Policies On Housing #3 – Sandy Garossino, Independent Candidate for City Council

[Sandy Garossino had been invited by e-mail to be heard as part of this series. Her office indicated she would respond to our questions. While we await that response, here are excerpts from an interview she did with Andrew Wit and Sean Antrim in The Mainlander, 5 Nov 2011. The whole interview is a ‘must-read’ for those interested in the issues. Thanks to readers who alerted us to this interview. -ed.]

Andrew Witt: … I think that everyone recognizes that there is an affordability crisis in the city. In 2008, Vision Vancouver was elected on a platform that would address housing, homelessness and the affordability crisis, but we all know they have done little to tackle the problem. How will you address this issue, and what distinguishes your platform from that of Vision Vancouver?

Sandy Garossino: Almost everyone that I have heard discuss this sees the affordability issue. I’m talking here about broadening this beyond homelessness and subsidized housing, but also market housing for the average working person. Almost everyone who talks about this, talks about it in the simple supply and demand equation, and their point is to increase supply. Because I deal with Asia, I understand capital markets in Asia, and I have dealings there, this seems to me to completely miss the true nature of the issue and the challenge that we confront. Just to give you a little bit of a background, our median income levels in Metro Vancouver place 20 out of 28 urban regions in Canada. Our median income levels for 2010 were below Sudbury, Windsor and St. John’s Newfoundland. We have the highest real estate prices in Canada, relative to median income. We have almost the highest real estate in the world. Relative to median income, we are 56% higher than New York City and 31% higher than London, so there’s clearly a serious distortion in the market. One of the first challenges we have is we don’t have the data. We don’t have information that can pin-point exactly what is going on and the extent to which capital is entering, and the extent to which that capital is non-resident, and how much that is affecting the market. We need to know a lot more than we do. But based on anecdotal information, which is turning out to be corroborated in news reports, it looks like global capital is having a massive impact.
I don’t know if you saw the CBC report, where on Cambie Street bungalows were sold for an average of $3.4 million to a mainland Chinese buyer. So, this is a non-residential purchase, we know there is a flight of global capital. What most people, even many people in land development and even many people in government are not perhaps cognizant of, is the extent to which rules in other parts of the world are creating a funnel effect that is driving global capital here. The challenge is not that there’s inflow of global capital because in some ways it could be quite beneficial and benign, the problem is that it is pooling in a single asset class, residential real-estate, where there is a compelling public interest. We’ve got median income levels at Sudbury levels, and we’ve got average real estate prices that are twice the average of Canadian real-estate prices. When people are feeling that they are choking, it is because they are. It is not only choking individuals, it is choking small businesses, because there is no disposable income. Businesses can’t recruit people, they can’t recruit talent, and universities can’t recruit talent. It is corroding the entire local economy, which is primarily a small medium enterprise economy. So what to do?

Sean Antrim: Bob Rennie, when he was recently speaking to the UDI, argued that it is not money coming from around the world. He looked at all of the property taxes were going out, and found that only single digit percentages of them were going to mainland China, or even just out of the country.

Sandy Garossino: I was quite struck by that analysis, because if you or I own property in a foreign country, you would have a property manager in that local environment, and that property manager would take care of all of those things. It is completely irrelevant where property taxes were mailed to. We need better evidence. Anybody who lives on the West Side, as I do, knows how false that is. There are people in my community who describe that they are the only occupied house on their block. There are houses sitting empty. We have a situation where in the marketplace, we have excess housing. We’ve got residences, thousands of them, both single-family homes and condominiums sitting empty. Well, we’ve got a rental crisis. We need to start looking at the levers. And what can be done? I don’t have the answers because this is a really complex question, but obviously we don’t want to shock the market, because that would take a bad situation and make it infinitely worse. So my approach is to ask what are the surgical tools you could start to use. So on rezonings, if we are going to be doing spot-rezonings which at least in the short-term foreseeable future we will continue to do, those rezonings should perhaps be made conditional on all the units being occupied, regardless of who the owner is. Because off-shore owners frequently do rent out their property, and often when they do they rent it below market value, that can be useful. There’s no reason in the world that we should be rezoning properties to build towers that are not going to be fully occupied. Everything should be fully occupied.
Secondly we should be looking at some of the solutions that other countries and cities have looked at like Singapore, which creates zones. Some zones are totally open for the international market, and some zones you can’t buy in unless you are a resident.

Sandy Garossino: ” … let’s look at the low-hanging fruit. Empty condominiums, and empty residents are investment properties, they should be taxed. If it is the case that business subsidizes residential housing, it should be subsidizing residential housing, not investment units. Investments should be taxed at the business rate. I would be looking for those kinds of mechanisms. We should be looking much more closely at the nature of capital that is coming in. It can be perceived as a threat because it is operating in a negative way, that has pooled so much. It is also an opportunity – one of the real interesting features of this capital is that, generally speaking, I think it is individuals, and they also have a tolerance for lower rate of return on income, lower return on investment, than the local developers. One of the challenges of STIR is that local developers actually want a decent return, or a lot of return, on their investment. That is really difficult when you have really high bank costs, but actually the non-resident investors are prepared to live with empty-units. Return on investment is not their primary objective, they are looking for something else. We should be looking to channel that investment into rental housing, channel it into financing some of these more innovative situations.”

Sean Antrim: “Bob Rennie has talked about “social housing condos” as people buy them as investments, I’m not sure if that is what you are talking about?”

Sandy Garossino: “I am thinking in concept. I think we actually need all of the players at the table, we need developers, they do understand planning costs, and we need everybody at the table, rolling-up their sleeves and really saying “OK, we are going to crack the code on this,” and we’re going to find solutions that are not going to destroy the equity that recent young buyers, the last thing they want is anybody who is actually able to shoehorn themselves into a property and for them to lose their house because we have a crash. We can’t have that.”

Andrew Witt: “You have served on a number of different art-institutions Boards. In Vancouver there are a lot of art spaces that are under erasure, especially under the threat of real estate speculation.What is your strategy to fund these projects as well as maintain Vancouver’s dynamic artist-run culture so that it is not displaced entirely.”

Sandy Garossino: “I see this in the broader context, in cultural context. The real cause of the problem, is that real-estate prices are off the charts. Being able to fund small boxes and little spots here and there is not how you instill energy and dynamism in a cultural community. My daughter is an artist living and working in Montreal. She is in the music scene, she is rising. Things are happening there. Why? It is not because of her space, it is because she is around other exciting artists and musicians. They have a a whole scene there. It is not a typical postal-stamp place that is affordable. It is about having an environment which is artist-friendly, where it is possible to be an artist where other artists want to be.”

Sean Antrim: “Why should people vote for Sandy Garossino on November 19th?”

Sandy Garossino: “Because we do need to get new voices in and, in particular, if you look at the development issue, there’s just a huge amount of money being poured into the parties and we need to have much more wide-open ability for interesting people to come forward. The other reason is that I will attack this affordability issue, and I’m going to get right to the heart of it, and not tinker around the edges and say there, we’re done. We’re not done until people can afford to live in this city.”

[This post is not to be seen as a VREAA endorsement of any of the above positions. See ‘Policies On Housing’ – The Positions Of Local Entities On The Challenges Facing Vancouver Housing‘ for an introduction/rationale for this series.]

35 responses to “Policies On Housing #3 – Sandy Garossino, Independent Candidate for City Council

  1. One thing I will say about Sandy is that she sees the bigger picture, that a real estate-dependent economy with speculative tendencies is a net economic impediment. She has this bang on and I’m pleased she’s running with this as the starting point. I wish her all the best.

  2. That was a shockingly refreshing, and realistic view of the local issues/economy. Sandy sounds like someone who understands the issues well, and could be a great person to have on the citizens side.

    I really hope she can get the deserved air time, and make an impact.

  3. These are the most comprehensive and the most specific statements on attempting to address the housing market challenges we’ve seen from any of the candidates.

    Interesting from many aspects:
    – The clear statements of how overextended our prices are relative to income; “there’s clearly a serious distortion in the market”
    – The description of presumed “flight of capital” into local residential RE; “funnel effect”
    – Disagreement with arguments that foreign ownership is low in relative terms
    – Acknowledgment that there is a lack of data regarding specifics of foreign ownership
    – The deleterious effect of high prices on the local economy; “choking”; “corroding”
    – Talk of the presence of ‘excess housing’; “everything should be fully occupied”; very clearly stating she intends to take action regarding speculators sitting on empty properties
    – Ideas to channel investor motivations in such a way that could solve rather than worsen the problems
    – The acknowledgment that high RE prices have a deleterious effect on culture as well as business
    – The mention of vested interests: “if you look at the development issue, there’s just a huge amount of money being poured into the parties”
    – The hope that there are solutions that don’t involve price drops: “we’re going to find solutions that are not going to destroy the equity that recent young buyers, the last thing they want is anybody who is actually able to shoehorn themselves into a property and for them to lose their house because we have a crash. We can’t have that.”


    We admire the amount of thought that this candidate is putting into housing. It is far more thorough than any we have seen from other candidates.
    She emphasizes that housing prices are extremely overextended, and points to all the deleterious social, cultural and economic effects to our society.
    At the same time she is wishful that the problems can be addressed without price drops.

    We personally can’t see how this wish could be realized.
    All policies that could ameliorate the situation involve the potential for price drops. In some cases they would initiate price drops.
    The market is precarious, it is a speculative mania; there is a large amount of fresh air between current market prices and fundamental values as determined by rental income or wages. Any significant pullback will perpetuate itself, as speculative buying and speculative holding leave the market.
    We simply don’t see a ‘soft-landing’ playing out.
    Large price drops will be part of the solution to Vancouver’s housing crisis.

    • Speaking of civic elections and ‘vested interests’, YVR political blogger/cigar aficionado Alex Tsakumis had this to add…

      “Both main parties are completely beholden to real estate developers more so than [at] any time in the city’s history. This isn’t good and I have to wonder just how much monied backslapping and handshaking is going on.”…

      http://tinyurl.com/794tgn8

  4. yes, affordable housing for Vreaa and every ocupyvancouver citizen who do not need to work but want to live in kitsilano and overdose on drug once a while. heck, forget the price drops, let issue a bylaw to demand every homeowner to open their doors to others free of charge.
    who is that “we” here by the way?

    • Royce McCutcheon

      [yawn]

    • Vancouver In The Rearview

      Fred, do you practice your ad hominem attacks, or is that your only natural talent? The bottom line is that young families can’t get ahead in Vancouver.

      My wife and I have good jobs in high standing professions. Between she and I, we have five university degrees in hard science fields (with a sixth at the doctoral level underway) all from top three Canadian universities. We have high responsibility jobs for good employers, and do well financially, but not well enough to afford what we think is reasonable for two people like us, a single family home with a yard. We are good with our money and have solid nest egg already built. We cannot justify spending 80% of our income to be able to afford a single family home anywhere within an hour of the downtown core.

      We also visit Seattle regularly. In Seattle, we would both make double or more than we would here in Vancouver, with housing at half the price, and the same climate. Similar circumstances exist elsewhere in Canada. While our families are here, we want to start our family in a place where we can provide our children with opportunities, not where every last dollar goes to real estate.

      To put a point on it, people like my wife and I are being groomed by our employers to take on senior leadership roles in their organizations down the road. The problem for our employers is that we won’t be here – we can’t have the family we want, along with quality of life we desire and can easily obtain elsewhere.

      I look forward to leaving this real-estate obsessed burg. Unless things change, things are going to get a lot worse here before they get better.

      • Awesome, keep us posted. I’m looking at Seattle too. Here’s the list of pros and cons that I’ve accumulated so far.

        Pros of Seattle:
        – Cheaper houses
        – Higher salaries
        – More interesting jobs (depending on your field of work)
        – Less ostentation
        – The economy does not revolve around real estate
        – Superb healthcare (depending on your job)

        Pros of Eastside:
        – Very low crime
        – Primarily well educated neighbors
        – Very good public schools
        – Has a “family friendly” feel that’s hard to pin down

        Pros of US in general
        – Lower taxes
        – Cheaper consumer prices (including flights, cell phone rates, …)
        – 30-year fixed mortgage rates
        – Mortgage interest is tax deductible
        – Trader Joe’s, Netflix, Amazon.com…

        Cons of Seattle:
        – Realistically, I predict that I would only visit friends & family in Vancouver ~6 times a year
        – Traffic is bad in some areas
        – Restaurant scene is less interesting
        – Fewer community centers
        – Skiing not so hot: Stevens Pass and Snoqualmie aren’t that great.

      • I think you would know by now that people like Fred don’t think people like you are any more valuable to this city and economy than a street cleaner or toilet cleaner. This is what Vancouver have turned into. Have lots of houses? You are good. Have lots of wealth regardless of how you acquire it? You are good. Worked hard to study in university in hard science field, working hard to contribute to a better tomorrow, but no money to start a family or buy a house in Vancouver? Well too bad because you aren’t worthy to live in Vancouver, get the hell out or shut up and move to xxx and be a man, do the right thing and buy a starter condo!

    • “who is that “we” here by the way?”

      Majestic plural.
      http://en.wikipedia.org/wiki/Majestic_plural

    • Oh yes, occupy crusties will be moving their tents to your street soon, lowering property values, the horror! Just hope your street doesn’t get turned into a bike route as well, the steady stream of unemployed bike riding renters will increase crime and lower property values even more.

    • fred – you are out of line with your comments here and you should know that. My opinion is that you detract from the value of this blog and should no longer be allowed to post on VREAA because of your abusive accusations and language. You are a despicable human being and I hope to never read another comment of yours again.

  5. you didn’t include Antrim’s response to Garossino in the third question where she mentions Singapore as an exemplary housing model for Vancouver:

    Sean Antrim: I think that something like 80% of the housing in Singapore is public housing. It is owned by the government. Over the past thirty years they’ve built a massive amount of social housing, and this is what a lot of people are calling for, as a direct way to solve the problem right now. Real estate prices often don’t go down, and when they do go down they plummet. How about building social housing? People say that we can’t afford it.


    this is a key point in the interview. it doesnt look like she’s concerned with subsidizing or building affordable housing but instead putting some stop-gap measures on foreign investment (ya right! – try doing that…). this isn’t a solution, nor is finding the facts about foreign investment in vancouver … then what?!?!?! this is not even policy. she says it herself : she has no answer to the affordability crisis.

    instead of politicking about International Capital, flood the market by building affordable, rental housing

    • The point she gets is that speculation is a detriment to the local economy. Flooding it with cheap housing won’t solve this. I don’t know if she understands the ONLY way to rid the city of unhealthy speculation is to rein in land prices, though I’m somewhat optimistic she will be relatively clear of barriers disuading her from understanding the bubble’s root causes

    • Flo ->
      What does the math look like?
      Where? On city land?
      Who does the building?
      How do you get a plan like this past a council that has been so heavily supported by developers who stand to lose as a consequence?

      • Use the Property Endowment Fund to build affordable housing. ($3 billion in the city’s coffers). – Tim Louis has talked about this, as well as revitalizing Vancouver’s Public Housing Corp.

        All councillors claim that they don’t have the money to build!, yet Vancouver has the lowest corporate tax rate in the world (check the KPMG report).

        There are two options there. It is possible that you could use a heavy cocktail of both. Why not?

        SEFC is a start (use built and unbuilt lands there). For one, I’m talking about the unsold-spectre that is the Olympic Village.

        Also, when developers are not complying to meet City goals, use the “Expropriation Act” to expropriate properties to meet their policy goals for the public interest. Again, the mainlander has put these points on the table:
        http://themainlander.com/2011/07/20/how-to-save-the-pantages-theatre/

        In the next three years, all of this is impossible, and I recognize that this is a pipe-dream!!! But three years from now, who knows? It is possible that someone gets elected and implements all of the above with more imagination than this hacky comment.

  6. A True Canadian

    Seems to me that property values in Vancouver are skyrocketing because people want to “own” land outright. How about designating ALL of Vancouver and maybe the Lower Mainland (LML) as leasehold land owned by the government (or as they say in the US, “by the people, for the people”)? This would be a situation such as currently exists in the Musqueam area by UBC. This would remove a lot of the speculative land hoarding that is going on. People would not pay upwards of $1mill for a shack. Pricing for a shelter would be brought back down to earth and shelter would be just that – shelter instead of a speculative “investment”. Land is owned by the government (just like in China) and the government can do with it as it pleases and not be beholden to NIMBY’s (just like in China) – haha!! Maybe people could then really afford to stay in housing located in the LML and those who really wanted to “own” land could buy elsewhere outside the LML – spread the wealth around the province a bit!

    I used to live in Banff and all townsite land was leasehold (leased from the federal government). The only way you could purchase a place to live in was by showing a genuine “need to reside” in Banff i.e. have a job in Banff or other credible reason. Made the local real estate less speculative ’cause you really had to have to reason to live there other than being just a tourist.

    As Ms. Garossino states, Singapore has a lot of public housing on land owned by – the government!

    Of course, I’m just dreaming about the people of BC actually “owning” all of the Lower Mainland ’cause the First Nations people are the true owners! And of course, none of the players in this mess have the political guts and will to do anything as radical as this. It’s so true: “There are too many interested parties in positions of influence making money from the status quo.”

    Just my thoughts (and dreams)…keep up the good work VREAA!

    • How would one go about ‘designating’ the Vancouver/LML land as leasehold?
      Edict? [We (Royal “We”; see above) could give it a go, but we’re not sure that many would listen.]

      Seriously, wouldn’t any such transition be impossible?
      Wouldn’t it involve the state having to buy back land first?
      Or are you considering releasing more state owned land?

    • You can get a similar effect to leasehold by taxing the crap out of it, or just the capital gains. Incidentally that’s similar to what Australia did with foreign ownership restrictions. (Incidentally prices in Oz have been weak of late; coincidence? Hu knows…)

      • I like higher property taxes. And here’s the spin: they don’t reduce house prices they reduce the cyclicality of house prices. Purchase timing matters less because you pay every year. (what to do with all the proceeds? how about education and health care).

      • “what to do with all the proceeds?”

        Or maybe significantly lower taxes when prices are close to utility value. That would get more people onside: remember most people bought when prices were considerably lower.

        Think of it as an environmental degradation tax. Speculative bubbles produce damage in terms of: limiting tools the City has to solve its most pressing social housing issues, causing distortions in commuting patterns, limiting disposable income of the city’s residents and their ability to support local businesses.

        If framed properly a great many might be in favour of some “tough on speculation” policies (and by speculation I mean high land prices). It’s relatively simple to implement compared to the complicated foreign ownership and occupancy rules tried in other jurisdictions (that may or may not have had much effect — prices in Hong Kong are still high because they grant landed status for those rich enough to buy residency visas and are free and clear to bypass the foreign ownership rules; Australia’s rules may have had an effect but they have much higher mortgage rates so it’s difficult to say for sure).

  7. Uhm…aren’t there tons of $1M+ condos on UBC leasehold land? Doesn’t seem like the leasehold thing is damping RE speculation there.

  8. Unforutnately, the very problem is hot money and the fact that Vancouver municipal government has done nothing about it. There’s no point in trying to be politically correct otherwise the paralysis continues – not to mention that all these west-side policitian home owners have zero incentive to pop the bubble by banning foreign purchases of residential real estate.

    For Pete’s sake, even the Chinese government is trying to squash their own speculative real estate problem while Vancouver politicians sit around with their thumbs up their collective arse complaining that there is no data – bull shit! – like the government can’t request the data?!. Vote somebody in who’s willing to do something about the problem and doesn’t have a perceived conflict of interest (ie. someone who is short a SFH)!

    • Hmm, and how do you plan to do that? Pretty much all credible politicians in Vancouver have SFH’s.

      Seriously guys, if you want the property prices to go down, then just increase the density in the most desirable places. Simple supply and demand. But if you are complaining that you can’t own a nice SFH on the westside, then you are out of luck. There is just too many people with money who wants a nice house in the Westside. Whether they make their money in Canada or not is irrelevant. They have money and are willing to pay for it and there aren’t exactly an overflowing supply of houses on the west side of Vancouver.

      To be honest, I don’t have a problem with SFH prices as it’s the hot commodity that these immigrants are after. What I have a problem with are the condo pricing in Vancouver. Because while the supply of SFH’s is a constant, condos are not and are purely controlled by developers. I think government can do a lot by simply allowing more density on the west side of Vancouver. With increased supply you will see price decreases.

      Like I said before in my posts. I think the biggest effect of HAM is in the form of SFH. Because they are all after land, something that they can’t get in China. And it compounds the problem as they are after land in our most desirable neighbourhoods. But that doesn’t mean they are after every kind of housing. Condos, for example, are far less desirable to them.

      • smart post Julian. But since most bloggers here want a detached home they will not buy into your theory – however true it might be.

      • 4SlicesofCheese

        I have to respectfully disagree.

        I actually feel the biggest effect of HAM is in condos, not to say HAM do not ultimately desire SFHs. SFH are desirable to every type of nationality not just HAM, but many face the same issues as locals, it is just too unaffordable. Therefore they buy into the property ladder theory like everyone else.

        Yes there is immense wealth coming from HAM (I had dinner with a lady from Fujian who had a 6 carat diamond ring.) Some are more wealthy then most people can even imagine, but I feel those numbers are not significant enough to alter the entire market. But the ” Mid Class HAM” I would consider greater in number and having a bigger impact on the local market, similar to locals.

        The condo market is less desirable but much easier to get into. Look at any presale condo development. Who are the ones lining up? I joked about all the condos in Burnaby and Richmond and East Van being asian oriented and you mentioned they eventually want to be SFH’s but I do not see how that is different than non HAM views.

        Finally for VREAA I was talking to a good friend of mine who is originally from HK, he bought in the Fullerton building in Richmond completed in 08. Similar units now sell for 100k more then his purchase price.
        I was browsing the buildings listings and happened upon possible speculator.

        MLS® # V896586
        MLS® # V896607

        Same unit, floor 8 and 9 both have the same realtor, both have the exact same writeup. Same single photo in the listing.

        Coincidence? If the units were both bought and held empty since 08 I would consider that speculating.
        Presale prices went for around mid 300’s list price now 465 and 469, Anyone want to do an analysis on possible investment numbers?

      • I’m not talking about restricting immigrant Canadians from buying. I’m talking about putting up barriers to hot offshore money that is purely speculative. This money pays no further tax than the initial property transfer tax and does not provide any long term benefits to the local economy. It’s not the same as locally generated money. Hot money is disruptive which is why most countries control it before serious problems. Go try to buy a house or apartment anywhere near the coastline in Mexico – you can’t as a foreigner. Australia has it right! Canada has it wrong! Even China stubornly keeps the peg on its currency because of the fear that an appreciation will result in even greater zero cost money flowing into China for the pure purpose of asset price speculation. Foreign restrictions on real estate are simple to implement and will have a very large impact on already softening Vancouver prices. This is the thing the SFH longs fear the most because they know what the effect will be on prices.

  9. by the way Julian, supply of SFH is not a constant. Over the last 15 years we’ve lost 20,000 of our detached homes to multi-family redevelopment.

  10. 😀 “What is this new devilry?”
    “A Balrog – a demon of the ancient world.” [i.e. a complete perversion of ww credit markets]
    “This foe is beyond any of you. Run!”

  11. 4SlicesofCheese

    http://www.cbsnews.com/video/watch/?id=7387331n&tag=contentMain;contentAux

    Crooked lobbyist Jack Abramoff explains how he asserted his influence in Congress for years, and how such corruption continues today despite ethics reform. Lesley Stahl reports.

    Possible in Canada? *developers cough developers*

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s