Prime Minister Justin Trudeau says overseas money from Asia is “obviously” playing a role in Vancouver’s increasingly out-of-control housing market.
But, during his two-day visit to Vancouver, he said he doesn’t want Ottawa to take any action that could make things worse, possibly by hurting other regions that benefit from foreign investment.
During an interview with CBC Radio, Mr. Trudeau said “obviously overseas money coming in is playing a role” in the region’s affordability challenges, which have seen housing prices soar by more than 30 per cent in some neighbourhoods in the past year.
Mr. Trudeau was in Vancouver for announcements and meetings related to transit funding, the innovation economy and housing.
He acknowledged that there’s a crisis in the local housing market and said he’s well aware of the anxiety that is producing because of what he hears from friends and acquaintances he has in the city where he once lived.
Last month, B.C. Premier Christy Clark urged Mr. Trudeau’s government to boost efforts to track real estate transactions because British Columbians want to ensure everyone is paying their fair share of taxes. Her comments came as the B.C. government launched an initiative to collect citizenship data on home buyers in response to concerns over how foreign ownership might be affecting real-estate prices.
Mr. Trudeau offered few specifics about what Ottawa might do, though he didn’t rule out the option of measures enacted in Australia to limit allowing foreign buyers to buy new properties.
“Those are certainly the kind of best practices we will be looking at and contrasting and seeing what can apply here and work here,” he said when asked about the measures.
“It’s very dangerous to try and apply a made-in-somewhere-else solution, exactly as is, to Canada. But we can certainly learn from successes and challenges various jurisdictions have.”
His statement was in contrast to statements during the past couple of years by the B.C. government and local real-estate organizations, which have played down the impact of foreign money.
But he echoed their caution in saying that “levers we use here in Vancouver and perhaps Toronto could have extremely negative impacts on housing markets in Calgary or Montreal or Halifax.”
He was also concerned, as has been Ms. Clark, about eroding the equity of local homeowners.
Friday, the Prime Minister was bombarded with information and suggestions at a roundtable where his staff had gathered more than two dozen people with expertise in housing and real estate.
Mr. Trudeau said he wanted feedback from meeting participants, including, “where do you think I should be nudging the provincial government and the municipal governments to take direct action.” He did not elaborate.
Those attending included developers like Ian Gillespie and David Podmore, academics like Tsur Somerville and David Ley from UBC, non-profit housing providers and tax specialists.
Developers focused on the problems with supply: cities taking too long to process development applications and charging high fees that add to the high price of housing.
Academics focused on the problems with demand: the influx of foreign investors who were buying houses as investments and taking advantage of Canadian social services and the capital-gains exemption on personal residences.
As well, people like Mr. Somerville argued that Canada shouldn’t be giving people citizenship just because they have a lot of money.
“On a long-term basis, there are no grounds to give immigration benefits to people with wealth,” he said.
And low-cost housing providers asked the Prime Minister to help the homeless and poor by reinstating coherent federal programs for subsidized housing.
Their voices “kind of got lost,” amid the developers and academics talking about taxes, foreign money and supply, said Janice Abbott, CEO of Atira Women’s Resource Society.
She and Kishone Roy, the CEO of the B.C. Non-Profit Housing Association, and others told Mr. Trudeau the federal government needs to get back into social housing. The federal Liberals ended social-housing programs in 1994, when then-finance minister Paul Martin was downsizing government.
“Subsidized housing requires a subsidy,” said Ms. Abbott.
Those at the meeting, which was closed to the public and media, said Mr. Trudeau suggested he was willing to make Ottawa the “heavy” in developing solutions, which might mean something like tying transit dollars to rezoning along transit lines.
Vancouver Mayor Gregor Robertson, after an event with Mr. Trudeau, said the most effective actions on the file need to happen at the B.C. government level – although he has criticized the province for a lack of action.
“They control the real estate industry here, regulate it and they have tools that can be effective in dealing with the market and the affordability challenges.”
He said the federal government could best help with supporting rental housing, social housing and co-ops after past governments have retreated from that area.
The mayor acknowledged that change will take quite some time to take effect. “It’s going to take some years to turn the corner on affordability,” he said.