Vancouver's in the midst of a serious housing crisis, that much is clear.
What's less clear is what, exactly should be done about it. The voices calling for drastic action are growing louder.
For many, the idea of a ban on foreign buying of real estate is no longer considered a radical idea – neither is revolutionizing property taxes, or joining forces with Beijing tax collectors. The cry is to simply do something big enough that it will turn this runaway train around.
BC Green Party Leader Andrew Weaver released a document last month that outlined a host of housing measures, including a ban on foreign buyers purchasing existing housing in B.C. The idea is that foreigners can continue to purchase new builds, pumping money into the economy by investing in new supply. But existing homes would be off limits. Australia and New Zealand have introduced that type of foreign-buying restriction. The Green Party, which holds the balance of power in B.C. legislature, also wants restrictions on foreign purchases of Agricultural Land Reserve. Mr. Weaver said he's received data that thousands of hectares of B.C. farmland has been purchased by mainland China buyers in order to grow hay for shipment to China. Attorney-General David Eby raised that issue as well, when he was Opposition housing critic.
"Our focus has been on the demand side, because there's been far too much pivoting to the supply side when we know supply side is not the problem," Mr. Weaver said in a recent interview.
A ban on foreign capital is the centrepiece of the Greens' Affordable Homes Strategy. However, Mr. Weaver doesn't expect it to be in the Feb. 20 budget announcement. Premier John Horgan and Finance Minister Carole James have publicly rejected the idea.
But Mr. Weaver expects the idea to take hold over time, much the way that the idea of eliminating Medical Services Plan premiums in B.C. took several years to become a reality.
"I don't expect to see [the ban] in the budget honestly, because [the NDP] came out and said they weren't going to do it," Mr. Weaver said. "But I will be conveying to Mr. Horgan … that the level of support for dealing with this is overwhelming."
"The foreign-buyers ban takes that to a whole new level in terms of the public support, and the most passionate cries for it are coming from first-generation Canadians who came to Canada for a better life," he said.
Mr. Weaver is not certain that the budget will take the drastic measures he believes are necessary. He's concerned that the government may be taking housing advice from its new chief of staff, former Vision Vancouver councillor Geoff Meggs.
"I don't think the BC NDP realizes the scale of concern. I think [David] Eby might, the Attorney-General. But I don't think others do at this stage.
"Mayor Robertson came out and said he didn't support this [ban] either. Look, Mr. Meggs being from Vision Vancouver and the fact it got out of control on their watch is slightly troubling to me in terms of the advice that might be given. I don't know what that advice is, but I would suggest that the advice should not be to continue doing what we were doing in Vancouver because it clearly did not work in Vancouver.
"Crises need bold action, they don't need tinkering around the edges. So I expect we will see the BC NDP tinker around the edges with some tax measures, here, but not really going directly for the problem, which is the offshore money coming in."
(A spokeswoman for Ms. James said she couldn't comment on government's plans until after the budget announcement on Feb. 20.)
Mr. Weaver's idea of a ban has the qualified support of citizen group Housing Action for Local Taxpayers (HALT), a diverse non-partisan group that wants government to take action on speculative and investor demand for Vancouver housing.
"This is not based on nationality," said HALT spokesman Raza Mirza, a tech worker who leases a home in Vancouver with his wife and children. "I'm an immigrant. We are all either immigrants or descendants of immigrants. So we have to be open to newcomers, but we want to make sure people who come here are starting a new life here.
"It's to address where they are earning their income. It's a ban on foreign capital that is distorting our housing market, and there are many ways of doing it. Weaver's announcement is one way of doing it – it's a good start. Does it go far enough? If you look at the New Zealand model, it bans them from buying existing homes, but they can still buy new homes and land to build new homes."
The risk with that model is that it could add more competition to the new-home market, and in the short term make housing even more unaffordable, Mr. Mirza said. "But it's still better than the Wild West that we currently have."
Mr. Weaver said the ban would only be one of a host of measures.
"The foreign buyers ban coupled with the speculative tax actually works quite well," he said. "You could start to phase things in. A speculation tax is also important, because that deals with existing stock, and you can increase and decrease the level of the tax. That's why it's critical to have a whole suite of policy measures. You don't just want one."
A foreign-buying ban is really just a foreign investment rule, University of Sydney housing expert Dallas Rogers said.
"At least in Australia, the federal government is still pro-foreign investment, but they want the foreign capital to be directed into new housing supply because they believe that increasing supply will help with the housing affordability problem," Dr. Rogers said.
But the impact of such a rule, he adds, has been difficult for Australian housing experts to pinpoint. Affordability continues to be a major issue.
"The idea of a ban on foreign investors buying established homes is a powerful political narrative. But as Australia shows, it might not be the silver bullet that will address the housing affordability problem."
Others have floated equally drastic measures, such as the government union employees' proposal for a land-value tax, which is used in other countries.
Harpinder Sandhu has been an appraiser for B.C. Assessments for nine years, valuating residential, commercial and industrial properties. As vice-president of Canadian Union of Public Employees 1767, he worked on a housing report with the B.C. Government and Service Employees' Union. They represent B.C. property assessment workers, and they came up with the report because of their expertise on valuations, to help address out-of-control prices.
The total value of assessed properties in B.C. for 2017 was $1.86-trillion, according to Mr. Sandhu. Real estate has clearly become lucrative business in B.C.
"It's kind of insane," he said.
Mr. Sandhu is not keen on the idea of a foreign buyer ban because he believes it could burst the bubble. The extent of foreign-owned real estate is much higher than government has indicated, he said. In 2017, a year after announcing a foreign-buyers tax in August, 2016, the then-government said transactions involving foreign nationals represented about 5 per cent of the Vancouver market.
Any appraiser will tell you [foreign buying] is much higher, Mr. Sandhu said.
"It's probably closer to 25 per cent in Vancouver, Burnaby and Richmond, even."
Because the share of the foreign-owned market is so high, Mr. Sandhu fears a restriction would pose the danger of an immediate deflation. If a neighbourhood has 100 homes in it, it only takes the sale of four or five homes in a year to value that neighbourhood. If those four or five homes are determining the market, and you remove foreign money, it could change rapidly.
"We don't think the government would even take the risk of cutting off the money and imploding the market and trying to fix that after," Mr. Sandhu said. "Our plan is so a bubble doesn't burst, because that could be way more detrimental. It's better to signal to the market, and slowly it comes down."
The unions' idea is multipronged, but a major aspect of it is involves reforming property taxes by taxing the land instead of the improvements on it. It's an old idea that's been used in jurisdictions around the world. Government could then offer development incentives to build affordable homes. The union group presents their idea at an affordability forum Feb. 26 at the Vancouver Public Library.
"So long as you are building something of value, it wouldn't cost you anything, as municipalities can boost the percentage of density required to avoid the tax, thereby incentivizing the development of affordable housing," Mr. Sandhu said. "But if you are just squatting on it or hoarding it, like many investors are doing, and speculating, then you pay tax on the increase of the land value when you sell it."
Mr. Sandhu, who's met with the government, said he doubts that their ideas will be included in the budget.
"We have the expertise, so we've been promoting that. We've been saying, 'Come use us, come talk to us, we are in the government, we know what we are doing.' But our hunch is that it's the government bureaucracy that has been entrenched there a long time that can't really handle or even model these changes. They don't have the capacity to impose or create models on this kind of stuff, and they haven't reached out to our workers, not that I've heard of."
Immigration lawyer Richard Kurland said a ban wouldn't do anything to control the flow of foreign money into the market. It will find a place to hide, he says. Instead, he'd like to see drastic action such as Canada Revenue Agency collaborate with their Beijing cohort to audit local real estate agents who sell to Mainland China.
"Raise the stakes," he said. "Get Beijing tax collectors to participate in CRA audits of real estate agents, when B.C. transactions have Mainland connections. People who properly pay their taxes in both China and Canada have nothing to fear.
"Real estate agent businesses are the easiest way to connect the dots between Canada and foreign countries. Those transactions can be nests of loose hanging threads that can put a smile on the face of any tax collector around the world."
In other words, we need to make Vancouver less of an easy mark for the rich speculators. As Mr. Weaver puts it, if we don't do something now, we'll collectively lose in the long term because there's no end in sight.
"There are 7.5 billion people in the world and only 4.5 million in B.C.," Mr. Weaver said. "Think about it. It's not rocket science."