million in the next decade. Brilliant.

Troy Thomas said...

I have a bad head cold, so I'm not thinking clearly, but much of this seems to do with neo-liberals absolute fear of deflation. They fear it more than they do economic bubbles. They don't believe in bubbles, really. There's only growth, growth, growth.

And, to them, the housing crash of '09 was an aberration rather than something predictable.

Anonymous said...

Is home ownership a human right?
It is a human right to have a home/roof over head as it is a right to heat and food.
Not all countries demand home ownership and for different reasons.

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/

Owning a home in Canada,USA and the UK now take place of savings account as money in the bank earns little interest.

Should Government build subsidised rental housing to accommodate the working poor?

It is true that the infamous one percent and their five percent friends look to 'invest' in foreign homes to evade taxes.
These are also the same people that can buy elections and circumvent local regulations and law.

Just thoughts!!

TB




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