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Geopolitics

Canadian Election: The Meaning Of Vancouver's Runaway Cost Of Living

Vancouver housing market is the second most unaffordable in the world after Hong Kong
Vancouver housing market is the second most unaffordable in the world after Hong Kong
Jeremy van Loon

VANCOUVER — James Hankle, a software engineer in his 50s sporting bluejeans and a Green Party T-shirt, is explaining his fix for Vancouver's runaway property prices when he's interrupted by an eavesdropping passer-by: "Stop allowing people from China to buy our houses and leave them vacant," she says and walks away.

Despite British Columbia's aversion to pipelines and affection for pot, housing affordability has pushed both aside as the No. 1 issue raised by area residents in the run-up to Canada's election this month. It's not completely surprising given that Vancouver has become North America's most expensive city.

Surging purchase prices have triggered protest movements like #donthave1million, started by a group of young professionals frustrated at being shut out of home ownership. They complain of having to delay starting families as they remain bunked in with roommates, often into their 30s and beyond.

The affordability issue speaks to broader campaign themes: the difficulty young people face getting established in the labor market, the economic anxieties of the middle class, growing concerns about income inequality, support for families with children. Residents also increasingly point fingers at wealthy Chinese immigrants and investors whose lavish embrace of the Pacific metropolis of 2.5 million has inspired reality TV shows with such gaudy names as "Ultra Rich Asian Girls in Vancouver."

Vancouver, with its 2.23 million Canadian dollar ($1.7 million) average price tag for a detached home, is playing an unusual role in the national election to be held Oct. 19. British Columbia is the only place where all four national parties are competitive — the Conservatives, Liberals, New Democrats and Greens — and, given the tightness of the race, its choices could spell the difference. As of now, the New Democrats and Liberals look likely to take some seats away from the Conservatives in the region, according to poll aggregator ThreeHundredEight.com.

The top contenders for prime minister, incumbent Conservative Stephen Harper, Liberal Justin Trudeau and New Democrat Tom Mulcair, have all given voice on campaign stopovers to the city's particular anxiety by promising they will, if elected, gather data on foreign ownership of its pricey condos and bungalows.

"There are real concerns that foreign, non-resident real estate speculation is the reason some Canadian families find house prices beyond their budgets," Harper said Aug. 12 in Vancouver. "That is a matter we can and should do something about."

Though no expert on the subject, Hankle, like just about everyone else across the city, is obsessed with the topic and increasingly resigned to never owning a house himself. Standing in Yaletown, a one-time industrial site where nearby two-bedroom apartments can go for 1.8 million Canadian dollars ($1.38 million), he calls on political parties competing for his vote to build more low-cost housing and introduce programs to guarantee people a livable minimum income.

He also picks up on the theme of the passing woman, saying governments need to begin collecting data on exactly who's coming into the city and their impact on affordability. "There's a huge concentration of wealth and it just isn't sustainable," he says.

Unlike the U.S., Canada didn't experience a housing price collapse with the global recession and has defied predictions ever since that the bubble is about to burst. With the exception of declines in 2009, 2012 and 2013, housing prices have risen in each of the past 15 years, with the cost doubling from August 2005 to 2015, according to the Real Estate Board of Greater Vancouver, out-pacing wage gains.

[rebelmouse-image 27089515 alt="""" original_size="640x480" expand=1]

Condos in Kitsilani, Vancouver — Photo: Roland Tanglao

"Our big challenge is affordable housing," said Vancouver Mayor Gregor Robertson, in a Sept. 25 interview at Bloomberg headquarters in New York. "It's been difficult to deal with more affordable housing for a younger work force in particular."

The Economist Intelligence Unit has named Vancouver the most expensive city to live in North America and a 2014 study by consultancy Demographia cited it as the second-least affordable housing market in the world after Hong Kong. Rising prices in Vancouver pushed housing affordability to "risky levels" in the second quarter as the costs of owning a bungalow rose to an unprecedented 86.9 percent of household income, an August report by RBC Capital Markets said.

"There's national trend on affordability and it gets especially bleak in Vancouver," said Paul Kershaw, an associate professor at the University of British Columbia who studies the impacts of public policy on housing. "The dynamic is signaling a change in the standard of living and home ownership that has been the norm for previous generations."

Vancouver's 25- to 34-year-old cohort earns less and carries more debt than a generation ago, Kershaw said, meaning it now takes 10 working years to save for a down payment versus two years back then.

Although harder pressed, Vancouver families are in good company in borrowing more and more to get ahead. The debt of the average Canadian household now stands at a record 165 percent of disposable income, according to Statistics Canada, about 30 points higher than before the recession and matching the levels of U.S. debt when its housing market crashed. Still, in Vancouver at least, prices are galloping ahead so quickly, they "make it a stretch" for a typical household to get into the market.

"It's possible to live decently here as long as you're single and don't have dependents," said Scott McFadyen, 38, an audio designer in the video game industry who moved to Vancouver from Alberta. "Truthfully, I'm thinking twice about starting a family here."

*With assistance from Katia Dmitrieva in Toronto.

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Economy

Lex Tusk? How Poland’s Controversial "Russian Influence" Law Will Subvert Democracy

The new “lex Tusk” includes language about companies and their management. But is this likely to be a fair investigation into breaking sanctions on Russia, or a political witch-hunt in the business sphere?

Photo of President of the Republic of Poland Andrzej Duda

Polish President Andrzej Duda

Piotr Miaczynski, Leszek Kostrzewski

-Analysis-

WARSAW — Poland’s new Commission for investigating Russian influence, which President Andrzej Duda signed into law on Monday, will be able to summon representatives of any company for inquiry. It has sparked a major controversy in Polish politics, as political opponents of the government warn that the Commission has been given near absolute power to investigate and punish any citizen, business or organization.

And opposition politicians are expected to be high on the list of would-be suspects, starting with Donald Tusk, who is challenging the ruling PiS government to return to the presidency next fall. For that reason, it has been sardonically dubbed: Lex Tusk.

University of Warsaw law professor Michal Romanowski notes that the interests of any firm can be considered favorable to Russia. “These are instruments which the likes of Putin and Orban would not be ashamed of," Romanowski said.

The law on the Commission for examining Russian influences has "atomic" prerogatives sewn into it. Nine members of the Commission with the rank of secretary of state will be able to summon virtually anyone, with the powers of severe punishment.

Under the new law, these Commissioners will become arbiters of nearly absolute power, and will be able to use the resources of nearly any organ of the state, including the secret services, in order to demand access to every available document. They will be able to prosecute people for acts which were not prohibited at the time they were committed.

Their prerogatives are broader than that of the President or the Prime Minister, wider than those of any court. And there is virtually no oversight over their actions.

Nobody can feel safe. This includes companies, their management, lawyers, journalists, and trade unionists.

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