
Another data storm passed over Vancouver last week, causing flooded minds but doing no other damage. There was little illumination in its wake.
The vacant-houses report by Ecotagious, presented to council on March 8th, was an anticlimactic thud, concluding that the percentage of vacant homes had barely budged since 2002. Last Friday, a detailed article in the Globe by Kerry Gold picked holes in the conclusions and was informative about the methodology and its shortcomings. To me, the salient information was the contrasting political reactions of Councillor Kerry Jang and Point Grey MLA David Eby.
Councillor Kerry Jang says the chief concern was to find out if houses were empty for a year at a time. He says the report is proof that foreign buyers are not hiding their money in houses and leaving them to fall into disrepair. He has no issues with a homeowner who only uses a house for a week or two out of the year, or a couple of months.
“It goes back to the fact that they assume an Asian investor is parking his money in Vancouver, leaving their house empty. That’s what I’m taking issue with here. It’s your property. If you want to live in it half the year, that’s your business. Are you to tell me I have to live in my house for eight months of the year? What happens if I don’t? Are you going to take it away from me? That’s the argument.”
Point Grey MLA David Eby, who’s raised the issue of empty houses in the media, says he was shocked at both the survey results, and also the media reaction, which tied the results to proof that foreign investment was a “myth.” He calls the methodology “conservative.”
“We have a shocking number of empty condos and a huge number of underused homes. The people who are trying to sell this [myth] line should spend a little time in Point Grey, in Kerrisdale, and they will see the reality for themselves, in the stores and on the streets. I understand the reasons for underselling this report and saying, ‘Oh, look, the real estate alarmists have been disproven,’ because a lot of people are benefiting from this system, but our community knows the issues. We see them every day.”
This could be one of the old NPA-COPE battles of values from 20 years ago. Eby’s town-hall style meeting, as noted in a previous post, takes place tonight.
Evidently, the question of how many vacant homes – or is it underused homes? – is not going to be solved by data. It will take leadership to craft public policy that will have to be based on community values, not the factoids of one study versus another.
I was really on the side of the Dunbar-West Point Grey-Kerrisdale residents who believed their neighbourhoods were hollowed out, that many houses were vacant and blocks were spooky, and maybe I still am. But a couple of gatherings – what might be called “west side cocktail parties” – around Christmas and thereafter nudged me away from a firm position.
For the first hour, I talked to people who wanted only to speak about the vacancy issue, often with overtones of race and crazy wealth thrown in; having tired of it, people then began to speak about their holidays, the houses they were renting in Palm Springs for the winter, the time-share in Scottsdale, the cabin at the lake, the trips to Europe they’d planned.
How many months of the year were they away, a few weeks here, a few weeks there? Were they engaged in their community when they returned? Is the issue underused homes, one made worse by the affluence of most people in some parts of town? And if it is, what can or should be done about it?













Interesting issue and as you point out, a lot more nuanced than often assumed. We tend to think of the 0.1% gobbling up real estate and leaving it empty but that’s a tiny part of the issue. The vast majority of second home owners are middle class, and this is the first time in history when there have been the resources for that to happen. Whole cities like Palm Springs are owned by people who barely live there, and the same is true in desirable locations all over the world. Vancouverites may be incensed by “those people” don’t even live in the houses they buy here but the truth is, more and more people from here and from elsewhere don’t live in one place any more. That takes some getting used to.
The issue is places like Phoenix that have many Canadians/Midwesterners owning vacation homes are more than capable of absorbing foreign ownership with little affect on overall prices as there is lots of space to build. Vancouver is not capable of absorbing a flood of Chinese money due to land constraints.
That may be true in Phoenix but right now Victoria, also land constrained, is in the same situation, being bought up by people from outside and those people are us: Vancouver boomers cashing out of their West Side / West Van homes. Victoria prices are up 20% in three months. So do we say that Victoria prices were low anyways so we haven’t really affected affordability? Or do we say its ok because it was always going to happen as the boomers retired? Or do we say if the Chinese hadn’t come to Vancouver, Vancouverites wouldn’t have been able to spend so much on homes in Victoria? I think we’re as much of the problem as the outsiders are. After all, who are the sellers in this equation?
Palm Springs, like Las Vegas, has always been a city built on bringing outside tourists in to temporarily enjoy it. Vancouver has not been that type of city, not should we ever wish it to be. Unfortunately our idiot Premier has been going around the world trumpeting an invite for international students without any thought as to how that impacts local residents. All she cares about is that she can offload some costs of higher education by peddling our institutions of higher learning like some used car salesperson.
Indeed the negative aspects of immigration is hardly discussed at all. For every action there is a reaction, or consequences. Vancouver & area has gained a lot by foreign money and Asian immigrants but it also has given up a lot. The upside is not necessarily offsetting the downside. Progress for some means regress for others.
My MLA, David Eby, had a packed event tonight about housing affordability, for example: http://us3.campaign-archive1.com/?u=764cf9659d918243dfbb39269&id=13f05b3b31&e=ae16f1a008
We need to seriously address foreign ownership and taxation thereof. We give away far too much for far too little in return (for example land that is grossly undertaxed) The debate is still very tepid. I feel less and less “Canadian” due to more and more uncontrolled immigration where anything goes and no real values are taught or aspired to. Related post: https://pricetags.wordpress.com/2016/03/11/what-does-canadian-mean/
Where is the line between “immigration is good for Canada” and “immigration is not good” ? Or where is the line between too much foreign money chasing too few single family houses ? Or: is Canada responsible to fix Syrian or Chinese problems ?
@ Bob: Interesting how people (perhaps you’re one of them?) get their shorts in a knot when a commentator mentions the word “NIMBY” in their post, and yet you feel it is perfectly fine to refer to the Premier as an “idiot”.
Decorum goes both ways.
BC ought to lean from booming and job producing Texas and tax incomes less, or NOT AT ALL, but charge far for consumption and property taxes, say triple.
People with skills and people with money can easily rearrange their affairs to declare their income where it is prudent, i.e. low. Many affluent immigrants do what is rational: declare no incomes here, send their kids and spouses here who own one or more homes, pay very low property taxes, pay no income taxes yet get services (education, ESL, healthcare, policing, ..) for free and pay no capital gains taxes when selling a house. Ditto with seniors. Ditto with semi-retired or young entrepreneurs.
Our tax system is planted in yesteryear thinking.
Why work harder to make an extra $100,000 and hand 50% of it to government, if one make $1M tax free buying a high-end home over 2-4 years ?
At least in the newest BC budget they are now tracking citizenship of home purchasers as much tax leakage is happening here on undeclared capital gain on home resale by “residents” !
Thomas, can you please find a better example than Texas?
http://www.star-telegram.com/news/business/biz-columns-blogs/baker-ahles-kaskovich/article55066195.html
http://www.washingtonmonthly.com/magazine/march_april_may_2014/features/oops_the_texas_miracle_that_is049289.php?page=all
Etc…
Etc…
Etc…
I know Texas, I have friends in Texas, and you sir, don’t want to be friends with Texas. (Ok, bad paraphrased quote … Was too tempting to avoid!)
My point was not about Texas. I own rental properties in DFW and the real estate & rental market is doing very well, and has being doing well for 15+ years, even through 2008/2009. Yes, it will grow less the next few years.
My point – for BC – was that we OVERTAX INCOMES but UNDERTAX PROPERTY and/or CONSUMPTION.
Housing, beyond a basic shelter/small house, is consumption.
Investors and affluent immigrants behave rationally. They are smart. Why work in Canada and pay income taxes when you can exploit the 1950 type tax laws and invest in property and make a killing ? No capital gains taxes on houses, low property taxes, free education, free healthcare .. come on in immigrants.
We need to monetize this rational behavior, i..e tax housing (and consumption) more and incomes less.
The recent BC budget went in the right direction by raising land transfer taxes and monitoring residencies of owners. But we have to do far more here:
a) elimination of capital gains taxes beyond a certain threshold (life time exemption, say $1M) and/or minimum possession length, say 5 years
b) increase of property taxes, especially for non-residents
c) far higher land transfer tax for non-residents
d) strict enforcement of tax evasion
I’d leave vacancy issue alone as it is very hard to enforce and really none of the state’s issue if I live in a house or leave it vacant. The issue is under-taxation of property (and overtaxation of incomes), not whether it is vacant or not.
On your points above, I essentially agree with you, and you basically agree with Tom Davidoff it seems also. I don’t agree with Tom that this is the panacea, and that this is the be-all-and-end-all solution to affordability, which it seems he does.
My point about Texas, when you say “BC ought to lean from booming and job producing Texas” is that Texas isn’t really booming, and its job production is very much resource based … Just like there are valid reasons for Vancouver not wanting to become Calgary, there are good reasons why saying we should emulate Texas doesn’t help your position.
Houston is resource based. Some of rural TX is like AB and indeed is retracting somewhat. Refineries, pipeline companies and harbours are as busy as ever, even in Houston as they are independent of oil prices. DFW and Austin is not, and both are growing VERY nicely. One reason is diversification of industry (high tech, manufacturing, airlines, finance, … ) ample land, lower wages, a government that emphasizes business, low low taxes, except if you consume (8% state tax) and buy big houses.
A few stats on DFW here: https://www.google.ca/search?q=why+is+dfw+booming
The point was that BC’s tax model is ancient AND WRONG. We need to recognize the new world of people moving around, making money internationally but living in nice scenic places like Vancouver or Vancouver Island or Naramata. Yet we tax incomes as if incomes are somehow BC or even Vancouver related. They are not, especially those of high earners. As such we need to tax (local) consumption far more, say a 12% PST and far FAR higher property taxes on residential property taxes, say double to triple. Then we can eliminate BC income taxes. Far too many people, including seniors and affluent immigrants and non-residents, exploit this weak tax law and mooch off society (free healthcare, free ESL, free education, free police services, ..) , to the detriment of younger working people and folks making less than say $80,000 a year as they get milked to death in taxes and can’t afford a house. Look no further than benefit sucking Vancouver Island with a very low income tax base.
==> Our tax model is not sustainable in a more and more international world !
From what I read, the percentage compares about the same with other Canadian cities on this one
We are unusual to have 0.3% rental vacancy and 25% house price growth… So maybe it’s a bit of a combo-deal.
Basically confirming this from 2014:https://pricetags.wordpress.com/2014/09/26/empty-housing-much-ado-about-much-ado/