Is Vancouver’s condo king calling the shots on the city’s affordability strategy? Really?
Bob Rennie says focus on foreign money is anti-Chinese racism, and housing affordability activists are ‘girls treating issue like a party game’
It’s a simple question. So simple it sounds ridiculous.
Is Bob Rennie – condo-king of Vancouver, whose marketing strategies have revolutionised the real estate industry and helped transform the city – really calling the shots on City Hall’s strategy to combat housing unaffordability?
Mayor Gregor Robertson last Friday broke with previous form to announce support for a speculators’ tax to curb a runaway real estate market rated the second-most unaffordable in the world, behind Hong Kong, according to the Demographia* study of 378 cities in nine markets around the world. Such a tax is politically palatable, and implementation would fall on the BC provincial government.
Less palatable was the fact that just hours before Robertson’s announcement, Rennie - an important financial backer of the mayor - used his annual speech to the Urban Development Institute to call for the very same thing.
I asked Braeden Caley, the mayor’s spokesman, if City Hall had discussed a speculation tax with the founder of Rennie Marketing Systems.
The response (in full) was a sidestep that omitted mention of Rennie: “The Mayor indicated his support for a speculation tax to the Premier [Christy Clark] earlier in the week, and has been raising significant concerns about Vancouver's housing market and the ability of people of all backgrounds being able to call this city their home without new policy action from the Province and Federal Government.”
Calling for a tax on speculators is pretty unchallenging - you might as well call for a tax on child molesters or puppy killers, given the city’s mood. Yet there is a strong suggestion of misdirection. Speculators may be in the spotlight, but City Hall was unable to cite the data showing what Robertson claimed, that it was “clear that rampant speculation” was the culprit driving up prices.
Both Robertson and Rennie have dismissed instead tackling the vast flow of money that has resulted from Vancouver receiving the world’s greatest influx of wealth-determined migration. Mainly from China, this ongoing influx over the past decade has coincided with a doubling of Vancouver’s median-price:median-income ratio (that’s all sales, not just detached).
In an interview on Monday, Rennie said of curbing foreign money: “You’re not curing anything, except you are being racist.”
Asked if he had discussed his affordability proposals with City Hall, Rennie said he had “told everybody” he was going to “answer the question” in his speech. But he also said he had not “[given] away my speech ahead of time”. “Do you really think the Premier’s office, or the Mayor’s office would let Bob create policy? Come on.”
Describing racism as “a huge undercurrent” to the entire foreign money discussion, Rennie said a speculation tax would represent a “measurable metric, so the racism can calm down and people can see that it [affordability] is being dealt with”. “If it’s sold in the first six months or one year, let’s take five or 10 per cent of that profit,” he said, fleshing out the proposal.
When it was suggested that it was, at least, politically clumsy of the mayor to have proposed a speculation tax on the same day as him, Rennie said: “I’m not the gatekeeper of the world. But I want to be the thought leader on this topic”.
Rennie was also dismissive of the #donthave1million campaign for affordable housing, that included a rally in Vancouver on Sunday. The campaign’s originator is Eveline Xia, 29, a Chinese-Canadian environmental scientist who fears a generation of Vancouverites has been priced out of the city.
In her speech to the rally, mainland-born Xia acknowledged the potential for racism. But she urged political leaders: “You need to start protecting us from the international capital against which we stand no chance. Let me ask you, how can we be expected to compete for homes with the globe’s billionaires and millionaires? So many places have taken action on the issue. Now is the time to follow their lead.”
Rennie said his data showed buyers were happy to look far afield to find the home they wanted. “Yet we’re all paying attention to these girls, they’re holding up banners, and wanting affordability to be a party game. And it is a really serious issue,” he said.
The real problem, said Rennie, was not foreign money, but supply, “and at the rally you don’t see anyone fighting for supply”. Asked whether the current generation of would-be buyers was too focussed on what their parents had, housing-wise, Rennie said: “My kids are all at the Ferrari dealership right now saying I want one. I’ll buy them a Fiat.”
He repeatedly rejected the notion that foreign money at the top end of Vancouver’s market – namely, detached housing – had an impact on other sales. Yet he went on to cite his own research showing that condo buyers were heavily reliant on downpayments provided by parents and grandparents.
Pressed on whether this logically meant foreign money poured into the detached market was thus funding condo sales, Rennie said: “It creates jobs. It creates opportunity. And if they help the kids buy something…48 per cent of baby boomers said they had helped or will help their children [buy real estate]”.
It’s possible, I suppose, that City Hall and Rennie reached their Damascene moments on the road to affordability independently. And there’s nothing wrong with politicians canvassing a range of opinions on the matter, including Rennie’s, if they are transparent about it.
But in which alternate reality does a condo salesman, who profits from an ever-upwards market, become the thought leader on tackling a city’s affordability crisis? The same one in which wealthy white property types get to lecture Eveline Xia on racism, I suppose.
[*Update: this story has been updated to include a link to the latest Demographia study and to describe its scope]
The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email email@example.com or on Twitter, @ianjamesyoung70 .