When it comes to purchasing a single-family detached home in increasingly unaffordable Vancouver, it appears that millennials literally can’t even. The hashtag #donthave1million, begun by 29 year-old environmental scientist Eveline Xia, has become a rallying point for disgruntled young urban professionals frustrated that they will never be able to afford a home.
Xia recently attracted a crowd of over 500 people, sharing their grievances at the Vancouver Art Gallery. The message here is clear: both the municipal and provincial governments must snap out of their blissful ignorance and take action on a housing market that only services the rich and neglects the middle class.
A popular target for Xia and her supporters is the issue of foreign investment, which they believe inflates prices in Vancouver when wealthy foreign buyers purchase property as a high-earning, low-risk investment.
The data that backs this theory up, though, is difficult to find. The Globe and Mail reports that “45,000 millionaire migrants arrived in Vancouver between 2005 and 2012.” Additionally, Business Vancouver reported on June 10 that foreign investors estimate around 5 per cent of the housing market, but “no hard number on foreign buyers [. . .] exists.”
These numbers don’t reveal the true scale of foreign buying, though they do suggest it could be a problem. More action should be taken to prevent wealthy buyers from sinking money into luxury Vancouver homes, which have risen in value by 63 per cent since 2001. For reference, salaries have risen by only 36.2 per cent in the same time period.
An absentee homeowner tax would impact wealthy owners who leave their residence empty.
A solution to this could be an absentee homeowner tax which would introduce a property tax on owners who leave their residence empty for a large portion of the year. This measure would specifically target those who either purchase holiday homes in Vancouver or those who buy homes for purely speculative purposes, with no intention of living in them.
Perhaps even more important than cooling down the breakneck inflation of the housing market is to rethink housing development in Vancouver. Maybe the age of the single-family home has come and gone. Vancouver is dwarfed by geographic barriers such as mountains, bodies of water, and farmlands, which prevent the city from sprawling in all directions.
As space reaches a premium, the “Vancouver dream” may have to shift from a detached family home to a condo or townhouse. The City of Vancouver must be more proactive in rezoning neighborhoods to accommodate higher density living, as well as creating incentives for high density development.
What is immediately apparent about mostly privileged millennials who are unable to afford a spacious detached house as their first property is that homeless people and those living under the poverty line are completely neglected from the debate. Any property taxes or rezoning investments will only marginally reduce housing price inflation and will primarily help the upper middle class. But British Columbia remains a province where approximately one child out of five lives in poverty.
While Ms. Xia’s group, Organized Vancouverites for Affordable Housing Rally, channels the ire of twentysomethings looking for a foothold in Vancouver’s property market, it is unclear who is advocating for the interests of those in extreme poverty. For these people, a single family-home may never be a reality and affordable housing initiatives must consider this.
The most pressing priority on the government’s agenda should be the creation of more public and subsidized housing across the entire Metro Vancouver region. While making homes more affordable is desirable and important for the city’s economy, as long as homelessness and poverty remains an issue, Millennials like Xia will have to stick it out with landlords.
If houses got cheaper in Downtown Vancouver, there is going to be an increase in the demand of the real estate, and wouldn’t it ultimately increase the prices? I am not an economics student, but I think the price of any commodity is hugely influenced by its demand. So I think there isn’t any practical solution to this issue.
“An absentee homeowner tax would impact wealthy owners who leave their residence empty.”
True, but it isn’t going to help the middle class population! If one wealthy owner leaves it, other occupies it. The situation is similar in almost every other country. Locations with good demographics are always going to be expensive. There is nothing unfair about it! If you want to live in big fancy houses with amazing locations, you need to make those big bucks. The government cannot (and shouldn’t) put restrictions on foreign direct investment just because the local families cannot afford it.