Vancouver being transformed by new wave of beligerant and noisy rich Chinese looking for a safe place to ‘park their cash’
Brian Hutchinson | December 12, 2014 8:29 PM ET
More from Brian Hutchinson | @hutchwriter
More from Brian Hutchinson | @hutchwriter
Wayne Leidenfrost/Postmedia News/FileVancouver-based urban planner and demographer, Andy Yan: "There are now rich people around the word who are looking for places where they can park some of their cash and feel safe about it. ...We're one of the places.”
VANCOUVER — Chelsea Jiang is young, beautiful and smart. An ethnic Chinese woman living the high life in Vancouver, she’s more than willing to display her wealth. This qualifies her to star on a local reality show that’s attracting millions of viewers at home and abroad, especially in China.
Subtle, it is not. Presented in snappy 12-to 15-minute segments, Ultra Rich Asian Girls puts a lens on Ms. Jiang and three female contemporaries, as they swan about their adopted city.
Chelsea JiangChelsea Jiang of Ultra Rich Asian Girls
A recent episode saw them leave Vancouver for a sumptuous island cottage owned by one of the women’s family. The four women feasted on B.C. crab and argued over what to look for in a potential husband. Forget handsome but poor, declared Ms. Jiang. “Ugly rich guys can use their wealth to get plastic surgery and become handsome,” she said. “Hot and rich.”
Whatever one thinks of its message — reaction has been mixed — Ultra Rich Asian Girls represents a growing segment of Vancouver’s population: Ultra Rich Asian People who aren’t afraid to flaunt it.
While the show can be accused of celebrating vacuity and lifestyles, it also taps into a frustration creeping into the local discourse and showing up in other ways over the impact that mainland Chinese money is having on the region’s economy and culture.
It’s a touchy subject, one most policy-shapers would rather avoid for fear of being called insensitive. With its position on the Pacific Rim, B.C. has long depended on Asian investment and immigration. Chinese money brings numerous benefits, supporting local businesses and helping create employment.
But there are striking differences between previous waves of Asian settlers, including Hong Kong immigrants who arrived in Vancouver just prior to their former British colony’s 1997 handover to Communist China, and today’s brash newcomers, especially those who bring with them significant sums of cash.
Between 2005 and 2012, according to Statistics Canada, 37,000 Chinese millionaires arrived in B.C. as permanent residents under the now-defunct Immigrant Investor Program (IIP), a federal initiative that invited wealthy immigrants fast entry into Canada in exchange for low-interest loans to provincial governments.
Affluent Chinese students, entrepreneurs, land speculators, retirees, the so-called “rich second generation” of mainland Chinese and astronaut families — mothers and children living in Vancouver, with fathers working in China — are also transforming the region. Their capital is welcome, but there are social and economic costs absorbed by the larger community, and stirrings of resentment.
‘They’re also intelligent and ambitious, and they want to make a positive contribution here in Canada’
In Richmond, a fast-growing Vancouver suburb that is now 41% Chinese-speaking, Chinese-only advertisements are found at shopping centres, on bus shelters, and outside real estate offices and residential construction sites. This sometimes stirs protest and petitions for draconian sign language bylaws.
One out-going Richmond councillor said last month that voting down the latest proposed ban was a mistake. New councillor Alexa Loo declared that while she embraces “inclusivity,” the Chinese-only signs in Richmond are, in her view, “ridiculous.”
At the University of British Columbia, the province’s largest post-secondary institution, students worry about precious resources being directed to a new college under construction on their campus. Vantage College is meant for the exclusive use of 1,000 international students who can afford its $50,000 annual tuition and accommodation fees.
There are already 19,100 students from China enrolled in B.C. universities, more than the number of foreign students from the United States, Korea, Japan and India combined, according to provincial government statistics.
Richard Lam/Postmedia NewsOne city councillor called Chinese-only signs in Richmond, B.C. “ridiculous.”
The majority of foreign university students attending UBC are from China. “It really is a big worry that they’re not going to be fully integrated and they’re going to be separate,” UBC Alma Mater Society vice-president Anne Kessler told the CBC, reacting to concerns around the new Vantage College.
But the most direct and widely felt impact is related to the local real estate market. Vancouver has the world’s second-highest housing prices relative to local incomes, trailing only Hong Kong, according to annual surveys conducted by Demographia, a U.S.-based consultancy.
Demographia’s 2014 survey showed the median house price in Vancouver is $670,000, the highest in Canada, while the median household income is just $65,000. That’s among the lowest of all major Canadian cities.
A slightly different income measurement, compiled by Statistics Canada last year and expressed as median family income, puts Vancouver near the bottom of a list of 27 Canadian cities, behind Calgary, Ottawa, St. John’s, Quebec City and Toronto.
Politicians understand there’s an affordability crisis in Vancouver but most are loath to discuss the role of foreign capital, particularly from China.
This bewilders and frustrates Ian Young, a reporter with Hong Kong’s South China Morning Post newspaper. Mr. Young, who is ethnically Chinese, moved to Vancouver five years ago, and writes frequently about the local housing market and the impact that mainland Chinese money has on the city.
“It’s accepted, widely understood that mainland Chinese money is a driving force behind the Vancouver property market,” says Mr. Young. “There’s a reluctance to discuss it” outside of Chinese communities, he says, because people are afraid that if they do, they’ll be branded as “racist.”
While there are no formal measurements of citizenship and property ownership in the province, there is building anecdotal evidence that suggests Chinese home buyers are indeed helping drive up the average price of local real estate. They have the money to pay for the most exclusive properties, they like the region, and they can deal with local realtors who speak their language and who share their culture.
Vancouver real estate agent Sarina Han knows the $25-million residential property she has listed on the city’s expensive Westside will eventually go to a Chinese buyer, who will then tear down the existing, ramshackle dwelling and build a mansion. Because that’s what happens in this city. “I sold a lot on the next street, and they are building 30,000-square-feet on it,” Ms. Han told the National Post this summer. “Most of my clients are investors from mainland China. And their friends who visit — they also want to buy.”
John Morstad for National PostThis derelict house on 1.2 acres of land with a view of Burrard Inlet on Vancouver's westside was recently listed for $25.8-million.
Examples like that are common, notes Mr. Young. He often cites a Landcor Data Corp. analysis of homes sold in the Westside. It revealed that in 2010, of 164 homes in the area that sold for more than $3-million, 74% were purchased by buyers whose names were “mainland Chinese spelling variants and who did not have any Western legal name.”
Mr. Young says the federal government’s now-defunct immigrant investor program turned Vancouver into an “epicentre of wealth migration.” There was a massive backlog of IIP applicants before the program was cancelled early this year, he notes, and the vast majority came from mainland China. While Ottawa did not provide a specific reason why it cancelled the IIP this year, there have been longstanding concerns that it did not bring sufficient economic benefits to Canada. Some claim that on the contrary, it was used as a passport-purchase opportunity.
With the post-1997 reintegration of Hong Kong into mainland China, many successful IIP participants have now returned to Hong Kong, where they live with Chinese and Canadian dual citizenship. There are now an estimated 300,000 Canadians living inside the Hong Kong Special Administrative Region.
“One can actually think of Hong Kong as the third-largest municipality in Vancouver,” says Andy Yan, a Vancouver-based urban planner and demographer.
‘We’re one of the places where people seem to want to park their cash, and there aren’t many of those places’
Born and raised in Vancouver, Mr. Yan works with Bing Thom, a prominent architecture with projects around the world. He is notable in his own right, for his unique and controversial opinions about the impacts of foreign investment in this city and its suburbs, and on real estate prices especially.
There are good reasons foreign investors are attracted to B.C.’s lower mainland, says Mr. Yan. Compared to other Asia-Pacific markets, Vancouver is very secure — politically, geographically, economically. It has nice neighbourhoods, excellent public schools and a mild climate; there are myriad reasons why Vancouver, unaffordable as it is, has for many years been ranked in the world’s top-five “most livable” cities.
Mr. Yan has another term for it. Vancouver is now an important “hedge city,” he says, where investment risk is low, and where capital can arrive safely and be withdrawn quickly.
“What hedge cities offer is social and political stability, and, in the case of Vancouver, it also offers long-term protection against climate change,” Mr. Yan told The New Yorkermagazine in May.
“There are now rich people around the word who are looking for places where they can park some of their cash and feel safe about it. …We’re one of the places where people seem to want to park their cash, and there aren’t many of those places,” he says.
Others have jumped onto the Vancouver-as-hedge-city bandwagon. “Vancouver lacks the cultural cachet of Paris or Milan,” PwC Canada and the Urban Land Institute noted in a joint report on real estate trends, released in November. “But it does offer comfort and stability — and a place for the world’s super-rich to park sizeable funds in local real estate as a hedge against risk.”
“Foreign buyers — the vast majority of whom are from mainland China or Hong Kong — are, of course, one of the key reasons Vancouver real estate prices continue to rise,” the report concluded.
Mr. Yan notes the impacts on local housing markets, in neighbourhoods where single-family houses predominate and in newer condominium clusters. In one affluent downtown Vancouver neighbourhood, he found, 25% of purchased condominiums appear to be vacant. The debate continues whether these empty homes are really “Plan B” geo-political hedge investments, and, if they are, whether this presents a problem.
High house prices hurt people without the funds to enter the market as buyers, even as renters, but they can potentially benefit existing homeowners and their inheritors. And the city is happy to collect property taxes paid by homeowners, regardless of their citizenship, or whether they live abroad.
Ben Nelms for National PostKevin Li, creator of the Ultra Rich Asian Girls series.
Vancouver is to some degree a victim of its own success, a conundrum it must somehow learn to cope with. That isn’t lost on Kevin Li, creator of the Ultra Rich Asian Girls youtube series. Born into a lower-income, “old school” Chinese family on the city’s east side, Mr. Li, 37, is documenting the growth of a much different culture.
While he says he isn’t completely at ease with rich Asians flaunting their wealth, he’s willing to exploit it. His four star characters are wealthy, even ostentatious; that’s the show’s main premise. “But they’re also intelligent and ambitious, and they want to make a positive contribution here in Canada,” says Mr. Li.
All four women speak English and Mandarin. They interact easily — but not predominantly — with people from other cultures. Ms. Jiang was born in Ottawa and spent her grade school years in Beijing. She says that like her co-stars, she identifies most closely with the Chinese culture.
She’s a good role model for people watching back in China, suggests Mr. Li. She’s informing millions of mainlanders about Vancouver, a modern Golden Mountain, where the new wave can have everything.
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