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Last winter, Andy Yan, an East Van boy with a master’s in planning from UCLA and a way with computers, took a stab at the mystery that is homeownership in Vancouver. Yan, who works for architect Bing Thom, has actually tried this exercise before, as have others-struggling to figure out if it’s really true that foreign investors have snapped up some undefined (but sizable) part of this city, leaving properties empty while the rest of us poor schmucks are left to fight over fixer-upper crack shacks.
Using 2011 census figures, he determined that 15 percent of dwelling units in Vancouver’s new downtown neighbourhoods were vacant or only temporarily occupied, and that the figure rises to nearly 25 percent in one part of Coal Harbour. The results, released in March, fanned a flame that had smouldered for several decades. (In 2006-2007, he examined the B.C. Hydro records of several downtown buildings; it was widely rumoured then that huge numbers of units used no electricity all year-evidence of offshore investment-but his report found otherwise.) Yan focused on condo areas, but anxiety spread across the city, especially among long-time residents in Shaughnessy, Kerrisdale, and Dunbar who say their neighbourhoods are being gutted as investors buy up properties, only to leave them empty.
Response was sharply divided. On one side: no, this worry is blown out of proportion; Vancouver doesn’t have that many foreign buyers; few condos and houses really sit empty. The subtext: anyone who brings up the subject of real-estate ownership in Vancouver is a racist, carrying on a century-long tradition of Yellow Perilism. On the other: we’ve hardly begun to understand the scope of the incursion, and anyone who denies it must have ties to the development industry, doesn’t want the international-money gravy train to halt, and will pursue self-interest even if it means wrecking the city by turning it into a ruin of empty, expensive towers and mansions. With that, conversation (and curiosity) ground once more to a stop.
Diane Fineman laughs at the stereotype of Coal Harbour living: lonely desperation in a Potemkin village. A Prairie immigrant, she hasn’t lost her small-town friendliness. “It’s not like we’re living in some ghost town. It’s a very vibrant neighbourhood.” Fineman and her husband, Aaron, lived in Winnipeg before they decided to spend their golden years on the West Coast. Now they live in Two Harbour Green, a handsome tower at 1139 W. Cordova, in the area of Coal Harbour where Yan’s statistics showed the highest “vacancy” rate. Yet they don’t feel isolated; in fact, they’re surrounded by others like them: Sondra Green, the former owner of the Ridge Theatre, who moved down from the West Side; Lawrence Ferchoff, CEO of an Edmonton construction company; Ian and Louise Mummery, the local couple whose company has become one of the world’s biggest online sellers of contact lenses; an allergist from Richmond; a couple from the prominent Ismaili Lalji family. Continue reading…
In all, there are 59 apartments. Of those, only 12 have property assessment notices that go to addresses outside the tower: Richmond, Edmonton, Calgary, and Waterloo, Ontario; Maryland and Corona del Mar, California; Australia. Mail for two goes to numbered companies downtown, another to an office in Richmond, and one, owned by a couple from South Africa who made their fortune with an auto replacement parts company, has its mail sent to a rental management agency.
The rest have owners who at least appear to be around enough to pick up their assessments. Half have Chinese surnames; a couple are Korean; some are Indian or Iranian. There’s no way to know their story-are they third-generation locals? offshore speculators?-and to wonder is to invite once more the charge of racism. George Wong, who marketed the three Harbour Green towers, as well as projects like Telus Garden and River Green in Richmond, says some of those apartments are indeed owned by offshore buyers-not to speculate or to leave sitting empty but to house a child attending school here, sometimes with family in tow. Doubtless, some Two Harbour Green residents are not around all the time. Wong, who lived in the building himself at one point, said one of his neighbours spent most of his time in Kelowna. Fineman estimates the building never sees more than 60 percent of residents. People travel to their other vacation properties or to main residences elsewhere while the rest of Vancouver frets, not sure who they are or how they’re changing the area.
Just down Cordova but a world away is Woodward’s. The project was sold as a place for Vancouverites willing to embrace this gritty urban neighbourhood. But as it turns out, only 153 of the 367 units in the taller of the complex’s two towers were bought by people planning to live there themselves. The other 214, aside from nine units of social housing, are owned by a breadth of investors-from big to penny-ante, foreign to local. Bob Rennie, who marketed Woodward’s, owns three full floors under his company, Roboson. Forty-seven units belong to companies, numbered and otherwise, with addresses from Prince George to Richmond. Six belong to Americans, who camp otherwise in Arizona, California, and Washington. Deepak Sharma from Singapore owns two units; Xiang and Jie Lie have the assessment notices for their modest $654,000 condo sent to them in Qingdao, China-the only concrete sign of the alleged foreign takeover. The vast majority are testament to the hold that investment culture that has on Canada’s middle class. The Someras and Sharmas and Francos are among the 10 investors from Surrey. The Di Spiritos, Estradas, and Paiks are among the nine from Burnaby. West Siders bought 20 units; those from East Vancouver, 14; from downtown, 18. Their names are a portrait of Vancouver: Seto, McDonald, Rizzardo, Mallazadeh, McLaren, Chang, Paley, Nguyen. Seven buyers from North Vancouver invested, including local TV anchor Mike Killeen and his wife, Jill. There are owners from West Van, Port Coquitlam, and Langley; from Saskatoon, Nanaimo, and Kelowna. Yet unlike in Coal Harbour, the apartments all seem to be rented. Owners are thrilled with the building and its mix. “I lived in Coal Harbour for eight years and I was a lot more frustrated,” says Robyn McVicker, a communications manager with the Vancouver airport. “I could see all the buildings were sold out and nobody was living there.” Continue reading…
Charles Rummel owns two condos in Woodward’s, as well as a collection of residences around the city: in North Van, throughout Yaletown, and on the West Side. He bought several at bargain prices when the recession hit. “I’m an amateur,” says Rummel, whose day job consists of helping match up international students with school districts. But he does well. He started 14 years ago, buying properties with a Korean business partner. He buys on the lower floors, where the price is far less per square foot than the coveted aeries but the rent is the same. He lived in one of his Woodward’s apartments for a while, but today he rents it out and lives in Squamish. A problem with investors in the city? He clearly doesn’t think so, being an investor himself and someone who works with many of those Asian families here to see their kids through school.
But there are still those who raise prickly questions about the investor culture and the impact of foreign money. “The foreign investor is a bit of a red herring,” says Sandy Garossino, the former Crown prosecutor who has become a minor political celebrity since her successful campaign against casino expansion and her run for city council. “But I don’t think there’s any doubt we’re a destination for capital. I think we’re seeing a phenomenon, and I think we have to be more curious about it.” Like a lot of people, she worries about the decreasing number of children and the increasing number of million-plus homes in Vancouver. Does investment, whether from Squamish or Shanghai, have something to do with that? She doesn’t know because there’s not enough information-and that’s the problem.
Richard Wozny, principal of the consulting firm Site Economics and one of the region’s most respected real-estate analysts, also asks why there is so little data. Yet there appears to be little interest. Real-estate boards don’t touch the topic. The city is busy coping with an agenda already packed with homelessness, bike lanes, and development. (Plus, there’s a sense City Hall can’t do much.) And to the federal government, it’s an issue isolated to a few hot spots-Yan’s research shows Toronto also has a near 25-percent “vacancy” rate in its downtown condo district, and Torontonians are developing their own legends about foreigners buying up the city-in this vast country.
Despite delusions of exceptionalism, Vancouver is far from being the only city that fears it is being bought up by foreigners. Venezuelans in Miami, Austrians and Italians in Slovenia, and Indians in the United States bought $3.5 billion worth of real estate in 2012. Canadians are pillaging Phoenix and Mexico. And mainland Chinese are apparently everywhere, in Berlin’s Mitte district, in San Francisco, in New York, in Miami. All over New Zealand. In Australia especially, stories about Chinese buyers and their extravagant purchases abound. Continue reading…
Australia prohibits foreign non-residents from buying houses in traditional neighbourhoods, restricting them to new developments (which means the same rules in Vancouver likely wouldn’t change our downtown condo market much). They can’t leave land vacant for more than two years (which, here, would force the Hong Kong owners of the forever-vacant lot at Robson and Broughton to do something), and though temporary residents can buy one “established property,” it can’t be rented out and has to be sold when they leave. It’s a far from perfect or comprehensive system. Catherine Cashmore, a former property manager turned market analyst and commentator in that country, observes that no one appears to track whether those temporary residents actually sell when they leave. A friend of hers tested the system by applying to buy a property with an obviously made-up name and false passport number. Approval came back in days. But the regulations do give Australians some sense of what is going on. In 2011-2012, the most recent reporting year, this country so like ours saw foreigners buy for personal use 4,000 residential properties worth about $3.8 billion, along with another $19 billion in residential land for development. The biggest group? Americans, at $7.6 billion. The Chinese and British clocked in at $3.8 billion apiece.
At various times, Canada has been wracked by suspicion that our stock is being bought up by Americans, by Japanese, by Russians, by Chinese. But those spasms have never led to an Australian-style Foreign Investment Review Board. So it’s no wonder we’re gripped by Yan’s study of electricity-use records. And by reviews of homeowner grants, analysis of the addresses where assessment notices are sent, and the discrepancy between what houses are worth and the alleged incomes in the same area. (One local real estate watcher points out that Richmond values have soared in recent years, and houses, especially on the west side of Richmond, typically top a million, yet the reported median income is among the lowest in the region. The obvious explanation? Offshore money.)
We want numbers because we can feel our homes, our city, changing beneath our feet. The investor culture is a big part of the geological forces, with none of us certain what part is played by foreign money and what part is played by all of us right here. Cashmore believes it’s important to know how and where global money is flowing into your country. She believes governments and banks have been happy to encourage investor culture, whether it involves foreigners or locals. “Banks won’t lend to developers unless they get pre-sales. The easiest way to get pre-sales is to market in Asia.” That encourages investors and speculation. “And the real thing that pushes up prices is investors and speculation.” The number one concern among Australians, according to a just-released report, is housing affordability-ahead of education and the environment. “What’s happened here is we’ve sentenced large swaths of home buyers to the prices of London,” she says.
Vancouver has all the same problems and still no answers. Take a walk through Coal Harbour after dark and you’ll see some lights in the towers along the water, but many windows that are dark, silent. We can believe they are all owned by foreign speculators, as empty sidewalks away from the seawall suggest. We can believe very few are so owned, since few notices overall are mailed out of the country. But we know the fear that’s in our hearts, a fear that needs more than one lonely researcher looking for answers.