Unaffordable housing prices on the Lower Mainland spark debate
City council and real estate experts disagree on whether taxes are the answer to high housing prices
Property assessment numbers were mailed out to homeowners this week, adding fuel to the debate over how to deal with unaffordable housing prices on the Lower Mainland.
Vancouver mayor Gregor Robertson took the opportunity to push the provincial government on implementing a speculation and luxury housing tax.
"A speculation tax would help slow down the practice of flipping houses, which treats housing as a commodity and intensifies the price escalation," he said.
"A luxury housing tax would ensure that the very wealthiest buyers or investors pay an added price."
Robertson says these taxes would raise enough funds to make housing more affordable for those with lower incomes.
The property assessments for 2015 released on Monday confirmed the value of many properties in Greater Vancouver jumped 10 to 30 per cent in value in the past year.
Speculation tax and vacant homes
But one real estate expert says adding more taxes simply won't work.
"A variety of property tax mechanisms that target vacant units or luxury housing really wouldn't change things very much," said Tsur Somerville, associate professor at the UBC Sauder School of Business.
He says there are not enough vacancies in single-family neighbourhoods to make speculation a big factor in housing prices.
"The landscape of vacant units, particularly in the single-family housing market, doesn't seem horribly out of line that makes that speculator story plausible."
In Richmond, the number of vacant homes went down, from 130 in 2013 to only 30 in 2015, according to the city's fire department.
But the story is different for apartments, especially those in downtown Vancouver. About a quarter of condos in some parts of the city centre are empty or occupied for only part of the year, according to 2011 census data.
Luxury home tax
Somerville added that taxing luxury homes brings up the challenge of defining what qualifies as a luxury home. The average price of a detached house in Vancouver is more than $2.5 million, according to the city.
But city councillor Raymound Louie says a luxury home is simply one that costs much more than the average house.
"Those houses, well beyond the norm of houses in the city, [the owners] have a lot of money — they can pay a little extra to live here."
Vancouver city council says it wants the federal and provincial government do a better job of collecting data on international investors and absentee owners.
With files from The Early Edition