Once, I saw a man cry real tears when talking about real estate. It was some years ago, early in the boom, and of course he was from Vancouver. It was at a dinner party in Toronto. The talk turned to houses and this fellow saw a chance to air his grievance. "You know what's happening, don't you?" he said. "They're pushing the prices up so high that soon I won't be able to buy a house (gasp) in my hometown, the city where (tears) I grew up." He fell silent, overcome by the sheer awfulness of it all.
He was ahead of his time, but these days much of Canada has caught up. When he used "they," he of course meant the rich Chinese who (according to popular belief ) have bid up real estate prices to unprecedented levels. There was more than a trace of anti-Chinese prejudice behind his words. He spoke of his hometown, as if that gave him a special right to live there and a reason why everyone else should be less welcome. It was so unfair! And he wrapped his resentment in an impassioned nobody knows the trouble I've seen tone. Clearly, he had turned real estate costs into a personal matter.
Something about this subject muddles Canadians, or at least a lot of us. In print or in conversation, we see the rise in real estate prices as an affront to our values. We are good, solid people, in our own eyes. Perhaps all those long numbers are just too strange for us.
Competition naturally inflates prices, as it always has. For various reasons, there are more buyers than sellers in prosperous cities. Chinese house buyers, fearful of instability in China, look on Vancouver as a safe place to invest. They are not doing something underhanded when they invest in Vancouver, Victoria and Kelowna, B.C. In fact, they (and other foreigners) are embracing the Canadian government's business-immigrant program on precisely the terms it was offered and for precisely the reason it was designed: to stimulate the Canadian economy. Others might see a welcome infusion of cash from across the Pacific as a benefit, a return on the money we send China for our T-shirts. Certainly many sellers of houses are generously enriched. But a resentful attitude seems to me a form of hysteria that arises from changes in the population.
A favourite theme in conversation is the craziness of it all, the sheer insanity of paying $2.5 million for a house that wouldn't bring more than a quarter of that a decade ago. But how can it be crazy? Buyers can pay those prices, sellers are happy. A sane response might be satisfaction: if prices go up, it suggests that there's some health in the economy. But Canadians greet this news as something close to a tragedy. The other day the Globe and Mail called it "the affordability crisis." There's a growing opinion that something is wrong and needs fixing, by the government.
The Tyee, an online Vancouver news outlet with generally liberal views, ran a piece headed: "Serious About Housing Costs? Ban Foreign Home Sales for Six Months." The author, Bill Tieleman, a former New Democratic Party strategist, wrote that "A six-month ban would give us time to start finding longer term solutions and send a signal to the world that Metro Vancouver is not for sale to the highest bidder as a blue chip investment."
He insisted that "People with no commitment to B.C. have no business buying residential property purely for speculation." That's a federal matter and would require a long wrangle in Ottawa, especially when someone remembers that this wasn't mentioned when Canada was soliciting wealthy foreigners. And as Prime Minister Justin Trudeau said in December, "We have to be very, very cautious about restricting foreign investment in our country."
The Vancouver mayor, Gregor Robertson, announced this week his latest creative plan: he will tax people who own empty houses. He claims there are 10,000 houses in Vancouver with no one living in them, presumably because the owners treat them as assets and want them instantly available. That disturbs the mayor, who thinks they should be rented. No one, even the mayor, knows what tax will be. How high would such a penalty have to go in order to persuade owners to rent their houses? And it's hard to say whether the tax would prove legal if it were challenged in court.
Still, politicians confronting angry voters must be seen to be doing something, even something that the future will consider cockeyed