Due to rampant property speculation, Vancouver is one of the most expensive cities in North America in which to live. Meanwhile, as stupendous profits are being made by parasitic landlord-speculators, workers are being forced deeper into debt, poverty, and financial turmoil. This illustrates a deep flaw within the capitalist system, and its inability to provide the bare necessities, such as housing.

Profits for the few, destitution for the many

In 2015, Vancouver residential real estate was valued at $657.2 billion, having doubled in the preceding ten years, due to pervasive speculation. This explosion in land value has astronomically raised the cost of living. In December 2018, the Real Estate Board of Greater Vancouver fixed the average price of a detached home at a little over $1 million. An apartment was around $664,100, and an attached home stood at about $809,700. Rent has also skyrocketed — the average being, in February 2019, $1500 a month for a single bedroom. This has serious implications for Vancouver workers and youth.

While the official living wage in Vancouver is $20.91, the minimum wage is only $12.65 per hour. This means that most workers cannot come close to meeting the average cost of living. In fact, Vancouver has the second highest poverty rate for working adults in the country: the median individual income of the working poor in Vancouver rests at $15,000 before taxes – the national poverty threshold is $33,936. Not surprisingly, exorbitant rents hit these sections of the working class hardest with 22 percent of renters in Vancouver spending over 50 per cent of their monthly income on rent compared to only 18 per cent nationally. Compare this to Montreal, where workers on minimum wage use less than 25 per cent of monthly income on rent. John Stapleton, in a report on the Toronto working poor, wrote, “Right behind [Toronto] stands Vancouver — Canada’s second richest city. In both cities, working poverty is growing faster than anywhere else in the country.”

The impact of this on average people’s lives is summed up by Jean-Pierre Kigonga, an East Vancouver worker making $17 an hour, who told the Vancouver Sun, “When you take [my salary], you pay rent, insurance, gas, it is not enough… We go to Superstore, and I say, ‘Don’t buy too much food because we need diapers.’” This is the abysmal condition the Vancouver working class is being driven into.

Middle-class professionals and skilled workers – accountants, teachers, office clerks, and even government workers – have also been driven out of Vancouver for the same reasons. Iain Reeve, a middle-class white-collar worker, told the National Post that, “Life is challenging enough, it’s so hard when you have [housing] insecurity all the time.” He also said that his family was evicted several times due to the owners selling the property. Another middle-class professional, Andrea Robbie, said in an interview, “Sharks are on the land, not in the sea anymore. I feel everything has been ripped from us…”

The high cost of living, and sub-poverty wages, have left the city hemorrhaging its labour pool. This labour flight is wreaking havoc on small and medium enterprises. It’s not uncommon to see “For Hire” signs all along the streets, and bankrupt shops shuttered up. As a result, Vancouver unemployment is very low, reaching 4.1 per cent in October.  This is not because of a booming job market, but because there are not enough workers! At the same time, it is claimed that 1 in 5 homeless in Vancouver are employed full-time. The influx of capital is offset by an outflow of labour.

Meanwhile, spectacular riches are being made at the expense of the poor. Chip Wilson, founder of Lululemon, has in recent years turned to property speculation with his family company Low Tide Properties. LTP has over $300 million worth of property, the vast majority within Vancouver. Not included in this $300 million is Wilson’s $78.8 million waterfront property. The housing market rakes in billions of dollars each year, and Wilson has become the poster boy of property speculation with his lavish lifestyle and outward enthusiasm for speculative real estate.

All this illustrates a tendency towards economic polarization inside Vancouver. The rich get richer and the poor get poorer. This has lead to plummeting living standards for the most vulnerable in society. But as a result of the untreated cancer of speculation, the loss of labour has been problematic for the capitalist system in Vancouver. It is clear, even to the BC establishment that the housing crisis must be solved – not in the interests of the working class, but in the interest of sustaining capitalism via amputating its most destructive attributes.

Speculation and the housing crisis

In August 2018, a survey showed that 90 per cent of Vancouver residents believed that they were in the middle of a housing crisis. All of the evidence and experience shows this to be true without a doubt. But there has been some disagreement as to the general cause of the crisis.

The BC Liberals, echoing big business leaders, have in the past put the idea forward that the housing crisis is not due to speculation at all, but rather a lack of supply to meet the growing demand. BC Liberal Sam Sullivan said in 2017, “I look at this housing crisis, and it’s really got three important issues: supply, supply, supply.” If all it took to end the crisis was building more condos, the crisis would have never even begun. It is clear that speculation – buying property with the intent to sell it at a higher price – is the cause of the current crisis.

The government’s admission that speculation has given birth to the housing crisis has brought forth its own monster. In the same study, 84 per cent of the people surveyed believed that “foreign buyers heavily contribute” to the inflated rent and price of homes. This hints at the racism and prejudice festering against Chinese immigrants in Vancouver. Many blame the “Chinese foreign investors” for creating “a flood of capital that is washing over cities throughout the globe, distorting home prices, irritating local residents – and defying almost every attempt to restrain it,” as one New York Times article put it. Now, while it is true that foreign investors – many from China and East Asia – have been eager to buy up property in Vancouver, it is not a “Chinese” problem: it is a capitalist problem.

Speculation is an organic development in any market under capitalism – whether that be raw materials, electronic hardware, or housing – and is found in every corner of the world. The first case of modern speculation was “Tulip Mania” in the Dutch Republic in 1637. Since then, market speculation has been a component part of the capitalist economy in every country. Today, the reintroduction of capitalism to China has given rise to an aggressive Chinese capitalist class, eager to invest in foreign markets that promise grand profits. But these foreign investors don’t work alone: they are accompanied and lent a helping hand by the Canadian capitalists and bankers in joint exploitation of the housing bubble in Vancouver.

Property speculation is not a new game for Vancouver either. In the 1880s, the Canadian Pacific Railway was planned to end in Port Moody, but was extended 11 miles west to what would later be named Vancouver. This was because of the CPR’s significant ownership of land in the area, which they sold after the railway bolstered property prices. Property speculation in Vancouver didn’t start with foreign investors “flooding our markets,” but with our own homegrown capitalists! This should remind us that Asian investors are not the cause of the problem, it is the entire capitalist system that delivered the crisis.

BC Liberals, and the NDP in power

Under the growing pressure of Vancouver’s working class, the BC Liberals introduced Bill 28 on August 2, 2016, with the stated aim to moderately contain the most grotesque features of Vancouver’s property speculation. It included a vacancy tax, which was to encourage landlords to either sell or rent out their vacant homes, and a 15 per cent foreign-buyers tax on all foreign investors looking to buy property. In 2018, the foreign-buyers tax was increased to 20 per cent. These measures only gave limited results, with housing costs rising slightly slower than before. The cause of the problem – the free market and rampant speculation – was left completely intact.

After taking power in July 2018, the New Democratic Party – partially elected due to the Liberals’ inability to confront the crisis with meaningful reforms – has also shown incredible weakness in addressing the crisis. Premier John Horgan stated, “We have to eliminate the risk of such huge increases for renters. Our new approach strikes a balance between giving relief to renters while encouraging people to maintain their rental properties.” The NDP restricted rent increases to “only” 2.5 per cent for 2019. For Vancouver workers, this is putting a bandaid on a gangrenous wound – a slowdown in rent increases still permits sky-high rent, which has become intolerable for the working class.

The NDP has also put forward a “housing plan”. This program, which appears very progressive at first sight, promises to build 72,000 new homes within a decade. The majority of units to be built are condos and “purpose-built rentals”, and 1,584 are currently under construction. But the reality is that these new units are not intended to relieve poor workers and youth. Vancouver Mayor Kennedy Stewart stated, “If you’re making less than $30,000 per year there’s not much any policy can do.” In fact, only 12,000 units are listed as “social and supportive housing”. This plan, if ever completed in the first place, is far too feeble to begin to address the housing crisis in Vancouver.

Ever since their defeat, the dethroned BC Liberals have been plotting their next move to re-take power. However, the Liberals have decided to put their most reactionary foot forward and intend to scrap all their previous anti-speculation legislation. This includes throwing out the foreign-buyers and vacancy taxes, as well as giving a tax break to landowners who possess more than $3 million worth of real estate. These measures will amount to accelerated rent levels and land speculation. To add insult to injury, Liberal figurehead Andrew Wilkinson said in a speech in the BC legislature, “I was a renter for 15 years… It was challenging at times, but it was fun… It’s kind of a wacky time of life, but it can be really enjoyable.” Rest assured, most working at minimum wage don’t find spending most of their income on rent  “enjoyable.”

The reality is that the foreign buyer tax does not solve the problem, and has real racist overtones. It attempts to scapegoat the Chinese speculators when the real culprits are all speculators, the majority of which are Canadian. We must take action on all those who are trying to profit from the housing misery of the workers.

Socialist solution for the housing crisis

The Vancouver housing crisis – and by extension the Toronto housing crisis – is a product of capitalism. The fact that thousands of houses stand vacant while homelessness looms larger every year, is sufficient proof that capitalism cannot meet the needs of society and only serves to enrich a parasitic elite at the top. The question only remains: what next?

The scant measures taken first by the BC Liberals, and now by the NDP, have proven to be insufficient to confront the crisis. This is because any attempt to reign-in the excesses of capitalism while maintaining a market economy leads to capital flight, economic slowdowns and even economic sabotage. Within the capitalist system, all reforms are subordinated to the needs of capital – this is why the NDP has shown that they are incapable of stopping the speculative gambling on the housing market.

There are plenty of houses and apartments to meet the needs of the working class and homeless population of Vancouver – the only barrier to putting them to use is capitalism. Homes being sold or rented at extortionate prices should be nationalized, and placed under democratically elected neighbourhood councils to decide the best way to use the property. Swaths of property owned by speculative capitalists should be seized without compensation and remodelled to fit the needs of the workers and youth, as well as the poorest in Vancouver. Only through collective ownership of housing, controlled democratically by those workers and poor who live there, can the crisis be solved.

Expropriation is only one part of the solution, however, and many of the problems that working class families face will persist as long as the capitalist system remains. As Engels wrote on the housing crisis, “It is not that the solution of the housing question simultaneously solves the social question, but that only by the solution of the social question, that is, by the abolition of the capitalist mode of production, is the solution of the housing question made possible.” In other words, only through the overthrow of capitalism can we put into motion the most thoroughgoing reforms in the interests of the working poor, and fully solve the housing crisis in society: a democratically planned economy would  not only allow resources to be allocated to build affordable, safe, and comfortable housing for everyone, but place the entire process in the hands of the workers themselves. In this way, the working class can secure a future without want, without homelessness, and without the barbaric exploitation of current day capitalism.

Expropriate the landlord-parasites!

Nationalize speculative property!