What the experts told the Mayor about foreign investment in 2012
Now that even the federal finance minister and the Premier are working to curb the impact of foreign investment in the real estate market, some commentators are outraged at Mayor Gregor Robertson’s suggestion that their actions were too long in coming.
The Mayor himself has minimized the problem, they say. Not true. The Mayor commissioned a group of leading academics to study the issue back in 2012.
This key advisory group to the Mayor’s Task Force on Housing Affordability, recommended “more research,” concluding there was no obvious way to handle the issue of absentee owners even if it was a problem. Nonetheless, council funded additional research and the city led the way in tackling the issue.
That group included Prof. Erick Villagomez, Founder and Principal – Metis Design (Roundtable Chair); Prof. Leslie Van Duzer, Director, School of Architecture and Landscape Architecture; Prof. Penny Gurstein, Director of School of Community and Regional Planning, UBC; Prof. Emeritus Michael A. Goldberg, Sauder School of Business; Assoc. Prof. Elvin Wyly, Assoc. Professor of Geography, UBC; Prof. Emeritus Stan Hamilton, Sauder School of Business; and Prof. Andrew Yan, School of Community and Regional Planning, UBC and Bing Thom Architects.
Their report concluded:
- More research – coupled with much better data – is required to better understand investment impacts. No concrete evidence exists showing either negative or positive impacts and the empirical conclusions of the impact of foreign investors on affordability is weak at best. Further exploration is required.
- Even if one accepts the findings without qualification, the evidence (5%-8% empty condo rate in the downtown condominium core) does not suggest there is an affordability crisis created solely by investor-owned units or even investor owned units that are held vacant.
- The evidence from the study neither proves nor disproves foreign or non-resident investment is necessarily a problem or contributes to the affordability issue.
- Even if we conclude that there is an issue with absentee owners, there is no obvious approach to handle the matter.
Now that the foreign ownership issue has been tackled, we can see clearly that the critical issue remains unresolved. Not a single new unit of affordable housing has been produced. Victoria is beginning to move on that front, but Ottawa’s initiatives remain weak and unfocused.