Finance committee  It's been my pleasure.

Finance committee  My view is that it's a bit of a dead end. What we've experienced in Vancouver is this: When we've allowed for additional density, the price of the unit has not gone down in conformance with the so-called law of supply and demand. What has happened is that the price of land goes up.

Finance committee  What happened in Vienna—of course, they had a number of decades to do it—was because of the strength of the non-market sector. This has had a mitigating effect on the market sector. You can get a market rental in Vienna for about half the price of an equivalent apartment in another major European city like Rome, Paris or wherever else.

Finance committee  My view is that we've tried it for 40 years in Vancouver. You know, a lot of people like me had a lot of faith in that position, but the empirical evidence contradicts the theory in this and many other cases. It's becoming much more evident that simply adding supply doesn't solve the problem.

Finance committee  We had a tremendous industry of non-market housing. There were thousands of units in Vancouver, for example. We were already on our way. If that hadn't been discontinued back in the nineties, Vancouver would probably already have about 30% non-market housing inventory in the form of co-ops, non-profit housing providers and so forth.

Finance committee  Yes, I do agree with that. That theory or fact goes back to Adam Smith, who said the same thing. He said that since land is not a productive factor of production with capital and labour—land is necessary but not productive—taxes should come essentially as much as possible from that source.

Finance committee  Well, globally, it looks like 2008. It seems that the recovery from 2008 after the real estate crash precipitated by the U.S. mortgage vehicles was the starting point. You get some ups and downs in various economies, but generally there has been this separation of the asset value of urban real estate versus the salaries of the people in those locations to manage those costs.

Finance committee  Basically, it's inequality. It's a 30-year trend globally, where the advantage has gone to, essentially, holders of capital or assets of one kind or another versus the people whose sustenance depends on their wages. There's been a huge separation. One major manifestation of that inequality separation between wage earners and holders of capital is this consequence.

Finance committee  I like to use the phrase “global capital”, because some of that capital is coming from within Canada and some of that capital is coming from outside. Generally, it's just the assessment about the worth of a particular investment opportunity, be it a condominium or a piece of land.

Finance committee  It appears that the driving factor is the global increase in the asset value of all assets, particularly urban land. Globally, urban land is the asset that is now up to 45% of total fixed asset value. This is the underappreciated fact of the day, in my view. The driver appears to be, first of all, inexpensive money, which became incredibly inexpensive during the COVID experience.

Finance committee  Sure. As I mentioned in my presentation, land is the problem. For example, in Vancouver, land is sold by the buildable foot. It's between about $600 and $800 per buildable foot, while construction is between $300 and $400 per buildable foot. The problem, really, in my view, has to do with land and the out-of-control price of land.

Finance committee  I'll conclude with that.

Finance committee  Thank you very much, and thank you for the invitation. For 30 years I've held a position at the University of British Columbia's School of Architecture and Landscape Architecture. During that time, my teaching, research and publications have been in the field of sustainable design.