Skyrocketing housing prices in Canada’s cities threaten the cohesion of our society – Joseph Stiglitz

Skyrocketing housing prices in Canada’s cities, most dramatically in Vancouver, threaten the cohesion of our society, argues Nobel laureate and former World Bank chief economist Joseph Stiglitz. …
“It’s the same phenomenon happening in New York,” he said. “We attributed it maybe to Russian oligarchs buying multimillion-dollar apartments in huge buildings… driving up rents, making it unaffordable to live in the city.” …
“There are very significant benefits to creating communities with diversity, diverse incomes and other forms, that cannot exist if we price ordinary people out of our cities.”

Read the interview by The Tyee’s David Ball (26 Oct 2015)

31 responses to “Skyrocketing housing prices in Canada’s cities threaten the cohesion of our society – Joseph Stiglitz

  1. Funny how these people don’t get this worked up when they are doing it to those poor developing countries in the Caribbeans and Southeast Asia. I guess the difference is that developing countries needs the $$$ more than social cohesion?

    • So, basically, suck it up and quit whining, eh space889? Once again you exhibit a callous penchant for shutting down any debate that doesn’t fit your narrow worldview.

      • uhm??? what??

        Excuse me for pointing out some hypocrisy when tables are turned. But I guess your view is that as long as I’m on the giving end, it’s all good and proper, but when I’m on the receiving end, well the world better know about how unfair it is, so it could be fixed and those other people be put into their proper place??

      • This is one in a series of comments of yours whereby legitimate grievances re: the deleterious effects of the housing bubble are shut down.

      • Uhm…no…

        I’m not shutting down anything…merely observing such concerns never seem to arise out of concerns for people who are suffering the same problem, often to a much large degree than us, who unfortunately didn’t win the genetic lottery and be born in a rich developed country.

        Or as analogy, just because people points out that Middle East countries suffers the equivalent of Paris terrorist attacks on a weekly basis, yet without any reporting, much less outpouring of grief, shock, and support in the West, doesn’t mean those people are shutting down the debate on terrorism. Rather it simply highlights that terrorism is global and there are people who have to live with it every day, with even less choice about it.

      • Sanctimony dressed as nobility.

      • Isn’t giving an issue a global perspective your specialty? You trout out economist numbers to give a global perspective no? So you pick and choose then, when it is you who is giving a global perspective, it is all good. But when someone else points out an equally global perspective on another issue, well, that’s shutting down the debate. Talk about being a hypocrite.

      • Royce McCutcheon

        “Funny how these people don’t get this worked up when they are doing it to those poor developing countries in the Caribbeans and Southeast Asia.”

        You imply hypocrisy where there is very, very little (i.e. the vast majority of people here don’t own in those places and would likely have zero problem with them enacting barriers to foreign ownership). Two wrongs don’t make a right.

        Like pretty much any human being, the difference in noise that you are observing is a function of a problem occurring in one’s own backyard vs. a problem occurring very far away (and which is not something one is contributing to themselves). You like to bring this up, ascribing hypocrisy or racist intent. There are meaningful discussion to be had about foreign money, but your tack here is lazy and easily dismissed.

      • “There are meaningful discussion to be had about foreign money, but your tack here is lazy and easily dismissed.”

        Well said, Royce. Unfortunately totally lost on these two buffoons.

      • Royce McCutcheon

        @El Ninja: Meh. For “the table to be turned”, I would have to be someone who owned a place in, say, Thailand, plus had a problem with laws there that reduced or removed my ability to own that place. I (and many people concerned about the cost of real estate here) do not fit that description, hence the charge of hypocrisy is clearly ridiculous after even a moment’s thought.

        Won’t stop that line of thinking from showing up (regularly) though, I’m afraid.

        (Cue a non sequitur shot about racism or me being a wrong bear…)

      • @Royce, while I don’t neccessarily agree with Space on this one, I don’t think he is all that wrong. Frankly I am a bit ambivalent at this point. I think the situation is what it is, not much I can do as my government clearly don’t care about it.

        I don’t think Vancouver is the only city that have seen foreign investment. I am sure there are other resort towns / cities in places like Mexico and Southeast Asia that have seen the same effect. From a global perspective, what we really have is a very first world problem. I think that is really what he is saying. Frankly I don’t even think Vancouver has a housing issue. For all the talk of how bad our prices are, I can point to properties on MLS that are well in the affordability zone that people from other countries would love to live in. It’s just we have this ideal that our standard of living is a place that is above a certain square footage in a certain part of town. But from a global perspective, I don’t see how we have much to grip about. There are older places in city limits that offer the square footage that other people in other countries would dream about.

      • Royce McCutcheon

        @Brian: “I think that is really what he is saying.”

        No, it isn’t. This exact false equivalency to make a claim of hypocrisy alone has been presented repeatedly, and other similarly false equivalencies to imply hypocrisy or racism have been presented by this poster again and again ad nauseam. This poster is either impervious to having these logical flaws pointed or is persistently disingenuous.

        At this stage, the next tactic is for this poster to make a generalized statement about racist VCI posters, attack something that was not being debated, or make a comment about how wrong stupid bears have been. This MO is so well-established it’s pretty much carved in digital stone. It is what it is.

        I don’t draw much utility from “global perspectives” insofar as they can be abused to make all kinds of arguments. Nearly half the planet lives on less than US$2/day. Few would disagree that those young families being screwed by the current housing dynamic in the Lower Mainland are still “rich” from a global perspective, including those families.

        As to whether Vancouver has a housing issue, the short version is that I disagree. I am still seeing too many talented young people with skills a large metro region needs leaving or planning to leave.

      • @Royce, I don’t have much quarrel with your perspective on Vancouver real estate because it is a valid point of view. I am only on this board to argue on what I think will happen to Vancouver Real Estate and not neccessarily the social aspects of it. I personally feel that VCI is more of a place whereby people have accepted that Real Estate has become very expensive and realized what is causing it to be. I see a lot of bitterness on that board frankly whereas on this board it seems like the attitude is, let’s all leave it and it will just return to normal in a few years. I have yet to find a board other than the foreign investment in vancouver real estate facebook page whereby people have talked about how to solve this problem.

        That being said, I do find some posters on VCI quite offensive in their tones. I can see how someone like Space would find a guy like BPOM to be quite racist. But one thing I have learned in life is that people who complained the loudest usually are not doing that well so I guess we can leave it at that in regards to some of the posters on VCI.

  2. I don’t neccessarily disagree with what he says. But inequality is everywhere right now and it doesn’t look like it will stop. To me, the social consequences are pretty bad but I can’t change it so I will just react accordingly.

    Just one related note though. Markets that drop significantly also offer opportunities to those who play them correctly. Just ask anyone who shorted banks before the financial crisis. The market is very fair, if you know what you are doing, there will be a way to make money no matter which way the market turns. That’s why you hedge your risks on your decisions.

    • and with a 20 years investment horizon to boot! You know, just to be absolutely sure you will win and come out ahead. ;p

    • Brian, that entire 2nd paragraph is utterly vacuous. You are simply parroting generic platitudes that no one, and I mean no one, is enlightened by. You might as well have remarked, “Hard work pays off”, or something similarly empty. Please add originality and insight to the discussion, or don’t say anything at all.

      • Look who is talking. Ask a regular joe how hedge funds work and whether they make money off of rising or falling markets and see how many can answer. On the other hand, see how many people can recite your cookie cutter logic of real estate being expensive. Who is talking platitudes now?

      • Vacuous and, I should have added, off-topic. This is the Vancouver Real Anecdote Archive — not “Hedge Funds for Dummies”.

      • Yet you seem to intend on educating people about the importance of 20yr+ investment horizons, and how equity outperforms RE.

      • I do have one question though. You are accusing me of contributing nothing to the conversation yet all you keep on telling are simple macro economic historical figures that everyone pretty much already knows. Do this, find the average Vancouverite and see how many people didn’t already know what you are saying. Most know this, but they have been absolutely screwed by it and suspect that something is not exactly the same here. Hence why I am trying to point out what isn’t the same. If everything was driven by interest rates, how come Vancouver is particularly bad compared to other places, even given the historicals? How come one asset class in the city is that much worse than all the other asset classes. You simply can’t explain it using macro economics.

  3. rod_jonsson_pmd

    pffft! … encore titano …

      • Uh oh, space889 and Brian. Some uncomfortable data here. Time to deny, dismiss, and/or obfuscate. Ready, set, go!

      • Data’s been there for how long now? People have been saying the same thing about Vancouver for how long exactly? Five years ago people said Vancouver’s ratios were bad, ten years ago people said it was crazy. Same thing with Hong Kong. Why do you think we are not aware of this data? I don’t get how this is news.

        The other thing is that this graph looks at housing as a whole whereas I only want to worry about single family homes which is a small segment of the market. I don’t get how we can clump together an asset that has no limit in supply with one that does. How does your economic theory apply to this case?

      • Thank you for proving my point exactly.

  4. tired of your bickering

    Just because the 4 of you CAN comment on each and every post…does not mean you HAVE to.

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