Giving Ian Gillespie tax dollars to fix the housing crisis would be like giving a fentanyl dealer public money to buy naloxone kits to sell back to his clients

Right Honourable Justin Trudeau,
Office of the Prime Minister
80 Wellington Street
Ottawa, ON K1A 0A2

Dear Prime Minister,

Please don’t hand over $14B of our tax dollars to Westbank’s Ian Gillespie

I’m dismayed and distressed to hear that the Government of Canada is considering handing $14 billion in taxpayer dollars to real estate developer Ian Gillespie and his company Westbank to build “affordable housing” through an outfit called Creative Housing. Giving Ian Gillespie tax dollars to fix the housing crisis would be like giving a fentanyl dealer public money to buy naloxone kits to sell back to his clients.

I urge you not to pour a supertanker load of salt in the deep wounds Mr. Gillespie has inflicted on Vancouverites by even giving a penny of our hard earned tax money to him.

If you’ve forgotten what Mr. Gillespie, your friend and fundraiser, has done to earn the dubious distinction as being an architect of the housing crisis, let me jog your memory:

  1. Westbank pitches Vancouver’s hot real estate market to buyers in China with the “Vancouver’s becoming a safety deposit box for the global rich!” as the selling point. “In recent years, the boom in Vancouver’s properties has attracted the global rich,” Westbank’s tells the world. “It took only two years for Vancouver’s housing prices to double.”1)Original: http://www.westbankcorp.cn/media/141.html Archive:http://archive.is/jdxTy
  2. Westbank has openly declared that it only cares about building for the Chinese market. “ But right now I have a rule when we talk about projects if the Chinese market doesn’t want it, I have no interest in it.” Westbank’s Director of Marketing Michael Braun said on the Westbank website2)Original: http://westbankcorp.com/michael-braun archive: http://archive.is/cwqJ8.
  3. Mr. Gillespie provides an “asset management” programme for absentee owners of his condominium projects, where property managers perform such tasks as running water through the taps and regularly switching on appliances should an apartment lie vacant for an extended period.3)http://www.scmp.com/property/international/article/1534655/vancouver-developer-targets-worlds-wealthy-his-52-storey
  4. Westbank sponsored a Yacht gala in China even as a judge ordered Mr. Gillespie’s other company to pay $200,000 in unpaid bills to a local contractor4)http://www.courts.gov.bc.ca/jdb-txt/sc/18/06/2018BCSC0600.htm.
  5. Mr. Gillespie himself doesn’t offer any apologies for the sky high prices of his condos. “I don’t set the prices. It is what the market will bear,” Gillespie told reporters5)https://www.thestar.com/business/2007/02/10/king_of_highprice_condos_coming_to_town.html.

Instead of rewarding Mr. Gillespie for fueling the housing crisis, I implore you to take all action necessary to stop him and other like him from doing further devastating lives and livelihoods of Vancouverites. You have the duty, as the leader of our nation, to stop Mr. Gillespie from turning Vancouver into a grotesque caricature of his deformed phallic symbols: glistening on the outside, empty on the inside.

Thank you,

Rohana Rezel

References   [ + ]

1. Original: http://www.westbankcorp.cn/media/141.html Archive:http://archive.is/jdxTy
2. Original: http://westbankcorp.com/michael-braun archive: http://archive.is/cwqJ8
3. http://www.scmp.com/property/international/article/1534655/vancouver-developer-targets-worlds-wealthy-his-52-storey
4. http://www.courts.gov.bc.ca/jdb-txt/sc/18/06/2018BCSC0600.htm
5. https://www.thestar.com/business/2007/02/10/king_of_highprice_condos_coming_to_town.html

Automated Short Term Rental Accommodation Licence Integrity Checking System (ASTRALICS)

Problem

City of Vancouver recently regulated Airbnb and other short term rentals. Hosts are required to obtain a licence from the city and platforms are required to deactivate hosts without a valid licence. Recent news reports indicate that hosts have been getting away with fake numbers as there’s currently no mechanism for platforms to validate licence number.

Solution

Automated Short Term Rental Accommodation Licence Integrity Checking System (ASTRALICS ) is a proposed application programming interface (API) intended for City of Vancouver to publish, which Airbnb can use to validate licence numbers.

  1. Upon a host entering the licence number, Airbnb sends licence number, street number, street name, and unit number (in the case of strata units) to ASTRALICS.
  2. ASTRALICS checks the City of Vancouver licence database to see if an entry matching the request data exists in the system.
  3. If an entry is found, ASTRALICS responds with “valid”. Airbnb will accept the licence number
  4. If an entry is not found, ASTRALICS responds with “invalid”. Airbnb will reject the licence number.

Implementation

I have created a fully functional ASTRALICS prototype as 65-line Azure function in Java. It can be easily ported to other languages.

Demonstration

I have created an example licence database as follows:

 

LICENCENUMBER STREETNAME STREETNUMBER UNITNUMBER
555-1000 Robertson Street 2002
555-1001 Gregor Drive 1001 111

If you access ASTRALICS API with a valid licence number, as in the request below, you will get “valid” as the response.

https://astralics.azurewebsites.net/api/validate?licencenumber=555-1001&streetnumber=1001&streetname=Gregor%20Drive&unitnumber=111

If you access ASTRALICS API with a invalid licence, as in the request below, you will get “invalid” as the response.

https://astralics.azurewebsites.net/api/validate?licencenumber=12345&streetnumber=2002&streetname=Robertson%20Street

Source Code

package ca.rezel.astralics;

import java.sql.*;
import java.util.*;
import com.microsoft.azure.serverless.functions.annotation.*;
import com.microsoft.azure.serverless.functions.*;

/**
 * Automated Short Term Rental Accommodation Licence Integrity Checking System (ASTRALICS).
 * Author: Rohana Rezel
 * Licence: MIT Licence
 */

public class Function {
    @FunctionName("validate")
    public HttpResponseMessage<String> hello(
            @HttpTrigger(name = "req", methods = {"get"}, authLevel = AuthorizationLevel.ANONYMOUS) HttpRequestMessage<Optional<String>> request,
            final ExecutionContext context) {
        context.getLogger().info("Java HTTP trigger processed a request.");

        String licenceNumber = request.getQueryParameters().get("licencenumber");
        String unitNumber = request.getQueryParameters().get("unitnumber");
        String streetNumber = request.getQueryParameters().get("streetnumber");
        String streetName = request.getQueryParameters().get("streetname");
        HttpResponseMessage<String> returnValue = request.createResponse(500, "Server error");
        if (licenceNumber==null || streetNumber == null || streetName == null) {
            return request.createResponse(400, "licencenumber, streetnumber and streetname are required");
        } else {
            Connection connection;
            try {
                String url = "jdbc:sqlserver:YOUR_CONNECTION_STRING_HERE";
                connection = DriverManager.getConnection(url);

                String selectSql = "SELECT * from Licence WHERE licenceNumber=? AND streetNumber=? AND streetName=?";
                if (unitNumber != null) {
                    selectSql += " AND unitNumber=?";
                }

                try {
                    PreparedStatement statement = connection.prepareStatement(selectSql);
                    statement.setString(1, licenceNumber);
                    statement.setString(2, streetNumber);
                    statement.setString(3, streetName);
                    if (unitNumber != null) {
                        statement.setString(4, unitNumber);
                    }
                    ResultSet resultSet = statement.executeQuery();
                    if (resultSet.next()) {
                        returnValue = request.createResponse(200, "valid");
                    } else {
                        returnValue = request.createResponse(200, "invalid");
                    }
                    connection.close();
                } catch (Exception e) {
                    e.printStackTrace();
                }
            } catch (Exception e) {
                e.printStackTrace();
            }
        }
        return returnValue;
    }
}

City of Vancouver MOU lets Airbnb off the hook

Vancouver Mayor Gregor Robertson announced last week with much fanfare that the City of Vancouver has signed a memorandum of understanding with Airbnb to help the city crackdown on illegal short term rentals.

I got a hold of the full text of the MOU1)https://drive.google.com/file/d/1fhQagqnZxXHX2DGmAysApgO5xYN0OSaa/view?usp=sharing through a Freedom of Information request. Buried inside the five pages of text is a clause indemnifying Airbnb from prosecution for the what people do on the platform.

1.7 Airbnb shall not be held responsible under any provision of the City’s License By-law No. 4450 for information provided by the Host, which may be incomplete or inaccurate. Airbnb shall not be held responsible for any infraction, violation or non-compliance by Hosts under any provision of the City’s Zoning By-law No. 3575.

It gets even worse. By signing the MOU, the city has agreed that Airbnb is under no obligation to remove offending listings.

1.11 The City is responsible for verifying the correctness and validity of STRA Licence numbers and exemptions posted by Hosts, and seeking enforcement against Hosts under its by-laws, Airbnb will not be responsible for removing from its platform any listings that have incorrect registration numbers or are otherwise invalid. Similarly, the City may pursue enforcement action against Hosts that have otherwise violated provisions of any City bylaws. Airbnb shall not be responsible for removing listings from its platform that belong to such Hosts that have violated provisions of City bylaws.

At a time when other cities are fining Airbnb upto a million dollars per infraction2)https://www.telegraph.co.uk/news/2016/11/24/barcelona-fine-airbnb-homeaway600000-offering-illegal-accommodation/, Mayor Robertson and the City’s General Manager of Licensing Kaye Krishna are letting Airbnb off the hook for any violations, and voluntarily giving up the power to force Airbnb to take any meaningful action.

Once again, Robertson and Krishna have betrayed the citizens of Vancouver by putting the interests of a predatory multinational corporation over those of the city’s residents.

Shame on you, Mr. Robertson. Shame on your, Ms. Krishna. Instead of trying to solve the housing crisis, you’ve just poured a tanker-load of fuel on it by crippling the city’s power to regulate short term rentals.

References   [ + ]

1. https://drive.google.com/file/d/1fhQagqnZxXHX2DGmAysApgO5xYN0OSaa/view?usp=sharing
2. https://www.telegraph.co.uk/news/2016/11/24/barcelona-fine-airbnb-homeaway600000-offering-illegal-accommodation/

No, Dr. Tansey, CMHC report never claimed that “the effect of foreign investors is small compared to other factors”

Yesterday, I demonstrated1)UBC report blaming red tape for housing crisis is based on lobby group report containing demonstrably false numbers that the report3)Growing Pains: Density, economic growth, sustainability and wellbeing in Metro Vancouver by Dr. James Tansey of UBC Sauder School of Business blaming red tape instead of foreign speculators has used a demonstrably false report as basis for estimating the impact of government regulations on housing prices.

Today we look at the second half of Dr. Tansey’s claim, i.e., that foreign buyers are having little impact on housing prices.

Here’s Dr. Tansey’s exact claim:

The CMHC study cited above, which is the most authoritative to date demonstrates that the effect of foreign investors is small compared to other factors.

The CMHC study Dr. Tansey is referring to is the report from earlier May 2018 titled *Examining Escalating House Prices in Large Canadian Metropolitan Centres*2)Examining Escalating House Prices in Large Canadian Metropolitan Centres .

Here’s what the report actually says about foreign buyers (emphasis mine):

A persistent challenge in understanding demand for housing in Canada is the extent of foreign investment. We have supported Statistics Canada in their efforts to bring better data to bear on this question while filling short-term data gaps ourselves. Ontario and British Columbia have also started collecting data on the flow of foreign investment. It remains difficult to quantify the impact of foreign investment, however. The comprehensive data released by Statistics Canada in late 2017 suggest that non-residents account for 3.4 per cent of residential properties in Toronto, and 4.9 per cent in Vancouver. Non-resident owners, however, tend to own proportionately more condominium apartments than singledetached housing. As discussed below, however, prices of single-detached housing have increased proportionately more than those of condominium apartments.

While official data on the stock and flow of foreign investment appear low, it is possible that upsurges of foreign investment at market peaks could alter expectations of domestic homebuyers on the price they should pay for housing, and encourage domestic speculators. Our new Homebuyers Motivation Survey shows that 52 per cent of the buyers who purchased a home recently in Toronto and Vancouver believed that foreign buyers were having an influence on home prices in those centres. Actions taken by the Provinces to curtail foreign investment could therefore have been timely to reduce excessive short-term spikes in house prices.

Dr. Tansey is being intellectually dishonest by claiming that the CMHC study ”demonstrates that the effect of foreign investors is small compared to other factors.” CMHC report admits that it’s difficult to gauge the impact, and suggests that even if the foreign buyer numbers are low, foreign buyers could be punching above their weight by altering the expectations of local buyers. CMHC even concludes that the BC’s and Ontario’s foreign buyer tax may have been a timely measure to cool down housing prices.

References   [ + ]

UBC report blaming red tape for housing crisis is based on lobby group report containing demonstrably false numbers

Dr. James Tansey of UBC Sauder School of Business has just published a study blaming red tape, and not foreign buyers, for Vancouver’s housing affordability crisis1)Growing Pains: Density, economic growth, sustainability and wellbeing in Metro Vancouver. Given that a recent “study” by Prof. Andrey Pavlov of SFU Beedie School of Business turned out to be a inaccurate, I decided to take a closer look at Dr. Tansey’s work.

Here’s Dr. Tansey’s central conclusion (page 3):

The effect of regulation and zoning constraints in the housings sector is six times larger than the effect of speculators, according to [sic] and the largest group of property investors who by[sic] to rent is actually older domestic owners who are seeking financial returns in a low interest rate environment.

It’s not entirely clearly immediately whom Dr. Tansey is citing as the source for the claim that red tape is the main reason for the housing crisis. The answer is found on page 16:

A more detailed bottom-up analysis by property and tax experts Burgess Cawley Sullivan suggested that taxes and development fees represent $220,256 to the cost of an $840,000 apartment and $337,582 of the cost of a $1.4m three bedroom apartment.

As the citation for the “more detailed bottom-up analysis by property and tax experts Burgess Cawley Sullivan,” Dr. Tansey has provided a link to a single-page “report” published by the development industry lobby group Urban Development Institute2)GOVERNMENT ADDICTION TO TAXING REAL ESTATE titled GOVERNMENT ADDICTION TO TAXING REAL ESTATE.

That’s two red flags in one: A single-page “study” with a biased title with no citations whatsoever published by a lobby group. Dr. Tansey would not risk his academic reputation on such a flimsy document, so, I thought that surely he must have thoroughly vetted the “study” for its veracity.

The UDI study purports to depict the breakdown of taxes and other government fees associated with a “Typical Cambie Corridor Assembly Project”. The authors state that the the Community Amenity Contribution(CAC) is $115 per square foot of buildable area of net additional density. They don’t cite a sources for this figure, and, it soon becomes apparent why.

The City of Vancouver published3)COMMUNITY AMENITYCONTRIBUTIONS – THROUGH REZONINGS exactly how much the CAC is for the Cambie Corridor. It is $68.18 per square foot.

In sum, the central conclusion in Dr. Tansey’s study is based on a single-page “study” with a biased title with no citations whatsoever published by a lobby group that uses made up numbers. In the words of Carl Sagan “Extraordinary claims require extraordinary evidence”. Dr. Tansey’s extraordinary claim is backed by demonstrably false evidence. We can safely conclude Dr. Tansey’s study is nothing but junk science.

Update

A kind reader has pointed out to me that there’s another glaring error in the UDI “study”. Empty Homes Tax applies to neither “property undergoing redevelopment” nor “under review for redevelopment of vacant land.”4)Will your home be taxed?

References   [ + ]