By KERRY GOLD
Friday, June 7, 2019
VANCOUVER -- There was a time when Vancouverites never gave any thought to the meaning of a condo that had no one living in it.
But too many dark windows got people wondering, and it inspired urban planner Andy Yan to start asking questions.
It's been exactly 10 years to the month that Mr. Yan made the first official attempt to measure the extent of Vancouver's empty condo problem, which led to him coining the phrase "hedge city," to capture Vancouver's emerging status as the ideal place to stash wealth.
The empty condo study was Mr. Yan's first public report, commissioned by renowned architect and mentor Bing Thom, with whom he had worked for 11 years as a planner. Mr. Thom, who was born in Hong Kong but had spent a lifetime in Vancouver, and Mr.
Yan, who had studied urban planning at the University of California, Los Angeles, had thought up the idea during one of their Friday afternoon chats. Every Friday, Mr.Yan would amble over to Mr.Thom's office for a lively philosophical sparring session. Mr.Thom died suddenly in 2016, while visiting Hong Kong. Mr. Yan is now director of Simon Fraser University's City Program.
"It was like sparring with Mohammed Ali," he remembers.
"You couldn't touch him, but once in awhile you might land a rare intellectual punch."
It was during one of these sessions that Mr. Thom said they should look into the persistent rumour about an empty condo problem in the city's downtown core. In 2007, even former mayor Gregor Robertson, who was a Member of Legislative Assembly at the time, said that Vancouver could become a "resort city" filled with half-empty condo buildings owned by investors.
Mr. Thom had wanted to start a data analysis arm of his firm, and call it BTAworks. The empty condo study would launch BTAworks, using any measures available to them to determine whether the claims were valid.
"Bing and I said, 'let's go see if it's true' - he always wanted to understand the bigger picture," Mr.Yan says. "We were committing explicit acts of social science. I had my own training in urban planning and research from UCLA, along with a practice in statistics, demographics, and urban development from a private practice in San Francisco and nonprofit work with a census information centre in New York, and with working for Bing. So, okay, let's see what might the data tell us."
They relied on what was available to them, including home ownership grants, assessment records, condominium strata council minutes and electricity usage as the most workable data sets.
Michael Heeney, principal at Bing Thom Architects at the time, says an intern was at the BC Assessment office for several weeks, manually looking up the address of each condo to see whether it corresponded with the address of the owner. Studying 13 buildings and 2,186 units over a two-year period in the downtown core, they discovered that in any given month, a range of 5.5 per cent to 8.5 per cent of the study's downtown condo units could be empty.
"But that wasn't the entire story," Mr. Yan says, seated in an east side coffee shop. "The story was that 52 per cent of the units were investor-owned - as in not occupied by the owner.
"That was totally unanticipated. That, to me, goes to the heart of the city we built - for all the buildings and condos we had put up in the city of Vancouver and the downtown in particular, it was about driving a speculator market."
Mr. Heeney, who is now president of the Surrey City Development Corporation, said they'd proved that the emphasis on investor-owned units was distorting the housing market. Because studios and one-bedroom units were easier for investors to rent out, developers were concentrating on that unit type, shutting out families that needed two and three bedrooms. He's since had Mr. Yan study Surrey, and he discovered that Surrey has the inverse problem - the majority of the city's housing stock has more than three bedrooms, and there is not enough smaller housing stock for those starting out in their careers. And investors own a much smaller proportion of Surrey housing.
"I think that [the empty condo] study was the first to look at this kind of thing empirically, and it definitely started the subsequent analysis that has got us to where we are today," Mr. Heeney says. "It was amazing at the time, as no one at the City or even at CMHC [Canada Mortgage and Housing Corporation], for that matter, were doing this kind of analysis. Policy was being made - or probably better to say not being made - based on no empirical evidence of what was actually happening."
Sandy Garossino, former Crown prosecutor and regular commentator on the housing market, remembers that those who bravely suggested the market was speculator driven and fuelled by global wealth were derided, or unfairly accused of racism and xenophobia.
"The public understood what was happening much better than bureaucrats and politicians, but they lacked the ability to prove their point," says Ms. Garossino, who ran for City Council in 2011.
"By the time I ran for council on the issue of foreign capital's role in our housing crisis, what seemed at the time like a dam breaking was only an illusion. Although I called for a tax on empty condos during the campaign to cool the market, bureaucrats, politicians and developers - who all had access to better data than Andy Yan could work with at the time - stonewalled.
"They actively undermined those of us ringing the alarm for our lack of data, then attacked our motives. It was an ugly battle that divided our community. Those whose responsibility it was to address this crisis turned their backs on a crying public need, while putting developers in charge of their election fundraising."
Mr. Yan also sees the period as a dark one for Vancouver.
"We kept hearing, 'We don't have any data. If only we had data.' That's a bit of a cop-out, because there was data," he says. "It wasn't direct, but it was directional. You could still make publicpolicy decisions because it was of such huge interest to the public welfare. You don't wait for the data on a burning house. You do something, and you adjust as better data emerges.
"It was an indifference, a narcissism, and denial, with a faint whiff of corruption," he adds.
"The complacent environment for corruption, whether perceived or real, is created with the amount of money circulating.
Any time that occurs, without a rigorous regime of regulations and measurement, it opens it up for abuse. And the indifference part of it is that 'the money is good,' and 'we are so beautiful so of course the world wants to come here,' which is also the narcissism, and then the denial of leaders who are supposed to protect us.
"I think so much of this is not Canada. It's completely counter to our Canadian values."
Mr. Yan's 2009 study was pivotal. The revelation of so much speculator buying signalled the decoupling of housing from local labour and incomes, and all the societal dysfunction and stress that entails.
The BTAworks study dovetailed with previous work by University of British Columbia geography professor David Ley, who'd written extensively on the migration of millionaires since Expo 86.
It also fit with the work of Toronto academic Markus Moos, who had written about the decoupling of the housing market from jobs as new immigrants' residential purchases became less connected to their participation in the labour market. It also tied in with work by professors David Hulchanski and David Madden, and United Nations special rapporteur on adequate housing Leilani Farha, who all wrote about the hypercommodification of housing, when homes become part of a sweeping profit-making system rather than a fundamental right.
"The study was just concentrated in downtown condos, but it lead to questions about how none of this was making any sense," Mr.Yan says. "It got us asking more questions. Now, we weren't talking about the movement of people so much, but the movement of money, and how that movement of money finds a home in real estate."
The City of Vancouver followed with its own empty condo report a year later that paralleled Mr.
Mr. Yan went on to dig deeper into census and assessment data sets to get a better understanding of the demographics of ownership and renting, and how we use existing housing.
"Now it became about the reason for building - to own and occupy, or to become safety deposit boxes in the sky? I think that is still the question that is out there now."
But the problems remain. He says there's still a lot of work to be done, and the provincial government's announcement last month of a public inquiry into money laundering is only part of the solution. Mr. Yan wants to see greater transparency of ownership, starting with the release of land titles to researchers for further analysis. Currently, there is a fee for each title, which makes any comprehensive analysis prohibitive. In other jurisdictions, such as in the United States, that fee is waived. That lack of democratic access to information has allowed the housing crisis to fester, he says.
"The challenges are still there," Mr. Yan says. "We still have to really deal with the issue of speculation, and we have yet to deal with the issue of how we ensure a level of security of tenure for so many different parts of the population.
That still hasn't been done.
"It's about creating new policies, but it's also about enforcing the ones already on the books.
"It's going to be painful, because it's going to shake who we think we are as Vancouverites, as British Columbians. But it's also who we have become, and how we need to change. That is what I hope the inquiry will be about. It's not a witch hunt as opposed to an exorcism - we need to expel the demons hiding within our housing system today."
Urban planner Andy Yan says his 2009 study found a 'totally unanticipated' result that 52 per cent of the Vancouver condo units his team studied were owned by investors.
DARRYL DYCK/THE GLOBE AND MAIL