CmB magazIne cmba-achc.ca spring 2018 | 19
emptygesture
T
he City of Vancouver recently
announced how many Vancouver
homes are considered "unoccupied"
and subject to the new Empty
Homes Tax.
As it turns out, very few homes qualify –
meaning city hall should consider other ways to
address Vancouver's housing shortage, namely
by enabling the construction of more homes.
Of the 183,911 submitted "property status"
declarations (representing 98 per cent of
Vancouver homeowners), 6,349 were either
eligible for one of several exemptions from the
new tax or declared vacant. Pending audits on
these cases, city hall will only issue tax bills
(and a $250 penalty) to the remaining two per
cent of homes – 2,132 – that failed to submit
their declarations.
All this to say, very few units in Vancouver
can be considered "unoccupied," raising
questions about what other phenomena might
be driving home prices in Canada's most
expensive major city.
Vancouver, like other in-demand cities,
has experienced a growing population, rising
incomes and low mortgage interest rates.
Combined, these factors account for almost
three quarters of house price growth between
2010 and 2016, according to the Canada
Housing and Mortgage Corporation or CMHC.
Faced with so much demand, municipal
governments should (and are better equipped
to) focus on the supply side of the equation.
How? By simply streamlining approvals for
new homes.
Consider this. It takes 21 months (on
average) for homebuilders to obtain building
permits from Vancouver City Hall – with
considerable variation and uncertainty. It also
costs almost $80,000 per housing unit (on
average) in fees and regulatory compliance
costs. Of course, the building permit process
exists for a reason, but there's obvious room
for improvement. Building permits take fewer
than seven months to obtain in neighbouring
Burnaby, where compliance costs and fees are
also significantly lower.
With municipal elections fast approaching,
it's understandable that local governments
– including Vancouver's – want to showcase
their attempts to address citizen concerns.
However, when it comes to Vancouver's
chronic housing shortage, a vacancy tax on
less than two per cent of the city's homes does
little – if anything – to help remedy the severe
imbalance between demand and supply. Only
by enabling the construction of many (many)
more homes will Vancouver begin to increase
housing affordability.
Bio: Headquartered in Vancouver, the Fraser
Institute has regional offices in Calgary, Toronto
and Montreal. We produce research about
government actions in areas that deeply affect
Canadians' quality of life such as taxation,
health care, aboriginal issues, education,
economic freedom, energy, natural resources
and the environment.
Originally published by the Fraser Institute.
eMPTY hoMes TaX –
Vancouver City hall Barking
up the Wrong Tree
By Josef filiPowicz
