The Van Mag Q&A: David Eby on our hot housing market

The NDP MLA for Vancouver-Point Grey has been an outspoken critic of the provincial government's inaction on the housing file. Now, he's taking that fight to the next level

March 17, 2016

By Max Fawcett

When he first planned the town hall on Vancouver’s super-heated housing market, NDP MLA David Eby reserved the event space at St. James Community Square, one that can hold around 100 people. As it turned out, he needed much more room than that to accommodate everyone who wanted to be heard on the issue. Upwards of 700 people ended up packing the Hellenic Community Centre on Arbutus Street Wednesday night to hear from elected officials, local activists, and a hodgepodge of local residents who were alternately frustrated and flabbergasted by the city’s real estate market and its impact on their lives. Less than 24 hours later, we caught up with Eby to find out how he thought it went.

You’ve used the word crisis to describe what’s going on in the housing market. Why is it a crisis, from your perspective?

It all depends on where you’re sitting in the market, I guess. From where I sit, I think about the future of the lower mainland. It’s one that includes the technology industry, that includes the clean tech industry, and that includes people of all ages. But the direction I see things going right now is the complete opposite—a community owned by absentee property speculators and the world’s super-rich, and a service economy [built] to attend to their needs. That’s why I call it a crisis. I think we’re at a crossroads, if we’re not past it already, in terms of the future of the Lower Mainland.

You’ve certainly been out front of this issue. But do other local politicians understand the urgency of it?

At the municipal level, it’s very well understood by councilors of all persuasions and all parties. But for some reason, that understanding seems to drop off at the provincial level. I think part of it is the government’s focus on the resource economy—LNG and mining, which are certainly important industries in our province but are both struggling pretty badly right now. The full attention to those issues has come at the cost of the attention to other areas of our economy that are growing, like tech and the economy in the Lower Mainland.

It’s certainly something that’s appreciated by the people who are driving the economic growth in this area. Ryan Holmes’s op-ed is quite famous now, about the challenges his business faces recruiting and retaining top talent, but I met with another tech leader (who did not want his firm’s name used) who said there are two directions for them. One is that they double in size in the next two years— they have a significant number of employees already—and the other is that they end up packing up and leaving because they can’t retain their staff. It’s a serious issue for these folks that are building these jobs of the future, whether they stay or go. And they do have other options—there are other places that will bend over backwards to address their concerns.

David_Eby_600x600Do you think people in this city fully appreciate that competitive pressure? I don’t think there’s any doubt that Vancouver is an amazing place to live, but there are other amazing places, and those other amazing places might be willing to address affordability concerns more aggressively than we seem to here.

Absolutely. If you look at who we’re competing with for technology jobs, whether it’s Seattle or Portland or somewhere in California or even Toronto or Montreal, it seems to me like these provinces and states understand that they’re in a battle to become hubs for this new economy. They’re willing to look at the laws that they have to make sure they’re enabling the growth of these industries. The challenges are all different in different places, but our challenge is housing prices—and for some reason, the provincial government doesn’t see that as a priority, or as being connected with this economic activity.

I’ll give you an example. In question period, I asked a question about Justin Fung, who was our first civilian speaker last night. He’s a software engineer, and he could work anywhere in the world with his skill set. But he has close personal family ties to Vancouver, and he wants to stay here. And he and his wife live in a two-bedroom apartment with their two kids that’s so small they can’t watch TV without waking them up. I said that in the House, and I was openly mocked—you can probably hear it on the tape—by the MLAs on the other side. They literally don’t understand that people like Justin, who have those skill sets, are building the economy of the Lower Mainland. If they vote with their feet and leave, the future is a rapidly aging population and nobody to pay the taxes for that population’s healthcare.

What could the government do if it wanted to take this issue seriously right now? Which policies could it put in place to address at least some of the issues that are at play here?

There are a couple of key initiatives it could engage in. The first is that there’s a growing consensus that international capital is driving a large part of our market, whether it’s Lawrence Fink at Blackrock and the investors they represent or money from mainland China. The fact that prices are so out of whack with what people can get paid here means the government needs to start taxing and regulating international money in our housing market. We’ve got a very modest initial proposal, the UBC proposal, that would identify people who are holding properties vacant and who aren’t paying taxes here but buying property. I think that’s a critical first step. Look at that neighbourhood in Richmond (Thompson) where houses are two to three million dollars and yet the income declared for tax purposes is at poverty levels. You know there’s a problem with our tax system—and that tax system is important because it’s the money that pays for affordability initiatives.

Let’s say, for the sake of argument, that the NDP forms government in the next provincial election. Is there any concern on your part that it will already be too late by that point to bring this market back to an even remotely reasonable level of valuation?

The longer the government lets this go the worse it gets, because people feel a sense of desperation to get into the housing market. I was talking with a friend who was showing me a home that her friends were interested in on the North Shore: Over a million dollars, a little shack, and they were going to leverage themselves to the hilt. You heard some folks last night talk about things like inflating the rents from basement suites and going to private lenders to assemble larger down payments for a mortgage they can’t afford. The problem with this kind of activity is that as soon as the interest rates go up, even slightly, these people are going to be in a real crisis. Or, if housing prices fall even slightly, and don’t appreciate the way they have been, they’re going to be in a really difficult situation as well because they’ll be stuck—they won’t be able to move.

I’d love to say we’ve got all the time in the world, and on May 2017 a new NDP government can come in and fix all of this. But when housing prices are appreciating at the level they are right now, we need to put partisan interests aside and say that this could be really, really bad—if it’s not already. We need government to act now. We’re putting the ideas on the table—we’re not holding them back for the election. We want the government to actually do something.

What do you say to someone like Justin Fung, who might be getting desperate and looking to leave the city because of the cost of housing?

I don’t blame him. My wife and I have the exact same conversations. We have a 17-month old, and my job ties me to the west side of Vancouver like so many people’s jobs tie them to the Lower Mainland, and I get it. I could say ‘Oh, I hope things will turn the corner—don’t make any rash decisions,’ but at this point I don’t see any prospect that government is going to be acting to rein this in at all. And I totally get that he’d be looking to move to somewhere like Seattle, where he’d be getting paid more and could buy a house for 30, or 40, or 50 percent less, and have a wonderful life for his family—and still be within driving distance of his parents. It’s hard for me to know what to say to someone in that situation, because I do feel—as many people do—a sense of inevitability, given the government’s attitude around this. The direction that we’re headed is insurmountable unless they start to wake up.

What’s it going to take to get people who think this is just a bunch of Millennials whining to realize that this is a fundamentally, categorically different situation than anything Vancouver has seen—or faced—in the past?

I really think we need some more 700-person meetings, and I think they need to be all across the Lower Mainland. That’s what we’re working on. But the people we need to realize this are the housing minster, the finance minister, and the Premier, as well as the Prime Minister. We need governments to realize it, and the things that governments recognize are large, spontaneous gatherings of people concerned about an issue. I hope we’re able to get their attention through events like we had last night.

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