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In planning and real estate Richard Wozny is a local legend for his ability to capture the upside of real estate in over 1,200 studies for public and private enterprises. That represents over $100 billion dollars worth of real estate work. Richard is direct, personable, and disarmingly honest. As Douglas Todd observes in the Vancouver Sun  Richard smiles and says “’My job is to make sure everyone makes the most of their real estate. That means ensuring the top one per cent make ever more money.”
But despite making those rich people richer, Richard is also blunt about what needs to change and what is wrong with our current real  estate system in Metro Vancouver. While in the hospital for treatment for terminal cancer Richard noticed that the hospital staff were not able to live well in Vancouver despite their stable incomes. His report Low Income and High House Prices in Vancouver   outlines that a giant amount of international money is being transformed into real estate in Metro Vancouver, making houses speculative instead of much-needed shelter accessible to local citizens. House prices are way above incomes, and a good income in Metro Vancouver does not mean you afford a house. How is this happening? It is by tax avoidance and evasion, giving those speculators “an unfair advantage over average taxpaying citizens.” Richard Wozny perceives the emergence of a middle class of people as one of the greatest achievements of the past century. And taxes are what makes it possible. Taxes are the price we pay for civilization.”
Vancouver lives with “radical inequality” as there is no ability for the city’s average wage earner to purchase a house at the current prices. But Richard argues that if all residents “shared the burden of paying for public infrastructure” prices would regulate to where they would be more affordable. In a market of “unequal rights and obligations” government is needed to enforce proper regulation and taxation in a situation where that capital is “unaccounted for, untaxed and unregulated.” Of course one of the challenges of the foreign capital is that new construction requires infrastructure to be built. Richard sees the resultant congestion and the fact that equal access to public services has declined as indicators that government should collect more from real estate speculators and expand public services with those funds.Noting that “residential real estate is not an investment vehicle” Richard states that “allowing  real estate prices to escalate to absurd levels, governments are allowing the middle class to be turned into mortgage slaves”.
xi0w8gtb“It means governments are supposed to protect our freedom to strive for our own personal goals. By allowing real estate prices to escalate to absurd levels, governments are allowing the middle class to be turned into ‘mortgage slaves,’” Wozny said. In summation, Richard believes that the burden for paying for roads, services and schools falls to everyone that owns real estate His conclusions are similar to SFU’s public policy specialist Josh Gordon who would like to introduce a hefty annual property surtax that would be offset by income taxes paid, with provisions for seniors. But is it too little too late? And how can the federal, provincial and municipal governments act together to quickly develop policy and enact regulation so that “mortgage slaves” can afford to live in Metro Vancouver?
 
Update:Richard passed away two days after this article was written. Condolences to his family from the Price Tags Vancouver editors.

Comments

  1. “residential real estate is not an investment vehicle”? Any provider of rental housing can tell you that IT IS an investment vehicle. Any British Columbian couple who have poured their life savings into their home and are depending on their equity in that home to fund their retirement will also tell you that residential real estate is an investment vehicle. The home has always been the primary and most sought after investment vehicle of Canadians.
    The only realistic way to get more people into housing and to make housing more affordable is to increase the supply of new housing coming on stream to a level that matches the demand.

    1. Simplistic. It has to be the right kind of housing that people can afford. The market is not delivering that. Government policy needs to ensure that it does which means intervention. The market works on drive ’til you qualify. A disaster!

      1. Affordability comes naturally as supply comes on stream faster. Municipalities control the quantity and speed of housing coming on stream. If distant municipalities bring on more housing faster, then you get more “drive ’til you qualify.” If core municipalities do this, then you get infill and “walk-to-work-ability.” Every additional unit built and sold/rented takes demand/pricing pressure off the market. Increasing the supply of new housing to match the rate of population increase for every municipality will get pricing pressures under control. If the provincial and federal gov’ts want to really help, the can provide resources to help municipalities speed up the community planning and development processes.

        1. I’m with you on the fact supply cannot be dismissed, but I’d add that non-market housing policy must now be part of the solution too. The Vienna model may be s good place to get ideas from.
          Though I tend to counter the still-unproven narrative that foreign money is the only, the single and the sole cause of our affordability crisis, it is having an effect. I haven’t read even one estimate of how much of the price rise we’ve seen since 2000 can be attributable to this one element.
          Ultra-cheap credit has pumped the world’s economy for years. There is no reason it hasn’t pumped Vancouver’s too, especially in the most desirable neighbourhoods that are naturally of greater value. Local speculation and land supply constraints have pumped it even more. These influences seem to be overlooked in the panicky and hasty call by crusader journos and their sources to slay the red dragon of foreign money, or at least tax it fairly.
          Not one of them, though, has promised that prices will fall dramatically, by which I mean by 35-60%. What may have that desired effect (short of a big quake) is dealing with foreign wealth concurrently with raising interest rates, increasing supply dramatically with market and non-market housing, by increasing the supply of rentals, and by very creative and liberal infill solutions underpinned by multi-use zoning and transit.

      2. A cursory glance at the real estate median prices provides the evidence that the market is delivering affordable housing in the Metro, but not in the preferred west side Vancouver locations or in more than one or two forms (condos and townhouses).

    2. Yes more demand will help, but also less demand, and especially more taxation of tax cheats that abuse Canada’s lax taxation system. Any “Canadian” in a house over $1M with 0 declared income should be audited and assessed as if earning $250,000/yr. hand out a few jail terms to send a message, i.e. incarcerate at the border on tax evasion. Far too much speculative money that is untaxed in Vancouver and area.
      Once you curb that demand down, perhaps 10-20%, and then supply up we’ll get more balance. Not cheap, but slightly lower than today.

      1. Editor: please replace the first word “demand” with “supply” (and then please delete this comment)

        1. They’d be exempt, for example by filing a certain document.
          But yes many allegedly poor elderly are in fact multi-millionaires, but collect CPP, free healthcare, free bus passes, reduced ferry fares and other benefits.
          Younger middle class wage earners are the most screwed right now: high taxes on incomes, high house prices, zero discounts anywhere, and soon, road tolls.
          As such, yes multi-millionaire seniors ought to pay more, for example for their property taxes or their healthcare. The current BC healthcare system, for example, is unsustainable.

      2. So Thomas, are you saying that all elderly retired Vancouverites that own a detached home (which they may have paid off years ago) and are struggling to get by on a minimal income should be considered tax cheats and treated as such? Are you calling their lifetime investment in their home… speculative?
        Do you remember what happened to the NDP under Harcourt (with Glen Clark as Finance Minister) when they went after the equity in high valued homes, many of which were owned by low-income Canadian NDP supporters? The unanticipated carnage they caused for the elderly made them instantly and severely unpopular with a major constituent group and they reversed course.
        Elderly homeowners crying on the news is how I remember it. I suspect the NDP are not keen on repeating that experience.

  2. What is the information contained in having this guy’s face in the article? Whose editorial decision was it to post this huge portrait? I can’t even read the article with some guy’s portrait staring at me.
    Whenever a Youtube video comes up with somebody’s face and the inevitable moronic greeting: “Hi guys” … click off.
    Cat videos are fun to watch. Babies can be interesting. A mug shot of a guy in a suit is appealing or useful to whom? I like reading Alex Botta. There is content. Do I need to see his face.

  3. Indeed our immigration system and associated tax system (both the very lax enforcement of taxes and the tax free capital gains for a residence) coupled with onerous building regs and CACs the main reason for excessive house price escalation in Vancouver & area.
    Especially noteworthy is the lax enforcement far too many Canadians of convenience (aka FakeCanadians) claiming residency here but not declaring any income here. Plus undertaxed (and in many many cases untaxed) flipping and foreign capital.
    Add GenY demand, baby boomers living longer, ALR restrictions & geography and low low interest rate and you get a toxic brew that is tough to unwind.
    I’d suggest to start with un-declared thus untaxed incomes of “residents” and associated jail time for tax evasion for a few to set a precedent, plus taxes and jail time for flippers (incl some lawyers & realtors) that do not pay taxes. Will we see this in the February NDP budget .. or merely a few timid words and nibbling at the edges ?

    1. CACs were meant to provide amenities and services for the public good, from art galleries and theatres to daycare spaces. These are no doubt still happening, but has there been a review of the policy recently?

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