Empty homes aren't just a Vancouver problem any more. They are a problem throughout B.C. – some municipalities more than others.
New data from Statistics Canada's 2016 census shows that the story varies from region to region, with Delta seeing a major increase and New Westminster enjoying a significant drop.
"We are struggling to figure out what [the data] is telling us, and what it means, but what makes it even more interesting is the real estate market has been very active in the City of New Westminster, and we've seen significant development and population growth," said New Westminster Mayor Jonathan Cote. "To me, it's showing that, for some reason, the investment in real estate here is being driven by those who actually want to live in the community, as opposed to external factors that might be buying strictly for investment purposes."
New Westminster, one of the region's densest municipalities, saw a 24-per-cent decline in the number of empty homes in the 2011 to 2016 census period. Pitt Meadows saw a 45 per cent drop; Langley a 14 per cent drop; Port Coquitlam and Port Moody also saw small drop-offs. Those regions are filling up instead of emptying out.
Meanwhile, Delta saw a 79-per-cent increase in empty or non-resident occupied homes, followed by White Rock at 35 per cent. Burnaby, North Vancouver, Richmond and Coquitlam also saw significant increases. Vancouver saw a 15-per-cent increase in empty and non-resident units.
A "non resident" home is defined as either empty or occupied by a foreign or temporary resident. But most often, the units are empty. Of all the homes in the region that fall into the category, 87 per cent are unoccupied, according to an Urban Futures report.
Part of the empty-home problem is speculative buying, which can take the form of a flip, a property to be held, or used as short-term rental, such as Airbnb – as opposed to a dwelling that doubles as an asset over time. In Vancouver's downtown – where Coal Harbour is 22.2-per-cent empty or non-resident occupied, and the census tract east of it is 18.2 per cent – the effect of short-term rental and seasonal use is probably playing out. But other, less obvious Vancouver neighbourhoods also show signs of emptiness.
The Marine Gateway neighbourhood has a 24-per-cent non-resident rate, as does Joyce-Collingwood, which is an urban-oriented transit hub. There are 609 empty or non-resident units in Marine Gateway and 791 such units in Joyce-Collingwood neighbourhood, which is Vancouver's densest neighbourhood. That translates into 24.4-per-cent non-resident homes.
The census data was analyzed and compiled by Andy Yan, the director of Simon Fraser University's City Program. Mr. Yan has been studying the empty and under-used homes trend for the past nine years.
"Speculation is one of our prime suspects," says Mr. Yan. "We don't know why, but we know it's concentrated in a few neighbourhoods."
For many, empty or under-used homes are tangible proof of the commodification, or financialization, of housing. There are those who will argue that an increased supply is necessary to subdue the market, to remove the pressure of scarcity. However, housing markets in what Mr. Yan calls "hedge cities," such as Vancouver, are fuelled by an unprecedented wealth coming from outside. Without addressing the speculative nature of the market, how much effect will supply have?
Mr. Cote says the majority of buyers in New Westminster are from Vancouver.
"Density is an ingredient in this question but there are other factors at play on how a neighbourhood functions, at least according to my definition of what a thriving neighbourhood looks like," says Mr. Cote. "An empty high-rise tower or half-empty high-rise tower is not going to have a lot of vitality for the neighbourhood.
"We are very dense, and densifying significantly, but obviously that densification in terms of land use is translating into people living in the units … the reality is, even without the 50-storey towers, New Westminster is one of the more dense communities in all of metro Vancouver."
Assistant professor at SFU's School of Public Policy, Josh Gordon says the numbers probably show the migration patterns of young families.
"It appears that some suburban municipalities have seen falling rates of non-resident occupied units as young families move away from the more expensive central areas in search of affordable housing options," he says. "So, while the more expensive areas see an increase in non-resident occupied housing, some cheaper areas experience the opposite pattern. I wouldn't ascribe this dynamic to any local policy initiatives, though, at this point."
United Nations rapporteur on adequate housing, Leilani Farha, has completed her report on the financialization of housing, which she presents to the UN on Wednesday. She began her research when attending a housing conference in Vancouver last summer, where she saw the impact firsthand. She can't speak specifically about Vancouver, but she can speak about the huge crisis that is the buying of residential properties for capital gain. It is no small irony, for example, that the new president of the United States has made his fortune in residential real estate, or that his newest chief adviser is also the chief executive officer of The Blackstone Group, the world's largest residential real estate private-equity firm. In her paper, she says that Blackstone purchased $10-billion (U.S.) worth of American homes that had foreclosed after the economic downturn of 2008 and 2009. Blackstone now manages $102-billion worth of property.
In the first quarter of 2015, limited liability companies made 58 per cent of all property purchases in the United States, worth more than $3-million, mostly in cash.
The report also notes that when remote investors own rented homes, money flows out of communities, adding to the concentration of global wealth. Airbnb has contributed to "escalating prices of housing and changes to the make-up of neighbourhoods," without any benefit to the local population.
"Part of what this report is trying to say is that we need a whole lot more than just building. We need a bigger shift, something much more fundamental," she said in a phone interview. "It's very clear to me that not only are we not building for low income people – I'm not sure we're building for people.
"We are building for corporations, for investment, for secure investment, for return on investment. It may ultimately be about the wealth of a few people, sure, but this is not people driven."
Housing is especially not people-driven when there are no people living in the units.
"While I do find many cities are very closely allied with developers, part of that is based on their lack of a funding base, so they see this as an opportunity to have money flow to the city. What I find concerning is that investment in existing housing does not flow to the community, especially when that investment is a vacant owner. They don't live there. So how does that exactly trickle down to the local community? It doesn't. The person isn't even there to go to the local grocery store to buy anything. They aren't using services. The unit is empty. So in those cases, how is that affecting or benefiting the local community?"
Mr. Yan's data, and Ms. Farha's UN paper, aren't attempting to provide definitive answers, but rather, are the start of a conversation, they both say.
"One would think that when it's such a huge part of the world's economies, [residential real estate] would be the subject of debate at a high level," says Ms. Farha. "Where is that conversation happening? So far, it's not."