Dear ___,
I have a quick thought to support you in your work to resolve the housing crisis in Vancouver/Lower Mainland.
Briefly:
The struggle for equal human rights for same-sex partners benefited from a change in how the issue is framed. The dominant but outdated idea that marriage was about tradition and religion had to be replaced with the idea that marriage was about love and commitment - including the rights of committed partners to visit each other in the hospital, to share property and will it to each other... To mark this transition, it was important at the language change so that it no longer evokes the old frame. As this happened, proponents of equal rights stopped talking about "gay marriage" and started talking about "marriage equality".
I think that housing security must go through a similar transformation in how it is framed.
Currently, the framing in the public sphere sets up a false conflict of interest between homeowners and aspiring homeowners. In this framing, there is the false assumption that there is an alignment between the needs of homeowners and foreign investors. They are both assumed to benefit from increasing house prices. This framing results in the following problems:
1. People who own will mistakenly think that their interests are aligned with foreign investors
2. People who don't own will mistakenly think that their interests are against the interests of homeowners
3. people with something to lose are more politically engaged in people with nothing to lose. So homeowners will understandably act to protect their perceived interests, which means opposing reforming the system that is destabilizing the housing market.
I'm writing to suggest the following framing:
Speculative investment is destabilizing the housing market, increasing the risk for local homeowners of a housing crash. This is because speculative ownership is artificially inflating the price of housing away from a reasonable and stable setpoint. Some local buyers are purchasing because they fear being unable to get into the market in the future, which means they make decisions that are not in alignment with their economic fundamentals. This further inflates prices.
So non-resident speculators are contributing to the creation of a bubble. Worst than that, they do not have strong ties to long-term ownership in the local market, which means that they could suddenly liquidate if they perceive it to be advantageous (as investors do at the first hence of the stock market crash). This will be most to disastrous for the people left behind – resident homeowners who cannot just sell at the drop of a hat to protect their assets. It will also be a disaster for any homeowners who must sell after the crash... when the flight of non-resident investors has artificially lowered the price below where it should be.
What I'm saying is that rather than talking about affordability– which evokes the interests of prospective buyers or renters and frames these as antagonistic to resident homeowners- we should be talking about housing stability or security. Everyone benefits from housing security. Homeowners benefit from security (they won't lose their wealth in a crash). Prospective buyers benefit because they can purchase when it is truly best for them and will not be priced out of the market - because the market will equilibrate at a level appropriate for the local economic fundamentals. Supply will expand to meet demand - it will neither be insufficient and therefore cause inflation nor overabundant and cause a glut and crash.
Homeownership provokes tremendous anxiety in people - and this anxiety is currently being rallied against reforms that would actually protect the interests of resident homeowners.
This anxiety is reasonable, but it should be directed at the actual threats, which are not from wise and reasonable reforms, but from unregulated speculative investment fuelled price instability. I have known people who have sold their homes, reluctantly, because of their perception that house prices are out of line with reality and they cannot afford to take the risk of losing their wealth in a crash.
Summary: rather than talking about "foreign" buyers (which evokes racism and is therefore politically problematic) we should be talking about speculative investors or non-resident homeowners. Speculative investment is threatening the shared interests of all citizens: resident homeowners, prospective buyers, and renters. Rather than talking about housing affordability, we should be talking about housing security.
Thank you again for all the work you're doing on this issue,
