This is going to be a longer post than my usual, so my excuses in advance, but I feel it’s important to address in detail a recent South China Morning Post item that impugns the credibility of someone I quoted and is also indicative of an ugly and unproductive debate that is happening in Vancouver.
As some of you may recall, I wrote a story May 9 that dipped into the debate on housing happening in Australia. In it, I quoted a young academic named Philip Soos, from Deakin University in Melbourne, and Dallas Rogers, an urban-housing policy professor at the University of Western Sydney. (Rogers’ bio is here, by the way, if anyone wants to check into whether he is credible.)
Here was the story I wrote.
http://www.theglobeandmail.com/report-on-business/economy/housing/is-australias-crackdown-on-foreign-real-estate-ownership-a-model-for-bc/article24325255/
Soos, who has studied extensively and written about housing bubbles in Australia, was later written about or referred to in two media stories and a speech by Bob Rennie at the UDI.
Ian Young, a local columnist for the SCMP, wrote a column this week that casts a lot of doubt on Soos’s credentials, calling him no more than “a student, along with more than 45,000 others” at Deakin University and with no qualifications in economics, only an undergrad degree in IT and an MBA. The deck of the story says that Soos is “an IT grad and masters student passing off the university’s address as his personal contact.”
The article also casts doubt on the World Economics Association, where Soos and a co-author recently had an online book published about the history of Australian housing bubbles.
There are a couple of unfortunate things about this story, which is here.
One is that Young doesn’t make any effort to deal with the content of what Soos (and, actually, Rogers too) said. Does he think Soos is incorrect to say that housing prices started to rise in a bubble-like fashion in the 1990s, long before Chinese investment appeared in a significant way? Does he think Soos is wrong about the real-estate industry perpetuating a cycle of domestic-investor speculation? Does he think his numbers are inaccurate on the level of foreign investment? That’s never addressed. As I said in my note to Young when he emailed me yesterday with his questions, he’s brought a sharp new voice and perspective to Vancouver and these issues, thanks to his connections to Hong Kong, among other things. So it would have been good to get his take on the actual content and research.
Second, he paints a less than full picture of Soos’s work in Australia and the role of the World Economics Association.
As I wrote to Young, I came across Soos, I believe, through Google Scholar, which I frequently search looking for research papers on foreign investment in residential real estate and its impacts. That kind of research is hard to find, as some of you may know. It seems to be that it’s mainly younger academics trying to puzzle it out, arriving at contradictory conclusions as they study it. (Interestingly, the role of foreign investment in Shanghai is a hot topic there.)
That particular week, I’d heard UBC professor David Ley talk about the efforts Australia was making to track and limit Australian investment. I’ve written about that before in a Vancouver magazine article (the link is here). Since another reporter was covering Ley’s talk, I looked around for people in Australia to talk about what is happening there.
Philip Soos popped up as someone who wrote regularly on the topic. He has blogged for Business Insider in Australia.(
Link here.) He is listed in a Deakin report as a PhD candidate, where he is studying political economy. He does research for and writes for a social-justice organization in Australia called Prosper, which describes itself as “a non government organisation inspired by economic justice. When wealth produced from land – the earth and natural monopolies – is the funding base for government, equality of opportunity becomes possible for all humanity.”
The organization is currently very interested in the issue of housing affordability, since speculation and rising house prices have had as bad, or worse, an impact on affordability for average Australian families in Sydney and Melbourne as anything that has happened here.
Soos wrote
this 77-page article on housing affordability for their website. As well, he was the lead researcher in 2012 and 2013 for studies that Prosper sponsored to track vacant homes. Soos obtained water-use statistics to determine where properties were vacant. In one area of Melbourne, it appeared that 22 per cent of properties had such low water use that they were likely unoccupied. (The
2012 study is here,
2013 here.)
That water-statistics work struck me as being similar to the kind of work that local well-known researcher Andy Yan has done, as he has participated in Vancouver’s quest to try to understand what is happening with its real-estate market.
Soos and a business partner, Lindsay David, who have a company called LF Economics, submitted
this paper recently to the parliamentary inquiry on home ownership (It’s the submission listed in #1, from LF Economics). That prompted a lot of coverage in Australia (
here,
here and
here, just to give a small flavour of the coverage and debate). According to documents from the inquiry, Soos and David have been asked to appear before the inquiry to testify Aug. 7. (Soos also testified at the 2012 Senate inquiry into housing affordability on behalf of a group called Earthsharing.)
And what is this World Economics Association? Young’s piece made it sound like it was an amateur operation run out of someone’s house, with only sketchy anonymous spokespeople.
I had suggested he look at the founding members and executive committee, who are listed on the website.
Since he didn’t mention them, I will. Here is the executive committee. (Canadian labour economist Jim Stanford is one of the lengthier list of founding members, just for some local orientation.)Juan Carlos Moreno Brid, Mexico, UN Economic Com. for Latin America and the Caribbean
C. P. Chandrasekhar, India, Jawaharlal Nehru University
Ping Chen, China, Peking University and Fudan University
Edward Fullbrook, UK, Real-World Economics Review
James K. Galbraith, USA, University of Texas at Austin
Grazia Ietto-Gillies, Italy / UK, London South Bank University
Steve Keen, Australia, University of Western Sydney
Richard C. Koo, Japan, Nomura Research Institute
Tony Lawson, UK, Cambridge University
Peter Radford, USA, Radford Free Press
Dani Rodrik, USA, Harvard University
I got in touch with Steve Keen, who changed jobs in 2014 and is now a professor and head of the school of economics at London’s Kingston University.This is what he had to say via email about Philip Soos and the WEA.
“WEA was an outgrowth of the “Post-Autistic Economics” movement, which economics students began in France in 2000 to protest at the unreality of their subject. It is supported by economists who are critical of mainstream economics–including many like myself with PhDs in Economics and positions at Universities.
It is a not for profit institution, run by Edward Fullbrook and a committee of professional economists, who all work for free. Its aim is to communicate why conventional economics is a set of myths–I describe it as “mythematics”–and does so by providing a rapid turnaround publishing system for selected non-mainstream authors.
Its journal is subject to a refereeing system, and its suggested publications are refereed before publication as well–the former having a more rigorous process than the latter, since the latter is deliberately a populist series are aimed at the public and for the sake of providing alternative voices in public debates, rather than definitive academic treatises.
Phil and Paul Egan’s book was an instance of that. They had tried to get a mainstream publisher for a book that argued, against conventional wisdom, that Australian property was in a bubble, and couldn’t get a taker. So they approached WEA, where several contributors had already read their book, and after their feedback it was published as an ebook.”
Keen, in a later phone interview, said Soos and Egan’s work on the book was at a rigorous academic level. “Phil has got quite good training in statistics. He’s using that to analyze the data.”
Catherine Cashmore,
a public commentator and advocate on Australian housing issues and the need for more rigour in tracking foreign investment, also had this to say.
Philip’s work is exceptionally high quality. The book he authored with Paul Egan is indeed one of the best books we have on the Australian land cycle – the research compiled within it is far reaching.
Getting funding to publish a book highlighting non mainstream economic views is not easy – especially when it paints a black picture of the local economy.
There’s also a suggestion in Young’s column that Soos and his partner are just trying to get media attention to bolster their business. (As far as I can tell, the business seems to be somewhat akin to Urban Futures locally — a service providing statistical analysis.)
Maybe I’m naive, but it seems to me that working for years on an 810-page book that analyzes price-rent relations and indebtedness in industrialized countries, using huge databases, and then publishing on a website frequented by alternative economists, along with working with social-justice non-profits producing dense papers on housing affordability and bashing the local real-estate industry, is not the usual road to riches or media stardom.When I interviewed Soos back in May, one of the reasons that he struck me as a good voice to bring into the debate is that, one, he is a moderate. Does he think foreign investment has NO impact on large metropolitan real-estate markets? He said it may be possible, but we don’t know. No economist has been able to make that case definitively. He awaits further evidence.
Second, he is no defender of the real-estate industry. In fact, most of his writing is a strong critique of the real-estate industry, which he argues has helped bolster the speculative market in Australia and is far more responsible for housing unaffordability than foreign investors. (That’s something Bob Rennie didn’t mention in his speech.)
Ironically, Soos’s writing strikes me as exactly the kind of critical, tough analysis of the real-estate industry, and politicians who support it, that a lot of local unhappy Vancouverites and real-estate industry skeptics here (some of whom have been retweeting the SCMP article gleefully) would find a very useful resource.
Here are a couple more samples of work he’s done:One on how property-investing politicians are compromised
here, one on the conflicts of the real-estate industry
here.
I would recommend that those of you interested in the real-estate market take a closer look at this young economist and judge for yourself whether you think he’s credible.
Young economist? Yes, that’s a fair term. “Leading economist” or “prominent economist,” as some Australian reporters wrote, is over the top. But Soos is an economist, working on his PhD in political economy, in much the same way as, say, David Moscrop, a young PhD student in poli sci at UBC, is a “political scientist,” as many media outlets have referred to him in a spate of recent stories about the transit plebiscite. Or the way Andy Yan, while he was working on his master’s in urban planning in California, was sometimes referred to as an urban planner. Or the way Ryan Berlin, at Urban Futures, calls himself an economist, even though he only has a master’s in the subject. (Critics will say that only people with a PhD and/or a teaching position should use the title.)
(By the way, I do not find it shocking or dubious that Soos uses a university email or address for correspondence. Many graduate students I know do so. And Deakin University, which sponsors the blog he writes on regularly, has an active social-media department. Surely if they had any problem with the way he has presented himself as a Deakin University researcher or post-grad student over the last few years, they would have acted.)
As I said at the start of this, it’s unfortunate that Young, who seems to train extra attention on those who question the thesis that only Chinese millionaires are responsible for Vancouver’s housing market, didn’t address the substance of what Soos and Rogers had to say. Both of them highlighted the fact that American foreign investment in Australia has been as high in the past as current Chinese investment, yet that didn’t raise the kind of public uproar that Chinese investment has.
But this seems to be typical of the way the debate over housing in Vancouver has evolved in the last few years.
It’s a painful time in Vancouver right now. All of us feel the city is changing in dramatic ways that are sometimes extremely uncomfortable. I personally take no pleasure in my rising house assessment, since it just means more people I like may be shut out of the market. I am actually contemplating steps to ensure that my eastside 1909 house can be protected and not torn down by some buyer far into the future, which of course may mean its value will be reduced.
Amid this change, there is a group of people who are convinced that Vancouver’s current affordability problems are only or largely the product of wealthy Chinese buyers. (And that debate keeps morphing. At first it was “foreign investors.” Lately, it’s shifted to “millionaire immigrants.” I fear that it’s heading in the direction of “all those Chinese who just work harder and are more aggressive about buying real estate.”)
They have persuaded many, though not quite all.
Local surveys show that the majority of the public believes that Chinese buyers or foreign investors are mostly responsible for Vancouver’s real-estate costs. But this group is convinced that the message isn’t getting out strongly enough and that the local media are too afraid or too complicit to cover the real story.
They also seem to think that the general public is so stupid that, if a real-estate organization issues a news release or is quoted in a news story, everyone will take it as gospel fact.
Writers, academics, members of the general public who suggest that there might be other factors affecting the city’s real-estate market are denigrated as dupes or mushy liberals. I don’t quite understand the anxiety these people have that there might be some few individuals out there who disagree with them, but the anxiety is definitely there and there seems to be a high unwillingness to tolerate any other opinion.
You can see that play out in
a recent interview Rod Mickleburgh did with Andy Yan for BCBusiness. Yan tries to articulate a moderate position, but a bystander goes on a rant about the Chinese buyers.
I’m with Andy. This is a complex issue. Here, as in Australia, the reality is that there is a history of racism against the Chinese that makes this whole conversation difficult. (If only all these wealthy immigrants were Brits or even Spaniards, it would be so much easier.)As well, there is so much about how the real-estate market works that we just don’t know.
There is obviously some kind of impact from global capital, which is hitting particular niches of the Vancouver real-estate market particularly hard. But whether and how that capital is affecting the entire market, from single-family homes in east Vancouver to condos in Maple Ridge, is harder to tease out.
And it’s an eclectic group of people trying to understand it: young academics, real-estate agents, self-taught real-estate analysts, people who’ve worked in immigration or banking, journalists, marketers, Andy.
Everyone is looking for ways to try to figure out this complex phenomenon. (One recent article that I thought was useful was Michael Wilson’s blog,
here, where this former engineer turned real-estate analyst looks at how the high end of the real-estate market in Vancouver is showing signs of anomalous price increases compared to other cities that indicate that global capital, and not just low interest rates, appears to be at work. Though I couldn’t quite work out from his charts whether low- and medium-prices sectors of the market end up being affected as well. That’s the ongoing issue. How is the bidding war for high-end properties impacting the rest of the market?)
We need everyone to pitch in with analysis, stats, observations and pressure on governments to provide more information. We need to be able to disagree publicly about the substance of what people say and the quality of their research. We need to be able to ask questions. So it’s troubling when voices offering alternative points of view have, not their information but their credibility questioned, using selective information.
I’ve been advised not to write posts like this, that it will just open me up to attacks and keep the issue alive. (For those interested in doing a future hatchet job on me, I have a useless degree in French literature, of all things, and an even more useless master’s in communications. I may or may not have dumped a pitcher of water on my astilbes during a non-watering day in the last week. And I’m sometimes impatient with people.) But I thought it was important to defend a young, interesting researcher and also to make a plea, maybe futile, to have an energetic but civil conversation on this topic.
