After I wrote this week’s post about Chinese homebuyers in Vancouver, I was surprised to learn about the racism debate that flared up in the city / on Twitter. I guess this really is a touchy subject. (See: #donthave1million)
My reaction to the research was: Great to see someone (Andy Yan) putting in the time to try and better understand a market phenomenon. It’s painful how opaque real estate markets can be. Let’s get even more data so that we can make even better policy decisions. I didn’t read it as: let’s deliberately single out a race.
Because the reality is that we all knew this was happening.
Bloomberg recently published an interesting and related article that talks about China’s money exodus and how the Chinese logistically get their money out of the country. There are restrictions in place.
But first, here are two snippets from Bloomberg that describe the order of magnitude we’re talking about:
This flood of cash is being felt around the world, driving up real estate prices in Sydney, New York, Hong Kong and Vancouver. The Chinese spent almost $30 billion on U.S. homes in the year ending last March, making them the biggest foreign buyers of real estate. Their average purchase price: about $832,000.
In total, UBS Group estimated that $324 billion moved out last year. While this year’s numbers aren’t yet in, during the three weeks in August after China devalued its currency, Goldman Sachs calculated that another $200 billion may have left.
Now here’s how it is being done:
It works like this: Chinese come to Hong Kong and open a bank account. Then they go to a money-change shop, which provides a mainland bank account number for the customer to make a domestic transfer from his or her account inside China. As soon as that transaction is confirmed, typically in just two hours, the Hong Kong money changer then transfers the equivalent in Hong Kong or U.S. dollars or any other foreign currency into the client’s Hong Kong account. Technically, no money crosses the border – both transactions are completed by domestic transfers.
And here’s a snippet that stood out for me because it shows how easy this has become:
While the first exchange has to be set up face-to-face, customers can place future orders via instant-messaging services such as WhatsApp or WeChat, and money changers set no limit on how much money they can move.
Given the scale and complexity of this issue – housing affordability – I have to believe that cities and policy makers would be far better off with more, rather than less, information. I hope we can work towards that.
I have a new favorite blog that I think you might all enjoy as well. It’s called BT | A | Works and it is the “architectural and urban research and development division” of Bing Thom Architects in Vancouver.
I think it’s it’s important to have people in a firm who are researching and experimenting with ideas beyond the day-to-day tasks of a job. So I was excited to discover their work this morning.
Their most recent post is a look at ownership patterns of single family homes sold in 3 west end neighborhoods in Vancouver from September 2014 to February 2015 (a 6 month period). These are some of the most expensive areas in the city and, collectively, they found 172 properties sold with an aggregate value of around $520 million.
Given the presence of foreign buyers in Vancouver’s real estate market, one of the things they then did was identify “non-anglicized Chinese names” on the title records. This means names like “Li Xian”, but not names like “Andrew Shui-Him Yan”, because the anglicized first name suggests that they are probably not a new immigrant or probably not living abroad.
Here’s what they found:
In total, 66% of the properties in the sample (172 properties) were associated with a non-anglicized Chinese name. And for properties over $5 million, the percentage jumps to 88%. The other interesting thing worth noting is that 23% of the registered owners declared their occupation as “homemaker/housewife.”
I thought this would serve as an interesting follow-up to the post I wrote about a month ago called, Is Hongcouver better off than Vancouver? If you’d like to see the full BT | A | Works presentation, click here.
We all know that city building is a multi-disciplinary endeavour. That’s why I was incredibly interested to learn about a new “Artist-in-Residence” program that Los Angeles is launching:
The Honorable Mayor Eric Garcetti, is pleased to announce the first collaboration between two City of Los Angeles departments to place an artist in residence in a department to serve as a Creative Catalyst who will develop creative intervention strategies to achieve department specific goals. The Creative Catalyst Artist in Residence Program will serve as a model to stimulate creative thinking and innovative projects, while supporting Mayor Eric Garcetti’s Back to Basics priority outcomes: to make our city livable / sustainable, prosperous, safe, and well-run.
Cities are complex organisms. And some of you might be wondering how artists can help city build. But this is about bringing different minds together, thinking across disciplines and, hopefully, leveraging design thinking to solve urban problems. And LA is not the only city to try this approach.
In my view, it’s not that dissimilar from the trend around “Designer-in-Residence” programs at venture capital firms and startup incubators. Cities, businesses, and many other organizations are recognizing that the way artists and designers think can be of tremendous value.
So if you’re an artist who lives and/or works in LA, this might be something worth considering. You have until this Friday, November 6th, 2015 to apply.