It’s a new era at Vancouver City Hall now that the new Housing Plan is approved. But as Jen St. Denis’ byline states in her article in Metro News, will more housing and less speculation truly happen, or is this now an impossible task? And why did the City not act sooner before housing prices rose way above what Vancouver workers could afford?
Is it too late to intervene? As Jen St. Denis notes “That was the question on several city councillor’s minds on Tuesday as city planning staff laid out more details of a revamped housing strategy .Even in areas we haven’t rezoned, there has been massive speculation,” observed NPA Councillor George Affleck, describing areas like the Broadway corridor, where a subway extension has been planned and Renfrew Street.”
Gil Kelley the City’s planner does not expect land prices to become cheaper but does expect that speculative future price increases can be curbed. This will be done by including more affordable housing in any new development, densifying single family neighbourhoods and expediting faster processing time for permits. When the single family residential market flatlined when a 15 per cent foreign buyer’s tax was introduced, that demand from global and locals just went into the Metro Vancouver condo market. Price Tags Vancouver has written about the the flippers making money selling condo units before construction completion and avoiding paying any tax to the Canada Revenue Agency. The city has been criticized for waiting too long to rethink its housing plans, following a property price spike that began in 2015 and has upended any relation between regional incomes and home prices.
The City is expecting the Provincial and Federal governments to consent to rental-only zoning changes in Vancouver to allow for affordable accommodation. Other suggestions include a tax or restrictive charge on property flipping, and substantially increasing the property purchase tax on multi-million dollar luxury homes. It may also be the time that income tax and capital gains tax will be charged on home sales to dampen the free-for-all speculation in the single family housing market.
Just as legalizing basement suites and allowing lane way houses were major changes to Vancouver’s fabric in the 20th century, this aggressive housing plan will transform the look and feel of the City in the 21st century. Key to the plan’s success will be achieving the amount of density to make affordable units, as well as choosing locations with accessibility to work, schools, shops and services. Others are also asking whether this increased density will have the form and function to be liveable. Will the City be developing park space for the new residents as well as community centres and other infrastructure usually provided through Development Cost Levies and Community Amenity Contributions? Will Vancouver start to look like a densifying suburban community? Is this all too little too late?
Clarification: the foreign buyer’s tax didn’t push foreign buyers into the condo market because condos were also subject to tax, as shown in this excerpt from the “exemptions” portion of the government website:
“Property classified as commercial by BC Assessment that includes a residential improvement (class 1), such as a condo in a building with commercial space. You pay the additional tax on the value of the residential improvement.”
In other words, the tax applies to the condo.
I suspect the real reason more foreign buyers went into the condo market after the tax is because they could still get a stake in the Vancouver market without paying as much tax. I also suspect that the massive uptick in Victoria housing prices was the knock-on effect of foreign investors placing the rest of their bets where there was no tax.
Note that pre-sale condos were NOT included in the foreign buyers tax, an egregious oversight the NDP should have corrected.
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Reblogged this on Sandy James Planner.
The local property tax effect:
http://www.bloomberg.com/view/articles/2017-11-28/why-economists-love-property-taxes-and-you-don-t
Unfortunately BC shortcircuits that property tax day of reckoning by letting seniors cling to their houses through tax deferral and making other taxpayers foot the bill.