VANCOUVER – The BC government will support the city of Vancouver’s request for a tax on vacant housing.
Finance Minister Mike de Jong says the legislature will meet later this month to consider revisions to the Vancouver Charter that would allow the city to create and collect the tax.
“We’ll be seeking to have the legislative assembly reconvene on Monday, July the 25th for the expressed purpose of dealing with legislative changes necessary to give effect to those objectives.”
de Jong says the changes would mean the city can make a new tax without having to hide it among the current housing taxes. “It is ultimately about supply. It is about trying to increase the supply of rental accommodation.”
de Jong: BC gov involvement so city has clear statutory authority to implement vacancy tax. No disguising it pic.twitter.com/VMkJuDZvRk
— Lasia Kretzel (@lkretzel) July 11, 2016
He says a vacancy tax is a reasonable request to try to regulate the rental market while waiting for new construction to come online.
de Jong says he spoke with Mayor Gregor Robertson before the announcement and believes he is pleased with the province’s efforts to respond quickly to the housing affordability crisis.
‘Get the international speculation under control:’ NDP
NDP Housing Critic David Eby says he will have to see what de Jong puts forward in the legislature before he decides whether to support it. He argues the province could do much more to address the affordability crisis.
“It’s such an empty announcement. It’s such a ‘least we can do’ announcement to stand in front of a sign that says ‘taking action on housing affordability,’ when the complete opposite is true. After two years of pushing this government, it’s an insult to the residents of Metro Vancouver.”
Eby claims the province has the tools to tax people who are making homes expensive by using housing as an investment instead of a place to live, but instead it’s downloading the problem onto cities.
“Get the international speculation under control,” says Eby. “Then we need to look at land-use policy and landing policies. It’s definitely a serious and complex issue.”
He says the issue also has to do with foreign money — not just supply.
Eby believes the only reason the province is taking action now is because they’re looking at their poll numbers in Metro Vancouver.
“Imagine this, that they’re asking the City of Vancouver to do their job of protecting the interests of Metro Vancouver residents who can’t afford to buy a place simply because they’re unwilling to do it themselves.”
LISTEN: Eby speaks live on NEWS 1130 to discuss the NDP’s response to the province’s announcement
Economist calls this a good first step
Tom Davidoff with UBC’s Sauder School of Business is one of the economists who initially proposed a tax on vacant homes.
He calls this a good first step, saying it will motivate homeowners to either put their property up for rent, or pay the tax. “That’s a win because it gets housing into the rental stock or it provides tax revenue that’s badly needed for the municipality to help people with housing affordability.”
Davidoff’s plan calls for a 1.5 per cent annual surcharge on vacant homes. We have yet to hear specifics from the City of Vancouver about what it plans to impose.
As for the fact any tax would only cover Vancouver, Davidoff says it will provide a good testing ground for implementing the idea elsewhere in the region. “I think it can be an example, if things proceed in a way that makes sense in Vancouver — if we see vacancy fall, if we get good data on how many homes aren’t used.”
“If we get good data on how many homes aren’t used — either rented out to a regular tenant or as a primary resident, which is going to be part of the information we get here — that may lead the province to change all municipalities’ charters,” he adds.
Vancouver mayor hopes new rules can be in place next year
Vancouver’s mayor is welcoming the province’s move to allow his city to impose a tax on vacant properties.
“We want this to happen soon,” says Gregor Robertson. “The affordability crisis is right now, and the sooner we can get through the machinations of government, the better, so we’re creating more housing.”
Robertson hopes the tax will be in place by next year.
“The BC government recognizes we have a crisis of affordability in Vancouver,” says Robertson. “So they’re looking at next steps. We just need to see action. That’s the main thing. I’m pleased to see a commitment to a legislative session in the next few weeks, and that’s a next step.”
There’s no word yet on what the definition of a vacant property will be, nor an approximation of what the tax rate will be for people who leave homes empty.