Four years ago this week, in my first effort as a regular Vancouver Courier columnist, I explained why neither provincial nor municipal politicians would dare intervene in the real estate market in order to drive down home prices.
Too much tax revenue was at stake, I argued, not to mention it would be politically risky. When home equity begins to wither away, property owners are quick to blame their elected officials.
May 2015 marked the mid-point of the B.C. Liberal mandate under Christy Clark’s leadership, and Mayor Gregor Robertson’s Vision party had just been re-elected to their third majority term in Vancouver. Both governments boasted about how strong the economy was performing, which was driven in part by a red-hot real estate market.
The irrationality of the real estate market during that period, with its double-digit spikes in annual property assessments, ultimately led each government to implement policies meant to cool things off.
It would be more than a year before Vancouver’s empty home tax and B.C.’s foreign buyers’ tax were put in place.
The beauty of these policies is that they targeted groups the public perceived were at the root of housing unaffordability — property speculators and foreigners (read: immigrants from mainland China). The resulting policies were popular as a result, even if the politicians who brought them forward were not.
Robertson and Clark were ultimately both frustrated in their attempts to tame the real estate dragon, and have since left politics.
Now it is Premier John Horgan and Mayor Kennedy Stewart who are hoping not to get burned. The former has announced a public inquiry into money laundering with an unlimited budget and a two-year timeline to conduct business.
How public support for the inquiry got drummed up was too cute by half. Legislative reporter Rob Shaw lauded the NDP’s strategy in his Postmedia podcast.
“Commissioning Peter German to do not one but two reports,” explained Shaw, “tying it into the drug overdose [issue], tying it into the real estate market [and] luxury vehicles… crafting those on a timeline that lands you halfway through the mandate, and then getting your union contacts, the BCGEU, to whip up public support for an inquiry. Acquiesce to the inquiry as if you really didn’t want it but the people want it, and hit that two-year timeline to bring it in right before the next election.”
“If you started with a blank piece of paper at the beginning of the NDP mandate and crafted a way to do this, it would exactly like what we’ve got,” the reporter added.
Indeed, the B.C. Government Employees’ Union has been pumping its #PublicInquiryNow campaign since last January, and also commissioned a poll on the issue.
Coincidentally, it was at that time when newly elected city councillor Christine Boyle announced her intention to ask council to support for a public inquiry modeled after Charbonneau Commission. Kennedy Stewart convinced Boyle to remove any references to Charbonneau in her motion, citing the fact that the Quebec inquiry focused heavily on corruption in local government.
Stewart clearly did not want to put the City of Vancouver in the crosshairs of a public inquiry.
As a side note, it is interesting that Boyle’s council run was endorsed by her friend Attorney General David Eby, the province’s point man on tackling “dirty money” that allegedly gets washed through B.C. real estate and casinos.
While the B.C. NDP are hoping that many from the B.C. Liberal opposition bench are caught in the dragnet of a public inquiry, it could lead to some awkward moments for the current government.
In 2003, prior to taking office, Horgan along with business partner John Heaney, through their government relations firm, successfully lobbied Vancouver city council to allow slot machines at the Plaza of Nations casino.
The public inquiry will undoubtedly shed light on countless overlapping connections like these to gambling and real estate, on all sides of the political spectrum.
Here are my safe bets for the inquiry — it will become a media circus, and a lot of lawyers will get fat off of that lack of a spending cap set by the province.
Regrettably, what it will not end is money laundering in B.C., or make housing here more affordable.