It's 'really problematic' to blame foreigners for housing crisis, says UBC sociologist

As talk of banning foreign homebuyers heats up in the city, some experts say it could be an extremely misguided approach.

Last week, leader of the B.C. Greens Andrew Weaver called on the province to follow in New Zealand's footsteps and limit property ownership to residents.

Nathan Lauster, an associate professor of sociology at UBC and a blogger on city issues, says banning foreign investment misses the larger issue of local real estate speculation.

"We've been led to believe that effectively foreign buyers are all speculators, investors and vacation-home owners while everyone who is in Canada is living in property they own," he said.

But that's not true, he told CBC host of On The Coast Gloria Macarenko.  

"You're talking about five times as much domestic investment in real estate compared to foreign investment in real estate by value, at least in the Vancouver market," he said.

By numbers, Lauster said, that's an estimated $45 billion worth of property in Metro Vancouver owned by people with foreign residency compared to $227 billion by Canadian residents.

According to a survey by Statistics Canada from December, non-Canadian residents are estimated to own less than five per cent of properties in Vancouver.

Some argue, however, the number is actually much higher and masked behind shell companies, nominees and trusts,

In nearly half of Vancouver's 100 most expensive property deals, the beneficial owners are unknown, according to a 2016 report by Transparency International Canada.

Terminology, taxes

Lauster said part of the problem with a foreign ownership ban is a matter of terminology. Does it mean permanent residents or citizens, he asked, and what about Canadian investors living outside of B.C.?

"It's difficult to tell exactly what anyone means by the term which is part of why it's so open to accusations of racism and xenophobia," he said. "It's a really problematic narrative to blame foreigners for all of our problems."

New Zealand limits property ownership to New Zealanders, Australians and permanent residents. Andrew Weaver, who proposed the ban last week, told CBC in a previous interview property purchases would be limited to those paying Canadian taxes.

Lauster said he would prefer to see a re-balancing of taxes — such as higher property taxes while lowering income taxes — and a focus on rental property instead of a foreign buyer ban.

"Our conversations about affordability often get sucked up talking about buying a home and we don't leave enough air to talk about renting," he said.

With files from On The Coast.