If you're a regular reader of Vancouver newspapers, you probably believe that foreign investors, particularly those from China, are the primary force driving up housing prices in the Lower Mainland.
That was the prevailing view in a recent Angus Reid Institute poll, in which 65 percent of respondents cited this as one of the main causes.
It was the top-ranking answer, followed by "wealthy people investing in local real estate" at 41 percent and "condos and houses being left empty by investor-owners" at 37 percent. (About 4.9 percent of all homes were empty in Vancouver in 2014, according to the consulting company Ecotagious.)
Those views were cited more often than other factors such as the desirability of Vancouver as a place to live (31 percent), low interest rates (18 percent), lack of supply of housing for sale (13 percent), and lack of available land for new construction (11 percent). The pollster did not ask about two other factors: the Bank of Canada's quantitative easing and equity-rich baby boomers passing money down to their kids.
For B.C. politicians looking toward the May 2017 provincial election, it doesn't matter if the public's views reflect reality or not. Elected officials aren't going to worry if a former federal politician like Garth Turner or a former federal candidate like Victor Wong say that foreign buyers only account for 10 percent of all home sales in the region.
If an MLA wants to keep his or her job, the most important consideration is what the public thinks is true and then taking action to address those concerns.
Industry caught flat-footed
Meanwhile, people in the real-estate industry are expressing shock that their "friends" in the B.C. Liberal government would impose a 15 percent tax on foreign buyers. They're bringing forth examples of hard-done-by foreign buyers whose lives are being severely disrupted by the new tax.
They're getting about as much sympathy as former French king Louis XVI's courtiers received in the midst of the French Revolution. That's because the public loves the new tax (at least according to the Angus Reid Institute poll).
This shouldn't come as a surprise. As critics of foreign buying were working nearly full-time on this issue for several years, the real-estate sector (with a few notable exceptions) ignored the rising level of alarm.
The tax-the-foreign-buyers crowd mobilized over Twitter, which is the preferred social-media platform of many journalists, as well as on Facebook. Reporters who advanced the foreign-buyers angle received lavish praise for telling the public what it wanted to hear. And that encouraged them to continue. Those who highlighted other factors were trashed as naive or in the pocket of the real-estate industry.
Meanwhile, industry lobby groups like the Urban Development Institute and the Canadian Home Builders' Association of B.C. were issuing news releases, organizing awards events, and holding insider conferences. Another organization, the Real Estate Board of Greater Vancouver, spent parts of this year fending off media reports that it hasn't effectively policed its members. Its credibility was tarnished and its voice was weakened by a widespread belief (backed by plenty of evidence) that some of its members were running amok.
I would wager that few people reading this article even know the name of the CEO of CHBA B.C. It's Neil Moody, a man I've never met, spoken to, or corresponded with. His predecessor, former B.C. Liberal government communications official Brian Bonney, stepped down after a month when it was revealed he was deeply involved in his party's ethnic-outreach scandal.
Over the past year particularly, media coverage has helped convince the public that foreign buying and empty homes are bigger factors driving up housing prices than interest rates, lack of housing supply, lack of developable land, and the desirability of living in Vancouver. And in the face of this narrative, the home-building industry has been mostly missing in action.
Several years ago, the home-building industry had an effective public advocate: Peter Simpson. Once a scrappy journalist with the Toronto Sun, Simpson understood how to get his industry's message across in the media.
As the CEO of CHBA B.C., Simpson wrote a regular column in the Vancouver Sun and often appeared on radio shows. For journalists, including some working in the press gallery, he was a known entity.
Not everyone agreed with him. I recall watching Simpson once try to argue against Vancouver council's plan to require more wheelchair-accessible housing units in multifamily developments in front of two councillors who were in wheelchairs. It was quite a sight as the two councillors from different parties interrogated him about the association's position. Yet Simpson didn't flinch.
Over the past week, I've wondered how the real-estate debate might have unfolded in Vancouver had Simpson not retired in 2012 and moved to Nova Scotia. It's unlikely that he would have sat back and let his industry's critics seize the agenda to the degree that they have.
Another long-time development industry advocate, Maureen Enser, retired in 2011 after 28 years as executive director of the Urban Development Institute. She was also vigorous in advancing her association's point of view in front of the public, whether it was through op-ed pieces or other means.
So if you hear industry officials bellyaching about how they're not getting a fair hearing in the media—or that the real problem is a shortage of supply—ask yourself this: why wasn't the CHBA B.C. or the UDI battling it out with its critics over Twitter or Facebook months or years ago? Why hasn't the industry taken more advantage of opportunities to publish commentaries in online and printed publications like so many other organizations have, such as Integrity B.C., the Canadian Taxpayers Federation, the Canadian Centre for Policy Alternatives, and the Fraser Institute?
Immigration and trade form backdrop
There are more public policies at stake than just the regulation of real estate.
As B.C. media coverage about a Quebec immigrant investor program has reached a fever pitch, some critics of foreign buying are adding another dimension. They're tweeting and retweeting that many of the foreign dollars are coming into the Vancouver housing market through immigration.
Taking this argument to its logical conclusion, taxing foreigners won't necessarily have a meaningful impact on reducing the amount of foreign money flowing in the local housing market. That's because people who become permanent residents are still bringing wealth into the country.
The logical corollary, which isn't being stated explicitly on a large scale yet, is that immigration will eventually need to be addressed to get a grip on the home-price issue. Or at the very least, immigration of rich people will have to be curtailed. In other words, it will be necessary to pull up the drawbridge to a certain extent on newcomers arriving in Canada. And that flies in the face of promises made by the federal Liberals in advance of the 2015 election.
Alongside this is the trade issue. If Toronto lawyer Barry Appleton is correct with his assertion that B.C.'s foreign-buyers tax violates Canada's international trade treaties, then something will have to be done about that.
The logical corollary is that Canada will have to amend or withdraw from NAFTA and other agreements to ensure Vancouver housing prices become more affordable.
Otherwise, foreign investors will be able file complaints to a NAFTA tribunal and the federal government could be on the hook for hundreds of millions if not billions of dollars, according to Appleton.
Reducing immigration? Ripping up or amending trade deals? Isn't that what the U.S. election and the fight over Brexit in the United Kingdom were all about? It's all starting to sound oh so familiar.
Constitutional arguments pop up
The debate took another surprising turn this week when Toronto lawyer Rocco Galati told the Vancouver Sun's Peter O'Neil that he was going to launch a charter challenge against the new foreign-buyers tax. Galati will argue that it violates the equality-rights provision in the Canadian Charter of Rights and Freedoms.
If Galati wins his case, the B.C. legislature will have to invoke the constitution's notwithstanding clause for the first time to protect the right to tax foreign buyers of residential real estate.
One of the foremost supporters of controls on foreign investment in residential real estate has been Martyn Brown, who was the long-time chief of staff to former B.C. premier Gordon Campbell. He and others have gone to great lengths to state that they're not opposed to immigration and that their concerns have nothing to do with race.
I believe that this is true in the case of Brown and the vast majority of journalists writing and broadcasting about this issue.
But it's still worth keeping in mind, however, that those who endorse the views of Immigration Watch Canada are likely quietly applauding how the broader debate is unfolding. The same can be said of any Canadian adherents of the U.K. Independence Party and its former leader, Nigel Farage.
And that's something nobody in the B.C. legislature appears to be eager to discuss. After all, there's an election on the horizon.