International speculation distorting Vancouver house prices, needs limiting measures

International speculation distorting Vancouver house prices, needs limiting measures
Yolande Cole
November 4, 2011

Independent city council candidate Sandy Garossino believes international speculation may be pushing up housing prices in Vancouver.

As part of her civic election campaign, the candidate is seeking to have the city examine whether what she says is the distortion of housing prices at the top end of the market due to international speculation is driving up costs throughout the region.

“When people feel like they’re choking on their housing costs, it’s because they are,” she told the Straight by phone. “These costs are way out of line, and they’re driving people out of the city and we’re losing talented people from the economy.”

“I’m concerned that we look not only at the supply side, but that we also look at the demand side, and we have to be very surgical in our response.”

According to Garossino, almost every other country or city has policies that protect domestic housing stock from international speculation.

“There’s a huge range of possible directions to go, and we need something that’s made in Vancouver,” she said.

The candidate cited policies used in other jurisdictions, such as Singapore, where certain areas have been zoned specifically for international buyers, Australia, where non-residents have a limited ability to purchase residential real estate, and France, where residents have to be a different tax rate on residential real estate.

“My major point is that we have to start this conversation, we have to be aware that this is going on, and we have to get all our options on the table, instead of just adding more and more and more condominiums, which seems to be the approach that most civic politicians just now are taking,” said Garossino, adding that “the Canadian-Chinese leadership and knowledge need to be part of this conversation”.

But Tsur Somerville, a professor at the Sauder School of Business at UBC, said most of the money flowing into the region from overseas, particularly in areas such as Richmond and the west side of the city, originates from people who are looking to live in the area.

“I would not disagree for a moment that money from China has flowed into Richmond and the west side of Vancouver, particularly in the last couple of years, and then creates housing crisis there,” he said.

“But…you have to separate out that money that’s coming because people are moving here to sort of people speculating on the housing with no intention of living in it or having it occupied.”

Garossino, who launched her candidacy for city council on October 3, was co-founder of the Vancouver, Not Vegas group that opposed the proposed expansion of Edgewater Casino in downtown Vancouver.

It was partly Garossino’s observations of community consultation during that process that led her to launch her bid for a seat on city council.

“When the casino application was going before council the notices that were sent…went to residents within two city blocks of B.C. Place stadium,” Garossino claimed.

“Which shows that the planning department had not fully engaged in the spirit of real community consultation at that stage. We’ve got to correct that.”

One approach that Garossino wants to see is more involvement from neighbourhood associations in the development of a vision for the future of communities.

The candidate’s criticism of the city planning and consultation process sounds similar to the central message of a new electoral group on this fall’s election ballot, Neighbourhoods for a Sustainable Vancouver.

Garossino called the NSV candidates, as well as Green candidate Adriane Carr, “very interesting candidates”, and conceded “there’s a good match” between her views on consultation and those of NSV’s.

“I could see myself working with all members of council, but I’m very interested in their knowledge,” she said.

While Garossino may have name recognition among some Vancouver residents for her previous community involvement, she and other independent candidates face an uphill battle during the remaining weeks until the election, according to one local political scientist.

“In the short-term, meaning in the next two weeks, their likelihood of making in-roads will be pretty limited,” said Patrick Smith, a political science professor at Simon Fraser University.

“Our at-large system in large cities is a very expensive proposition to run elections,” Smith explained. “You have to get your name known across over 600,000 people.”

Smith said while “local legwork” by candidates, such as involvement with community organizations, can trump money, this kind of scenario is the “exception rather than the rule” in a city where major parties spend up to $2 million on their campaigns.

Garossino plans to release details of her election platform leading up to the November 19 election.

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