I’ve been wondering about this for some time: Would those of us who have ridden the property curve up to the stratosphere actually sign a petition that says, ‘Hey, we did little to earn these millions that have been the consequence of good timing in an extraordinary location. We believe that, yes, our political leaders should take action to moderate the market even we see a drop in the value of our property.”
Well, civic journalist Frances Bula has called for just that on her blog:
If Vancouver residents really want the province to start making changes to try to moderate the officially out-of-control (parts, anyway) real-estate market in Vancouver, just holding demonstrations and/or waiting for newsrooms to provide coverage is not going to do it.
My experience of politicians — okay, not all, some do things strictly out of principle — is that they wait to see how much public uproar there is. If it seems like it will die off in a few weeks, they’ll just sit out the dust storm. If it seems like it’s building up to serious levels, they’ll start to move.
One thing that would have an impact is if homeowners, those people with their money sunk into the market and whom the premier seems to be so afraid will be upset if she does anything, should start a petition saying they do not need the excessive profits that the last couple of years have been providing and that they’d rather see the market moderated.
Many people I know, myself included, take no pleasure in seeing the big jump in alleged value of our homes the last couple of years.
They’re not planning to cash out and take their millions to Hedley or Charlottetown. They are committed Vancouverites (and, by this, I don’t mean just the city but the region) who want to stay and would like to see other committed Vancouverites be given a chance to put down roots here.
Go ahead: Let the premier and her party know, in your thousands, that you don’t need that extra $500,000 or $1 million or $2 million on top of the 300 per cent or so increase in value you’ve already seen on your property since you bought.
So how about it? Sign here.
To Premier Clark, Mayor Robertson and other leaders in this community:
I have seen a significant increase in the value of my home over the last few years – well beyond what I would have imagined when I bought it. I know that because of the extraordinary rise in asset value that I have benefited from, average families and young people in particular are unable to afford to live in Vancouver and put down roots here. Speculation in the market is of unknown dimensions, but evidence continues to accumulate that it is distorting the market because of the expectation that prices will continue to rise. The spillover is affecting some commercial real estate and rental properties. Empty homes proliferate; demolitions accelerate. The consequences on our communities are disruptive, and our social fabric is threatened by cynicism and distrust.
I don’t need that extra money on top of the increase in value I’ve already seen. I would rather see the market moderated even if it means a loss of value in my home. I believe asset values should be redirected to provide more affordability and public policy used to provide more housing alternatives.
Gordon Price
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Why stop at a petition. After all, talk is cheap. Instead of just talking euphemistically about “redirecting asset values”, why don’t people just take the extra millions they make on selling their houses and donate them directly to people they don’t know so that those people can have a better life.
(StatsCan can tell you why: when faced with the prospect of giving away actual money, people just don’t give very much — less than $800 per year for families earning $120k or more. Or you can just ask my old neighbours who sold their house for a million more than they expected. They gave it to the kids, and not so they could buy a place in Vancouver because they all live elsewhere. They gave it to the kids because that’s what parents generally do.)
The reason that isn’t viable is because most people don’t just sell their home and die – they need to buy another home to move into. If you keep less money for the home you sell then in our market you won’t be able to afford the home you’re trying to buy.
So it only works if the politicians are convinced to introduce broad rules that lower the price of all housing by a similar amount.
…but of course any general lowering of value can be a big problem for people with mortgages who still owe a lot of money on their properties. And I’m pretty sure that’s too large a proportion of homeowners to make this suggestion politically palatable.
People wanting to buy a home are part of the problem too. This is called demand. Without them, prices would be a lot lower. You can ban wealthy foreign buyers and tax speculation, but as long as basic supply is constrained and demand still remains high, prices will respond.
There is no certifiable proof that doing the things above or new government policy will lower prices to pre-2000 levels. Higher prices are here to stay and the proof of that was the 2008-09 world financial meltdown that caused local prices to dip about 15% locally, but only temporarily. Wailing and gnashing of teeth will not lower prices. Lowering expectations and promoting greater housing choice and supply will be far easier to accomplish.
Agreed. The Province simply confiscating the house-price windfall of long tenured Vancouver residents would do nothing to remedy the underlying supply / demand imbalance. Bula seems to think that being a “committed Vancouverite” is a virtue here, but if she and her cohort were more willing to cash in and live out their golden years in, say, the Okanagan, that might actually help matters (not saying she should, just pointing out that lack of housing supply / diversity is the central issue). And confiscating value from recent buyers who paid full freight would plunge many into negative equity, which is hardly fair either.
@MB not quite true. With offshore money taken out of the equation prices are limited to those able to pay with local incomes. Even the most generous bank is not going to lend someone $2 million for a tear down shack, unless they’ve got a heck of a good paycheque.
Taking that foreign capital out of the equation seems to be the stickiest part. It seems Australia has done something effective, even chasing buyers who bought property under murky or illegal circumstances.
I’d be interested to see how much prices came down in these cases. My guess is, not a huge amount.
Call me pessimistic, but that will be as likely as, say, a groundswell of no demolition clauses written into sales contracts.
foreign ownership has gone a muck there needs to be restrictions similar to australia as well as a clamp down on flippers and dirty laundered money. Don’t tell me the government can’t figure out a way they can.Also close down any loopholes that these buyers try to abuse.A balanced market will be the result although it will still be pricey at least it will protect canadians to some degree because the bs going on now is out of control.The government has ignored it on purpose because they are raking in big taxes but now they are talking about it because people are fed up and the scandals have been exposed by the media.Start protecting canadians first.
Citations please. Referring to Australian anti-foreign ownership policies is rampant, but what are the results? Have their new taxes resulted in a massive lowering in housing prices? Or lowered demand and created an abundant supply? Do Sydney, Melbourne and Perth have a similar set of geographical constraints as Vancouver that also constrain land under inefficient zoning despite foreign opwnership?
This petition makes sense, but it is shy on specifics. I sent this letter today:
To: David Eby, MLA Vancouver – Point Grey
Cc: Christy Clark, Premier, BC
Mike DeJong, Minister of Finance
David:
I truly appreciate the publicity you received on highlighting some shady areas of house flipping in MetroVan. Allow me to comment.
A realtor does a service, for a fee, and like any business some folks give excellent and some sloppy service. No seller is forced to accept any contract nor any price. If the realtor gets a fair price he/she deems fair after reasonable marketing efforts, and a buyer then assigns this contract to someone else for a fee, why is this immoral or even fraudulent ? This is done in the stock market on a daily basis, tens of thousands of times. Why not real estate ? Real estate is not only housing or shelter, but an investment also.
The core issue as such is NOT assignments per se, but first and foremost if assignment profits are declared as busines income and taxes are paid, and secondly (or perhaps primarily) if housing for non-Canadians should be taxed far FAR higher, on acquisition, while holding and on exit ?
The overarching, unaddressed, issue is general over-reliance in our provincial revenue model on income taxes as opposed to consumption or real estate related taxes. We overtax incomes but under-tax consumption, including housing. Housing, beyond mere basic shelter is consumption. Why is it taxed so low ?
As such, affluent immigrants and foreigners do what is rational and legal: do not declare incomes in Canada but take advantage of healthcare or education services for themselves, kids, parents or spouses, while buying the biggest house they can afford, plus flip one or four while paying little in property taxes or consumption taxes.
As such we ought not to make this illegal, but monetize it, i.e. tax it. Our income taxes are far too high, and our consumption and real estate related taxes far too low. And yes, there is the odd shady realtor, but most are honest.
The core isssue is NOT flipping, but lack of taxation of acquisition, holding and gains on resale, for both residents but especially for non-residents. Our tax code needs to reflect this new reality, but it does not today.
Imagine the job and investment boom we could create here in BC if we did it like Texas: no state income tax, but far higher property taxes and higher consumption taxes ! We’d encourage working hard and making money, but tax locals and foreigners alike on excessive consumption, including homes. Add to that perhaps a foreign owned land transfer tax of 1% per $1M, to 15% and we’d monetize foreigners’ desire to park their (legal and often illegal, but hard to track) cash here !
Real estate is the new gold. Don’t stop foreigners investing here, but MONETIZE IT !
Yours Kindly,
Thomas Beyer
On 11 February 2016 at 08:16, Price Tags wrote:
> pricetags posted: “I’ve been wondering about this for some time: Would > those of us who have ridden the property curve up to the stratosphere > actually sign a petition that says, ‘Hey, we did little to earn these > millions that have been the consequence of good timing in an ex” >
Hi Gord,
Your hyperlink to the petition doesn’t seem to be working? can you please post it and also a link to the page, directly?
OK, was I punked? 🙂
We sneaked back into Vancouver in 2010, outbidding a builder on a tear-down, and slowly made our beater house livable. We are among the many in the city whose lives are caught up in our little patch of dirt – my wife’s garden, my vegetable garden, the 10 x 12 foot space I use as a studio, our neighbours and community. Yes we could move to Hedley and have enough money left over to buy a time-share in Puerto Vallarta and spend the balance with WestJet. Big deal. I don’t feel cashed-up at all! The only possible benefit of this paper-value will be when I’m too old to look after myself and I’ll be able to afford a better quality of dog food at the care home. I’m with Frances on this one: take the business opportunity out of the zoning, lower the allowable FSRs to match what’s there, and moderate the upward pressure so we can still have young neighbours who are engaged in the city as it is.
” moderate the upward pressure so we can still have young neighbours who are engaged in the city as it is.”
What specifics do you suggest ? Higher land transfer taxes – for all or only for non-Canadians ? Higher property taxes for non-Canadians ? Capital gains taxes on gains ? Making home ownership illegal for non-Canadians, or perhaps even for non-BC-residents (incl. folks from USA, Alberta, Ontario, Europe, ..) ? Disallow foreign ownership – like Australia – of single family houses but not of condos ?
As I said, above, take the business opportunity out of the zoning. There will still be upward demand pressure on a limited supply of “affordable” old houses, but there will not be the incentive to demolish and rebuild at a much larger, more luxurious, more expensive size. It’s that jump – from price x for land with old house to price 3x for same land with Big New House – that is killing the west side, at any rate. And I would create incentives to renovate (not renovict) existing apartments and rooming houses, which will not add new supply but at least will stabilize the old supply. I’ll leave the fiscal and taxation stuff to others.
@Michael Kluckner: “lower the allowable FSRs to match what’s there”
The problem with this is that it flies directly in the face of the city’s push for densification. If you can’t add density then housing will remain scarce which will itself push up prices. Not to mention forcing more people to the burbs and increasing the volume of commuters.
When you start to pick at one thread the whole garment is in danger of unraveling.
I was hearing from a friend the other day that one of Squamish’s zoning tools is a maximum number of units per block, but not necessarily a specific FSR … I haven’t looked into the details of that, but one tool might be to limit the FSR but not limit the UPS (units per site) … so that one could cap the size of each unit while still allowing densification for more unique and ‘missing middle’ types of housing forms which aren’t possible in an RS1 zone now (or not easily possible).
This could allow greater density even then house + laneway house, while still keeping a lid on bulk (allowing side by side + back to back townhouses for instance, some of which exist in Kits near Kits Point, for example, but not in RS1)
This is pointing in the right direction. Densification is supposed to be about people/hectare, not size of buildings, so Coal Harbour is not really densified, right? By all means, split up the west side lots into 2500 square foot fee simple parcels as an option. The failure of RS-1 is that it’s destroying affordability and not adding human density to those neighbourhoods.
Anyone else notice that the city’s push for densification pretty much began when the onslaught of Chinese money began scooping up all the West Side houses? Gotta have somewhere to house the locals and keep ’em quiet!
It’s plain that we need a new freehold single family home model that uses less land.
… such as the townhouses in South and Central Surrey and Langley, that are selling fast and are easily reached by the new Port Mann Bridge and a new Massey Bridge.
This is once again the crux of the issue. As much as the idea of living close to the city is preferable to planners, both urban and transit, the desire to have a small space with a tiny bit of earth, repeatedly arises.
My belief is that if the transit planners had looked beyond their inner-city fiefdom and suggested a fast-rail system running to South Surrey, Langley and the North Shore, all linking into the Canada Line in Richmond, the Millennium Line in New Westminster, the original SkyTrain and the new Evergreen Line, then the citizens would have seen a vision of a metropolis with a modern transit system like so many around the world, and they would have been prepared to pay for it. I think a plan like this would have passes even if the tax increase were 2%.
Indeed, instead of more wobbly buses. Only RAPID transit, fairly smooth and in pleasant temperatures will induce people to leave their cars, not crowded wobbly buses that are often too hot or not air-conditioned in summer.
Also missing in this funding debate is the rational behavior of many many affluent immigrants, and certainly non-residents, to not declare their incomes here. As such we ought to increase consumption taxes (aka PST) but also property taxes (on purchase, while holding, and on exit) while lowering or eliminating income taxes, for example like Texas.
Real estate, beyond mere basic shelter, is consumption, and is grossly undertaxed relative to incomes.
We cannot expect cities or the province to provide (education, healthcare, policing,…) services for free while people like in multi-million $ mansions with nary a tax paid on it. Why is capital gains on houses not taxed ? Why are foreigners not taxed far more on acquisition or when holding, say double to triple, especially single family homes ? Why do we tax even middle class incomes 30% .. and anything over $200,000 almost 50%, but a $2M windfall on a house 0 ? As such, why work if one can make a few hundred grand, tax free, by flipping houses every few years ?
Didn’t Trans Link awhile back float the idea of expanding the West Coast Express (using coach buses) to other areas such as those mentioned. Bus ways are far cheaper to build than rail so such a plan would be more likely to see the light of day. If you have a service that connected to the Skytrain junctions and could average at least 60 kms an hour right into the DT core, that would give commuters a pretty good alternative to their private vehicle.