For our special 50th anniversary issue, Canada’s brightest, boldest, and most rebellious thinkers, doers, and creators share their best big ideas. Through ideas macro and micro, radical and everyday, we present 50 essays, think pieces, and calls to action. Picture: plans for sustainable food systems, radical legislation, revolutionary health care, a greener planet, Indigenous self-government, vibrant cities, safe spaces, peaceful collaboration, and more—we encouraged our writers to dream big, to hope, and to courageously share their ideas and wish lists for our collective better future. Here’s to another 50 years!

If you’re a This Magazine reader, you almost surely have an opinion about gentrification—that either it’s good or bad. Otherwise known as neighbourhood renewal, gentrification has come to dominate the discourse around modern urban development. And no wonder. When coupled with the hockey stick-shaped inflation in the housing market, gentrification has made urban living increasingly less affordable for those who don’t command six-figure salaries. These are the same people who do all the essential work that allows cities to function: teachers, nurses, personal support workers, public servants.

The issue I want to raise is how municipalities can become more proactive about the ripple effects of this rapidly accelerating process. Namely, I want to ask: Why should municipal officials go out of their way—as often seems to be the case—to improve neighbourhoods experiencing gentrification? Why don’t they instead pursue a form of negative planning—becoming incrementally less responsive to homeowner concerns, or promoting development projects that conflict with the quality of life in up-and-coming neighbourhoods? Why don’t local governments deliberately seek to make these areas less desirable as an antidote to run-away real estate prices?

Stay with me here. As someone who has been writing about municipal affairs for more than 20 years, I’m keenly aware my foregoing questions are more rhetorical thought experiment than workable policy proposal. But I still think it’s worth pulling this thread if only to explore how the cycles of gentrification, real estate speculation, and municipal re-investment reinforce and amplify one another—thus accelerating the interlinked affordability and housing crises that afflict big cities. The privileging of gentrification is baked into certain types of municipal policies—for example, the cash-for-density-bonus mechanisms, such as Ontario’s Section 37/45 rules. Under them, municipalities allow developers to add density in exchange for money invested in local improvements—new or improved parks, art spaces, public art, daycare spaces, etc. (Other jurisdictions have similar versions of these policies.)

The ostensible justification is that such funds are invested in public amenities that become necessary due to the incremental population growth that comes with increased density. The reality, however, is quite different.

In Toronto, for example, hundreds of millions of dollars in Section 37/45 funds, paid by high-rise condo developers, land in neighbourhoods experiencing intensification. But intensification is often a manifestation of desirability: developers build in sought-after areas that are already seeing an influx of capital and discretionary spending. The residents of these same neighbourhoods then receive additional benefits, in the form of new amenities, which, in turn, make their homes even more desirable, thus attracting other developers. In short, the financial benefits from these developer contributions accrues—in the form of higher property values—to the residents in these communities. It all gets very circular.

I’d argue that for cities facing skyrocketing housing prices (including rents), the only justified use of such funds in gentrifying neighbourhoods is the creation of new affordable housing. I am surprised to find myself agreeing with former Toronto councillor Doug Ford (brother of the late mayor Rob) who argued during the 2014 mayoral race that the millions collected from downtown developers should be spent to improve public amenities citywide, including less affluent communities that see little in the way of new development activity, and thus receive virtually no Section 37/45 money.

The point is that municipalities can, in fact, choose to impose a measure of control over the pace of gentrification and the intensity of the real estate speculation that accompanies it—one that could buttress the resiliency and sustainability of the entire city. A mindful approach would recognize that officially enabled gentrification will eventually become a self-consuming force that produces lovely neighbourhoods in which almost no one will be able to afford to live.

Ottawa's South March Highlands at sunset. Photo courtesy Ottawa's Great Forest.

Imagine a major Canadian city fortunate enough to have both an old-growth forest and wetlands, rich in biodiversity and rare habitats, covering an area almost three times larger than Vancouver’s Stanley Park. Now picture chunks of it bulldozed for subdivisions and a highway. Unthinkable? Welcome to Ottawa’s South March Highlands, an estimated 1,100 hectares of ecologically significant land, home to hundreds of species—almost 20 at risk of extinction—and believed to be the site of ancient Aboriginal artifacts. But only 40 percent of it is protected by the city as conservation land—and developers are moving in.

“It’s one of the most biodiverse areas in Canada,” says Ottawa resident and environmentalist Paul Renaud, “and it’s 15 minutes from the centre of the nation’s capital.” Perhaps that’s why, in 1981, when developer Campeau Corp. purchased 550 hectares there, it agreed to keep 40 percent as “open space”—a contingency that carried over to subsequent landowners. But this open space isn’t exclusively environmentally significant land, as the area’s biodiversity wasn’t fully understood at the time of the purchase. Meanwhile, developers have capitalized on the agreement’s consent to build sports fields, storm management areas and an 18-hole golf course.

Several new residential subdivisions in the South March Highlands are currently planned or under construction. There’s the 269-hectare Kanata Lakes development being built by KNL Developments, a partnership of Ottawa builders Urbandale and Richcraft. There’s also the 84-hectare Richardson Ridge subdivision planned by the Ottawa-based Regional Group of Companies. Clearcutting of the popular Beaver Pond Forest began in January as part of KNL’s hotly contested plan to build 3,200 homes in the area. In 2009 the city approved an extension of Terry Fox Drive, a major arterial road that will bisect conservation land.

Unsurprisingly, local environmental groups and residents, including Renaud, have rallied against the area’s destruction. In early 2010 they formed the Coalition to Protect the South March Highlands. It has thousands of members locally and nationally, and Sierra Club Canada, the David Suzuki Foundation, and the Algonquin First Nations have joined the cause. “We need to do a better job of protecting the rights of indigenous people and the natural environment,” says Renaud. “It’s not too late to do the right thing.”

In the meantime, development continues to move forward. In December 2010, city council gave up an attempt to acquire 29 hectares of the Beaver Pond Forest from KNL, citing lack of funds and failure to agree with KNL on the land’s price. “The city can put new conditions on [KNL’s subdivision approval] if we have reason to do so,” says city councillor Marianne Wilkinson. “But if we try to do it, they can appeal it to the Ontario Municipal Board.” That’s one battle council wants to avoid. UPDATE: clearcutting of the Beaver Pond development site KNL Developments began in late January. The Coalition to Protect the South March Highlands says it is “not backing down” and encourages supporters to call city councillors and the Ottawa mayors’ office.

Residents have asked the provincial and federal governments—who hold responsibility for species at risk, areas of significant biodiversity, and the capital region greenbelt—to step in. Without the political will to protect the wilderness, the South March Highlands may become a case of not knowing what we’ve got until it’s gone.

The problem with the official budget is that it excludes Olympics-related infrastructure costs, like the Sea-to-Sky Highway, despite the fact that the Games are the only reason that money’s being spent.

If we include infrastructure and other Olympics-related costs, the total bill for the 2010 Vancouver Olympics is at least $9.2 billion—although no one will know the final bill, realistically, until the games are long past. VANOC intends to recoup some of their costs selling off the Athlete’s Village after the Games end—but the recession and subsequent tanking of Vancouver’s real estate market makes that plan increasingly dubious.

Here’s our independent tally of the real cost of Vancouver 2010:

Christopher Shaw. Photo by Flickr user The Blackbird. Used with permission.

Christopher Shaw’s day job is professor of ophthalmology at the University of British Columbia, but since Vancouver launched its bid for the Olympics more and more of his time has been spent campaigning against the Games—first as the founder of No Games 2010 and now as lead spokesperson for 2010 Watch. Shaw’s book, Five Ring Circus: Myths and Realities of the Olympic Games, argues that those responsible for bringing the Olympics to town are those with the greatest financial stake in it: the developers and realtors who profit from the Olympic infrastructure. Far from being about sports, Shaw claims that the true pillars of the Olympic Games are dodgy real estate deals, huge profits for a select few, and a really big bill for everybody else once the Games have left town.

This: You just came back from the torch ceremony. How did that go?

Shaw: From my perspective, I thought it was pretty lame but then I’m pretty jaded. For me, it’s sort of offensive on top of everything else that you have what can only be described as a Nazi propaganda tool being run through the streets as if it’s brotherhood and friendship and kittens and puppies and rainbows. Commentators weren’t recognizing it. They were saying the torch goes back to Ancient Greece, but it doesn’t; it goes back to Germany in 1936. They invented the torch as a propaganda tool and, ironically, ran it through many of the countries they were later to invade.

This: How did you first come to oppose the Olympic Games?

Shaw: I first came to be an opponent back in 2002. I had heard that Vancouver was being shortlisted and when I saw people lining up in favour of the bid, that instantly made me suspicious, because when you see the ostensible political left and right joining forces it’s either something really good or something else is going on. I thought, “Maybe this demands a little more scrutiny.” I did a commentary for the CBC thinking that would be my one shot to say, “It’s not financially what you think it is.” Then it just blossomed, and when Vancouver was shortlisted and turned in their bid book, I began to devote more scrutiny to the whole thing and started No Games 2010, which, once the Games had been awarded, defaulted into a watchdog role.

This: What is 2010 Watch’s goal?

Shaw: The best we can achieve is making the running of the Games very painful with the purpose of drawing attention to things that need to be addressed, like poverty and homelessness, and educate other cities so that if they are thinking of going down this path they have the information, which we did not. The other thing is that we hope through our lawsuit to strengthen the charter. The municipal and provincial laws against ambush marketing are violations of our charter freedom of speech, and we hope to strike them down.

This: Tell me more about that lawsuit.

Shaw: The city passed an Olympic and Paralympic signage bylaw in July, and the province has recently — in a bill before the legislature called Bill 13—expanded the powers of Vancouver, Whistler, and Richmond to enforce an anti-marketing bylaw. The city of Vancouver maintains in their bylaw that you cannot go into so-called celebratory zones with a sign that has a stick on it, because presumably it could be used as a weapon. You can’t pass out leaflets, you can’t have a voice amplification device. You can’t demonstrate, in other words.

This: Part of your book is about the people who were responsible for bringing the Games to Vancouver, and their own financial stake in that outcome. Who was involved with the initial bid?

Shaw: The initial bid was mostly realtors, and then they handed off the Bid Society to [real estate developer] Jack Poole’s Bid Corporation, which was stuffed with developers, realtors, and a few athletes for cosmetic reasons.

This: Who is getting rich from the Vancouver Games?

Shaw: Well, the developers do, and certainly the high-end hotel sector does okay. Anybody near a celebratory zone as well; it’s all the people outside those zones who are getting the shaft. People won’t be able to get to them, they won’t be able to get their deliveries, traffic will be massively disrupted. If you’re a small restaurant away from the main area, you’re going to find it hard to continue your business.

This: Will the government injecting money into these big development projects have a trickle-down effect on the rest of the economy though?

Shaw: That’s the theory; it just turns out not to be true. In a number of Games it’s like an Obama stimulus project: if you throw in enough money you’ll get this runoff effect. And to some extent that’s true—but not with the kind of things they end up building. For example, if they said, “We have $6 billion we don’t know what to do with, so we’ll build hospitals and schools,” they generate outcomes everyone uses and permanent jobs. But building a luge run just doesn’t do that, or any of the special sporting facilities. It does during the building of it, but then it ends. All the construction projects are done now so it’s demonstrably both here, and in London, not a long-term economic stimulus.

This: Who are the biggest losers in the Games?

Shaw: You and me, and our kids and our grandkids. This is going to be the Big Owe: we’re going to be paying this for 30 years. The Olympic adventure has cost Vancouver a considerable amount of money, and some of it will never come back. The operating budget is a $60-million deficit, and there’s no way the city can keep the 250 units [of the Athlete’s Village] that were going to be social housing. They have to sell them. Basically, the province is paying for Vancouver’s party.

This: One number that’s still unknown is the security cost. What’s the current estimate?

Shaw: The current number is $900 million. I suspect that’s a vast underestimate, but the problem is we’ll never know because they routinely hide the number. The newest trick with security things at the federal level is to walk it into the privy council and all of a sudden it gets stamps with a 30-year exclusion, and getting to the bottom of that is going to be a problem. The province is equally squirrelly. I just requested some email communications between [B.C. Finance Minister] Colin Hansen and Annette Antoniak, the former secretariat to the Olympic Games for the province, and much of it is censored or excluded based on half a dozen exclusivity loopholes in legislation. So $900 million would probably be a low-end estimate. The last three Games were well over a billion. Athens was $1.5 billion. London, who knows?

This: And where’s the money coming from?

Shaw: Well, from three levels. Of course city taxpayers for policing. The rest of it falls supposedly on the provincial and federal government. That’s probably true for things like the RCMP, although the province is still pretending $175 million is correct, which it’s not.

This: There are some things that are odd about the Games’ organizing body, the International Olympic Committee (IOC), such as not paying taxes. How do they swing that?

Shaw: They swing it because they make it part of the contract with the city that they have to be exempt from any kind of taxes in the country where the Games are held. They somehow managed to convince the Swiss government that they are a nonprofit organization, and nonprofits don’t pay taxes. Also, nonprofits don’t get audited, so the IOC sails through life with no one looking over their shoulder. They are a law unto themselves. The IOC also dictates whether categories of people can exercise their equality rights. The IOC does not have ski jumping for women, and a number of woman ski jumpers sued the Vancouver Organizing Committee (VANOC) saying that, because of the Charter, if you’re putting on a ski jumping event for men, there has to be one for women. VANOC claimed they were unable to do anything about it because they were a subsidiary of the IOC, and the IOC could dictate how the events were going to occur. The judge said that it may be true that this is unequal, but that there was nothing he could do. That was a ruling that essentially weakened the Charter.

This: Another issue is the Native land claims. Is Native land being co-opted for the Games?

Shaw: Native land has been co-opted for the Games. First Nations hosts did not have anywhere near consensus. In St’at’imc areas definitely most people were against it and the band leadership went ahead anyway, and money changed hands that went to the leadership. Then of course there are the co-opted Aboriginal symbols and culture: it’s convenient to use Indigenous cultures for cute things like mascots, without doing anything about the problems of those societies, because tourists think the Natives are cute and fuzzy. We can have them dance for tourists, but God forbid we get them decent job prospects or get their kids into decent schools or recognize their sovereign claims. There are a lot of words about how inclusive the Games are meant to be, but the reality is very thin.

This: Do you think that despite all the expense and scandal the Games are still valuable as a celebration of sporting excellence?

Shaw: The Olympics are ostensibly about competition at the highest level, better understanding among people, and the world coming together to play beach volleyball. To some extent I’m sure that’s true, but I don’t think it’s unique. When I go to neuroscience conferences I sit down and chat with people from all over the world. I don’t think the Olympics is the only way countries get together, and the Olympic Truce is nonsense. A few months back someone asked [Olympics CEO] John Furlong to ask if the Canadian government would seek a truce with the Taliban during the Games and Furlong said it wasn’t his business, and the government wouldn’t even think about it.

This: Are we seeing the same patterns for the London Games as in Vancouver?

Shaw: Yes, absolutely everything’s the same. The cost overruns may be even worse, the security costs, the massive deceit about what’s going to happen. They are already cannibalizing money from arts and culture to pay for cost overruns. Security is going to be a nightmare because they’ve chosen for the Athletes’ Village location an immigrant population, and it’s going to be surrounded by a lot of these people. So they’ve parked it in an area they’re terrified of.

This: What is the Olympics going to mean for homeless people in Vancouver?

Shaw: I think they’ll be pushed further and further out of the downtown core. They will be continue to be marginalized and a lot of them will find it very hard to move around and live their lives during the Games because police are going to be shuffling them around. I think impacts will be huge and governments at all levels will say, “We’d love to help but we are now in deficit,” without actually blaming it on the Olympics. Any future solution will be pushed further down the line, and I think people in the streets in 2009 will be on the streets in 2012, and it’ll all be traced back to governments claiming they can’t afford to do anything. I think that will be the legacy for them.

This: Do you think the Games are salvageable? Is there a way to rein them in and make them the simple sporting festival they used to be?

Shaw: Yeah, there is. Get the IOC out of the picture and put it in the hands of the athletes, and have the athletes negotiate with communities. Or park it in one place and don’t move it. If it came back to the same city that had paid for the infrastructure and absorbed the cost it might actually make some money. But that would fly in the face of the real purpose, which is to generate money for the IOC. Why would they give up this golden goose? I’m also not all that sure that the Olympics hasn’t gone past its best-before date. I’m not sure any kind of mega-events, given global warming and given the costs, are even reasonable anymore. Someone said recently that Rio in 2016 might be one of the last Games. They’re going to bankrupt their city, they’re facing ferocious problems in their slums, and it might finally be the message that it’s just not doable anymore.

[This article originally said Chris Shaw was an assistant professor at UBC. He is, in fact, a full professor. We regret the error.]

Wal-Mart: paving paradise and putting up parking lots since 1962.

In Salmon Arm, B.C., there’s been a long-standing fight over plans to build an enormous shopping centre directly on the floodplain of the Salmon River. Last fall, the city voted not to allow mall developer SmartCentres to build big box stores on this ecologically sensitive tract of land. Well, now we receive a report that a few days ago, SmartCentres started building anyway.

Warren Bell writes:

In essence, a giant developer (SmartCentres, based in Vaughan, ON, if you want to look them up) wants to build a giant Walmart-anchored shopping centre on a giant parking lot planned for the middle of the floodplain of the Salmon River, which enters Shuswap Lake within the boundaries of Salmon Arm, and supplies most of the water to the Salmon Arm of Shuswap Lake (which has 4 arms, like a giant chromosome), from which the town draws most of its water. The floodplain/wetland complex filters and cleans the water. And yes, there are several species of salmon slowly returning to the Salmon River, after nearly 20 years of local volunteer restoration work.

Last fall, SmartCentres came at this project, and were defeated narrowly by a vote of City Council. Now they’re back with a vengeance. Two days ago [on Friday, September 4], without waiting for government approval, they began dumping fill all over the floodplain.

I’m president of a small group of local citizens, called WA:TER (Wetland Alliance: The Ecological Response) leading a resistance movement against this proposal — not against development, but against development there. We’re struggling along in more or less “David and Goliath” mode, and now have our backs to the wall, because the developer is moving ahead before Dept of Fisheries and Oceans has said they can.

You know the story: wreck the ecosystem, pay the fine (the “cost of doing business”), and carry on building.

Warren Bell
Past Founding President, Canadian Association of Physicians for the Environment
President, WA:TER (Wetland Alliance: The Ecological Response)

If this story weren’t so sad, it would almost be funny—it features so many clichés of real-estate development hell: the Wal-Mart rolls into town, dumps landfill all over a fragile wetland, and paves the whole thing with a parking lot. The only thing they’re missing here is a moustache to twirl while cackling in the shadows.

I’ve got a call in with SmartCentres to confirm that construction has started. I’ll update this post with their response if and when I hear back.

[Original creative-commons photo by Jadel Menard]

House prices: what goes up, must come down? Illustration by Graham F. Scott.

So much for that buyer’s market. After it appeared that the balance of power in the real estate relationship had finally swung back to the buyer after almost a decade in the seller’s favour, home prices in most major markets in Canada have resumed their seemingly inexorable climb. According to the Canadian Real Estate Association, almost 150,000 sales of houses and condominiums were registered during the April-May-June period, the fourth-best quarter on record since the organization began collecting data in 1994. These near-record sales aren’t being driven by low prices, either, as the cost of the average home in Canada is at an all-time high of $318,700, higher than the record set in 2008 before the subprime mortgage crisis in the United States triggered a global recession that has resulted in hundreds of thousands of lost jobs and billions of dollars in government spending aimed at resuscitating a global economy in full cardiac arrest.

This doesn’t make any sense. How can a housing market rise in the face of an economic crisis that has pushed unemployment to near-record levels, forced provincial and federal governments to run massive budgetary deficits, and raised the possibility of deflation? Why are people investing huge sums of money in an asset class that, just a few miles to the south, is in the midst of a three-year freefall that has no obvious end in sight?

Free money is a powerful enticement to irrational behaviour, though, and the banks have been doling it out for months now, empowered by record-low interest rates and the tacit support of the federal government. In the midst of last fall’s crisis, Canada’s banking industry enjoyed a brief moment of near-respect, as its comparatively restrained approach to lending was contrasted against that of the United States, whose policy appeared to be, in the words of Rolling Stone writer Matt Taibi, “writing mortgages on the backs of napkins to cocktail waitresses and ex-cons carrying five bucks and a Snickers bar.”

Yet even that hallowed Canadian restraint appears to have all but vanished in the current economic climate. Stories abound of young couples with combined incomes barely higher than that of a Toronto garbage worker getting approved for zero-down loans of six or seven-times their annual paycheques. But to twist an old riddle, if a loan is pre-approved but it isn’t used to buy a $700,000 tear-down, does it even exist? As Japanese bankers learned in the 1990s during that country’s “lost decade,” banks can approve all the risky, half-cocked loans that the want, but they still need the home buyers to sign off on them. The reckless abandon with which Canadian banks are approving loans these days isn’t the reason why Canadians continue to dive head first into the increasingly shallow end of the Canadian real-estate market. It might get them onto the pool deck, but what’s making them take the leap is the relationship that most of them have with the idea of home ownership, one that has all the characteristics of a classic Ponzi scheme.

With the collapse of Bernie Madoff’s empire and the bizarre spectacle of Montreal fraudster Earl Jones, Ponzi schemes have been all over the news in recent months, and while the real estate market isn’t a Ponzi scheme per se, it does bear some striking similarities. Where traditional Ponzi schemes depend upon a relationship of trust created by a charismatic personality, Canadians have instead invested that trust in their homes and the identity associated with owning them. For example, the position of homeowner, once not much different than that of “blender owner,” has become an exalted one in our culture, while the owned home has evolved from a building with a bed into an unambiguous marker of success and status. The quest for home ownership has become so universal, and so feverishly pursued, that one almost expects “Peace, order, and granite countertops” to be installed as Canada’s new guiding principle.

As with other Ponzi schemes, the relationship between Canadians and home ownership is about making money, preferably of the easy variety. To that end, the most seductive enticement that the scheme’s practitioners provide prospective clients with is the notion that renting constitutes “throwing away” money. Nearly as attractive is the idea that the value of real estate rises inexorably—an idea that its recent recovery in the face of a vicious global recession appears to validate.

As with every Ponzi scheme, the investors are in up to their eyeballs, as Canadians have on average more than 80% of their wealth tied up in their homes. This is a dangerously high figure for any asset class, but as with every Ponzi scheme that risk is supposedly mitigated by a guarantee of safe and steady returns. But like all Ponzi schemes, the promise of a risk-free investment that delivers easy and exorbitant returns is a carefully constructed fiction. Its architects, that familiar combination of politicians, bankers, and industry operatives, have worked hard to transform a rational choice into a universal aspiration. With governments creating various incentives and programs that encourage ownership, the banks providing the easy credit, and the industry spokespeople relentlessly spinning the facts and figures—ones that they usually create and distribute themselves—they have managed to make home ownership look like a leap that only a self-destructive idiot wouldn’t take.

The disdain with which the home ownership narrative and those who push it reserve for those who refuse to conform to its values reveals the depths and dangers of the deception that is at its core. In our ownership-addled culture, those who rent by choice are regarded in the same way as a self-identified communist might have been 25 years ago: an eccentric figure whose views would be subject to ridicule if they weren’t so obviously ridiculous.

Yet, as former MP turned author and real estate blogger Garth Turner points out, “the financial goal is not to have a giant house making people think you’re wealthy,” but instead to be wealthy, and owning a home frequently interferes with that objective. Renting, for example, is often a prudent economic choice. Prospective buyers who have bought the industry line that renting is an unjustifiable waste of resources rarely stop to consider the money that they “throw away” on the costs associated with owning a home. They overlook the interest payments they make to their bank on their mortgage, which on the overleveraged, lowest-payment-possible loan that has become so popular these days often exceed the value of the home itself. That’s not all, either, as there are the thousands of dollars that home owners must spend each year on property taxes, insurance, condo fees, and regular maintenance, costs of home ownership that routinely get overlooked by over-anxious buyers.

Those tidy rent vs. own calculations that banks and real estate agents use to sell potential buyers on the myth that renting constitutes an unnecessary waste also neglect to mention that owners will be lucky to see fifty cents on every dollar they invest in renovations when it comes time to sell their home, or that they’ll have to set aside 4 percent from the proceeds of their sale to pay their real estate fees. Moreover, only the savviest buyer remembers to include the opportunity cost of having their money tied up in real estate in their calculations rather than invested in the market. In the absence of a significant down payment—25 per cent, at a minimum—the monthly cost of owning a home can be double or more that of renting one.

The notion that their homes will increase in value in perpetuity is equally flawed. As anybody who survived the housing crashes of the early 1980s and 1990s remembers, to say nothing of the debacle that continues to unfold in real-time in the United States, real-estate can go down, and when it does the ride is rarely a smooth one. Meanwhile, even in the best of conditions, real estate can be a dubious financial proposition. Despite the remarkable run-up in prices over the last decade in Canada’s hottest market, if you bought a home in 1992, at the tail end of the last significant correction, UBC’s Centre for Urban Economics and Real Estate’s calculations [PDF link] indicate that you would have only seen the inflation-adjusted value of your home rise by an annual rate of 5.3 percent, barely better than the return you might see on a GIC. There’s a reason why people used to routinely refer to houses as “money pits.”

Given that it has yet to collapse in on itself in the face of a recession that has bankrupted the domestic automobile industry, put hundreds of thousands of people out of work, and forced governments around the world to intervene in the economy in ways that we haven’t seen since the 1930s, it’s fair to wonder if the real estate market has managed to transcend the laws of logic and reason and will rise forever, divorced from trivial concerns like jobs, affordability, or even plain old common sense. Yet as Bernie Madoff demonstrated, even the most elaborate and well-supported Ponzi schemes are ultimately destined to fail. Their collapse is a matter of when, not if, and although Canadian home owners have the banks, the government, and an entire industry of consultants, brokers, and agents working to maintain the illusion in which they are all so heavily invested, their time will come. As with all Ponzi schemes, when that time does come it will be those who bought into the lie most earnestly who will suffer the most. The central bankers, the slick developers, or the elected officials who abet them will escape with no more than a few superficial scratches, while the young couple that just recently signed a zero-down mortgage at 2.5 per cent on a $500,000 house and will have to spend the rest of their thirties eating Kraft Dinner and enjoying romantic nights out at the public library when interest rates naturally rebound to more normal levels, their monthly payments balloon, and their dream home becomes a liability. For them and the thousands of other Canadians who are undercapitalized, overleveraged, or otherwise unsuited for the challenges of home ownership, the vaunted dream of real estate will become a nightmare from which they cannot escape.

The good news, if there is any in all this, is that the eventual collapse of the Canadian real estate Ponzi scheme may return the market to a more natural point of equilibrium. With it, the kind of near-insane behaviour associated with real estate transactions that have become commonplace might again begin to look as crazy as they truly are. People might stop engaging in ludicrous bidding wars for clapboard tear downs in Leslieville and East Vancouver, or spending half a million dollars on a condominium that is barely bigger than a bus shelter and is located in a neighbourhood with more crack houses than coffee shops. If we’re truly lucky, we might even get back to a point where people buy homes because they can afford them, not because they feel they can’t afford not to. We have a long way to go to get there, though, and the ride down isn’t going to be much fun for any of us.

It started as the sound of rustling underbrush behind the heavily wooded Salt Spring Island hillside where I live. It’s not a deer, I thought. It’s not a cougar. Way too noisy. It must be people. Now it’s highly unusual, you understand, to hear people in this neck of the woods. There are miles of uninhabited bush behind our cabin; I refer to it as supernatural nowhere BC. If Walden had a bush, this would be it.

Salt Spring Island, British Columbia, located 35 minutes by ferry from Vancouver Island and three hours from Vancouver, has a population of 10,000 people spread out among 182 square kilometres of lakes and woods with most of the population concentrated near the bustling town of Ganges. The South End, where I live with my sweetie and son, is far from Ganges and “the last of lawless Salt Spring,” as a friend of mine puts it. For me it symbolizes what west coast life ultimately represents: freedom, a chance to live off the grid as I have done all my adult life, grow vegetables in a Mediterranean climate—and now, continue to do so with my family and create a home.

So when I looked out from the cabin we have rented for three years and saw two men in bright orange work vests pounding stakes into the ground, I was surprised to say the least. A “rich American” had bought the property adjoining our place, one explained, sight unseen, online. These surveyors had been hired to drive a stake into the ground every five feet across five acres of land to mark Mr. Cyber-American’s property line.

The next day I came back, ripped out every single stake and chopped it up for kindling. I left the ones painted white and pounded them deep into mother earth with my sledge.

Salt Spring Island was originally claimed as Coast Salish territory, and still is. Property lines have no place here—it’s all stolen land. No, really. First Nations here never signed treaties surrendering land. Any pacts the natives signed were friendship pacts. To the colonizers they were legally binding documents, and often land deeds.

At the top of Cyber-American’s place is a midden, a garbage dump of bones and shells indicating habitation by First Nations. The Cowichan people have been coming here for more than 5,000 years, collecting oysters and clams, harvesting plants and hunting wildlife. In the 19th century, African Americans came to Salt Spring escaping slavery, and a little later Hawaiians travelled here as shipmates with the Hudson Bay Company and decided to stay. Now I’m adding to the midden heap.

During the early years of transition, nobody questioned citizenship. Even today what does it really matter—we’re all global citizens right? But to understand here, you have to live here in relationship to the land and its people, develop an understanding of its ecology and the effect it has on you. It’s what makes us so damn weird out west. We love the land. A case of nimbyism? Hardly. I don’t own this backyard.

So, yes, ripping out those stakes was incredibly therapeutic. It also, I discovered later, placed me within an intriguing subset of public opinion. It’s the subject of Environics cofounder and social scientist Michael Adams’s Fire and Ice: The United States, Canada and the Myth of Converging Values (Penguin Canada). Canadians are actually becoming ever more different than Americans. The book is based on interviews with 14,000 Canadians and Americans over a 10-year period and two years’ worth of analysis of trends in more than 100 key indicators of social and cultural values.

Nowhere are these differences more apparent than in British Columbia. Of 16 North American geographic regions, British Columbia is the least driven with consumerism, and the most interested in life’s nonmaterial rewards. The United States, Adams points out, is “lacking in ecological values,” which indicates a detachment from the land. Ecological fatalism is up in the US, he adds, while empathy for your neighbour is way down.

“The whole island is being bought by Americans,” the surveyor working on the property next door—a longtime Salt Spring resident—points out. He should know, they are employing him. Finding out the numbers to support such a comment, however, is a lot more difficult. As of January 1, new provisions in the Privacy Act make it impossible to find out the nationalities of landowners in Canada.

But after talking to a number of real estate agents, one gets a pretty good idea about who is buying property—not only on Salt Spring Island, but on the rest of the Gulf Islands and Vancouver Island as well. One Salt Spring realtor told me that one-third of all waterfront property on Salt Spring is owned by Americans, and there are areas of Salt Spring that are 50 percent American-owned.

On neighbouring Mayne Island, one sale out of 40 went to an American three years ago. Over the past year, one in five properties that sold went to an American. On Salt Spring Island, the buyers are the big-money kind. Goldie Hawn, Al Pacino and Robin Williams own places but don’t live in them. People who don’t have to think twice about the price of a home are driving up land prices. In the past three years housing prices on Salt Spring have increased by half.

There are three types of US real estate refugees: those who immigrate here and gain citizenship, those who seek citizenship but are denied it, and those who simply want real estate holdings here. It is the latter that make up the bulk of purchasers here. “They disapprove of American foreign policy and the current Bush administration, they fear that in America they will be under terrorist attack and they want to have Canada as a safe place to retreat to in the event of such an attack,” says Jan MacPherson, another Salt Spring realtor.

A few days before the border-stake incident, I saw a Humvee with Oregon license plates at the recycling depot. So I was in a certain frame of mind, let’s say, when I chopped up the stakes. While considering my feelings and discussing them with friends, an intriguing bumper sticker started showing up on vans, island beaters, road signs and hydro poles: “USA Out of Iraq and The Gulf Islands.” Apparently I wasn’t alone in my thoughts.

To be fair, the American migration is part of a larger trend of gentrification on the islands. In the 1960s and ‘70s, young people moved here searching for a simpler way of life. The hippie dream was alive and well and the growing conditions for marijuana perfect for a down payment. Today, back-to-the-land has been replaced by back-to-the-bland, comfortable middle-aged city-dwellers investing in country property (preferably on the waterfront) where they can develop estates for weekends and holiday retreats. Here it isn’t often a case of trying to live off the land; more often it’s living off stock options in an expensive second home with a hobby garden and an electric fence.

“I’d like to see an economy where people who are investing their lives here have the opportunity to buy property,” says Ellen Garvie, a community development consultant. Garvie suggests that back to nature at $500-per-square-foot properties such as the one built by Randy Bachman of BTO and the Guess Who (which reportedly employed 400 people) are not sustainable. The effect of
the value of the house outweighs the short-term employment opportunities it provides. And the people who work on the house won’t be able to afford to buy property here.

The island has a zero vacancy rate for renters, and as Garvie notes (and I have experienced) there’s a shocking decrepitude to places available for rent. The last place we rented was 400 square feet, with no tub, for $750 a month and the landlord and his barking dog Bubba adding to the midden pile outside our door.

In the 1996 federal census, 17 percent of locals reported earning gross personal incomes below the federal low-income cut-off level of $14,473 for a single person and $27,235 for a four-person household. Almost half the households on Salt Spring enjoy an income of less than $30,000, with 30 percent of households surviving on less than $20,000. Can one experience “the good life” under such conditions?

To make sure the good life remains accessible to longtime residents, a few have gathered together to form the Salt Spring Island Coalition, whose goal is to develop an independent political entity—an Island State—to ensure a sustainable community. According to Eric Booth, who was born and raised on Salt Spring Island and has raised two children here, chances are that only one or two percent of the 100 children graduating from high school each year on Salt Spring today will be able to remain here and raise their own kids.

Booth, who worked as a real estate agent on the island for close to a decade, bases this statement on the fact that there are only 6,500 subdividable lots on Salt Spring Island, which can support a population of 15,000 to 18,000 people. “After that, the population of Salt Spring will have maxed out,” he says. “There will be no more land available to build. Once that happens the price of real estate here will go through the roof.”

But you can’t stop people from wanting to come here, can you?

“Oh but you can,” says Booth. “What is the current immigration criteria for coming to Salt Spring now? If you have the money you can come. What definition of citizenship is that? If Salt Spring were to become an Island Nation like the Isle of Mann or the Channel Islands we could define what criteria make for a citizen. In the future the people who contribute to the uniqueness of Salt Spring, the artists and craftspersons, the musicians and farmers, won’t be able to afford to live here. Then the Island will be only for the rich. We can insure that there will always be room for a culturally diverse population if we define it by our citizenship.”

Prince Edward Island has taken one small step in that direction. Property owners who were born outside its boundaries pay double the property tax of the indigenous population.

“People who come here from out of country don’t make the same connections to community in most cases,” says Garvie, “If you are younger and raise your children here, you can put a face to the community and invest energy into it. It is in your best interest.”

Four cedars, each at least 500 years old, have already been chopped down on my neighbour’s property. Cedars my two-year-old son and I have placed our hands upon countless times, But it cuts deeper than that. There is now a daily assault of chainsaws outside our rented home. It truly does feel like an American invasion. In just weeks the ecosystem here has been reduced from a relatively undisturbed 10,000 years of post-glacial forest life to a redneck mud pit of man conquering trees. (I have a chainsaw; I cut down four trees a year for firewood. This is not about raving environmentalism.)

The bush is abuzz with the sounds of building another weekend retreat for Americans. And with the silence goes the idea of living on the land and raising your kids here. And, of course, for my sweetie, son and I the question remains where to go next? With all the US immigration headed this way I hear there are some great real estate bargains just south of the border.

Grant Shilling is the author of The Cedar Surf: An Informal History of Surfing in British Columbia. Shilling was the editor and publisher of The GIG, an eclectic news-paper that served the coastal communities of BC. His surf drama “Tough City” is to be produced by True West Films. Shilling surfs a longboard dubbed “The Muff.” He is a lot of fun at parties.