Sociologist Harvey Molotch famously suggested that cities should be understood, first and foremost, as Growth Machines. The big takeaway is that the urban political class and overlapping landholding class tend to agree with the basic idea that growth is good and should be encouraged. For the landholding class, in particular, growth is good for their bottom-line. Land value goes up as more and more people are encouraged to concentrate in the same place (particularly if they’re wealthy people). So big landholders, who also often drive local politics, actively and aggressively push for growth. They’re aided and abetted by numerous other parties, including local media. Along for the ride in more or less passive fashion are local home owners, many of whom might be understood as “lottery winners” as they watch their property values soar. Sound familiar, Vancouver?*
Of course, “lottery winnings” from housing wealth are only really available for people to tap into if they a) sell their housing and move somewhere cheaper, or b) avail themselves of complicated financial instruments akin to mortgages. But this sets up a really interesting dynamic, especially with respect to immigration. People can move from a “lottery winning” locale to a much less dynamic real estate market and pocket a lot of change along the way, arriving as a wealthy immigrant. In places with less developed mortgage systems, this pattern can be further complicated, as sellers will have accumulated few loans against their housing before selling (setting aside, for the moment, those who don’t own property).
What does this imply for immigration around the Pacific Rim? Much of immigration takes place to and from the big “gateway cities” of the Pacific Rim. These gateway cities tend be very expensive markets locally because the flow of international migrants drives much of real estate dynamics. Partially as a result, local prices can drift upward from what might be expected by local incomes. But gateway cities are also quite diverse in terms of the success of their local growth machines. As a result, some “lottery winners” are far wealthier than others. By selling their home in an expensive growth machine and moving to a cheap one, migrants can cash in their lottery winnings.
Where should we expect this to be a feature of immigration streams in the Pacific Rim?
I recently stumbled across Numbeo, providing crowdsourced estimates for property prices by square meter of size (as well as rents, etc.) for cities around the world. I still have a lot of questions about this data (and I’m more than happy to entertain critiques!), but they seem quite transparent in their methods, and I can see their stuff is already being used in (forthcoming) academic articles, so it seems like worthy play material. Using their estimates for property prices (in Canadian dollars), I put together the following comparison:
I’ve highlighted Vancouver in blue as a big gateway into Canada. Of note: when it comes to the Pacific Rim, anyone selling their home to the left of Vancouver before migrating to same could arrive with a great deal of wealth, especially if they’re moving from a city centre! Vancouver looks cheap to arrivals from Hong Kong, Singapore, Beijing, Shanghai, Tokyo, Shenzhen, San Francisco, Seoul, Sydney, and even (to some extent) Taipei. “Sell your place, move to Vancouver, and get rich!” could also work at least moderately well for arrivals from London and New York City.
On the whole, this provides some important evidence to contextualize patterns of immigration into Vancouver. Positioned as a gateway into Canada from the Pacific Rim, we should expect a lot of East Asian immigrants to arrive quite wealthy just from selling off their homes in their city of origin! That’s setting aside a host of related issues (e.g., Canada’s selective immigration policies – including its relatively terrible investment class program, China’s selective emigration policies, intergenerational concentration of wealth in single children) that favor wealthy immigrants, as well as others (e.g., China’s capital controls and less developed mortgage system) that complicate the story.
Recent (and generally good, I think!) reporting in Vancouver has emphasized the crooks among Vancouver’s wealthy immigrants – and by all means, go get them! But this has a tendency to obscure how you don’t have to be crooked to arrive in Vancouver with money to spend. You just have to be lucky. And there are lots of real estate “lottery winners” scattered around the Pacific Rim, including many homegrown right here in the Lower Mainland.
Lots more to think about, but I’d love to hear more about a) the Numbeo data! and b) how this maps onto people’s thoughts about Vancouver’s role as gateway to the bustling growth machines of the Pacific Rim.
*- This dynamic is viewed as providing home owners a material interest in siding with growth machines. Of note, Molotch’s analysis is pretty solid with respect to North American cities at their founding and through most of the Twentieth Century, and it still mostly holds for central cities. But anti-growth coalitions began to arise and drive metropolitan politics pretty quickly, most dramatically in the suburbs, where NIMBYism and exclusionary policies are pretty much the norm. Lots to say about that, including both that “material interest” can be interpreted quite flexibly and it’s not the the only thing driving NIMBYs, but I’ll set it aside for the moment. How do Growth Machine stories explain other places? Growth Machine analyses are often received critically in Europe, where they don’t seem to work as well, but have been largely embraced – at least in modified form – across much of Eastern Asia. In China in particular, the political economics of urban growth have received a great deal of attention, in particular the collusion between local politicians and local developers (paywalled examples here and here, or see books like Li Zhang’s excellent In Search of Paradise: Middle-Class Living in a Chinese Metropolis for a view from the ground). But less attention has been paid to the more or less passive “lottery winners” of Eastern Asia’s rapid urban growth. In the context of China, of course, urban growth was joined to the privatization of housing, producing many double-winners (as well as many new losers, especially rural migrants to cities). See Forrest & Izuhara (sadly pay-walled) for a really nice view of how intergenerational housing wealth accrues – or fails to do so – in Shanghai. It’s one of my regular teaching tools!