Vancouver is at the epicentre of an urban affordability crisis that is gripping many cities. Now, it’s come up with a novel and nuanced idea.
The BC Housing Affordability Fund (BCHAF) proposes a 1.5% tax on all residential property in the province that is bought by investors but remains unoccupied. That could raise $90 million or more in Vancouver, alone, money it proposes should be returned to Vancouver homeowners and renters to help them keep up with soaring rent and property taxes.
Unlike recent efforts in Hong Kong, Singapore, and Sydney (which CityAge covered here), the plan isn’t a tax on foreign investors. It essentially applies to anyone — other than pensioners, the disabled and veterans — who buy a property and don’t put it into productive use.
An added benefit: administering the tax will help create a database for Vancouver’s leaders to learn more about the state of foreign ownership and vacancy, as well as the patterns of home-grown speculators.
This just might be an idea that is an elegant step toward dealing with affordability for many cities. In the end, the tax will only apply to individuals or investors who own property but choose to keep it vacant.
Housing affordability is a problem in Vancouver, and it’s only getting worse. As the region becomes what The New Yorker has called a Hedge City, it risks pricing out the professions the city requires to function. By raising revenue for the people who live and work here, and by discouraging empty houses and condos in Coal Harbour and West Vancouver, the BC Housing Affordability Fund is a plan that just may work.
At CityAge we hear a lot about the affordability crisis, because it’s a major issue in each of the cities we’re headed to in 2016, including San Francisco, Toronto, Los Angeles and Hong Kong. This is an idea that presents a potential — and equitable — path to balance.