The City of Vancouver could do more to create affordable housing through better land use planning and lower fees and levies for new homes, Premier Christy Clark said to Mayor Gregor Robertson in a strongly worded letter June 4.
Clark made the recommendations in response to Mayor Gregor Robertson’s May 22 letter that requested the B.C. government build more housing and implement a tax to penalize property speculators and increase the property transfer tax on luxury homes.
“Using any method of new taxation with the goal of driving down the price of housing could have the unintended effect of hurting current homeowners across the region,” Clark said in her letter, which was circulated to various news outlets, including the Courier. “Driving down the cost of housing by just 10 per cent would mean a family with a home currently worth $800,000, could lose $80,000 in equity in their home. That could put some homeowners with large mortgages into negative equity.”
Spreading that same 10 per cent calculation across Greater Vancouver, roughly $60 billion in home equity would be lost, according to a Ministry of Finance analysis of the real estate market, which was attached to Clark’s letter..
While acknowledging she shares a concern with the cost of housing in Vancouver, Clark pointed to a report done last year by the Urban Development Institute that estimated Vancouver’s civic fees and levies add $76,144 to the price of a new condo unit worth roughly $450,000.
She added that “beyond any new taxes to curb demand, there is also the option of increasing supply through better land use planning.”
The Ministry of Finance analysis said the B.C government could encourage local governments to address affordability through local taxes and planning measures such as:
• Adopting growth strategies and plans that encourage affordable housing units.
• Nurturing a regulatory environment that is “housing-friendly” and encourages densification.
• Offering property tax incentives and targeted reductions to build or renovate affordable housing.
• Streamlining development approval processes.
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There is one rather disturbing implication of the Premier’s position:
- If no action should be taken that, as a matter of public policy, would lower housing values – and yet these values keep escalating – then the government is waiting for some externality for which it cannot be blamed that would do the job. In other words, a crash.
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But another more salient point is this:
“Better land-use planning” means, explicitly, densification.
- Densification, under all regional and municipal plans, requires more transit.
- If there is to be more growth but no increase in transit, why would any community accept densification?
- If growth occurs anyway, then, presumably, it will be more auto-dependent – putting more demand on the road system, which in large part is a provincial responsibility.
All this comes to a head with the results of the referendum – and the Premier’s interpretation of a no vote.
If she concludes that the voters have spoken and there will be no increase in transit capacity for the foreseeable future, and yet municipalities should densify in order to deal with affordability in the absence of any provincial initiatives, what will be the Province’s obligation and commitment to handle the transportation demand that results?
Having failed to be elected TWICE in our fair city and having never served at the municipal level, she is now an expert on the issues this city faces? Could she be carrying a grudge, perchance?
As Manthorpe points out, other countries similar to Canada facing similar impacts are at least trying to do something to mitigate the impact of – possible – foreign hedge ownership. The very least we could do is to follow the money.
Or look at facts. CC is digging her own grave by not even acknowledging there is a problem !
“Vancouver’s civic fees and levies add $76,144 to the price of a new condo ”
Nearly 20% of the cost!
Does the $76,144 include the upgrades to water, sewer etc. to accommodate a new condo building?
BIV reports, “[Realtor] David Goodman calls the process of building housing in Vancouver, “dizzying levels of red tape, disincentives, financial extractions, sustainability requirements and other demands” made by city officials.”
As Frank says, someone should follow the money; follow the city money.
Reducing those fees would be political suicide.
The money has to come from somewhere. If it’s not going to come from new development fees then it will come from property taxes paid directly or indirectly by every registered voter in Metro Vancouver.
or non-residents. The critical distinction is housing to live in it, and housing to park money. Monetize the later far FAR more, by l- for example – linking it to the income tax system as neither property taxes nor income taxes are high enough for investment properties held merely to park foreign cash – or by raising property and land transfer taxes for all and then giving rebates to house owning and income tax paying BC residents.
Christy Clark unfortunately is seeking an easy way out, by ignoring the issue of foreign money. The Mayor is actually on the right track.
I’m sure there are ways to streamline and make the process more efficient…but you can bet the first time there’s a fire or something because code wasn’t met–who’s gonna get the blame?
It won’t matter because the City of Vancouver absolves itself of all responsibility – even in the event of negligence. Check out the Homeowner’s declaration you have to sign if you want to renovate your house with permits. So the purpose of permits and an inspection is…? $$$$ for the City coffers.
If that were entirely true, why bother with inspections. Just take the money.
just because they’d rather not get sucked into a legal black hole doesn’t mean that safety isn’t a goal of the inspections.
“The owner hereby agrees to indemnify and save harmless the City of Vancouver and its employees from all claims, liability, judgments, costs and expenses of every kind which may result from negligence or from the failure to comply fully with all by-laws, statutes and regulations relating to any work or undertaking in respect of which this application is made.”
– from the homeowner’s undertaking letter
http://vancouver.ca/files/cov/owners-undertaking-letter.pdf
Yeah, so if you don’t follow the rules, you can’t blame the City. So we either enforce the rules (takes manpower and $) or we don’t. Which you would prefer?
Well if they’re inspecting things, shouldn’t I be able to hold them liable for negligence? Or what about when one inspector tells me I can run my sewer line this way and a different inspector at final inspection tells me “no, no, no – that’s not acceptable” and I have to redo it all at an extra to me cost of $12,000?
“negligence or from the failure to comply fully”
I assume negligence means on behalf of the owner as that same sentence says or failure to comply fully etc.. as in, if you do something after it’s been inspected, you’re liable.
As to the second point, that’s a different matter, I don’t know how often that happens but if it does, yeah, that’s something that needs fixing.
I just went to a bouldering gym and they made me sign a declaration saying I cannot sue them for injury even if they are negligent. That’s pretty much standard these days.
I actually agree with the premier. I don’t think building subsidized housing is an effective means of lowering housing costs for the vast majority of the population. Much better simply to reduce prices across the spectrum through reductions in fees and increases in supply.
Lowering housing costs by reducing municipal fees isn’t going to do anything to improve affordability because property taxes will have to be raised to make up for the lost revenue. The net cost of owning a home will remain exactly the same.
It doesn’t, “have to come from somewhere”…reduce expenditures. 30 million for the Burrard bike lane etc. Isn’t that a bit rich?
Eric, the $30M is a made up number. Over $20M of the cost is for the railings which are falling apart and long over due (planned and budgeted for since the 1990’s) and related sewer work. The intersection redesign which is going to reduce the number of accidents is about $6M. The redesign of the north end of the bridge is going to make traffic more efficient and safer for everybody and will reduce delays for many. The reallocation of the bridge does not reduce capacity, as the capacity is limited by the intersections.
BTW, the project does not add a bicycle lane (as there are already cyclists only facilities on both sides of the bridge), it adds a pedestrian facility and will reduce walking times for some by up to 5 minutes.
Are we paying part of our $6 million to the same designers that created the mess and congestion at the northern end before? How much did that cost six years ago?
Why the call for improvements when Gregor Robertson proudly said in 2010, “Findings from a UBC cycling safety study indicate that accident rates have decreased since the separated bike lanes have been added. In a five-month period before the lane separation, four cyclists were injured severely enough to require hospitalization. In the same five-month period during the trial, the number of cycling trips increased but only one cyclist went to hospital.”
Who’s wrong, the UBC study or the Mayor?
The $30M is for a lot more than the new bike lane. Perhaps, Eric, you should read the project docs. Or the thoughtful (hint, hint) comment by Mr. Brander
Why. Brander incorrectly says that the $30 million includes sewer work, yet the City says that the work will be co-ordinated with sewer and water works. There is a big difference.
City of Vancouver:
“Relevant plan directions include:
Improve safety, eliminating transportation-related fatalities
Increase green transportation so that at least two-thirds of all trips on foot, bike, or transit by 2040
Make walking and cycling safe, convenient, and comfortable for people of all ages and abilities
Manage the road network efficiently for all road users
Burrard Bridge and the other False Creek bridges are top priorities for improvement because:
Each bridge has unique challenges that can make walking and biking difficult
Declining motor vehicle volumes and the timing of required maintenance on all three bridges make it possible to combine improvements for less money”
Relevant:
Again, the City tells us that motor vehicle traffic is declining while pushing for a Yes vote for billions more for TransLink because vehicle traffic is growing and we will soon have gridlock.
The City says whatever it wants. In the same day it contradicts itself for partisan purposes, For the first year the new and improved Burrard Bridge was claimed by Gregor to be safer after Gregor put in the first bike lane and chopped in half the southbound access for westbound vehicles on Pacific. Now, a few years later the City is trying to tell us that $30 million must be spent because it was approved by council in 2012, and it’s now the second worst place for accidents, injuries and deaths.
Believers go on believing but the rest of know BS spin that is just like all other BS. Meet the new boss – same as the old boss.
city permits + architects + engineers + realtors = densification?
According to the UDI (Urban Development Institute) the $76,000 is only part of it. Considering that it takes up to three years to gain approval of a project, or a building, the owner/developer has to finance the entire project during this period. This can easily add $1,000.00 per month, or $24,000.00 for a quick two year process, to the cost to the buyer.
Furthermore, the City of Vancouver does each project as a unique project (just like their infamous Spot Zoning, so developers/owners/builders cannot pre-judge the city squeeze costs, so they have to speculate and gamble on what the shake-down costs will be.
Pity the first-time buyer in this expensive minefield.
I think there may be too much emphasis on taxation. Could we not invert the problem by concentrating on the subsidies given to property owners. All owners receive hidden subsidies by virtue of the higher rate charged to commercial , retail and manufacturing sector which brings down the overall mill rate- for every property owner. Our provincial and federal governments also return grants and subsidies to municipalities to bring down the total cost of civic government. What if proof or residence is required through our federal / provincial tax return documents to qualify for the lower mill rate. I have no problem with offshore purchasers buying here. Canadians do the same in other overseas cities. What we could do is disallow the hidden subsidy to apply to all property owners from offshore. Tell me if this is too complicated because I would like to suggest it to our mayor and council . Comments please.
yes it is far too complicated, but you are saying the same thing: non-residents have to pay more.
Relatively speaking, non residents WILL pay higher taxes than residents by virtue of not being eligible for the Provincial Home Owners Grant, seniors adjustment and, what I am proposing, is a new City Home Owners Grant. This City Home Owners Grant is paid from the same existing subsidy on the residential mill rate which is afforded by higher commerce industry etc mill rates. This is not semantics but a recognition that all property owners should have the same basic rights, responsibilities and non discriminating tax base but those of us that live here and pay provincial and federal taxes should also be eligible for the subsidy resulting from the differential civic tax structure and therefore should enjoy lower taxes relatively speaking.
Both politicians (CC and Mayor Robertson) act irresponsible here. It is plainly obvious that foreign money drives up values . The only question is ” how much ” and ” what to do about it” ! Many affluent passport seekers, masquerading as immigrants and all non-residents pay little if any income taxes here yet avail themselves of expensive services such as street cleaning, garbage pick up, parks, policing, education or health, often also for their non-income tax paying kids and elderly parents.
As such it is only fair to ask them to contribute far more to the tax pie.
We expect the elected governments to recognize the problem, gather facts and then act upon it as a variety of reasonable solutions exist !
Such solutions could be:
a) increase property taxes or land transfer taxes on non-residents, say to 1% per $1M to 15%, or
b) enforce the reporting via income tax filing system and actually collect the 25% tax on a gain, or
c) have everybody pay higher property taxes but give a rebate to BC resident income tax payers on their tax filing, or
d) have luxury taxes, or
e) introduce PST on real estate as it is a form of consumption, no different than a car, a ring or a meal in a restaurant.
Each option has its merits, but also drawbacks, and all options should be on the table, discussed, measured, then implemented as the fabric of Canadian societies is at stake here !
The teachers’ strike around not enough aides for too many ESL kids in school and lack of taxation of too many passport seekers, aka “immigrants” for merely 3-4 years, is clearly related and needs to be taxed far more.
==> We cannot continue to give away passports for almost no cash, via taxation, in return yet pay for all healthcare and education for years just to see people leave after 3-4 years. This phenomenon is widely abused in MetroVan and other select cities in Canada. Are we this desperate in Canada ? Can CC not acknowledge that , then ask for more data, then decide s.th. sensible here ?
Ina more legible format:
for Ohrn and Brander:
Why. Brander incorrectly says that the $30 million includes sewer work, yet the City says that the work will be co-ordinated with sewer and water works. There is a big difference.
City of Vancouver:
“Relevant plan directions include:
Improve safety, eliminating transportation-related fatalities
Increase green transportation so that at least two-thirds of all trips on foot, bike, or transit by 2040
Make walking and cycling safe, convenient, and comfortable for people of all ages and abilities
Manage the road network efficiently for all road users
Burrard Bridge and the other False Creek bridges are top priorities for improvement because:
Each bridge has unique challenges that can make walking and biking difficult
Declining motor vehicle volumes and the timing of required maintenance on all three bridges make it possible to combine improvements for less money”
Relevant:
Again, the City tells us that motor vehicle traffic is declining while pushing for a Yes vote for billions more for TransLink because vehicle traffic is growing and we will soon have gridlock.
The City says whatever it wants. In the same day it contradicts itself for partisan purposes, For the first year the new and improved Burrard Bridge was claimed by Gregor to be safer after Gregor put in the first bike lane and chopped in half the southbound access for westbound vehicles on Pacific. Now, a few years later the City is trying to tell us that $30 million must be spent because it was approved by council in 2012, and it’s now the second worst place for accidents, injuries and deaths.
Believers go on believing but the rest of know BS spin that is just like all other BS. Meet the new boss – same as the old boss.