by Charlie Smith on April 25th, 2018 at 11:51 AM
Vancouver–False Creek MLA Sam Sullivan has framed the debate over high housing prices as a battle between Vancouver academics and Ottawa economists.
“One side blames Chinese immigrants and foreigners; the other says lack of supply is exacerbating local forces,” the B.C. Liberal legislator says in the video below. “Vancouver media have dedicated over 100 articles to the Vancouver studies. The Ottawa research, only five.
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“One side recommends demand suppression, especially against outsiders,” Sullivan continues. “The other says increase supply by repealing government antihousing policies.”
He points out that nowadays, 69 percent of residents blame foreigners for high prices, whereas only 18 percent “believe antihousing policies are to blame”.
“Many media support the popular theory that China’s wealthy have had more impact than anything on affordability—even after CMHC revealed that less than five percent of homes are owned by nonresidents,” Sullivan adds. “The B.C. government has endorsed the theory that outsiders are to blame.”
At that point in the video, Sullivan highlights the following quote from NDP premier John Horgan: “What we know with absolute certainty is money is raised in other parts of the world is distorting our housing market.”https://www.youtube.com/embed/qa_OMaf0suE?wmode=opaque&controls=1&rel=0&showinfo=0Watch Sam Sullivan’s video that takes Vancouver media to task for its coverage of the housing market.
Sullivan, however, goes on to take the side of the “Ottawa economists” as opposed to the “Vancouver academics”.
He notes that 30 of these economists, all with PhDs and using massive data sets from Statistics Canada, crunched the numbers for nearly a year.
“They found that by plugging in just three variables—income, population, and mortgage rates—their model predicted 75 percent of Vancouver’s rising house prices,” the MLA says.
Next, he adds, these Ottawa economists went to looking for an explanation for the other 25 percent rise.
“They found it in the elasticities of housing supply,” Sullivan reveals. “Vancouver has a shockingly inelastic supply curve, the worst in Canada. Edmonton, Montreal, and Calgary have healthy elasticities. Toronto is deficient at 0.5. But Metro Vancouver is abysmal at almost 0.25.”
Therefore, he concludes, “geography and antihousing supply policies are responsible for most of the rest of the prices rise. Government cannot control geography so government policies are to blame.”
The video concludes with an examination of historical discrimination against people of Chinese ancestry.
He emphasizes that people were condemned 100 years ago for making money in B.C. and sending it back to families in China.
In an ironic twist, Sullivan says that in the 21st century, Chinese people are being blamed for making money in China and sending it to their families in B.C.
“Most troubling is that government housing policies appear to be based on research that scapegoats ethnic minorities and is demonstrated to be false,” the MLA maintains. “It does the very things the economists recommend against.
“How fortunate we are that so many skilled economists, with the budget required have shed light on this issue that is so important to our economy, quality of life, and community harmony,” Sullivan concludes. “Now it is up to us to act on their advice.”