By Patrick Condon, Professor of Urban Design, UBC
I am now of the mind that since the real estate market has been effectively globalized, and since the global market for real estate is also distorted by black money seeking a safe harbour, cities like Vancouver have only two choices.
1. Retain a faith in the global market economy and assume that the rules of supply and demand still apply. In this view we need only to reduce regulations that block the free flow of capital into housing. In this view the city can also tax this money flow to supply decent housing for those who fall below the 20 percent of average income line (this explains the target of 20% affordable housing in many city policies). The city has largely assumed this strategy was the most propitious. Their recent housing reset moves away from this faith to some, but not to the full, extent.
2. Assume that the new realities of the global marketplace have fundamentally distorted the real estate market such that housing has been irrevocably removed from its traditional connection to average family income. In this view the market can never be depended on to supply affordable housing, not just for those below the 20 percent line, but even for those making more than the median (50%) family income. This means that more than half of our citizens can’t be housed by the market. That’s the majority.
I am in the camp that thinks number two is more descriptive of our current Vancouver reality. It is also why I think we are now in a situation where it is necessary for government to supply supported housing for up to 40 percent of people who work in our city. This may seem radical since neoliberal policies have convinced governments around the world to hand over all responsibility for housing to the market (England housed over 42 percent of its people in council housing in 1979. Its 8 percent now. Vienna still houses over 60 percent of its wage earners in supported housing).
In this neoliberal view the market is the only efficient supplier of housing, while those who were desperate or disabled could be given vouchers to be able to participate in the market as well. That may have been true 40 years ago when the neo liberal philosophy was first ascendant under Reagan and Thatcher. It’s not so true now.
Thus, our choices seem to be:
1. Ignoring the problem and letting Vancouver turn into nothing more than a cash box for international capital,
2. Supplying massive subsidies to our wage earners to be able to compete with global capital flows in the marketplace for housing, and
3. Return to a more active government role in providing affordable (not free by any means) housing for wage earners, akin to the post WWII era in England.
Stated this way, number three, despite the fact it would be a really hard climb, seems like the only pathway to a city still worth living in.
[Photo Credit: City of Vancouver]
