Green Party pressures B.C. government to specify what 'moderating' housing market means

Finance Minister Carole James hasn't stated what metrics the government will use to define success.

Finance Minister Carole James hasn't stated what metrics the government will use to define success

A neighbourhood full of single family homes near Vancouver's Queen Elizabeth Park. (Rafferty Baker/CBC)

The Green Party is calling on the B.C. government to offer more specifics on how it will define success in tackling the housing affordability crisis through its 30-point plan.

"What outcomes is the government actually looking for with the plan it's putting forward? We've been stonewalled ... and that's troubling," said leader Andrew Weaver. 

"Public policy is there to design and reach an outcome, and the public deserves to know the direction government is trying to take us."

In Tuesday's budget, Finance Minister Carole James announced a variety of housing-related taxes, including an increase of three to five per cent on the property transfer tax for properties over $3 million and a "speculation tax" that would be applied to vacant homes in large metropolitan areas. 

James has been vague to both reporters and the Green Party in question period regarding the government's precise goals. 

"We're looking to moderate the market," she said several times this week.

"People will always want to live in B.C. But we want to make sure there are houses for people who live and work here."

But left unsaid was what metrics the government would be using to define affordability — including benchmark prices of homes, or ratio of median house prices to median incomes — or what would make them consider changes to the new tax structure. 

"We're going to be watching this housing plan closely. There may be changes that need to occur ... this tax is the first in the country, so we're going to monitor it as we go along," said James. 

Weaver said that without clear goals in place, there's a risk the market could abruptly crash.  

"Let the air come out slowly so the market can stabilize over time. This is what we're hoping to see an outcome with, but we're not getting any direction in that regard," he said.

The City of Kelowna is one of the areas where the government's new speculation tax will apply. (City of Kelowna)

Tax on vacation homes?

Also unknown is how the government's speculation tax will impact vacation homes. 

The government says the tax — which starts at 0.5 per cent of a home's value in 2018 and goes up to two per cent in 2019 — will be collected on "homeowners who have removed their units from B.C.'s long-term housing stock — meaning they are not owner-occupied or a qualifying long-term rental property." 

A tax credit to offset the tax will be given to B.C. residents, leading to accusations by Alberta MLAs that the tax is directed at their citizens with vacation homes in B.C.

In response, B.C. government officials have pointed out that it only affects homes in the regional districts of Metro Vancouver, Fraser Valley, Nanaimo, Victoria and the municipalities of West Kelowna and Kelowna — meaning the vast majority of lake and mountainside cottages and chalets will not be affected. 

And ministry of finance officials say it will take some time to determine what will qualify as a "long-term rental property" and which homes will be allowed to be vacant.

"These details, as well as information on how to apply for an exemption/income tax credit, will be provided in the coming months, prior to the implementation of the tax," the ministry of finance says in an information sheet.

Legislation for the tax is expected to be implemented sometime in September or October.