RJ Aquino and Christine Boyle: Gregor Robertson won't solve housing crisis with "speculation tax"
It looks as if, eight months later, Mayor Gregor Robertson is borrowing a plank from the OneCity platform in last November’s election. Unfortunately, a few nebulous statements don’t equal a practical, achievable plan.
Robertson, together with mega condo-marketer Bob Rennie, are now beginning to talk about a “speculation tax” on house sales, though they think somebody else should do the taxing, and they’re pretty vague about how the proceeds would be used. Rennie, a top Vision Vancouver supporter, is of course also a major donor to the B.C. Liberals and Christy Clark, who recently came out against intervening in foreign investment—because efforts to slow down investor purchases might bring housing costs down.
Let’s compare the two proposals (though it’s a bit of an exaggeration to call the Rennie/Robertson musings a proposal).
On October 9, 2014, we proposed a flipping levy that would work like this:
The Vancouver Flipping Levy will be applied only to speculative profit, the difference between the initial purchase price and the resale price. It will encourage long-term home ownership and spending in the local economy by decreasing over time, disappearing after the fifth year, and by exempting the cost of renovations, green retrofits and other capital improvements…
OneCity’s proposed Flipping Levy will be 50 per cent of speculative profit in year one; 35 per cent in years two and three; and 20 per cent in years four and five…
The revenue generated by the Flipping Levy will be transferred to the Vancouver Housing Authority to create new living spaces for low- and middle-income people throughout the city.
Robertson says it’s the B.C. government which should take responsibility for such a move. Fat chance. Rennie suggests that the revenue generated (though he doesn’t put forward a plan for how to calculate the tax and the revenue or how much would be collected) would be used for small grants to first-time buyers. Would a $5,000 grant make it more possible for any middle or low-income family to buy a home in Vancouver? Of course not.
Our plan is straightforward and achievable. Significantly, it calls for revenues to be used to create rent-geared-to-income units. That’s real affordability for the families, young people, and seniors who so desperately need places to live in Vancouver.
City council continues to assert that their policies are somehow making Vancouver housing more affordable. But their solutions—including waiving development cost levies, which pay for community centres, social housing, parks, and childcare, for rentals that cost up to $1,366 per month for studio apartments—are driving low- and moderate-income residents out of the city. Vancouver needs bold solutions to the affordability crisis and so far we haven’t seen any.
Jon Q. Publik
May 25, 2015 at 2:54pm
This banter of a speculative condo tax by anyone is dumb - it makes the assumption that current buyers foreign or domestic are in the real estate market to make quick returns on investment by selling their unit rather than holding on to the property for rental income - which usually requires a longer term commitment.
Any policy should really be driven by hard data which unfortunately no one seems to be willing or able to do.
May 25, 2015 at 4:13pm
But the city doesn't have these kinds of taxation powers, and would need the city to grant them. If you think it's unrealistic to think the BC government would collect this tax themselves, good luck having them give the city the power to do it.
The truth is that levers like the development cost levies, permits, density bonusing, and rezonings are the only tools the city has right now. Could they be used more aggressively? Absolutely! Would it be awesome if they province gave Vancouver more power? Hell yes!
But don't poo-poo the mayor's tax idea when your own isn't any more realistic.
May 25, 2015 at 9:53pm
Anecdotally, there is a lot of flipping going on. A person watching MLS listings will see a property for sale, off the market, then back on not long afterwards, much higher. When you developed your flipping levy idea, did you have data? Can you publish it? I suppose anyone with access to MLS listings history (realtors or associations) could do the analysis. Has it been done, and are the numbers out there? It seems that before any such policy is adopted, the analytical basis will be needed.
May 26, 2015 at 12:08am
May 26, 2015 at 3:06pm
Didn't OneCity get hammered in the election?
May 26, 2015 at 6:22pm
I applaud your intentions, but your proposal is far too weak. Many speculators hold on to vacant properties for 10 years or more to choke supply. Just look at Concord Pacific. Gains on real estate should be taxed at 75% or more regardless of when the property is sold and who the owner is. People just shouldn't expect to make easy unearned money by sucking blood out of the community.
Greg:Don't bother trying to distract us with speculation tax
May 26, 2015 at 7:37pm
Straight, Bob Rennie, and whatever other media or "activist" groups, don't bother either.
Greg: we don't need to have a "conversation" about this issue: we just had an election in lieu of such a talk. Now it's time for you to take responsibility for what we voted for, which was affordable housing, m'kay? So whatever you have to do, sit down and have a think, and start defending your promises and your constituents, talking to higher levels of government, looking up policy, in short do your job. But WE? we definitely don't need to talk.
Perhaps the worst thing about this housing bubble is its effect on the mood of the city...it's not simply "boring"...it's suspicious.
Leave it to the parasitic propagandizers hell bent on superficialities such as the young generation's "dreams of home ownership" to contaminate the discussion with utter nonsense. A house in Burnaby shouldn't be $1 million. And we shouldn't be letting in more Chinese into the region (45,000) than the US does across the whole country (30,000).
Even if nothing changes, however, the main thing to notice is the deterioration of the mood. No, the Economist missed the mark about Vancouver simply being boring. Now, with all of these greedy buffoons and boors...now what is doesn't have is class.
May 27, 2015 at 9:11am
Is it just me or does it seem like the mayor gets all his talking points from Bob Rennie?
Really, who is running this city?