When San Francisco citizens cast ballots in California’s general election on November 4, they’ll also vote on several local-initiative measures, including one related to housing.
The measure seeks to discourage real-estate speculation, particularly the flipping of apartment or multi-unit residential buildings. If approved, it will impose an additional tax on sales of these properties that occur within five years of purchase.
“Home prices and market rents in San Francisco are among the highest in the nation and are now beyond the reach of many San Franciscans,” reads the proposed ordinance.
That’s something that many residents in Vancouver can relate to. It’s a concern that the OneCity civic party plans to address with its own version of a “flipping levy”.
The levy would be charged in increments as a percentage of “speculative profit” on the sale of properties within five years of purchase.
Based on OneCity’s proposal, the tax would be 50 percent of the profit in the first year, 35 percent in the second and third years, and 20 percent for the next two years.
“It’s for people who go into the market to buy a home and then turn around and sell it to make a big profit,” OneCity’s lone council candidate, Rafael “R J” Aquino, told the Straight in a phone interview.
According to Aquino, the measure aims to foster long-term ownership and actual use of houses in the city.
“It will encourage people to hold on to their properties longer and use it for long-term ownership and make it available for housing for anybody that needs that housing,” he said.
Aquino noted that Germany, Malaysia, Singapore, and Hong Kong have tax laws aimed at curbing the practice of flipping properties.
OneCity’s proposed levy would exempt costs for renovations, green retrofits, and other capital improvements to the property.
Revenues generated would be used to develop affordable homes.
According to Aquino, the flipping levy will work in concert with his party’s proposed “20 Over 5” housing policy, which it earlier rolled out as part of its campaign in advance of the November 15 municipal election.
That policy provides that all new multi-unit developments of at least five homes should devote 20 percent of units to low- and middle-income residents.