By Roy L Hales
Vancouver’s real estate values have skyrocketed 280% since 1986, while wages have only increased 7%. A new report shows the affordability crises impacts both renters and homeowners. The average westside home was selling for $1.4 million last May. Though 10,800 housing units have been empty for more than a year, 1 only about 337 available as rentals. 2 This suggests that speculators own many of the vacant units. City staff recommend taxing Vancouver’s empty homes.
Taxing Vancouver’s Empty Homes
“Vancouver housing is first and foremost for homes, not a commodity to make money with,” wrote Mayor Gregor Robertson.
He added, “If Council approves the report, I will write to Premier Clark asking for the Province to create a new “residential vacant” property class so Vancouver and other municipalities could levy a special property tax on empty homes. If the Province does not commit to taking action on empty homes by August 1st 2016, the City will move forward with our own empty homes tax.”
Survey Of Residents Agrees
82% of the Metro Vancouver respondents to a 2015 Angus Reid poll support a “vacancy tax” on unoccupied investor-owned properties.3
This number was even higher in a May 2016 survey of more than 15,000 Vancouver residents.
“91% (12,257 respondents) agreed that higher taxes on empty homes should be targeted towards owners with very few economic ties to BC, such as owners who do not pay income taxes in BC. 84% (13,152 respondents) agreed that owners who occupy or rent out their home should receive an annual tax credit and pay less property tax than owners who leave their home empty.”4
More than 7,000 people left additional comments. Here are a few examples:
“With many families juggling multiple jobs just to be able to afford rents in the city, I would really like to see foreign owners pay extra tax as the money they are earning is not going back to the community they own property in.”
“Notwithstanding my response in favour of taxing empty homes, I’m equally concerned that any regulation that is implemented will become yet another bureaucratic mess that has no affect and that those it targets finds loop holes and avoid being taxed.”
“Outlaw agents talking home owners into quick sales for lower than market, and then selling to a buyer before the original deal closed, at a higher price. This allows the agent to drive up prices, and avoid paying sales tax, on second sale”
“Property owners renting out entire units on airbnb and the like for continuous periods of time should be subject to regulation and taxed. I know of local investors who have bought units solely for the purpose of renting out on airbnb. They are paying no tax and taking away possible rental from residents.”5
2,000 Of Vancouver’s Empty Units
The Canada Mortgage and Housing Agency found that only 0.6% of the city’s 56,190 apartments are available to new renters. This is far below the 3% to 5% considered a “healthy” supply. The situation would be rectified if 2,000 of the empty units were made available.
City staff notes that, “Although renting is still a less costly option than ownership, renters in Vancouver face significant affordability challenges – 34% of renters pay over 30% of their income on housing, with 14% paying over 50% of income on housing.”6
Top Photo Credit: View of the apartments in downtown Vancouver by Flightlog via Flickr (CC BY SA, 2.0 License)