Vancouver's empty-homes tax is an empty promise.
It will take a half-dozen years to see any evidence of its impact. Even then it will be a rounding error in the city’s need for social housing and its failure to nurture acceptable conditions to rent.
The tax, 1% of appraised value of homes left empty (with many exemptions), was in the news again last week when the city trumpeted that it would put $30 million into municipal coffers in its first year.
Well, not exactly. Not even close.
An even cursory look at the claim finds (a) only $17 million has been collected and the balance has to be chased, (b) the balance is bound to be challenged at taxpayer expense, (c) the program cost of $7.5 million to start is bound to grow as the chase and challenge ensue and (d) it will cost $2.5 million to administer annually, if you believe this won’t be an annual chase and challenge.
Such is the Vision Vancouver new math.
Thus the net proceeds at the moment are closer to $7 million.
Now, put that into social housing, and let’s see if we see anything to show before 2023. Of course, by then this government will be a faint memory – a trail of photo opportunities, tweets, self-congratulatory rhetoric and the illusion of success. But in politics, tomorrow is hardly important when you have today to boast.
If recollection serves me, the impetus for the tax was not social housing. The tax was designed to financially, even morally compel owners to rent empty quarters in a city with near-zero vacancy. But once data had provided estimates of vacant homes, the city realized that little things like laws, permits and personal circumstances shaved the number considerably. So it pivoted to emphasize the social housing play.
Our rental problems are deeper and wider than our social housing misery, which is saying much. But last week’s buoyant news conference did not – and no data will ever – reveal how many owners were cowered into landlording under the city’s tax threat. Most likely, behaviour didn’t change; if you wanted a vacant home, you paid for the pleasure.
There are excellent arguments that vacant homes are missing teeth in neighbourhoods that once had more to smile about. Nearby stores have less foot traffic and there is an eerie quiet and dark in places there should be vibrancy.
But there is an important question, too, about what any city can and should do about any owner’s preference to leave unused what has been bought, particularly property, especially if it is not empty year-round. Ask the good owners in Palm Springs, many of them Vancouverites, about the idea of an empty-homes tax for occupancy each year of less than six months. Our indignance locally forgets our indulgence elsewhere.
What’s clear is that owners facing the tax are laughing in defiance, skirting via exemptions or just shrugging and ponying up a pittance compared with the property’s appreciation.
If the city had been serious, it would have been serious.
Want to put an owner’s feet to the fire? Well then, impose a 10% tax or, with the province’s help, plunk a further surcharge when the place is sold for keeping it empty. Then you’re talking serious money.
Want to help people hurting from the vacancy squeeze now? Instead of waiting five or six years to build social housing units, spend five or six weeks building a means-tested local income-support program. Keep people in the city with direct assistance.
In other words, be the socialists you say you are. Play Robin Hood. Don’t be such milquetoasts. Get in with both feet, not a toe in tepid water – if you’re serious, anyway.
But no, the tax most benefits not the renter in need of a place, not the disadvantaged in need of a shelter, but the public service in its oversized oversight of a puny penalty whose proceeds are sucked into a black hole for years to come.
This is what we have come to. Even for its base, the city cannot imaginatively wage class warfare. Its solution for the housing crisis? Taxes. •
Kirk LaPointe is editor-in-chief of Business in Vancouver Media Group and vice-president of Glacier Media.
