Ng Weng Hoong in Vancouver
July 22, 2019, Monday 12.41 pm
3,052 words minus headline and footnotes

Student Rose Wu has written a poignant commentary about how Vancouver’s decade-long challenges with housing affordability has turned into a racial discourse. Her 678-word piece (1) in the online publication, The Tyee, should be compulsory reading for the handful of influential politicians, academics and journalists whose campaign against skyrocketing prices has cast a pall on “Asian-looking people” while downplaying the role of other major factors.

So, how did the Canadian housing story become linked to race? Specifically, what has led to the framing of this narrative as the “Vancouver housing crisis with Chinese characteristics”?

Ms Wu doesn’t need to look far for an explanation. In separate commentaries preceding her July 4 piece, three media professionals and an academic laid out some of the themes of the “Blame the Chinese ” storyline.

Part 1 of this article looks at the comments put forth by local Vancouver journalists Mitchell Anderson and Lynda Steele while part 2 examines the “unimpeachable” arguments offered by Josh Gordon, an assistant professor at the Simon Fraser University (SFU), and Ian Young, the Vancouver correspondent for the Hong Kong-based South China Morning Post.

Part 1. The view from the ground: Mitchell Anderson and Lynda Steele

Mitchell Anderson: Chinese capital flight, tax avoidance and money laundering
In his July 3 commentary (2) in The Tyee, freelance writer Mitchell Anderson summarizes the popular opinions that collectively blame China, Chinese immigrants and their money for Vancouver’s housing problems. His summary is noteworthy for not mentioning the domestic factors that have contributed to the region’s housing boom or crisis. This would include a decade of prolonged low interest rates, the surge in bank lending for home buying, the rise of alternative mortgage lenders, the region’s strong economy and jobs market, restrictive anti-supply policies and practices by the various levels of governments, the shortage of rental-only (3) developments, the inter-generational transfer of wealth, population growth, and record tourism arrivals.

According to Mr Anderson’s one-dimensional explanation, China’s wealthy together with its criminal elements and corrupt officials have spirited a huge amount of money out of their country into Canada’s housing market. He cites a Bloomberg story about US$800 billion leaving China since 2014 without asking if a large part of that is foreign direct investment (FDI) projects undertaken by the country’s many large companies in various parts of the world. His suggestion that the bulk of that US$800 billion has gone into buying Metro Vancouver’s C$50 billion (US$38 billion)-a-year housing market is absurd: imagine a garter snake (4) trying to swallow a horse.

Mr Anderson also repeats a widely circulated story that wealthy Chinese migrants evade paying taxes after arriving in planeloads through Canada’s Business Immigration Program that ran from 1980 to 2014. The “satellite family” (5) phenomenon is often portrayed as widespread among Chinese immigrants where the man returns to China to work and pays no taxes to Canada while his wife and children live off welfare in their new homeland. The Canadian media’s obsession with Chinese satellite families pales in comparison with its surprising lack of interest in the far bigger tax evasion problems posed by the country’s corporations (6) and powerful elite (7).

Mr Anderson, a frequent contributor to The Tyee, completes his negative stereotype of today’s Chinese immigrant with the inevitable reference to money laundering. These days, “money laundering” and “Chinese” have become mutually associated words. Credit goes largely to British Columbia’s attorney general, David Eby, who has alleged — and yet to substantiate — that Asian immigrant gangs are laundering billions of dollars through Vancouver’s housing market, casinos, luxury goods business, and expensive cars trade. The impression that Chinese gangs have swamped Vancouver with “mind-blowing” amounts of money has been largely sold to the public through regular sensational news reporting in the Canadian media, often with helpful government leaks and secret police studies. The high point of this campaign is Mr Eby’s recent series of studies on money-laundering (8) undertaken by supposed experts that is looking more like political theatre (9) built on dubious data (10) and speculative assumptions (11). Just as troubling is that Mr Eby and his chief investigator Peter German seem overly focused on targeting Chinese (12) money, immigrants and criminals as the main villains. As noted in the Georgia Straight (13), the Eby-commissioned studies fail to address established money-laundering activities in other major sectors of the economy where the Chinese factor is far less pronounced.

Lynda Steele: DINK couple can only afford a condo in Vancouver
When you and your partner are a high-powered Double-Income-No-Kid (DINK) couple who cannot afford one of those C$20 million waterfront mansions, who do you blame for your “housing crisis”?

Unlike Mr Anderson’s attempt at “macro analysis”, Global News Radio CKNW host Lynda Steele (14) offers a more personal perspective into how the Vancouver housing discussion has become so twisted.

“I should be living in a mansion in Shaughnessy, right? Champagne dreams and caviar wishes?” Ms Steele asks half-mockingly. Instead of the high life befitting her celebrity status, she and her partner have to settle for a condo. She blames wealthy Chinese migrants and money-launderers working with greedy developers and incompetent politicians for having priced them out of the mansion.

The most telling but unstated point in her comment is that the “Vancouver housing crisis” (15) story means different things to different people. The homeless and the poor now have to share that narrative with those who feel they should be owning multi-million-dollar single-family houses in the city.

To support her argument, Ms Steele cites Simon Fraser University (SFU) urban planner Andy Yan’s 2015 “study” of 172 expensive homes in an affluent section of Vancouver’s west side. Mr Yan was given a set of selected data by Mr Eby (16), the NDP’s housing critic when it was in opposition. Suspiciously, 66% of those homes were bought by people with “non-Anglicized Chinese names.”

The study’s apparently pre-determined conclusion had the desired effect of igniting national outrage for the “evidence” it provided that new Chinese immigrants and their capital had taken over Vancouver’s housing market. Over time, reporters were citing that 66% figure (17) with no reference to the tiny sample size of 172 houses.

When Vancouver’s then mayor, Gregor Robertson, (18) criticized the study’s focus on race, he was rebuffed by influential journalists Douglas Todd (19) of the Vancouver Sun and Ian Young (20) of the South China Morning Post (SCMP). Mr Todd cited experts who said it is not racist to discuss the impact of global capital, regardless of their origin, on local housing cost. But he and the experts neglected to mention that the study’s flawed methodology, data selection, and small sample size had pre-determined the conclusion of home ownership by race. If they had wanted to prove the impact of global capital on Vancouver’s housing prices, the Eby-Yan study was not the smoking gun document.

In a bizarre twist, it was Mr Young who underscored the study’s racial tone (21) while trying to defend it from racism charges. In an interview with Maclean’s magazine, he said the study accomplished two things:

“It proves that those buyers are ethnically Chinese. I don’t think that’s disputable. If someone’s got a purely Chinese name, they’re ethnically Chinese.

“Secondly, I think to an almost irrefutable degree, it proves they have some form of Chinese as a language mother tongue.”

Mr Yan won over the popular opinion, and his study remains as influential as ever. In a mushy piece for Maclean’s magazine that included the usual allegations of Chinese complicity and stereotypes, author Terry Glavin (22) hailed Mr Yan as “the analyst who exposed Vancouver’s real estate disaster.” City planning expert Sandy James (23) recently praised the Eby-Yan study for proving that the arrival of “a significant group of people” had led to the “commodification of housing as a holding, not a place to live in.”

Judging from Mr Glavin’s coverage and Ms James’ comment, it still has not occurred to Canada’s talking heads that a survey sample of 172 houses taken from more than 42,000 Greater Vancouver homes (24) sold in 2015 is statistically meaningless. The survey should never have seen the light of day, much less evolve into an authoritative study of reference. Few have noted that Mr Eby had focused his data-collection effort on a small section of Vancouver’s west side noted for its high representation of ethnic Chinese residents. This methodology can also be applied to, say, parts of Surrey and Oak Street to show that people with “non-Anglicized Indian” and “non-Anglicized Jewish” names dominate certain neighbourhoods. What does it prove? Nothing, except that the methodology was likely racially motivated and its “finding” of a high rate of Chinese home ownership was rigged from the start.

With the mainstream media and academia failing to ask critical questions, it was left to a former politician living in eastern Canada to warn about the “Yellow Peril” racist nature of the inquiry.

“Eby’s guy (Andy Yan) looked at the names of the 172 buyers, screening them for ‘non-anglicized’ Chinese names, which is…racist,” said Garth Turner (25) in his November 2, 2015 blog piece.

“Of course just looking at names does not reveal if the buyers are Canadian citizens, landed immigrants, permanent residents or the children and spouses of people working abroad but investing here.”

If Ms Wu wants to know why, how or when the housing discussion turned racial, the Eby-Yan study of the 172 houses would be a key moment.

Part 2. The “Unimpeachables”: Josh Gordon and Ian Young
SFU academic Josh Gordon announced his entry into the debate in May 2016 with a sweeping declaration that “puts a lot of the blame for the housing crisis on foreign buyers, and buyers from China in particular.” He delivered this conclusion in a rudimentary paper (26) built largely on news clippings, the flawed Demographia survey (27), and his own arguments that money from China had made housing in Vancouver unaffordable for local wage earners.

The public policy specialist, who admits he is not a housing expert or an economist, dismisses the role of other factors in the region’s housing price surge of 2009 to 2018. He shows little interest in analysing domestic credit growth, the role of lending by banks or alternative mortgage providers, or the impact of Quantitative Easing in inflating asset prices in major cities around the world.

He supports taxes as a major solution to make housing affordable for two reasons: they discourage foreign investors from entering the province’s real estate market while raising revenues presumably for the government to build affordable homes for local residents. Ironically, 74% of BC residents (28) told a recent survey that the deluge of new taxes is adding to the region’s housing and living costs. At the same time, the taxes and new regulations are deterring investors, both local and foreign, from adding supply to meet the housing demand of the province’s growing population. Since the introduction of the foreign buyers tax in August 2016 followed by other anti-demand taxes and measures, Metro Vancouver remains mired in its housing affordability crisis. Meanwhile, the province’s tax revenues from housing transactions have taken a big hit with 2018 revenues plunging 24.2 percent to C$55.8 billion (29) from the previous year.

None of this fazes Mr Gordon who has doubled down on his “blame foreign capital” argument in his latest June 2019 paper (30) based on some limited data work by another analyst, the late Richard Wozny.

Jens von Bergmann, a founder of MountainMath, an independent Vancouver company which provides data analysis, has written a critique (31) of the data and methodology that Mr Gordon employs. He concluded his comment by calling Mr Gordon’s paper “a mess” and its thesis that foreign ownership is the main reason for Vancouver’s unaffordable housing as “irresponsible” (32). Mr Gordon has responded (33) with a lengthy rebuttal.

While both have raised valid points about data and methodology, their dispute risks becoming a narrow academic discussion for ignoring the bigger issue of Mr Gordon’s failure to investigate other factors behind the strength of Vancouver’s housing market. Mr Gordon said he has found a high correlation between rising home prices and foreign ownership. But as others have noted, correlation does not prove causation (34), which in this case means it is not conclusive that foreign ownership alone or largely caused the run-up in prices. For a high-volume, high-value market such as housing, a complex myriad of factors is in play, all at the same time.

The surge in Canada’s money supply — a basic building block in the understanding of modern economics — is glaringly not on his radar, as can be seen from his 2016 paper and subsequent public pronouncements. According to StatCan, Canada’s M2 money supply (35) measuring the total amount of cash, checking deposits and convertible near-term money in circulation doubled from less than $900 billion in 2009 to more than $1.7 trillion by mid-2019. Along with the world’s major economies, bank lending and money circulation in Canada exploded in the aftermath of the 2008/9 global financial crisis. This was the result of a concerted joint effort by the world’s leading governments and central banks to boost spending to prevent the global economy from collapsing under the weight of the US subprime crisis and its disastrously expensive wars in Iraq and Afghanistan. A large chunk of that new liquidity went into mortgage lending that ignited a global housing boom, Metro Vancouver included.

Mr Gordon also ignores the impact of the commodities boom on Canada’s resource-heavy economy. Crude oil prices surged to a record US$145 a barrel in 2008, and stayed above US$100 a barrel through early 2014. Other commodities also rose to record prices during this period. Some of that wealth generated in Alberta and Canada’s western provinces would have found their way into Metro Vancouver’s coveted real estate.

There is also a strong case for Mr Gordon to follow up on the Strategic Insights study that C$1 trillion in personal wealth is now being passed onto the next generation. If true, the “biggest inter-generational wealth transfer in Canadian history” (36) easily exceeds the impact of foreign money on the housing market. The Strategic Insights study looks just as, if not more, worthy of a closer examination than Mr Wozny’s data.

In recent years, Metro Vancouver has witnessed the emergence of a high-tech sector (37) and the liquefied natural gas industry (38) along with a booming tourism trade (39) that seem to have escaped Mr Gordon’s attention. The high-tech and LNG sectors are multi-billion-dollar industries that are creating high-paying quality jobs while tourism is labour intensive. All three are putting further pressure on housing demand in Metro Vancouver.

Mr Gordon will have to exhaustively study these factors and many more before he can make the unimpeachable conclusion that foreign capital is the main or sole culprit of the region’s expensive housing.

Perhaps the most intriguing aspect of the Gordon-von Bergmann duel lies not in the merit of their respective arguments, but the media’s coverage. Mr Gordon’s Wozny paper was given prominent coverage by the SCMP and ZeroHedge (40) and several local newspapers including the Vancouver Sun (41) Vancouver Courier (42), and StarVancouver (43) while Mr von Bergmann’s critical review was not mentioned at all (as of my writing this commentary).

Ian Young, the SCMP’s Vancouver correspondent, gave Mr Gordon’s study the biggest endorsement that included a quote describing its finding as “unimpeachable (44).” Mr Young’s unqualified support for the study — his story failed to include any opposing views — is consistent with his partisan position in the Vancouver housing debate. Since his arrival in Vancouver at the start of this decade, he has given plenty of coverage to misbehaving Chinese immigrants, their wealth, and its impact on the region’s housing market. Like Mr Gordon, he rarely discusses the other factors driving the housing market despite the SCMP’s pledge to provide balanced reporting according to the principles of “Truth and Fairness” (45).

Not content with his lengthy puff piece, Mr Young continued to actively market (46) the Gordon report on twitter at the same time attacking its critics which included a description of Mr von Bergmann’s critique (47) as “insane”.

But instead of inviting skepticism and derision from the public, the media’s lack of objectivity and impartiality has become the new norm in the housing debate.

This strikes at the core of Ms Wu’s lament that while “my family and I haven’t contributed to the skyrocketing prices…we’ve been lumped together with all Asian-looking people.”

The harsh reality is the Canadian public (48) is already convinced that foreign capital, especially Chinese, is the source of Metro Vancouver’s housing crisis. The public is not interested to continue with the discussion. The Chinese blamers have won.

Over the past year, this guilt-by-association trend for “Asian-looking people” has extended to their alleged involvement in widespread tax evasion by satellite families, casino money-laundering, and the opioids crisis.

As if these challenges weren’t enough, Chinese Canadians must contend with three emerging major trends that will subject the community to further suspicion.

Firstly, Chinese Canadians, despite their mostly negative sentiments towards Beijing, have the new burden of proving they are not China’s proxy (49). But not without basis, there are growing fears in Canada’s policy-making and security establishments that some immigrants of Chinese descent are potential conduits of influence and espionage for Beijing.

Secondly, the public’s conflation of Chinese with China is becoming a public relations nightmare for the community. These days, China’s global image is in free fall on account of human rights abuses in Xinjiang and Tibet, the riots in Hong Kong, and Beijing’s worsening ties with neighbouring countries and the West. Canada’s all-time low bilateral relations with China are still reeling from Huawei-related security issues and diplomatic disputes.

Thirdly, in line with the United States and Europe, anti-immigration xenophobia (50) and populism (51) are on the rise in Canada. Non-white immigrants will have to contend with increasing “go back to your country” sentiments, especially now that the US President (52) has made it all but officially acceptable. Chinese will be under pressure to prove their Canadianness.

Ms Wu may not have intended it, but her article speaks to the growing uncertainties for Chinese Canadians amid the challenges brought on by an increasingly aggressive China, and the emergence of a new and troubling strain of Sinophobia in Canada.


    July 4, 2019. Vancouver’s ‘Race Estate’ Market Has Hurt Many of Us
    July 3 2019. Canada Should Quit Grovelling and Push Back Against China. Cracking down on real estate money laundering and tax avoidance would help Canadians and send a message.
    July 10 2019: Vancouver council’s zero-sum game on rental housing is doing much harm
    May 1 2019. Douglas Todd: Why we need to stop subsidizing foreign ownership of Metro Vancouver housing
    June 18 2019. Canadian companies failed to pay billions of taxes owed, new CRA report reveals
    May 30 2019. CRA signs secret settlement with wealthy KPMG clients involved in offshore tax scheme
    May 9 2019. Billions in money laundering increased B.C. housing prices, expert panel finds
    May 26 2019. Money-laundering melodrama made for TV
    May 10 2019. ‘$5B dirty money in B.C. real estate’ guesstimate based on standard formula
    May 15, 2019Vancouver’s Dirty Money Figures: The Smoking Gun That Wasn’t
    November 5, 2018. The parallels between David Eby and Mackenzie King
    On David Eby’s trail of embedded bombshells about money laundering
    June 27, 2019. Lynda Steele: I own a condo in Vancouver and I’m a DINK
    November 11, 2018. The media crisis in Vancouver’s housing crisis: Demographia
    November 2, 2015. Mainland Chinese buyers account for 70 per cent of market. But what does that even mean?
    June 30, 2019. Ian Young: “66% of Westside housebuyers having Chinese full names (Yan 2015)”
    November 2, 2015. Vancouver foreign ownership research prompts cries of racism in hot housing market
    November 15 2015. Douglas Todd: There’s nothing racist about Metro Vancouver housing study
    November 6, 2015. Why ‘non-Anglicised Chinese names’ matter in Vancouver’s housing market: No, it’s not about race
    May 16 2016. Ian Young on Vancouver’s ‘freak show’ housing market
    February 14 2018. Andy Yan, the analyst who exposed Vancouver’s real estate disaster
    March 28 2019. Duke of Data Andy Yan Was Right All Along~Vancouver Housing Ownership
    December 2015. Metro Vancouver home sales set an all-time record in 2015
    November 2 2015. Yellow Peril

    PART 2
    May 2016 Vancouver’s Housing Affordability Crisis: Causes, Consequences and Solutions.
    October 8, 2015. Vancouver doesn’t have the world’s second most unaffordable housing: The art of selling a crisis
  28. June 3, 2019. Real estate affordability worsened by taxes and limited options, say B.C. residents
    December 2018. BC Home Sales Decline 25% in 2018
    Solving Wozny’s Puzzle: Foreign ownership and Vancouver’s “de-coupled” housing market
    June 25, 2019. How not to analyze the roots of the affordability crisis: Taking a closer look at Josh Gordon’s “solving Wozny’s Puzzle” working paper.
    June 29, 2019. Jens von Bergmann: “…claims that Josh’s arguments show that “foreign ownership” is the main reason for unaffordable housing in Vancouver are not “unimpeachable” but irresponsible.”
    July 10, 2019. All bark, no bite: A reply to Jens von Bergmann
    June 30, 2019. @notaYIMBY: “…correlation does not prove causation”
    StatCan. Chartered bank assets and liabilities and monetary aggregates
    January 30, 2018. Affluent Canadians are worried about wealth transfer
    September 25, 2018. Tech Salaries Continue to Rise in BC While Talent Shortages Persist
    May 27, 2019. Prosperity for all when B.C.’s LNG industry takes shape
    June 27, 2019. Vancouver Reports Another Record Year. Metro Vancouver attracts record 10.7 million overnight visitors in 2018.
    June 29, 2019. Vancouver Housing Unaffordability Due To Foreign Ownership, Chinese Funds, & Migrant Millionaires, Study Says
    July 4, 2019. The $22.5 billion drop: Figures show Vancouver real estate coming ‘back to reality,’ realtor says
    June 20 2019. Data paints ‘compelling’ picture of foreign money skewing Vancouver housing market
    June 19, 2019. Analysis shows foreign money fuelled Vancouver’s shockingly high real estate prices, says academic
    June 26 2019. Foreign ownership main culprit for unaffordable housing in Vancouver, a top destination for Chinese funds, ‘unimpeachable’ study says
    SCMP: “The importance of understanding the world from both sides of the story, which is key to truth and fairness.”
    June 29, 2019. “The name of Gordon’s report is “Solving Wozny’s Puzzle”.”
    June 27, 2019. Ian Young to Jens von Bergmann: “I just read your piece for a third time…what’s the word…insane?”
    June 27, 2019. Most blame foreigners for high home prices in Vancouver
    July 12, 2019. China, India could use communities in Canada to advance agendas, feds warned
    May 22, 2019. 37% in Ipsos poll say immigration is a ‘threat’ to white Canadians — what’s the threat?
    July 15, 2019. Canada’s Divisions Are Hardening
    July 14 2018. ‘Why Don’t They Go Back’: President Trump Tweets at Congresswomen of Color.