The New Face of Vancouver’s Housing
A new type of housing has become popular in Vancouver, Canada in the last two to three years: camper vans and recreational vehicles (RVs). They are parked on industrial roads and the quiet streets around the city’s SkyTrain (rapid transit) stations. The residents of these camper vans are locals who have found themselves priced out of traditional housing.
While some of the city’s RV dwellers are pensioners, or people living on disability assistance, many are young and employed. Their full time wages are simply not enough to pay for housing in Vancouver.
According to Rentals.ca, a website that tracks the cost of renting in Canada, in May 2019 the average monthly cost of renting a one bedroom apartment in Vancouver was $1,826 CAD (about $1300 USD or 1200 Euros) while a two bedroom apartment rents for $2,915 ($2154 USD/1929 EUR). For single Vancouverites, this easily represents most of their monthly salary. A person living on a pension or disability assistance only receives about $1000 – if they are lucky.
Buying a home, on the other hand, has become an impossible dream. According to the Real Estate Board of Vancouver, in April 2019, the benchmark price for a detached home in the city was over $1 million CAD, and the benchmark price for an apartment is nearly $657,000 CAD. Most families in Vancouver earn $74,000 annually – not enough to get a mortgage large enough to be useful. For locals facing this reality, buying a second hand camper van for less than $5000 is a “no-brainer.”
How did living in Vancouver become so expensive that RVs are the only option for many locals? For years, developers’ mantras have been that a lack of housing supply is inflating prices. But a recent building boom has not lowered the cost of housing. Two independent reports commissioned by the province of British Columbia offer some troubling insight. Peter German, a former officer with the Royal Canadian Mounted Police (RCMP) and independent investigator hired by the province, did two separate investigations following the money moving through Vancouver. His reports revealed money laundering is happening on a massive scale through local casinos, the real estate market, and luxury goods dealers.
Weak anti-money laundering laws, and even weaker enforcement of those laws, allowed anywhere between $84 billion CAD and $212 billion CAD to be laundered in Vancouver casinos in the past 20 years. German estimated that about $5 billion were laundered through real estate in 2018 alone, and that figure was a conservative number after studying only one set of housing sales for that year.
How could this much money be washed without anyone noticing? Canada’s financial intelligence unit, FinTrac, was only created in 2000 and the local real estate market seems almost designed to help clean dirty money. Lawyers are not required to report suspicious transactions. Real estate agents either do not know or do not bother to comply with anti-money laundering rules, and there is no one to enforce compliance.
Unlike many other jurisdictions, in British Columbia, property can be purchased through blind trusts, holding companies, or even nominee owners in Canada – and there is no legal requirement to disclose the identity of the actual owner of a property. Even if a transaction is reported, German’s reports found there is not one single RCMP officer assigned to deal with money laundering in B.C., and there are no provincial resources dedicated to fighting the problem.
Local developers still insist that more supply is needed. But it was taxes on foreign ownership and speculation that caused the first, small, drop in prices. The noticeable market drop happened only after German’s second report – linking money laundering to real estate – was released in May 2019.