It’s always interesting to see ourselves through other people’s perspectives, and this article from Crosscut.com via Tom Durning contextually examines Vancouver from the Seattle perspective. Writer Gregory Scruggs observes that “Seattle area’s increases in home prices led the nation for the 13th straight month in November, the longest-ever such streak for real estate around Puget Sound. That meteoric rise has made it ever harder for the region’s booming population to buy a home. But if we think it’s difficult in Seattle, look 140 miles north to Vancouver, British Columbia, where experts say house prices are like those of San Francisco but incomes resemble those of sleepy Halifax.”
In discussing the speculative nature of the Vancouver housing market, Scruggs notes that Seattle’s new mayor is going forward with spending $100 million dollars for affordable housing, making the Utility Discount Program more accessible to low-income earners, and setting up a city-wide Rental Housing Assistance Program. Seattle also is afraid of becoming a “hedge city- a place where the global rich park their money in houses and condos that they live in part-time at best but mostly purchase as a safe place to put their assets.”
With housing being treated as an investment commodity, Scruggs sees Canadian immigration policy as allowing “well-heeled foreigners” to live in Vancouver and buy luxury condos. He points out that a Washington law discourages condo development and apartments are the norm, with locals in the tech industry “making the kind of salaries that can afford now-expensive Craftsmans, though believers in speculative influence suggest that even tech money can’t explain Seattle’s current price boom.”
Scruggs reviews the Canada Mortgage and Housing (CMHC) research on speculative purchases, the Foreign Buyers Tax and the Empty Homes Tax, and suggests that Seattle housing will not be at the critical affordability level as Vancouver until prices rise another 20 to 30 per cent. Scruggs also spoke with several Vancouver experts including the Duke of Data Simon Fraser University’s Andy Yan who noted that because of power delegated to counties in the United States, “you are able to respond in a much more agile way than metro Vancouver”. University of British Columbia’s Business Professor Tom Davidoff notes that Seattle could adapt a Seattle-specific measure “to set high property taxes that could be rebated for property owners paying income tax at that address, or landlord with long-term tenants”.
This is being discussed for Metro Vancouver as part of the BC Housing Affordability Fund with the current Provincial government. As Tom Davidoff states this fund would flush out who is legitimately in the housing market. “If you’re not paying income tax at that address and you’re not a landlord, then what are you?” Davidoff asks. “You must have brought the money in from elsewhere.”
The full text of the article is available here.