Homes in the lower mainland are getting to be too expensive for people working in the lower mainland to afford. There are few who would argue this point. It was all fun when we watched the $1Million line march eastward across the City of Vancouver, then the $2Million line, but now single family homes in New Westminster are regularly selling over $1Million, we cannot bring on alternate housing types (townhouses, row homes, cluster homes) fast enough, and high-rise condos are selling out before the ground is broken.
It is a classic market run, and people are both afraid to get in and afraid to miss the boat. This is a situation ripe for unscrupulous profiteers inside and outside of the semi-regulated Real Estate industry to start the raking in cash. However, those skimming value from an opportunity cannot be blamed for the problems that created that opportunity. Free enterprise, folks.
As with any long-emerging crisis, there is rampant speculation by people ready to pin the problem on their pet bugaboo, though few deny the complexity. I get weekly e-mails from racists telling me it is an immigration failure. People speculate (on thin data) about the number of vacant homes being held for investment. Efforts to bring more stock on line run up against “character of the neighborhood” arguments in Kerrisdale, on Commerical Drive, in Queens Park. Following on 20 years of dropping rates following the peak of the 70’s recessions, we have now had more than a decade of bargain-basement mortgages, making the borrowing of money to buy a house (or houses) the only sure investment for a generation. We have in-migration (foreign and domestic) pushing for more supply, limited physical area for growth, and a complete failure to fund regional transportation infrastructure that would improve the accessibility of regional housing options. Disruptive technologies and economic drivers (AirBnB, remote work, etc.) are pushing against zoning, taxation, regulation, and any attempt to manage a shrinking supply. Equally disruptive is the generational change caused by baby boomers cashing out “wealth” accumulated during an unprecedented post-war economic growth cycle while voting to strip apart the social contract that made it possible before it can be passed forward to the next generation. At the same time, real wages have been stagnant, failing to even keep up with a decade of record-low CPI increases (“it’s not a depression, and it’s not a recession. It’s an unprecedented kind of breakdown: a divergence, regression, implosion”). On top of this, the federal government, then the provincial government, got completely out of the affordable housing business, leaving local governments and a patchwork of social service agencies attempting to fill the gap with none of the resources to do the job.
It’s a mess (as was that last paragraph!) and it would be ridiculous to claim that any one of those alleged causes is the only cause. But a ridiculous reactions to unsupported claims is the current BC governance style, so here we go.
The BC Government has managed, for years now, to avoid addressing the root causes above in any meaningful way. To be fair, not all of the issues leading us to this place are provincial jurisdiction, but developing strategies to keep housing in our communities available and affordable is 100% provincial responsibility, thanks to the Constitution Act of 1980. However, the story has now become enough of a front-page annoyance that the Premier has decided it necessary to be seen to be doing something.
In the most knee-jerk reaction possible, they have called an emergency session of the Legislature to change the Vancouver Charter to allow the City of Vancouver to charge a tax on vacant homes. This is, in their defense, one of the short-term measures speculated upon by the Mayor of Vancouver, but no-one can seriously believe this is a going to solve the housing problem, nor is it clear how this spit into the ocean warrants an emergency summer sitting.
Not surprisingly, Mayors from across the region are perplexed about how this approach (which will only impact the City of Vancouver proper, as they exist under separate legislation than every other City in the province) will help or harm the situation in their housing markets, and the pressures they are feeling now that the problem has clearly become a regional one. But that is not the only problem they (correctly) point out.
The venn diagram that connects “vacant properties” with “non-resident” owners, “investment” owners and “foreign” owners is a muddy one – which makes applying a punitive tax to any one group a complex problem for the province or a City. Of course, we have no idea if the proposed approach will actually have any effect on the real issue at the core of this, which is (do I have to remind you?): homes are becoming uncomfortably expensive relative to wages. Realistically, we can be pretty confident it will not be a solution, but will cause repercussions across the region we cannot predict.
We don’t know what legislation will be introduced next week, but we know there is little chance that emergency legislation passed in a brief summer session will provide the complex suite of governance tools required to address the multiple causes of this emergent situation – one that has been growing for several years. This shameless pandering to headlines, this feigned effort to look like they are “doing something” after years of providing no discussion of real solutions, this duplicitous offer to allow a local government to tax their way to a solution while remaining somehow above it all (and at the same time blaming local government taxation for worsening the problem!) should be resisted as a point of principle, and called out for the bullshit cynical lack of governance that it is.
The Opposition and every Mayor in the region should resist this short-hand legislation to change the Vancouver Charter, and prevent it from being expanded to the rest of the province. Speculative and punitive tax measures should only be applied as part of a comprehensive plan to address the actual governance problem, not the headline problem.