When the former Chief of Staff to Gordon Campbell writes an essay as scathing as this on the housing crisis, it’s another serious sign that a tide is turning. Worth reading in its entirety, but here are some selected quotes:
- Enough already. Metro Vancouver’s real estate frenzy is out of control. Like a virus, it is a killer concern that is spreading. Metro Vancouver’s affordability crisis is now Greater Victoria’s unfolding nightmare.
- Each level of government blames the others for failing to address the supply problem. Yet the provincial government is hardly in any position to point fingers at local governments. Its refusal to properly invest in desperately needed public transit infrastructure has clearly inhibited the densities and investments needed to rapidly liberate more affordable housing. Plus, the Clark government wants Metro’s governments to raise property taxes and community amenity “contributions” to finance critically needed TransLink investments. It wants to hike taxes that would only further add to the costs of new homes and existing homes alike. And now it has the gall to attack the NDP for its proposed new speculators’ tax? Spare me.
- … the province now collects about three times more in property transfer taxes than it receives from the natural gas royalties, despite Premier Christy Clark’s endless yattering about the wealth that sector generates. Arguably, the proportional benefit and impact of the money the B.C. Liberals receive from their paymasters in the property development and real estate sectors is even greater.
- In politics, money talks. And the cash the B.C. Liberals get from their wealthy benefactors in those sectors has made the NDP’s demonstrably sensible demand-side measures targeting foreign speculators and absentee owners a mute point for the Clark government.
- ….homeowners … have seen their property values soar with the offshore investment tide that supposedly “raises all boats”, as it also quietly drowns out hope for young families and swamps those most in need of affordable housing. Most homeowners want to stop the worst abuses and negative side effects of unwanted foreign investment, but only to the extent that it does not reduce the new market value of their most valuable investment.
- … unwanted demand, it must be noted, is also largely driving certain new supplies of new housing that is being built primarily to attract those wealthy foreign buyers and the higher prices their investments leverage. It is also hiving off huge portions of our existing housing supply to sell to those wealthy foreign buyers, who are typically wealthier than most Canadians and who enjoy a competitive edge over all domestic buyers by dint of the substantial premium they gain on our struggling currency. Contrary to what the Clark government maintains, we do need to address the demand side of the housing crisis. Because that unquenchable demand is arguably doing more harm than good.
- British Columbians are being inundated with story after story that rightly makes their blood boil. Stories about coercive pressure tactics, deceptive sales pitches, dishonest brokerage practices, and even threats of personal violence that paint an ugly picture of a Wild West real estate industry that is hurting British Columbian sellers and buyers.
- As the Globe and Mail reported, “An in-depth look at public data—including land titles, tax reporting and court records—revealed a distinct pattern, suggesting the typical wealthy foreign family buying Vancouver real estate pays little or no income or capital gain tax…
- Some of Vancouver’s wealthiest and most desirable neighborhoods are being alienated before our eyes, as wealthy absentee buyers and foreign investors scoop up those iconic properties, only to let them sit empty. It is happening in slow motion, as a crime against our culture.
- … none of those measures would fundamentally address the legal ability of those with deep enough pockets to buy whatever they want, wherever it is for sale in British Columbia. And therein lies the greater problem, in my view.
- I think it is time to say that here, in British Columbia, if you are not a citizen, a permanent resident, or otherwise demonstrably committed to living and/or working in our province, you cannot buy B.C. land or fee simple property that is specially designated for protection. Period.
- A good start might be to strike an independent expert advisory group that is charged with consulting British Columbians and assessing the many mechanisms now employed around the world for restricting foreign ownership of residential and agricultural properties.
- To be clear, I am not talking about in any way restricting or inhibiting immigration. Nor am I arguing to restrict foreign property investment or ownership specifically from China, per se. …It should be possible in this country, of all countries, to have a respectful, intelligent debate that is grounded in the principles of mutual tolerance and respect, which most of us consider defining hallmarks of Canada. We should talk about this issue openly and honestly, without fear of recrimination or being branded as “racists”.
- It is time to openly discuss the vision we hold as a society for the land beneath our feet and who should own it. If anything, we need to deal directly with that “elephant in the room” before it crushes Canadians’ welcoming attitudes towards immigration and much-needed foreign investment. Otherwise, I submit, public resentment and anger will build in ways that are anathema to Canada and to our multicultural society.
I think the bubble that Martyn Brown is describing may actually be an intractable situation. There are too many people with a vested interest in keeping the game going ad nauseam, despite the obviously disastrous consequences. Perhaps it is time to put an end to the madness by extinguishing all the property rights of everyone who owns property in Vancouver by returning Vancouver to the aboriginal owners of the land (who have already kindly offered to take Vancouver back). The European and Asian invaders of Vancouver have really messed the place up with their absurd real estate freak show. The Musqueam, Squamish and Tsleil-Waututh First Nations could clean up the mess and restore civility.
“First Nations could clean up the mess and restore civility.”
They’re off to great start with Tsawwassen Mills.
Gimme a break David
What’s worse? A misguided mega mall owned by First Nations in the blueberry fields, or two regional-scale sewage plants plunked down directly adjacent to Native residential neighbourhoods by the Metro (Iona + Capilano)?
Bad planning does not have a cultural identity.
Its a global village now. Langleyites created their own enclave. The rest of us that dont have Chinese $ windfalls can take advantage of fast cheap interurban transit that will leave cars standing still and access land like langley in 15 min from downtown. That I know will be a game changer. Google VP even has a few million at stake. Not me.
Well argued, especially those TWO serious suggestions:
” I think it is time to say that here, in British Columbia, if you are not a citizen, a permanent resident, or otherwise demonstrably committed to living and/or working in our province, you cannot buy B.C. land or fee simple property that is specially designated for protection. Period.
A good start might be to strike an independent expert advisory group that is charged with consulting British Columbians and assessing the many mechanisms now employed around the world for restricting foreign ownership of residential and agricultural properties.”
I see no argument here. Just a lot of asphyxiation metaphors and a “conclusion” that some thing must be done on the demand side only. And yet again the only suggestion is simply to restrict foreign ownership unless of course the purchaser can demonstrate to some committee’s or bureaucrat’s satisfaction that he truly intends to love Canada with all his might and never ever leave. Silly and Unenforceable. Tax them or ban them. But let’s at least be honest with ourselves about our true motivation.
Certainly a cutting criticism of Clark especially, but even the Federal Liberals. I would say he lets the municipal level off the hook. They do have the power to zone what can and can’t be built after all.
One thing I have been wondering, which Gordon might know, does the Vancouver Charter allow the city to charge differential tax rates on residential property already? Could expensive homes be taxed at a higher rate?
Author
No. The City can’t charge differential rates with an assessed class.
Can the city differentiate between condos and single family houses (SFH) ?
I think SFHs are not only assessed too low (not a city issue, I know, but a provincial BC Assessment issue) but also pay FAR too little in property taxes given the land they usually occupy, and the associated free parking in most cases, the associated free ESL, free schooling and free healthcare for the occupants. Also see: https://pricetags.wordpress.com/2016/03/07/free-parking-is-like-squatting/
I have a problem with Horgan’s Housing Affordability Levy. The idea of taxing investors and non-residents is great, but this implementation is problematic. It is a regressive tax that effectively allows only those with high incomes to afford homes.
Take my family. Our house was less than $700k a decade ago. Now it might be worth as much as $2 million. The annual Levy on that is 2%: $40,000. We don’t pay income taxes of $40k per year. Applied to us, the Levy would push us right out of our house. We live close to work. A house whose levy was commensurate with income tax paid would be a long way away by car.
But we are five people in a three-generation household: a house is the most economical (and financially sound) form of accommodation for us. So we would probably be over a bridge in a car-oriented community. We would need a second car, increasing our expenses substantially and wrecking our quality of life. (Alternatively, my wife could abandon a job where her unique skills do a lot of good.)
If we wanted to stay within range of work, we would have to look at condos. But the few condos that might accommodate a household like ours cost more than our house. (Though they would be inadequate, with no separation between us and in-laws.) Or we would need two two-bedroom condos, costing as much. Both options are made impossible by the Levy.
The second is also impossible because my in-laws would not be able to afford any residence at all. They would be forced to rent. This means they would be apart from us, where we could provide the elder care they need. Now we need to hire someone (Mandarin-speaking) to look after them in their home. Neither, if my son was younger, would they be able to provide child care for him. So costs just rocketed up again, for a substantially worse quality of life.
The only realistic option for families like ours would be to rent. There aren’t enough rentals available, so that would not work out. Over time, though, it would lead to property ownership being consolidated in the hands of a few wealthy individuals and firms.
As I say, we are grandfathered in because we have owned our house for five years. So, for the moment, my family is safe. But if we moved, we would be sunk. New families like mine would also be sunk.
Unless I am suffering from some gross misunderstanding, this proposal has not been adequately thought through. I suspect many people who support it don’t what it would really do. Again, I support the principle of taxing investors: of ensuring regular people, not just wealthy elites, can afford to live in Vancouver. This Levy does the opposite. It effectively says that if you do not have a high income, you are not allowed to live here.
I would suggest writing to Horgan with your comments. It would be interesting to see if you get a reply, as I suspect they would love to make inroads with the demographic you represent. Certainly you bring up some unintended consequences they need to think through. Still it is nice to see them at least trying to come up with solutions unlike the BC Liberals.
What I find interesting is not that Martyn Brown, a former Campbell Liberal acolyte, finds the Vancouver real estate situation abhorrent (just follow the crowd), but that the BC Libs have an Achilles heel on this issue that is being gnawed on by their own.
Unaffordable housing leaves Christy’s magnificent arrogance and two-faced responses vulnerable in next year’s election. Its forcible introduction into the debate over Christy’s head by card-carrying Libs could be their Leap Manifesto moment.