With a bit of grumbling behind the scenes, our 85 MLAs have trekked back to Victoria this week to deal with an emergency summer legislature sitting.
The stated purpose of this brief session is to comply with a demand from Vancouver city council for the ability to impose additional property tax on vacant residential properties.
Vancouver Mayor Gregor Robertson, a former NDP MLA who likes to direct provincial affairs when he isn’t issuing instructions to Ottawa on pipeline policy, should be careful what he wishes for. B.C. Finance Minister Mike de Jong was happy to drop this hot potato in his lap, and now Vancouver city hall can try to determine who’s vacationing for a few months and who’s holding an investment property while living somewhere else.
When NDP leader John Horgan began calling for a “speculation tax” of 1.5 per cent on “offshore” investments, de Jong cited a Vancouver survey that showed the number of vacant properties in the city was declining, even as prices were climbing rapidly.
Horgan argues that Metro Vancouver is in the grip of a housing “bubble” that must be caused by foreign money.
“If wages have been stagnant for a decade, which they have, where is the revenue coming from to inflate these prices?” Horgan said last week. “It’s coming from somewhere else. And that’s not sustainable over the long term.”
Another point likely to be made repeatedly this week is that the province stopped collecting citizenship and residency data on real estate purchases back in the late 1990s. De Jong changed that this spring and with great fanfare rolled out the first three weeks of sales data from June.
They showed that only three per cent of purchases of B.C. residential real estate were from foreign buyers, mostly from China. They were concentrated in Metro Vancouver, and accounted for about five per cent of the total value, which suggests they were for higher-end properties.
This was assailed from all sides. Not a big enough sample size, doesn’t prove anything, etc.
We have one of those situations I call coffee shop consensus. Everybody “knows” it’s Chinese money pouring into B.C., and that many homes are being left empty, even if the actual evidence doesn’t show that.
Seattle has a similar problem with real estate in choice locations, by the way. Down there, the coffee shop consensus seems to be that it’s those darn San Francisco and Silicon Valley grillionaires who are driving up prices beyond the reach of working folks.
Blaming foreigners is a great narrative. We saw the same thing with B.C. campgrounds. Utter nonsense, but it has “truthiness,” as U.S. comedian Stephen Colbert says. Truthiness comes from the gut, not the brain.
In a recent radio interview with CKNW’s combative talk show host John McComb, de Jong put forward another theory. He mentioned that the aim of hosting Expo 86 and the 2010 Winter Olympics was to put Vancouver on the global map, and it seems to have worked.
Whistler has worked as a world destination too, as galling as it may be to those who insist these were all costly failures.
The real estate boom has had ripple effects in Victoria and other urban centres, with bidding wars for choice homes.
And it’s beginning to reverse a long trend of depopulation from small communities and rural areas, as people are forced to look for something they can afford.
And it’s produced an urban building boom, including the rental market. There are worse problems to have.