The reason that the government started moving on foreign investment in BC initially back with the taxes in 2015 was that it was so dominant that it was changing the types of housing that was being built.
Companies such as Westbank were making projects like Oakridge, Alberni, Butterfly, Canada House with condo units specifically designed as pied-a-terres, marketed with storefront showrooms in major cities across Asia.
Even setting aside the whole issue of prices, when the actual product being made, the thing that is drawing huge amounts of local labour for years, is not designed with the needs of locals in mind (ie. tiny hotel-like pied-a-terre) that is a huge long term problem.
As soon as the tax was brought in pretty much overnight Westbank dumped this business model and started building purpose built rental for a local renter market. As things should be.
Well I think the main reason is that it annoyed the populace that felt they were now having trouble buying a place due to all this foreign competition, and politicians need to serve the populace, not foreign investors.
But the real problem is that building housing is a physical process that takes time and limited manpower. If we're devoting our trades to building empty condos for rich people, then they are not spending their time building housing for regular local workers. That means there is less supply of regular housing, increased scarcity and rising rents and prices. Unhappy local workers.
There's no simple matter of just training more trades because that takes time and effort too, so when you think about all this in an environment of rapidly rising prices where we need a solution NOW not later, it makes a lot of sense to destroy foreign investor demand at a stroke of a pen and effectively force local development companies to focus their product once again on a local buyer.
There is 100% some xenophobia and nimbyism at the margins and those sort of people latching on to "foreign buyers!!" fears to advance their motives, but I do think there was underlying real problems and 100% not-xenophobic, wonky economist policy people in the government were concerned about real outcomes.
With this new Fed ban I'm not so sure what the data that is driving it is, maybe it is just politics with this one, but I do feel confident that with the earlier Foreign Buyer Tax brought in in BC there was real data and troubling trends to support the notion.
Companies such as Westbank were making projects like Oakridge, Alberni, Butterfly, Canada House with condo units specifically designed as pied-a-terres, marketed with storefront showrooms in major cities across Asia.
Even setting aside the whole issue of prices, when the actual product being made, the thing that is drawing huge amounts of local labour for years, is not designed with the needs of locals in mind (ie. tiny hotel-like pied-a-terre) that is a huge long term problem.
As soon as the tax was brought in pretty much overnight Westbank dumped this business model and started building purpose built rental for a local renter market. As things should be.