Close to a hundred people joined me on September 23 outside the extravagant estate of lululemon's founder, Chip Wilson, to say just that. We chanted “Chip in, Chip!”, and presented a mock Notice of Assessment detailing just how much he’d owe every year under my Mansion Tax.
We came together to say that we need to tax the rich to build the housing we need. It’s opened up a discussion in various media outlets, on social media, and in all-candidates meetings. And now I thought I’d take the time to explain what we are thinking in a bit of detail.
We have a housing crisis, as everyone knows. Over 2,000 people are homeless, average rents for a one-bedroom apartment are over $2,000, and working people are moving out of the city because they can’t pay rent, let alone buy a home.
Providing a modular home to each person who needs it costs $75,000 per unit, or $160 million in total. And, for the 18,000 Vancouverites currently spending over 50 percent of their income on rent, we can build social and cooperative housing, costing about $360 million per year.
That’s the housing we need but the private market is not building it.
That’s what our Mansion Tax is for. Provincial and federal governments get their revenue from income tax which is progressive—the more you earn, the higher the rate of tax. Cities get their revenue from property tax which is a flat rate, making it impossible to get enough revenues without hurting modest homeowners. So we’re proposing that if you own a home valued between $5 million and $10 million, we would tax an additional one percent. For the value of a home over $10 million we would tax an additional two percent. For homes worth $5 million or less, there would be no change to your taxes.
To be clear: the amount under $5 million would not be affected, so the impact would be minimal on even homes slightly over $5 million. We can structure the Mansion Tax so that no senior would have to leave their family home because their taxes were too high for their incomes. They could simply defer their taxes until they pass or sell their mansion.
This plan will bring in about $174 million a year. Just one year with the Mansion Tax is more than enough to cover the cost of modular housing—$160 million—for every person without a home. Studies have shown that keeping someone on the streets is actually more expensive than housing them: $23,000 per year in health care, policing, and other costs. So the initial investment will pay-for-itself in four years.
One critic of my plan, Brent Stanford, writing in 24 hours, simply ended up supporting my argument. “If we end homelessness we should be able to drastically cut back on the hundreds of millions of dollars government currently spends each year on Vancouver’s Downtown Eastside,” he wrote. “This would be real savings.”
With the Mansion Tax, we’ll start building hundreds of units of permanent social and co-op housing for people who desperately need housing. For the 18,000 Vancouver residents facing housing insecurity, it will cost about $360 million per year to build enough social and cooperative housing. The Mansion Tax alone will cover about half this cost.
The City reserves another $70 million per year for affordable housing with community amenity contributions and development cost levies. And we would still be getting housing contributions from federal and provincial governments to add to what we could get with the Mansion Tax.
We should work our way up the need scale so we are gradually housing people with higher incomes, but ensuring that all have a basic human right to decent housing.
In other countries people live in social housing. In Vienna, for example, 60 percent of residents live in social housing. It’s nice housing and it’s secure. We could have that here too with this source of revenue to buy land and build the housing.
We must also start making public land available to Indigenous people for housing. A key part of the plan will be to put substance into reconciliation.
We can use some of the money to put teeth in reconciliation, for housing and land for Indigenous people. For example, with this policy the threat of condo desecration at the Musqueam midden could have been stopped right away and the city could buy the land and return it to its rightful owners.
I’m not the only one who thinks a Mansion Tax is a good idea. “It’s not a foreign system, it’s not something that’s coming totally out of the blue,” Andy Yan of SFU’s city program approvingly said in a Vancouver Sun article.
From the same article, UBC economist Thomas Davidoff says: “It’s very hard to find anything undesirable about raising taxes on high-value Vancouver property...Obviously, it’s bad for the rich guys.”
A Mansion Tax would result in a bit less money for the rich but it’s necessary. And I’m hoping that with new provincial legislation that reduces the amount that corporations and rich people can contribute to elections, we might have a greater chance of actually making it a reality and solving our housing crisis with it.
As I said at Chip’s, this is the housing we need and this campaign is the revolution we need.More