British Columbia

More than speculation tax needed to address housing affordability, says expert

The leaders of B.C.'s two largest parties have duelling visions for tax policy designed to increase housing affordability in the province, but an urban affairs expert says both can work together, and a lot more will still be needed to help renters and owners.

Growing number of people in B.C. can't participate in the market housing at all, says SFU's Andy Yan

NDP Leader John Horgan is holding up his party's Speculation and Vacancy Tax as an example of policy that has helped make homes more affordable in B.C., while B.C. Liberal Leader Andrew Wilkinson says he would get rid of the tax. (Rafferty Baker/CBC)

The leaders of B.C.'s two largest political parties shared duelling visions for tax policy designed to increase housing affordability in the province on Friday, but an expert in city planning says both plans can work — and they aren't mutually exclusive.

NDP Leader John Horgan touted the speculation and vacancy tax his party introduced in 2018, claiming the policy has already filled 11,000 vacant condos in the province.

"Because of the speculation and vacancy tax, we've received $115 million in new revenue — not from British Columbians, but from people who live somewhere else who look to Vancouver as a place to invest, not as a place to put down roots," said Horgan at a campaign stop in Coquitlam.

Meanwhile in Vancouver's Yaletown neighbourhood, B.C. Liberal Leader Andrew Wilkinson told reporters he would eliminate the speculation and vacancy tax.

"We're going to be talking about a complete overhaul of property taxation," said Wilkinson, calling Horgan's tax a "phoney speculation tax that doesn't actually address speculation at all."

He said his party would introduce a tax on condos that are resold before they're built — something known as "paper flipping."

Housing affordability is shaping up to be an early focus for B.C. political leaders. (Rafferty Baker/CBC)

For Andy Yan, director of the city program at Simon Fraser University, there's an appeal to Wilkinson's plan — but he says Horgan's tax has also worked well so far, and need not be scrapped.

"It's an action that I think was needed years ago," he said of the speculation and vacancy tax. "It hasn't lowered prices per se, but it's certainly stabilized them."

Yan said housing starts have continued to increase since the tax was introduced, but he says more time is still needed to ultimately assess how effective the policy has been.

With regards to Wilkinson's proposed paper-flipping tax, he said it's "a pretty interesting idea," that could cool the pricing frenzy paper-flipping can create.

Yan said Wilkinson's plan for a tax policy review is needed, but he commended the work the NDP has done with its policy which has restarted the conversation around real estate as housing rather than a commodity.

But Yan said both parties need to present platforms that address the supply and demand sides of the housing equation.

Don't forget about renters: Yan

He said across the province, 32 per cent of households rent — a figure that increases to a majority of households in Vancouver and Victoria — and the parties need to focus on them as well.

NDP Leader John Horgan says the speculation and vacancy tax has filled 11,000 vacant condos in B.C. and brought in $115 million in revenue from owners outside the province. (Rafferty Baker/CBC)

Yan said issues like mortgage affordability land in the realm of the federal government, but the province can do a lot to help renters with affordable housing supply.

Finally, Yan said the leaders will have to remember the significant group of British Columbians who struggle to access housing at market rates — be it as renters or owners.

"Each party, I think, is going to have to issue a platform that deals with the role of non-market housing in this discussion, because there's a growing population here in British Columbia that can't participate in market housing," he said.

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