Wow, tough topic, and tough call.
And if the online comments weren’t completely anonymous, perhaps people wouldn’t be putting their brutally honest thoughts and feelings into writing!
There’s an online petition circling at www.change.org that calls for B.C. Premier, Christy Clark, and Vancouver Mayor, Gregor Robertson, to introduce laws to curb foreign investment in Vancouver’s residential real estate market.
Is it up to the Province? The City? Or the Canadian government? Or is this “change” something we shouldn’t be contemplating at all?
Are you a sports fan?
Do you follow hockey?
I’m a sports fan, but to be perfectly honest, I follow the business of hockey more than I follow the sport, at least in recent years.
So I was fascinated to see THIS article last week, about the mess the Tampa Bay Lightning are making.
I’ve never seen anything like it.
The Tampa Bay Lightning are attempting to restrict ticket sales for their playoff games against the Montreal Canadiens to “Lightning fans” only. As a result, you can only buy tickets through Ticketmaster if you have a valid Florida address.
Check out the message below:
Forget, just for a moment, how stupid this is, given it actually IS physically possible to be a fan of a team, without living in the state.
My wife and I are huge New Orleans Saints fans, and we’ve been to games both in New Orleans, and in cities where they visit. And we were actually (gasp!) allowed to purchase tickets, even though we don’t live in Louisiana.
But aside from the geographic mistake that the Tampa Bay brass have made here, do you think it’s fair to restrict sales to only fans of the team?
Is it anti-competitive?
Is it discriminatory?
You could argue it is both, with ease.
Even worse than the decision to restrict ticket sales to Florida residents, however, is the decision to restrict what fans can wear to the game!
Fans have been encouraged to wear “a shirt of neutral colour,” or risk being asked to remove their clothing (presumably Montreal Canadiens jerseys), or being asked to leave the building.
Montreal fans have also been banned from certain areas of the building.
The article linked above doesn’t mention it, but I’ve seen it printed in other media that some fans were even asked not to cheer for the Canadiens. There was apparently a box suite rented by some Montreal fans, and they were “too loud.”
Is this right?
Is this just?
Or is this just commerce in 2015?
Downtown Toronto nightclubs have “dress codes” which, of course, they refer to as “style guidelines,” which allows them to restrict people from gaining access if they’re not wearing the right type of shoes, or pants.
Nightclubs can also restrict the age of patrons as well.
Back in my day, it was guys that had to be over 21, or sometimes 25, to gain access to the “mature” scene.
Today, it’s girls that are being restricted, since there are apparently too many 19-year-old girls busing in from Brampton and Richmond Hill, trying to meet up with Bay Street dudes. Not my words – this is what somebody told me last week!
So is it fair to restrict ticket sales at sporting events to certain people, and insist they dress a certain way?
Well, I guess if the arena is selling out, then they can do whatever they want.
But at some point, it’s discriminatory, is it not?
What if Tampa Bay management said, “We only want fans with Florida addresses, but in ‘certain’ neighbourhoods,” perhaps referring to a certain demographic – whether that’s race, religion, average income, or all of the above. That would be discriminatory, would it not?
Is it their right to pick and choose?
Should they be allowed to place restrictions on who purchases their goods and services?
The Tampa Bay Lightning are a privately-owned company, but what if a wing of government in our country were to restrict who can purchase certain goods and services?
It wouldn’t be anything new, that’s for sure.
There are all kinds of quotas, tariffs, and import restrictions in our country.
As I’m writing this blog, I’m listening to 102.1 FM, and wondering why so much of this music is crap. But alas, the CRTC mandates that a certain amount of content on TV and on the radio must be Canadian…
So is it reasonable, and is it not discriminatory, to suggest that the Province of British Columbia should restrict the amount of foreigners who can purchase real estate?
www.change.org is a petition website, and on it you’ll find a petition about this very subject – restricting foreign ownership in Vancouver.
HERE is the link to the petition, which now has 17,182 signatures since it was first published on April 5th, 2015.
The petition’s mandate is as follows:
“This petition is about protecting current Canadian citizens—including recent immigrants—from the tsunami of international capital that is hitting Greater Vancouver’s residential real estate market, driving up prices, and lowering our standard of living as a result. The race or national origin of the investors who are purchasing real estate is irrelevant, and moreover, these investors have done nothing wrong—they are behaving in a financially rational manner within the rules that our government has set for them, and I wish them all the best. The onus to shape Canadian and British Columbian law is on us, not them.”
I find this absolutely fascinating.
And this petition has some legs, too! Almost 18,000 signatures, and while I know there are 2.4 Million residents in the greater Vancouver area, and in actual fact – any of the 7 Billion people on planet earth can sign this petition, 18,000 is not bad in five weeks.
But does this petition have merit?
“Protecting citizens,” the petition reads.
Protect them from what?
From massive tax-free, capital gains on primary residences that have increased in value significantly in the past decade?
Sure, that’s for folks that own real estate, and perhaps those who might be cynical to this petition.
But for frustrated non-owners of real estate, to blame foreign ownership is a bit of a stretch.
Foreign ownership is one reason why prices have risen, but not the reason.
Reading that mandate over and over, I really don’t see any reason for the petition, other than rising prices. They talk about the “decreased standard of living,” which really can’t be proven other than anecdotally, but what does this actually refer to?
I would imagine the petitioner ascertains that somebody paying more for their mortgage pays less for food, clothing, and the basic necessities of life.
But that’s really the only way you can link “decreased standard of living” to the increase in foreign-owned properties.
Otherwise, wouldn’t the real estate boom have helped the standard of living?
More jobs means more money for Vancouverites.
More taxable properties means more revenue to spend on public infrastructure.
It would seem to me that the only other “decreased standard of living” could be, say, less sunlight, due to tall condominiums.
In any event, the questions we should be asking are twofold:
1) Does Canada or British Columbia “need” to restrict foreign ownership? If so, why? What would be the result, and what is the benefit to residents of B.C.?
2) Would either level of government be within their right to restrict foreign ownership?
The first question is one we can debate all day.
If the Province decided that the real estate market needed to be “cooled off,” then they could act accordingly. It wouldn’t be out of the ordinary. Consider that since 2008, the Canadian Mortgage & Housing Corporation (CMHC) has taken massive steps to cool the Canadian real estate market, with some of the following policies:
-reducing maximum amortization from 40-years, down to 35, then 30, now 25
-raising minimum down payment to 5%, from what was actually more than 0% (with cash back financing)
-mandating minimum 20% down payment on any property other than a primary residence
-no longer ensuring mortgages over $1,000,000, meaning minimum down payment is now 20%
And that’s just to name a few.
The only reason why the Canadian or Provincial government would restrict foreign ownership, from what I can see, would be to stop the influx of money, and thus cool the market.
Well, I suppose you could argue that there’s another reason: we just don’t want foreigners owning “our” properties.
That’s not very “Canada-like” of us, however, and I don’t see that ever happening.
So as for the second question, as to whether or not Canada or British Columbia could pull this off, well as the petition duly notes, there are countries that are doing this.
Australia restricts the purchase of real estate by foreigners, and they’re quite open about the reasoning! They even have a website dedicated to it, HERE.
It’s amazing.
The entire reasoning behind the restriction is that the government wants to create new supply and avoid speculation (I’m assuming you avoid speculation to avoid rapid price increases, but they don’t mention that).
Have a look at some excerpts:
–
The Australian Government believes that foreign investment in the housing sector should increase the supply of homes, and should not be speculative in nature. So the policy is designed to channel foreign investment into increasing the supply of new housing.
Foreigners can normally get approval to buy vacant land — as long as they start continuous construction within 12 months.
Foreigners can normally get approval to buy existing residences for redevelopment — as long as this will increase the supply of housing. As well, the house must remain unoccupied during redevelopment. Foreigners can normally get approval to buy units, townhouses, and house/land packages in a new development.
Because Australia’s foreign investment policy is designed to increase the supply of new housing, foreigners cannot normally get approval to buy houses, flats or units which have been occupied (ie. anything pre-owned).
The exceptions to this rule are:
1) Foreign nationals temporarily resident in Australia for more than 12 months, who are buying a home here.
2) Foreign companies buying a home for their senior executives who will be living in Australia for more than 12 months.
–
This is amazing.
So the government has restricted the purchase of real estate by non-residents to only that which will create new supply, and thus create jobs at the same time via new construction and renovation.
Are they on to something here?
Maybe they know more than just rugby, kangaroos, and really good looking blond guys with chiseled abs who smell like surfboard wax and steal our women with their intoxicating accents…
Australia may have beat us into World War II by a paltry seven days (September 3rd, 1939 vs. September 10th – just in case this is on Jeopardy one day), but it also seems as though they’ve beat us to the punch in dealing with what some people, evidenced by that online petition, feel is also a threat.
Foreign ownership of real estate in Canada has helped our economy tremendously in the last twenty years, and you have to wonder if that petition is borne of sour grapes, or good ideas.
I’m interested to know what my readers think…
Kyle
at 10:09 am
This whole idea of regulating foreign ownership is nothing more than a divisive wedge that a squeaky entitled minority are trying to use to build support for their own self-serving entitled goals (i.e. lower house prices). There is no informed rationale behind it (what exactly are you trying to achieve by limiting foreign ownership and how does that benefit the province?), no data or information supporting it (where’s the evidence of how much foreign ownership is out there? And how that is an issue?), and no study as to the impacts of restricting it (Sure you might get lower house prices, but what does that do to the economy as a whole?). This is purely an emotional argument, put forward by those who want something they can’t afford.
Libertarian
at 10:25 am
We Canadians are an entitled bunch – we all expect to have a big house, cottage, cars, highways (with no traffic), schools, hospitals, smartphones, super-fast Internet, premium cable channels, big-screen TVs, vacations, etc., all for free. Why all for free? Because the 1% should be taxed up the ying-yang to pay for our entitlements. And if anybody else gets in the way of our entitlements, such as foreigners buying real estate, they should be stopped. People these days are ridiculous! No individual responsiblity. End of rant.
Funny how David mentions if Tampa Bay’s management wanted fans from certain neighbourhoods. This actually happened in the NBA, with the Atlanta Hawks. One of the owners was caught saying the exact same thing and had to sell his portion of the team.
Chroscklh
at 11:07 am
You article timely. I attend the dinner with B.C. government folk recent and this question raise. Dismiss very quick, Response wuz “how can we tell world we seek foreign invest in economy but restrict invest in housing? not our message.” What no like is foreign buyer buy 6mm$ house Point Grey, no live there, no rent, house degrade. Maybe rule ’bout vacant home? Anyway this crazy discussion. Do New York restrict foreign invest so guy from Queens can afford upper west side? If no like house price, do what Chroscklh did – trade commodity, exploit arb in steel mkt, make fortune, move Canada and buy real estate cash and participate not complain? But is easy me to say – I grew up in war-torn country in poverty so I had advantage of fear for life
Kyle
at 3:01 pm
This is bang-on. I agree vacant homes are a problem, but vacant homes and foreign owned homes are different. The media often likes to lump them together as the same thing. A local can leave a home vacant, and a foreign owned home can have residents. So what exactly are
they trying to restrict?
The other thing these petition signers haven’t done is define what exactly “foreign-owned” means. Should a family that is in the process of immigrating to Canada, but still has citizenship of another country restricted from buying? Is someone who is here on a 5 year work or student visa restricted from buying? Is a Canadian citizen who works overseas restricted from buying? Even the most fundamental and rudimentary questions haven’t been considered or analyzed at all. It all just seems like a big fat whine from bitter, envious, hateful cry-babies looking for a scapegoat for why they can’t afford the home they want.
Jason H
at 11:28 am
I do not agree with your point of view simply due to the fact that people are getting pushed out of simple homes. The fact that condo’s in Vancouver and Toronto are over the 200 range is testament to an unrealistic price for housing. Its an apartment.. it’s ridiculous.
I don’t think foreign buyers are entirely the problem but the more we can cut out of the equation to make housing affordable the better. No one has a right to own a home but at the same token not being able to afford a home doesn’t help the social fabric of our society either.
Kyle
at 1:32 pm
I don’t mean this as a personal attack, but this is what i am talking about. I ask questions on why foreigners should be restricted and the answer i get is nothing more than vague general platitudes that clearly show that this has only been considered from your own narrow view point.
So, what you’re really saying is the problem isn’t foreign owners, it is high house prices. But who should determines what is in your words is “unrealistic”, cause 1000’s of people are transacting at these prices every month and they would tell you that what they paid/received is very realistic. Basically this all comes back to the entitlement, i referred to, you think you “should” be able to buy a condo for under $200K in Toronto or Vancouver, and if oyu can’t then prices aren’t realistic and therefore bad for the fabric of society – again who judges this and how is societal fabric measured? And because you can’t buy it for less than $200K (or what you deem to be realistic), everyone else who is able to afford it (at what you deem to be unrealistic) should be excluded, starting with foreigners.
keith
at 3:52 am
Yeah and I see you have a great grasp of the english language too.
Jonathan
at 12:28 pm
The smart thing to do would be to charge non-residents a higher rate of property tax, just like they do in Florida. High enough to raise a little extra cash without choking off purchases. As it is, non-resident foreigners make for great property owners since they pay taxes but don’t use any services. An empty condo building owned entirely by foreign investors would be great for the tax base!
IMHO a bigger problem is immigrant families where the wife and kids live in Canada but the husband keeps his business (and income taxes) in another country. In that case the family uses Canadian services but generally does not contribute an appropriate amount in taxes.
Clifford
at 9:12 pm
I agree. I feel foreigners should pay more
Jason H
at 11:30 am
I don’t think foreigners should be allowed to buy property at all. Not for housing cost reasons but actually for the fact it provides no net benefit to Canada.
Atleast if it’s allowed it should be regulated that it can only be one home and it must be lived in by the owner (or considered a vacation property).
Kyle
at 2:57 pm
It’s pretty short-sighted to say that someone who has paid land transfer tax to buy a house, legal fees to a local Lawyer to close the purchase, property tax the entire time they are holding it, commission to a local agent to sell it and another legal fee to a Lawyer to close the sale “provides no net benefit to Canada.”
Jason
at 7:03 pm
What I think is short-sighted is the fact everything you’re talking about only is upon initial transaction.. and a few thousand in “taxes” per year doesn’t constitute a net benefit to Canada.. Net benefit is spending money in Canada and working in Canada which produces more taxes for the base.
Kyle
at 7:29 pm
Ummmm,when a foreign person, buys a house from a local person, the whole entire cost of the house is a net inflow to the Canadian economy. Some of these purchasers are contributing more to the Canadian economy in one shot than locals do in a lifetime.
Wertt
at 8:39 pm
David, how do parked investment properties that sit vacant create jobs in Vancouver, as opposed to an owner-occupied home with a family that is locally employed and contributes to the local economy as consumers?
If anything, high housing prices are forcing people not to consider moving to Van. I’m a medical resident and didn’t even apply to train in Vancouver because I knew there was no way to own a home there with my young family. You can call that entitlement if you like but its still a real factor in decision making, can’t deny it.
Joe Q.
at 12:48 pm
There is an article making the rounds about a couple in Vancouver (Richmond actually) trying to contact their neighbours about trimming / removing a hedge that is undermining a retaining wall. Problem is — they have never seen these neighbours — house was sold in 2013 and has sat vacant since then, mail and flyers collect at the front door and the grounds are overgrown and unkempt. When asked for information about how to contact the owner, the LA from the 2013 transaction cuts off the call.
It is this kind of situation (houses and condos sitting vacant) that riles people up, more than foreign ownership per se.
Kyle
at 2:43 pm
My problem with articles like that one is it takes one anecdote and tries to use it to justify the unfounded presumptions that many of the readers’ out there harbour about foreign owners. The underlying problem isn’t foreign ownership. Broadly speaking property upkeep is completely unrelated to the citizenship of the owner. Such articles do nothing but fan prejudice. There are just as many or more unkempt, derelict houses where the owners actually live in them…hoarders anyone? And there are just as many if not more foreign owned (depending on how you define foreign-owned) houses that are well kept (some are vacant, some are tenanted, and some are occupied by relatives). There is a beautiful mansion in my neighbourhood that sold a couple of years ago. To my knowledge it is not occupied. Never any garbage bins on trash day, never see anyone going in or out. But it is immaculately kept – grass is cut, snow is shovelled, windows are washed, at Christmas someone puts out large festive planters and lights and at Halloween someone puts out pumpkins and a dish of candies for people to help themselves. Is it vacant? Probably. Is it foreign owned? I don’t know, but regardless the house is certainly not a problem for its neighbours.
Appraiser
at 9:23 am
Regarding the petition: It is assumed that foreign ownership of residential real in Vancouver is widespread. Is it? Nobody knows. It is further assumed that foreign ownership is a detriment. Is it? How so, and can it be quantified?
Racism, xenophobia, irrational fear and blind ignorance are no substitute for logic. Altering the legal property ownership landscape in B.C. (or Canada) based on such dubious information, or lack thereof, is ludicrous.
Clearly, anti-immigrant and anti-foreigner sentiment is alive and well in some quarters, as always.
Pure pish-posh.
Boris
at 1:06 pm
Yes, I know, Appraiser. It is rampant.
And yes, it is negative.
And kiss my ass for playing the race card.
If you hate all races, then that’s not racist, right?
jeff316
at 12:48 am
Race card? Do you think the media would be all over the Vancouver situation if the perception was that most foreign owners were Brits? Of course not.
Boris
at 9:57 am
Yes, I do. They bend over backwards to be PC. Its unreal. Reverse racism!!
keith
at 3:55 am
The organizer is Asian.
natrx
at 12:46 pm
It should be more about money laundering than specific ownership.
It’s apparent and there is a report out there on that a lot of the money is not accounted for properly.
keith
at 4:09 am
BINGO!!! Someone that understands what is going on. Reporting left to agents? Please. Reporting requirements for new housing? Old housing under the same guidelines with Fintrac or not at all? To answer the above statement on it being not Canadian to question foreign ownership because we may be deemed as racist. I’m Canadian and I question it. Play the racist card, it’s what the norm has become.
Kyle
at 10:01 am
Great article from Bob Rennie on this subject.
http://www.rew.ca/news/vancouverites-upset-over-affordability-must-become-stakeholders-bob-rennie-1.1943537
Fuck.You
at 9:33 pm
Of course a real-estate agent wants your money-train to keep rolling, despite the negative effects this runaway market has on everyone else. You’re a slime-ball.