In 2013, a study by the City of Vancouver found that roughly 20 percent of condos in the upscale downtown neighbourhood of Coal Harbour were sitting empty.
Today (June 22), Mayor Gregor Robertson held a press conference with those towers behind him and pledged the city would implement a tax on vacant properties, with or without the help of the province.
“An empty homes tax is really a promising first step to create a more level playing field in the market, and also to ensure that there is more rental housing available in a city where vacancy is almost non-existent," he said.
The mayor outlined two options for how the city can proceed.
The first and preferred path would see the provincial government cooperate with the city to implement a residential-vacancy tax that could be applied against properties based on existing data collected through tax information and property assessments.
Without the assistance of the province, Robertson continued, the city could unilaterally create a new class of business tax that would target vacant homes understood to be held as investments.
“Either way, Vancouver is moving forward with this empty-homes tax and putting thousands of empty homes onto the rental market,” Robertson said.
He imposed a deadline of August 1 for the provincial government to respond to the city’s proposals.
“I will be writing to Premier Clark asking for her support in creating this residential vacant-property tax class,” Robertson said. “If we don’t receive a written response confirming a commitment from the B.C. government by the first of August, then we are going to have to take action,” he said. “We’ll move forward on that on our own after the beginning of August, if we don’t hear the province’s commitment to the residential vacancy tax.”
Premier Christy Clark reacted to the mayor’s press conference with a message posted on Twitter.
“Thank you @CityofVancouver for your thoughtful work on housing vacancy,” it reads. “We are reviewing your report and will respond quickly.”
One question yet to be answered is how much a tax on vacant units would cost. The city has also yet to define what qualifies as a vacant home.
Last March, it published a study that found that in 2014, one percent of single-family and duplex homes were sitting empty and 12.5 percent of condos were vacant. That equates to 950 single-family and duplex homes, 125 rowhouses, and 9,750 empty apartments in Vancouver.
Robertson noted those numbers were calculated using BC Hydro data that found they were unused for 12 months of the year. That means the city could attempt to apply a vacancy tax to an even larger number of dwellings if it aims for a lower threshold of under-utilized homes left empty for extended segments of the year.
“Those 10,000, if we can get several thousand onto the rental market in the near term, that is an enormous new supply that, typically, would take many years to build out,” Robertson said.
According to the Real Estate Board of Greater Vancouver (REBGV), over the past three years the benchmark price for all residential properties in the region it describes as Greater Vancouver increased by 48.3 percent. As of May 2016, the benchmark price for a single-family detached home on the city’s East side was $1.46 million. On the West side, the benchmark price was $3.44 million.
Robertson described the situation as an “affordable-housing crisis”.
A staff report that examines potential next steps for the city is scheduled to go to council on June 29.
Robertson said the city’s hope is to catch the province’s attention as soon as possible.
“The timing is really, firstly, about urgency,” he said. “We need to move this forward. We also recognize that the provincial government is going into an election cycle. We want to see action taken in these next couple months, before they are distracted by the upcoming election in B.C. We want to make sure, as well, that we get a signal early on. Everyone has had many months to look at this. We’ve been in a crisis for many months. It’s action time now.”