Flip through any newspaper or Twitter feed, and you’re bound to find Vancouver’s real estate market a permanent fixture in the headlines. Housing prices rose 25% every year, coupled with commercial rates that are also skyrocketing. Affordability has therefore become a growing concern for residents who are no longer able to live and work in the cities they once grew up in.
The cause of this real estate bubble leads many to point the finger at foreign ownership. Chinese investors are said to be buying up homes and commercial properties, only to leave them empty and vacant. Meanwhile, residents are being pushed out further and further into the suburbs. Municipalities such as Burnaby, New Westminster, Maple Ridge and Pitt Meadows are experiencing record setting listing prices. Most recently, Abbotsford has garnered attention as the newest suburb to enter bidding wars.
Brian Lee Crowley, Managing Director of Macdonald-Laurier Institute and Political and Economic Commentator, has a different explanation as to what’s driving prices. A native of North Vancouver, Crowley is a serial think tank entrepreneur and national thought leader. He is the founder of the only independent national think tank in Ottawa, the Macdonald-Laurier Institute (MLI), recently ranked one of the top three new think tanks in the world. In addition, he’s a columnist in both the Globe and Mail and Ottawa Citizen, a best-selling and award-winning author, an advisor to governments, industry and international organizations and frequent commentator across all media.
As the speaker at our May Breakfast Event, he shared insights on what he feels is really causing the problem.
“We simply don’t know enough to say for sure that foreign investment is the cause of the affordability crisis,” said Crowley. “The balance of probability tells us that Chinese appetite for expensive properties in the downtown core and the million dollar two-bedroom home in East Van is highly improbable. These issues are not because of Chinese carpetbaggers.”
Instead, Crowley said it comes down to systemic failures, blaming poor governance over public policy that’s “controlled by urban elites who force their ideals on Canadians.” He continues that these policies are restricting supply to create demand and using Chinese investors as a means to distract us from what’s really going on.
Crowley believes that policy makers restrict land supply, which only increases commercial and residential prices. Half of the cost of a home is attributed to the restrictive land use regulation, which in turn drives up rates like never before.
Do you agree with Crowley? Tweet @naiopvancouver and let us know!