A man walks past a contractor's sign outside a mansion currently under construction in a Vancouver neighbourhood popular with Chinese buyers September 9, 2014. Chinese investors' global hunt for prime real estate is helping drive Vancouver home prices to record highs and the city, long among top destinations for wealthy mainland buyers, is feeling the bonanza's unwelcome side-effects.Reuters
A long-shot prospect for mayor of Vancouver wants to slap a punitive fee on investors who purchase property in the West Coast city but do not live in their residence on a full-time basis.
Though there are few statistics on investor-owned properties in Vancouver's increasingly pricey real estate market, there is anecdotal evidence of darkened, multimillion-dollar homes with no visible full-time residents. One local urban planner found that in some downtown neighbourhoods, nearly a quarter of condos were empty or occupied by non-residents.
It is one of the more troubling aspects of Vancouver's global housing market, where many believe investment from abroad has helped push up the price of local property, making affordability a serious concern.
Meena Wong, a mental-health worker and community activist who is running for the left-leaning Coalition of Progressive Electors, or COPE, wants to make real estate investors pay more than just property taxes for the privilege of having an empty property in Vancouver.
"If you enjoy our city so much, do your duty – contribute," Ms. Wong said. "And then we can use that money to build affordable housing."
Grappling with affordability issues related to global capital flows and migration, which skew housing prices locally, is the "new normal" for Pacific Rim cities such as Vancouver, Sydney, Singapore and Hong Kong, said Andrew Yan, an urban planner.
Mr. Yan, who digs up data on local housing issues, found that Vancouver has a higher rate of empty apartments and houses than other Canadian cities – particularly in the downtown Coal Harbour neighbourhood of condos and penthouses, an area ideal for investors but which can often looks like a ghost town.
"What are the aspects of demand that we want to nurture, and what are the aspects of demand that we can or want to discourage?" Mr. Yan asked. "That's part of the unique nature of housing markets in global Pacific metropolises."
Ms. Wong, 53, represents a unique perspective on Vancouver's expensive housing market.
Born in Beijing, and raised in Hong Kong after her parents fled from the chaos of China's Cultural Revolution, Ms. Wong came to Vancouver at the age of 19. She is part of one of several waves of transpacific immigration to this global, cosmopolitan city: There was an influx of Cantonese-speaking immigrants ahead of Britain's handover of Hong Kong and inflows of tens of thousands of Taiwanese in times of cross-strait tension. In more recent years, wealthier mainland Chinese have come over on formalized investor immigrant programs (the most significant of which was recently cancelled).
In a recent survey, major B.C. real estate firm Macdonald Realty said about a third of all single-family homes sold in Vancouver went to people with ties to mainland China. And many have speculated – in the absence of conclusive data – that this pool of foreign capital has played a role in rising prices in Vancouver. The price of a detached family home here is now $1.2-million, more than 10 times the median family income – which has made Vancouver the second-most unaffordable city in the world, in terms of housing, after Hong Kong, according to one survey.
But Ms. Wong, whose platform says she would declare a "State of Emergency" on affordable housing on her first day in office, is very much against discussing the origin of these buyers, saying it is easy to scapegoat a community.
"Most immigrants coming from mainland China are workers, hard-working people … I don't want to paint the whole community as wealthy billionaires," she said. "I don't want this to be a racialized thing. But if you're going to buy in Vancouver and not live in Vancouver, we're going to do something about that."
Of course, Ms. Wong's municipal party is not in power. Vancouver's city council is led by councillors who are part of current Mayor Gregor Robertson's Vision Vancouver party, as well as others from the Non-Partisan Association party.
Unlike Vision Vancouver and the NPA, which have received donations from real estate firms, Ms. Wong said her COPE party refuses to accept developer donations (Ms. Wong, separately, says that she managed family real estate investments in Toronto). While in power, Vision has encouraged the construction of new laneway houses and approved more than 1,000 units of rental housing in 2012 and 2013.
Politicians are struggling to find ways to solve the affordability crisis without enacting policies that would discourage the flow of foreign investment, which would in turn negatively impact local real estate developers who court foreign buyers.
Geoff Meggs, a city councillor who was part of Mr. Robertson's task force on housing affordability, said the city is expecting a report in the next year with detailed statistics on Vancouver's housing market that could lead to solutions.
But even if everyone agrees vacant properties are a problem, when does an empty apartment turn into a vacant one, he asks, and when would it get taxed under Ms. Wong's proposal? And does it matter to people seeking affordable housing if a luxury penthouse sits empty in Vancouver's Coal Harbour?
"Everyone agrees there's an issue here, but we don't have any hard data," Mr. Meggs said. "Nobody knows how big the problem is."
Although it is still unclear what actions can be taken locally, and which will be taken at the provincial or federal level, Ms. Wong at least hopes to influence the debate, even if getting elected is unlikely.
"It's such a beautiful city," she said. "I want everybody to be able to enjoy it, not just the rich and powerful."