Trust the New York Times to call it like it is.
As the newspaper astutely observed this past weekend:
Last year, in a provincial election almost entirely about housing costs, citizens voted out the center-right B.C. Liberal Party, which had run British Columbia for 16 years, and brought in a government led by the left-of-center B.C. New Democratic Party. Since then, the New Democrats have not only tried to increase the housing supply, but have also proposed a slew of measures that aim to curb housing demand and chase away overseas buyers.
And The New York Times also noted that many homeowners think this is the “best idea they’ve heard in years”, as the province’s NDP government, “raised British Columbia’s foreign-buyer tax to 20 percent of a home’s purchase price, from 15 percent. (Ontario has a 15 percent tax.)”
In addition, the party plans to impose higher property taxes on second homes, on families whose primary breadwinner’s earnings come from money abroad and on homes valued at more than 3 million Canadian dollars ($2.3 million). Vancouver has passed a number of local measures, including a tax on empty homes.
Gil Kelley, Vancouver’s Director of Planning calls it, “getting out of the mind-set that more is better”, and by more, he means the cost of a house.
In 2016, the non-profit Angus Reid Institute conducted a public opinion poll, whose results suggested that almost two-thirds of respondents in Metro Vancouver wanted housing prices to cool off — anywhere from 10 per cent to 30 per cent, or more. And this was not just grumbling from renters; almost half of homeowners were on-board with a cooling off, with one in five homeowners wanting to see prices fall by thirty-plus per cent.
Our own Duke of Data Andy Yan has documented one of the contributing challenges to the affordability crisis — Vancouver’s low wages. Yan notes that, while there are certainly jobs in the region, you would need two or three to afford a house.
In the City’s bid for Amazon’s second headquarters, “Vancouver officials boasted about having ‘the lowest wages of all North American tech hubs.'” As the gap between wages and housing affordability has widened, Vancouver has been consistently promoting itself as a “subsidized resort town and retirement community” to the rest of the globe, according to Josh Gordon at Simon Fraser University.
The impact of demand for city housing from China is “hotly debated”; Yan notes that the surge in development of new buildings has not reduced prices, instead suggesting that there may be an “under-estimate of the influence” of foreign capital, as the data excludes Canadian immigrants with capital from overseas.
Regardless of the reasons, the end results are the same — people working in Vancouver cannot afford to live here, and the morphing of Vancouver into an international gateway city has shut out the hope of every buying a home.
From the Times:
People who live and work in Vancouver can’t afford to live here,” said Nathalie Baker, a lawyer who is in favor of measures to cool the market, even though she owns a home here. “And that is a very significant problem.
You can read the whole article here.
Photos National Post & New York Times