We’re taking a look at burning issues on the campaign trail. Today’s explainer dives into foreign ownership of real estate in Canada’s hottest housing markets. And read our in-depth primers on the campaign’s 12 dominant issues here.
Stephen Harper stood on North Vancouver’s waterfront and, as he hyped his morning pitch to voters, appealed to a softer side. “Our dreams live in our homes,” said the Conservative leader, who lamented the unaffordability of home ownership for so many young families in Canada’s big cities. Vancouver’s crowded downtown core, a backdrop packed with pricey condos, was a powerful visual reminder of a west-coast housing market that prices out young people before they even consider buying a home. Yesterday, a local newspaper’s latest look at foreign ownership of local real estate revived a charged debate about foreign money’s role in killing young dreams of home ownership.
Today, Harper talked about affordability, and he didn’t shy away from questions about foreign interests. For those hoping to buy their first home, he offered incentives in the form of a $5,000 tax credit (which is not a new measure). For those who fret about making a down payment, he offered an increased limit on tax-free RRSP withdrawals. For those curious about just how many of Vancouver’s houses and condo units are owned by investors from faraway lands, he offered a plan to collect data on foreign-owned real estate in Canada. Today, Harper said, no government in Canada collects this data.
The Prime Minister complained that up to 15 per cent of condos in Vancouver sit empty. And though he didn’t have the hard data to prove it, Harper hinted that foreign speculators might be behind many of the vacancies that so frustrate Vancouverites looking to buy homes. But are 15 per cent of the city’s condos really empty? And are there really no data on the citizenship of homeowners in Canada?
The Tories sourced their “15 per cent” claim to a 2013 study led by Andy Yan, a senior planner with Bing Thom Architects and a researcher with BTAworks, the firm’s research and development division. He has a slight correction for the Prime Minister, for the record: that 2013 study of Vancouver vacancy rates looked at all housing units, not just condominiums, and the 15-per-cent claim, while not incorrect, masks more precise trends that are even more startling.
The 15-per-cent reference looks at vacancy rates in all of downtown Vancouver, but Yan drilled down even further. He found that a quarter of all units in the Coal Harbour neighbourhood directly across the water from Harper’s announcement were, according to available 2011 census data, without occupants. The numbers are less eye-popping in most other parts of town; proof that the empty-unit epidemic is, Yan says, a phenomenon only in certain neighbourhoods.
It’s conventional wisdom that foreign ownership is having some kind of effect on Vancouver’s housing market. But no matter the anecdotal popularity of the theory that offshore owners are behind the so-called ghost towers quietly gathering dust in Vancouver, Yan says nobody can yet prove anything either way.
On that score, he says, Harper’s data-collection pitch is on to something. Nobody knows conclusively how many Canadian homes, nor how many empty units, are owned by non-citizens. Harper’s plan could address that gap. But it’s not all thumbs up for the Tories. Yan hinted that the elimination of the long-form census, a signature achievement for Conservatives that angered myriad scientists and researchers across the country, reduced the value of what Canadians know about where they live. “We need better information in terms of what is happening in our city and our country,” he says. “Policy without reliable and transparent data is just guessing.”
Yan’s opinion of foreign ownership, whatever the data eventually say, doesn’t take sides. “It’s not a bad thing or it’s not a good thing. It’s just a fact that’s happening in cities around the world,” he says, pointing to similar trends in New York and London, among other cities. “I think modernizing the system we use to measure its impact is pretty important.”