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The real estate war on the west coast: Vancouver's wealthy haves vs. middle-class have-nots

Last Updated Jun 13, 2018 at 7:42 am PDT

Houses line the street of Dunbar neighbourhood in Vancouver, BC on May 29, 2018. (Photograph by Jimmy Jeong)

Across the street from a run-of-the-mill Starbucks in the Kitsilano neighbourhood of Vancouver is a two-storey Ferrari and Maserati dealership. Locals will tell you with amazement that it is the highest-volume location in North America. Whether or not that’s true, the five homeowners gathered today around a table at the Starbucks want to make clear that Ferraris are not for people like them. Though their homes on the west side of the city may be worth millions of dollars, they do not consider themselves rich. “It’s really hurtful when someone says, ‘You live in a $2-million property, so that means you’re a wealthy person,’ ” says Mary Lavin, an English teacher. “Um, no. Not at all.” Lavin points to her car in the lot, a 1998 Toyota Tercel. “I’ve had one holiday in my life.”

Premica Baines, a retired federal government worker, notes she walked here from her home in Point Grey, which is assessed at around $4.5 million. She even brought her own coffee. “The majority of the people who are not living in the neighbourhood think we have lots of money in our accounts,” Baines says. “It’s not true.”

They do, however, have lots of equity in their homes, which the provincial NDP government has moved to tax at a higher rate. The government announced a change to what’s called the school tax, a levy derived from property values that helps fund the education system. Starting next year, some residents will pay an additional 0.2 per cent on the amount by which their property values exceed $3 million, and 0.4 per cent on the portion above $4 million. (For a $3.5-million home, that’s an increase of $1,000 per year.)

The change has deeply angered the west side of Vancouver, where large detached homes perch on leafy, green lots. Residents have launched petitions, staged protests and erected yard signs claiming the tax is “hurting seniors and working-class families the most!!!!” Home values have skyrocketed in the area, but incomes have not. Those who purchased property many years ago don’t necessarily have extra cash on hand.

Around the table, there are multiple objections to the taxMainly, the group feels targeted because of their home values. “We don’t think it’s fair that it’s only applied to certain individuals and not others,” Lavin says. “That appears discriminatory.” Lavin bought a duplex in Kitsilano two decades ago for $500,000, and it’s now assessed at just over $2 million. The tax does not apply to her. “My concern is that it can be arbitrarily lowered to a $2-million property, which would impact me.” Recently, a UBC professor called for increasing property taxes on homes worth more than $1 million. “Personally, I’m fearful,” says Lavin.

The effect of the government’s fixation on housing wealth, they say, is to sow harmful social discord. “When you single out a part of the community, and fuel that discrimination by talking about the haves and the have-nots, it’s not only bad policy, it’s bad for our community,” says Jeff Petter, who works for a medical technology company. “We find that is morally repugnant.” (He doesn’t want to say how much his property is worth, but allows it’s “absolutely absurd.”) Baines nods in agreement. “I had dinner with some friends last night, and the person who is renting was attacking the people that were there,” she says. The renter was telling the homeowners to just sell their homes and enjoy the windfall if they were so worried about taxes. “What kind of response is that?” she says.

Houses line the street of Dunbar neighbourhood in Vancouver, BC on May 29, 2018. (Photograph by Jimmy Jeong)

While the issue of housing has long strained the city’s social fabric, it’s now creating discernible tears. Owning a home here costs 85.2 per cent of a typical household’s income, the worst level ever recorded in Canada, according to RBC. Even a condo eats up half a household’s earnings. Everyone seems to feel like a victim: homeowners fretting about taxes, locals priced out and forced to move to suburbs, and those struggling to find anywhere to live in a place where the vacancy rate is less than one per cent. There is fierce disagreement over the cause of the crisis—insatiable demand or a lack of supply—and, as a result, no consensus on solutions.

As part of an effort to tackle affordability, the NDP government has opted for taxation to reduce demand. In addition to the extra school levy, the province increased and expanded the foreign buyer tax and put in place a so-called “speculation tax,” which applies to vacant homes in select regions. Finally, the province boosted the property transfer tax on high-end homes, and expanded disclosure requirements to end hidden ownership. “We finally have a government that’s serious about housing affordability and is willing to see prices fall,” says Joshua Gordon, an assistant professor in the school of public policy at Simon Fraser University. “That’s not to be underestimated as a force.”

Polls show the NDP’s affordability measures have broad support, but not everywhere. For the first time in years, those who have ostensibly benefited from Vancouver’s real estate boom—homeowners, investors, flippers and the entire industry—feel threatened. “The NDP is creating class warfare, and using real estate to drive the wedge,” fumes real estate agent Keith Roy. Someone, he notes, recently defaced lawn signs on the west side protesting the school tax, scrawling “EAT THE RICH” on them. “Homeownership is being punished,” he says. “Success is being vilified.”

On a recent weekday morning, David Williams is giving a walking tour of his block in Dunbar, on the west side of Vancouver. At 64, Williams is retired from a career in finance, and he walks briskly through the quiet streets describing who bought which house when. His tour is really about how wealth—or hot money, he believes, referring to foreign capital—is transforming his neighbourhood. “The guy across the lane from us, he tore down an old house, built a whopping new house, and he had a Rolls-Royce and a Ferrari in the garage,” he says.

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