Frances Bula has a nice piece following up on transnational investments in Vancouver’s real estate market, in particular including the big commercial and industrial properties, like the Molson Brewery. Are purchases being crowdfunded? If so, what does that mean? Are all of the investor/buyers being told about the planning restrictions in place?
There are lots of interesting points to draw from all of this. One point, a point that sometimes gets lost in simplified political economic analyses of urban affairs, is that developers don’t always get their way. There is little reason to suspect that either the City or Metro Vancouver are bluffing in their commitment to keeping the Molson Brewery zoned for light industrial land use. Municipal regulations and their regulators still have power, even in the face of the “sharing economy.” The Province has even more power, which is why we don’t yet have Uber in Vancouver. It’s also why the BC Securities Commission is apparently looking into some of these crowdfunding advertisements.
Another and perhaps more disturbing point concerns the potential for crowdfunding (and other forms of investment) to operate as scams. We know they’re out there (we’re definitely not getting straight stories from all the parties involved in the “Sun Commercial real estate brewery project”). This is, of course, a problem for investors – mostly, it would appear, operating out of China – some of whom are undoubtedly more deserving of sympathy than others. But scams are also a problem for Vancouver. In a local sense, they potentially tie up properties (big & small) in litigation, leaving them unattended for years. In a larger sense, the more of them there are out there and the more of them buying and selling to one another, either by design or by accident, then the more the market as a whole looks and feels like a giant pyramid scheme. It’s a long, long way down to the bottom, and getting longer by the day.
*** Ummm… And here is more on pyramid-building practices via Kathy Tomlinson at the Globe & Mail. Read the whole piece! It’s worth it!