Housing Myth: The Housing Crisis is Caused by Foreign Capital

In this Housing Myth series the Vancouver Tenants Union digs into prevailing social, cultural, and economic myths about housing. Join us and see just how flimsy these capitalist-derived myths really are.

Myth: The Housing Crisis is Caused by Foreign Capital

The myth that foreign buyers (often, specifically Chinese buyers) are one of the main causes of the housing crisis here in North America is pervasive in our news media. Take a look at a local or national news site for an article on the housing bubble and you're very likely to see foreign buyers mentioned as a driver of high property values. The assertion that foreign, not domestic capital is a main driver of housing prices relies on specific, prevalent, western-supremacist preconceptions about investment in the housing market. An examination of the evidence demonstrates clearly that foreign buyers do not have an outsized influence on the price of homes or the shortage of housing here.

As long as houses are part of a system of private production, they will be exploited for money. It doesn’t matter whether a developer, a real estate corporation, or a single-building landlord is from Canada or not. All these separate sub-categories of land owner engage in speculation in the same exploitative, capitalist system that we as renters are subject to. This is nothing new: Vancouver itself was founded on private real estate speculation (1). Domestic capital is equally as culpable for the housing crisis, as evidenced by mass displacements during neighbourhood 'revivals', the destruction of SROs and other nominally affordable housing after both Expo 86 and the 2010 Olympics, and the razing of Hogan's Alley. In fact, reports show that as of 2019, foreign capital only accounts for roughly 8% of total home ownership in Vancouver (2,3). We should not allow quibbling about percentages to define our argument, though.

The most critical point to return to in our struggle as tenants against landlords is this: The citizenship of your landlord doesn’t matter, a boot is a boot. Efforts by certain elements within the liberal democratic states of the west to curb foreign capital have been unsuccessful because capitalism rewards speculators regardless of citizenship. If you're a renter, it doesn't really matter where your landlord and their money comes from, it's their ownership over your means of survival that matters. That's the relationship that your struggle is defined by, and the relationship that drives what we often perceive as a crisis but is really part of an ongoing effort by real estate capitalists to repossess as much of our wages as possible through rents. It's class war!

You are no doubt familiar with the oft-repeated idea that if we could eliminate foreign ownership in our country, the housing crisis would evaporate. Reactionary, nationalistic arguments like this one - ever present in our settler colonial state - frame our social struggles as conflicts between nationalities rather than between classes, and in doing so benefit the ruling class directly by pitting different facets of the working class (foreign-born vs domestic labourers, different racialized groups, etc.) against each other, making organizing against those in power more difficult. In pointing this out we must also note that national identities and nationalism are not inherently reactionary (take for example the struggles of Black nationalism or Indigenous nationalism in the colonized world), but they are so when based on settler colonial national identities such as Canadian or USian.

A final, critical point is necessary: Canada's history of anti-Asian racism has been both consistent and prevalent - and in Vancouver specifically - racialized immigrants are often scapegoated. A significant component of the local discourse around "foreign" money in the housing market is directly connected with that local history, and particularly with anti-Chinese sentiments among white people. (4) We cannot forget this critical point when discussing "foreign capital" as tenants.

The foreign capital argument is ultimately a reactionary, nationalist argument, closely connected with the long history of anti-Asian racism in Vancouver. As long as housing is part of a system of private production, it will be exploited for profit. It doesn’t matter whether developers or landlords are from Canada or not, it is the class relationship of renter/landlord that is the key to understanding our struggle as tenants. The foreign capital myth works to benefit the ruling class by distracting us from taking collective action and pitting neighbours of different nationalities against each other.

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References & Recommended Reading

  1. Land of Destiny: A History of Vancouver Real Estate
  2. Canada Mortgage and Housing Corporation. “New Insights on Non-resident Ownership and Participation in BC, ON and NS Housing Markets”
  3. Housing report offers new insights into B.C.'s non-resident home ownership (Vancouver Sun)
  4. White Supremacy and the Foreign Investment Debate (Mainlander)