[We have previously featured Sandy Garossino’s interview with The Mainlander as part 3a of this series. Here follows her specific response to our questions. -ed.]
Thanks for getting in contact. Here follow Sandy’s responses to your questions regarding her position on housing policy.
This is an important issue for Sandy and we appreciate being able to share her thoughts with your readers.
Sandy and team
1. What do you see as the main housing challenges facing Vancouver?
Battling homelessness is a constant challenge. My worry is that a housing crisis has now spread into what is termed in Hong Kong as the Sandwich Class—those with incomes above subsistence levels but below the wealth required to buy medium level property. Excessive buying of residential property for investment, rather than shelter purposes has driven housing prices to stratospheric levels relative to local median incomes. A housing crisis for the middle class stresses the entire system including our ability to house the homeless.
The larger context is the challenge that faces all global investors. Apart from labouring for wages, the way to make money is to build or invest in a business, buy stocks and bonds, or speculate on assets like real estate or gold.
In the current climate of global uncertainty, almost nothing in the world is matching Vancouver real estate for return on investment, security, and long term value. My concern is that our real estate market has morphed into a stock market, and human beings who need affordable homes are being forced out of competition.
Vancouver’s future rests on a healthy knowledge economy as well as small and medium sized businesses that will provide long-term employment. Both these sectors need young people and immigrants with good prospects and disposable incomes. Because housing prices have now detached from the local economy, we cannot offer a promising future to the very people we need to build it.
2. What measures do you propose to address those challenges?
The most important thing is to recognize that we have a problem and we must commit to solving it. We have to gather critical data, including clear information on the extent of non-resident purchasing of investment properties. We can then have an informed discussion about solutions such as incentivizing capital toward rental properties or investment in local businesses, taxing unoccupied properties at the business rate, or considering innovative zoning options. This is a sensitive issue and we need a made in Vancouver solution. Lets bring experts together to generate savvy solves that turns this into an opportunity for Vancouverites.
3. What is your policy on housing densification?
My mind is not made up on density. We must take care to add density of residences for human beings as opposed to density of investment units. A second priority is that density should be absorbed by the City on terms that meet neighbourhood objectives.
Adding density in an attempt to moderate housing prices is unlikely to work. We have to look at the demand side. That said, there are many positive benefits of the right kind of density and I am open to those.
4. Would you support policies that would lead to a drop in real estate values?
This is a time for great care in policy development.
We may well be in a real estate bubble and a sharp drop in values for other reasons is not out of the question, regardless of government policies. However, government’s role should be to modulate severe market swings and not precipitate them. Shocking the market has potential to wreak havoc on households, especially those who may be over-leveraged or recent buyers.
I think we can be more surgical in our responses. Finding solutions that look at targeting specific real estate practices can help solve some of these problems while also encouraging investment in other asset classes.
5. What is your own family’s housing situation?
I have been a homeowner for 24 years. My first house was purchased in 1987 in Point Grey for $125,000, with parents and in-laws supplementing our down payment. The opportunities that created such security for our generation have vanished and it is vital that we stand up now for young people and families.
As a homeowner, I understand the concerns of Vancouverites about possible drops in real estate values and the risks associated with broad, generic approaches to housing policies. We need to find specific, pragmatic solutions tailored to the Vancouver market.
[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.]