Metro News and reporter Jen St. Denis reports on Toronto economist Paul Smetanin who has ascertained that if an elderly couple in Vancouver are living in a house with over one bedroom, they are overhoused. Of course those elderly that live in a house with more than one bedroom would be wealthier too. Smetanin estimates that 70 per cent of people living in Vancouver have “800,000 spare bedrooms.”
“In Smetanin’s analysis, a co-habiting couple living in anything more than a one-bedroom home is considered “over housed.” Homeowners who are wealthier and older are most likely to be over housed. The number of empty bedrooms is equal to 15 years of construction at current rates, said Smetanin, who has used data from Statistics Canada and other sources to create a broad set of data about housing needs in Canadian cities.
The numbers are similar for Toronto, and policy-makers from the United States to the United Kingdom to Australia are struggling with the demographic shift. ”
Gene Balk, a columnist at the Seattle Times has calculated that the number of empty bedrooms in Seattle has increased by 50 per cent in the last 16 years. Local real estate developer Michael Geller has suggested that seniors may be delaying going into condominium housing forms to avoid strata councils, and a range of different housing forms is needed.
The ability for seniors to defer property tax and the fact that there are no capital gains on the sale of a home may encourage seniors to age in place. There are also compelling financial reasons to stay in the home you raised your family in: homeowners don’t pay capital gains tax when they sell their principal residence and make a profit, and some argue it makes more sense to stay in the home and leave the total appreciated gain for your estate.
Geller does see a change where seniors are now interested in supporting new forms of housing for the post-house phase of senior life. “These baby boomers are the ones who are often opposing townhouse and apartment developments in their neighbourhoods for the last 30 years,” he said. “Now that they’re ready to perhaps move into a new housing choice, I think there’s a greater willingness to accept sensitive infill development.”
Certainly a good argument for eliminating the property tax deferral for seniors.
For thousands of home-owning aged, low or moderate income pensioners, deferring taxes is a life saver and enables them to stay close to their doctors, clinics and prescription drug counters, let alone their social networks and nearby shopping. In this context they can age in place and not suffer the distress and dislocation of moving while in frail condition. Deferral also leaves seniors with a bit more money to spend today and contributes more to the economy.
And the key word is “deferral,” which does not mean paying less or elimination. In fact, the taxes are paid with interest on top of inflation, so there is a cost to deferral and a net benefit to society. Payment is usually triggered when the senior dies and the home is sold, or the beneficiaries who will live there pay the bill.
Or it’s a way of locking younger people out of neighbourhoods and preventing additional housing types from being built. You can’t argue for densification in one breath, then argue for a program like this in the next Alex.
Tax deferral is a subsidized loan the taxpayer foots the bill for. It is difficult to justify handouts for owners of million dollar properties when so many young families are trying to start their homes in this city, with no such help. Not being able to afford your taxes is the same as not being able to pay your hydro or gas bill, a sign that your living beyond your current means. the absolute only exception I can see being valid is for senior condo owners hit with assessments for leaky buildings or other defects.
You need to call the city and determine what the tax deferral policy really is. It is not a handout, a freebee, a subsidized loan or any other of your other uninformed conjectures. It is in fact paying later at an added cost to the owner and a net benefit to society over time. Moreover, people who apply have to meet stringent qualifications. It’s not open to everyone, and has built-in limitations.
Many seniors who applied for the tax deferral already live in dense walkable communities with Millennial neighbours renting nearby. All they want is to be able to stay in their own neighbourhoods. Many seniors deferring taxes already live in apartments and townhouses.
What is most offensive in your comment is the utter discriminatory bullshit that seniors on limited incomes who happened to have bought their houses and raised families over decades are causing the affordability crisis b y their presence, and the implication that they are dispensable while Millennials are worth more.
Out with the old, and in with the new, eh?
The deferral is essentially a loan program through the provincial gov’t at a whopping 1% interest rate.
There is absolutely no value to me in you being able to stay on in your multimillion dollar home. Zip, nada. If I owned a business in your neighbourhood, it would actually be a detriment to have one or two people past their peak consumption years rattling around in an old house, as opposed to a family who would be buying much more.
It boggles my mind that you can argue for density on one hand, and not understand that the density won’t get built in many of Vancouver’s neighbourhoods as long seniors can sponge off the taxpayer in their nice big house. If they were required to make the same financial choices as younger demographic cohorts, they would be pushing for more housing options in their neighbourhood. Instead, as Gordon frequently points out, they are usually the ones at zoning hearings complaining against any change.
This doesn’t even take into account the Homeowners Grant, which was recently adjusted upward to cushion the blow for that same boomer segment.
Clearly it could easily be argued that seniors do not pay their fair (tax) share, with subsidized (or soon, free) healthcare, subsidized BC ferries discounts and option to delay property taxes. Healthcare is about $5000/person/year in BC so MSP should be north of $400 per month, and not $150 or soon, $75 or even 0. Ditto with this right to delay property taxes in tax-free multi-million $ homes.
Clearly a leftover from the old days when seniors were all poor and houses not worth that much. Time to revisit this policy. But, which party will propose this first and get hammered by the media and the seniors’ advocates as they drag out 5 poor seniors in old dilapidated homes ?
One day, Bob, you will be a senior and be subject to similar self-centred, discriminatory comments that you dish out now from the comfort of anonymity.
You are not a senior. And I suspect you have absolutely no experience with caring for an elder either, let alone one who owns property. Or maybe you pass that responsibility onto other family. And you obviously are not aware of how many limited income seniors in houses on large lots cannot afford to build a laneway house, but who have deep ties to their home of so many decades. Home is not defined as commodity. The city does not allow subdivision of lots over vast areas, something that would allow a senior to sell the back half of their lot to a developer / builder / other family without having to move. Or how many already live on tiny lots that predate the zoning bylaws by a half century, but which are technically illegal now. Or how long the waiting lists are for care facilities and assisted living units.
Moreover, when a senior dies and leaves a house to her / his beneficiaries, it takes anywhere between 14-24 months for the executor to process probate, do the last taxes, pay all the legal fees, distribute the estate assets in accordance with the will, and so on. Two years before the house hits the market, and years more if there are disputes and lawsuits among the family. How is that wait going to prove your theory that seniors are backing up the supply?
What galls me about your acerbic tone on this is your near absolute hubris against one growing demographic group — toss them out and don’t discuss the plethora of options.
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Right. Good one.
So in Bob’s World the logical conclusion would be for the state to confiscate property owner’s assets the day they turn 65, then hand them over to Millennials at a discounted price.
Thanks, Bob, for illustrating why Millennials are developing a bad rep amongst Boomers who have paid their dues over and again (and have the scars to prove it), why they are totally oblivious to ageing, and are too immature be mindful of the fact that 65 is just around the corner.
One more time. Seniors are not the cause of the housing affordability crisis.
It is pretty easy to check the facts. Here are the current interest rates on tax deferals:
Regular Program: 0.70%
Families With Children Program: 2.70%
Financial Hardship program: 2.70%
http://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes
It is clear that the regular program which is available to anyone aged 55 and over is definitely subsidized. However, many residents have lost their homeowners grant and their seniors grant. Also, we in Vancouver are subsidizing school taxes and other regional and provincial taxes for those in other locations.
Taxation by definition subsidizes one group at the expense of another. The question is with the BC Greens now holding more sway in BC what should change and what will change here, if any ?
Arno, you have not accounted for inflation.
Thomas, the Green Party is extremely fiscally prudent. You need not fear any wild spending from this group. They are based on an internationally developed policy framework, The Libs and NDP are very weak in this regard by comparison.
Alex – you are correct. Property taxes rise way faster than inflation and that is another reason why people choose to defer their property taxes.
Empty “bed” rooms are often used as offices, sewing studios, art studios or space for kids and grandkids when they visit. They are not usually as empty as stated.
A better term to use is “room” not bedroom. In Europe they often call it a 4 room house whereas here we’d call it a 3 BR house.
The issue is that we tax consumption and real estate – another form of consumption – generally far too low and incomes far too high. Unfortunately I have not seen this in the BC Green party (nor NDP or Liberal) platform as taxing consumption (with the intention to reduce it) would be real green actually !!
Interesting enough Texas – generally not considered so “green” as it is quite conservative, car oriented and oil producing – does just that: no state income taxes but very high consumption and very VERY high real estate taxes. That is a model BC should look at, to monetize offshore wealth parked here in real estate, to reduce consumption, to increase tax revenue AND to create more jobs & more disposable income !!
How would they differentiate between a 2,500 ft2 one BR loft with two associated parking spaces and an older 1,800 ft2 three BR cottage limited to on-street parking? Aren’t there better measurement means like density related to urban design and housing type, or even per capita floor area in neighbourhoods?
This is distinctly “home=commodity” stuff. What value would they put on a family home with deep emotional meaning that was custom built by grandpa and passed down to three or more generations? Or a dwelling renovated as a home at great pain and expense for permanent living, not as merchandise to be flipped? What has more significance, ageing in place in the family home in a walkable community vs being forced to downsize and to assume the stress of moving to an unfamiliar neighbourhood in your late 70s?
This reminds me of George Monbiot’s columns calling for a fine to be applied to vacant bedrooms in cramped Greater London while he himself resides in a spacious rural cottage in Wales. What’s next, the state forcing homeowners to house tenants, or expropriating the home from under the owner’s feet?
This article seems to excuse cities from upzoning wasteful land use and places guilt and blame on house or apartment owners for having a spare room at one point or another. Let’s instead measure these things from the viewpoint of density and demographics.
Author
Reblogged this on Sandy James Planner.
Mais non! Paris just increased its tax on vacant homes to 60%. Vancouver’s tax is very modest but still created an uproar. I don’t see how millennials can have much sympathy for those with multi-million dollar pied-a-terres. But that’s just them and their wasted, entitled ways – always munching on avocado sandwiches.
From Better Dwelling: https://betterdwelling.com/vacant-homes-global-epidemic-paris-fighting-60-tax/#_
Forcing the elderly on limited incomes to move because they happen to have a spare bedroom will not address affordable housing OR realize the widely accepted planning objective of creating diverse, mixed use walkable neighbourhoods where ageing in place is a viable human right.
Instead, the Metro should ban detached homes on large lots in favour of upzoning to small lots, attached single-family + suited homes and duplexes, low rises and so forth. All levels of government need to consider building not just more social housing but also market rental housing with rents indexed to inflation with fair and definable price ceilings and floors. Putting 50,000 such non-profit, non-subsidized rental units into the regional market will go a long, long ways to counter price surges and investment condo vacancies, offering housing stability and security.
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Those who castigated young families for moving to the suburbs because they wanted their own house quickly bared their teeth when ti came to questioning seniors’ right to enjoy subsidized single family home living. Every sentimental string was pulled in defense of granny not being yanked from her home. Meanwhile no tears shed for those youngsters who want to start their life here.
Maybe this will help drive home to some entitled boomers the true cost of the policies that kowtow to them:
Theatre artist Emelia Symington Fedy: “I love you Vancouver, but you’re breaking my heart”
Actor tried to make it work here, but the city became impossible to live with—and so she and her family are headed east
http://www.straight.com/arts/911506/theatre-artist-emelia-symington-fedy-i-love-you-vancouver-youre-breaking-my-heart
Your meme is tiresome and incorrect.
I know several families who chose to live downtown and other parts of the inner city because they did the math on the cost of commuting, and wanted to stay close to favoured schools and to work and transit. A new school was just built in International Village, and its presence was a major selling point for sticking with condos to many young families. Perhaps the majority of families who do move to the outside edge don’t do the math and are shocked to see their housing cost differential pretty well sucked dry by the costs of owning more than one car.
I bet a loonie that the majority of younger families thinking of moving to the suburbs would change their minds if viable alternatives to the excessively expensive detached home on large lots, as well as to the ubiquitous stratified condo, were allowed. Simply put, upzoning RS zones to accommodate the subdivision of open lots into attached single family with suites with result in allowing granny to stay put and sell a portion of her land, to lower overall house prices by slicing off a chunk of land, to raise incomes with legal basement suites or duplexes, therein to accommodate population growth, fill the schools once again, and stimulate the economy with walkable neighbourhoods filled with services, and to support better transit with more ridership.
You purposely overlooked the discussion on the ‘missing middle’, and you shortchange yourself by doing so. Then next, you choose to frame the issue as some kind of generational war and sob stories about granny.
That commentary says more about you than it does about the issues or anyone else
Great, so your answer is consign young families to the cramped quarters of the missing middle but let the taxpayer help granny stay in her house? And you’ve overlooked the point many others have made that it is usually senior homeowners arguing against the creation of the missing middle to sully their leafy streets. Maybe we should force speakers at the city hearing to disclose whether they are deferring their taxes.
We have an underused room (it’s full of books — who needs them? — and a bed occupied by visiting family and friends). What interests me is the situation of a couple of widows I know. Their gardens are their lives — they’ve each put more than 30 years into them, growing the sort of landscape that supports pollinating insects and Anna’s hummingbirds, the sort of creatures that park board and condo plantings totally ignore. One widow has been actively looking for a downsizing, but her conclusion is to stay put. New places that would offer any kind of outdoor space, even a decent-sized terrace, are almost as expensive as the house she would be selling, and come with condo fees and hassles mich worse than fee-simple ownership problems. There, in a nutshell, is the reason many old people don’t want to move. The available alternatives are much too expensive and restricting.