Archive for February, 2016

First Time Home Buyers’ Program

Wednesday, February 17th, 2016

Other

Here is what we know: 1. There are no changes to the first time home buyer exemption limits; 2. All buyers (whether first time buyers or not) no longer pay PTT on purchases of NEW homes up to $750,000 in value; note the buyer must be a Canadian citizen or a permanent resident; there is a partial exemption for homes between $750,000.00 and $800,000.00; 3. PTT has changed so that there is now a 3% tax on amounts over $2,000,000.00. The 3% tax is only paid on the amount over $2,000,000.00, not the full price. These are effective for deals closing today and going forward. We had one client close on a new home yesterday, and we believe they are out of luck. We also had one client that was to close today on a $4,000,000.00 purchase, but we moved the completion to yesterday to save the client $20,000.00 in PTT.

Below is from the BC Government Website:

The First Time Home Buyers’ Program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax.

If one or more of the purchasers don’t qualify, only the percentage of interest that the first time home buyer(s) have in the property is eligible.

For example, if you qualify and purchase a property with a fair market value of $400,000 with a person that doesn’t qualify you would still qualify. If you owned a 60% interest in the property, 60% of the tax amount would be eligible for the exemption.

Do I Qualify?

To qualify for a full exemption, at the time the property is registered you must:

  • be a Canadian citizen or permanent resident
  • have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years
  • have never owned an interest in a principal residence anywhere in the world at any time 
  • have never received a first time home buyers’ exemption or refund

and the property must:

  • be located in B.C.
  • only be used as your principal residence
  • have a fair market value of:
    • $425,000 or less if registered on or before February 18, 2014, or
    • $475,000 or less if registered on or after February 19, 2014
  • be 0.5 hectares (1.24 acres) or smaller

You may qualify for a partial exemption from the tax if the property:

Find out the amount of your exemption if you qualify.

If you don’t qualify because you are not a Canadian citizen or permanent resident, but you become one within 12 months of when the property is registered, you may apply for a refund of the tax. To apply for a refund call (250) 387-0604.

Apply

To apply for the First Time Home Buyers’ Program you need to complete the First Time Home Buyers’ Property Transfer Tax Return when you or your legal professional register the property transfer.

After you have applied you must meet additional requirements during the first year you own the property to keep the tax exemption.

Penalty for False Declaration

All applications are reviewed. You will be charged a penalty equal to double the tax if you falsely declare that:

  • you have never owned an interest in a principal residence anywhere in the world at any time, or
  • you have never received a first time home buyers’ exemption or refund

First Year of Ownership

At the end of the first year you own the property you will receive a letter. The letter is to conditionally confirm that you meet the occupancy and property value requirements after you:

Existing Home

To keep the tax exemption you must have:

  • moved into your home within 92 days of the date the property was registered
  • continued to occupy the property as your principal residence for the remainder of the first year

You may keep part of the exemption if you moved out before the end of the first year.

If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, you still qualify to keep the tax exemption.

Built New Home

If you registered a vacant lot and built your own home, to keep the tax exemption:

  • the fair market value of the land when you registered the property plus the cost to build your home must be:
    • $450,000 or less if registered on or before February 18, 2014, or
    • $500,000 or less if registered on or after February 19, 2014
  • you must have built and moved into your home within 1 year of the date the property was registered
  • you must have continued to occupy the property as your principal residence for the remainder of the first year

You may keep part of the exemption if you moved out before the end of the first year.

If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, you still qualify to keep the tax exemption.

Copyright © 2015, Province of British Columbia

How Netflix Inc’s new global recommendation algorithms are upping the ante with Canadian rivals

Wednesday, February 17th, 2016

Claire Brownell
The Vancouver Sun

Drawing on the power of Netflix Inc.’s global programming database could give the company’s new recommendation algorithms an advantage over Canadian competitors shomi and CraveTV when it comes to keeping viewers paying the monthly subscription fee.

On Wednesday morning, Netflix’s vice-president of product innovation Carlos Gomez-Uribe revealed the company has changed the algorithms that recommend what viewers should watch next. Instead of making recommendations based on regional models, Netflix now analyzes the types of videos a customer likes to watch and looks to other users with similar tastes around the world — presenting recommendations based on what’s popular with members of that fan community regardless of where they live.

Gomez-Uribe said the new algorithms are so good at personalizing recommendations, they’ve established that there’s a global community of people who like to watch movies with talking horses that’s distinct from the community that likes to watch movies with talking dogs. “It’s pretty funny. It’s not a level of detail we had before,” he said in an interview.

In contrast, both shomi — a video streaming service jointly owned by Rogers Communications Inc. and Shaw Communications Inc. — and Bell Media’s CraveTV tout the human touch their recommendations offer.

Mike Cosentino, senior vice-president of programming at CraveTV, said its service “features human curation for Canadians by real Canadian TV programming experts,” while shomi uses “a marriage of human curation and technical algorithm (to ensure) members discover new and unique content that is of interest to them but not limited to the boundaries of their profile,” said Anne Tebo, senior director of customer experience and insights.

Asked if Netflix’s new global algorithms can beat a human’s suggestions, Gomez-Uribe laughed. “Any day,” he said.

Canadian subscribers may still not be able to watch American Horror Story, for example, but Netflix is getting better at telling Canadian horror fans what else they might be interested in that’s legally licensed for them to watch.

On January 14, Netflix announced it would take steps to make it more difficult to access Netflix shows and movies that aren’t licensed for viewing in a customer’s place of residence by using services that obscure a computer’s location.

As many as one-third of Canadian Netflix subscribers use virtual private networks to watch videos available to our U.S. neighbours, according to some estimates.

Alan Wolk, a senior analyst at media consulting firm Diffusion Group and author of Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry, said good recommendations are valuable to streaming services because they keep viewers engaged by constantly offering up new videos they want to watch. And happy and engaged customers are less likely to cancel their subscriptions, he said.

The downside is the loss of “serendipity,” Wolk said. Netflix might know that a viewer who’s watched three animated movies with talking horses is likely to be interested in a fourth, but that same viewer might have expanded his taste horizons had something else been offered.

“Sometimes we stumble upon something that’s completely unlike anything you’ve ever watched before,” Wolk said. “That’s something unfortunate that we’re losing.”

Algorithms that cater to niche global tastes offer both advantages and disadvantages to Canadian filmmakers. Netflix’s new global algorithms mean a Canadian who has never shown any interest in Canadian film could be less likely to receive a recommendation to watch one, but an American who loves whodunits could be more likely to receive a recommendation for, say, CBC’s Murdoch Mysteries.

The Canadian Radio-television and Telecommunications Commission relaxed the Canadian content quotas that broadcasters must meet last March in response to increased competition from Netflix. It also decided against requiring the U.S.-based company to pay into a Canadian content fund.

Gomez-Uribe said Netflix’s new recommendation algorithms should increase exposure to Canadian films and television shows by suggesting them to people who are more likely to actually watch them.

“You’ll have many more people across the entire world watching Canadian productions,” he said.

© 2016 National Post

BC Supreme Court approves city rezoning to allow West End rental tower

Wednesday, February 17th, 2016

Glen Korstrom
Van. Courier

B.C. Supreme Court on February 16 ruled that the City of Vancouver’s proposed rezoning of a site on Pendrell Street near Denman Street is OK to proceed.

That opens the doors for Westbank to build a proposed 21-storey, 178-unit market-rental tower.

Six West End residents had tried to block the project by appealing to the court for a judicial review of a rezoning decision in which Vancouver city council voted five to three to convert three adjacent lots to the CD-1 zoning that would allow the project.

LandlordBC CEO David Hutniak told Business in Vancouver that the court’s decision was great news because people complain about housing becoming unaffordable in the city and this is a way to alleviate that concern.

“We have such a chronic shortage of purpose-built rental in Vancouver and we’ve had a huge gap of 25 or 30-plus years from building it [in the West End],” he said.  

“We need to get this cycle going again of building new stuff, which becomes affordable in seven to eight years.”

Mayor Gregor Robertson was also elated.

“This is a very positive step for both the West End and affordable housing in Vancouver,” he said.

“This new development provides 178 new rental homes, including 26 at below market rents, in a neighbourhood with one of the lowest vacancy rates in the city. This is the type of housing Vancouver needs and we are pleased that it can now proceed.”

Residents who took the matter to court were concerned with the site making the area too dense, blocking views and otherwise disrupting the neighbourhood.

© 2016 Vancouver Courier

 

BC budget offers new-home buyers big incentives

Wednesday, February 17th, 2016

Jen St. Denis
Van. Courier

In a bid to make housing within reach of more people, the B.C. government will give a big tax break to buyers of new homes worth up to $750,000.

The property transfer tax exemption, included in today’s 2016 provincial budget, will apply to newly constructed housing, including detached homes, townhomes, condos, and existing homes that have been newly subdivided into a strata. A new home buyer who buys a house worth $750,000 would save $13,000.

Currently, the property transfer tax exemption applies only to first-time buyers of properties worth up to $475,000, but this exemption will apply to any buyer who is a Canadian citizen or permanent resident who lives in the property for one year after purchase.

The province will also make luxury home purchases more expensive by raising the property transfer tax from 2 per cent to 3 per cent on homes worth over $2 million. The government anticipates this will raise $75 million, which it anticipates will cover the cost of the new exemptions.

The property transfer tax was introduced by Premier Bill Vander Zalm in the 1980s. As Metro Vancouver’s real estate market has become extremely heated over the past several years, the property transfer tax has been a major contributor to government revenues, raising over $1 billion in 2015.

The province is also committing to track data on foreign ownership — something it did regularly before 1998 — and to study what is driving price increases, which have become extreme in certain markets in the Lower Mainland.

Critics have said increasing the property transfer tax exemption is the wrong move if the province wants to make housing more affordable, because the policy increases demand for housing and puts upward pressure on prices. It also does nothing to help renters, who are struggling in Metro Vancouver with a very low vacancy rate and rising rents.

However, Finance Minister Mike de Jong said the exemption for new homes will have the effect of increasing the supply of new housing and should therefore ease demand pressures.

“In Metro Vancouver you’ll see fully 50-70 per cent of the market fall into that less than $750,000 range,” he said.  

“We should be capturing the bulk of the market and creating some incentive for more homes to be built. We’ll be working with municipalities to facilitate that and we’ll be tracking closely the impact they have on market behaviour.”

Multiple media investigations, interviews with real estate industry insiders and analysis of the limited data available have all pointed to the influence of wealth from mainland China flowing into Vancouver’s residential and commercial real estate as one factor contributing to price increases in areas like apartment buildings and single family homes in select neighbourhoods.

But de Jong emphasized that government believes the key reason properties in Metro Vancouver have become so expensive is that there is not enough supply to meet local demand. B.C.’s population has increased 70 per cent since 1980 compared to 35 per cent for the rest of Canada, according to Ministry of Finance briefing notes.

He encouraged municipalities to do more to increase the supply of housing, especially multi-family housing, and to encourage more density in the geography-constrained Lower Mainland.

At 18 per cent, the real estate sector is the largest contributor to B.C.’s GDP. Along with sectors like tourism, film production, manufacturing and consumer spending, real estate is expected to be a major contributor to economic growth in the province in 2016, in contrast to the struggling mining and oil and gas sectors.

But while employment is up in sectors like manufacturing, said de Jong, employment in real estate has recently dipped.

“Go figure,” he said.

© 2016 Vancouver Courier

BC drops home tax to stimulate building in tough to get into housing market

Wednesday, February 17th, 2016

REP
Other

British Columbia introduced tax changes in its provincial budget Tuesday to help buyers and builders of new homes valued up to $750,000, while targeting people able to afford properties priced above $2 million.

Housing policy experts and the NDP panned the tax measures as inadequate, saying bolder action was needed to help young people enter the hot housing market.

Finance Minister Mike de Jong said the government considers housing affordability an area of major concern. Average prices for homes in many Metro Vancouver neighbourhoods are above $1 million.

Prices for single-family homes in most areas of Metro Vancouver have increased between 45 per cent and 70 per cent over the past five years, while the cost of multi-family homes has jumped between 15 and 40 per cent.

“Is there anything more reflective of who we are as Canadians than the dream of owning a home, and the ability to make that dream a reality?” de Jong said. “For many B.C. families, that reality has become harder to achieve in recent years as home prices have continued to rise.”

He said the province’s fourth consecutive balanced budget, which has a surplus of $264 million, contains a new housing initiative that exempts payment of property transfer taxes on newly built homes, including condominiums, priced up to $750,000.

The current property transfer tax is set at one per cent on the first $200,000 and two per cent on the remaining price.

De Jong said the exemption will save buyers of a new home $13,000. People who buy older homes will continue to pay the property purchase tax at the current rates.

New Democrat Leader John Horgan called the changes cosmetic.

“They were not what people were looking for,” he said. “They were looking for substantive change to help people get into the market.”

University of B.C. housing policy expert Paul Kershaw said the budget has done little to help British Columbians enter the market, especially young people in Metro Vancouver where he estimated it takes 23 years to save for a down payment on a home.

“As a result, he’s actually missed the reality that unaffordability is a provincewide problem and it looks more and more like our province is drunk on high housing prices.”

De Jong said much of the new housing exemption will be funded with the creation of a third tier of property transfer tax. It involves increasing the property transfer tax rate to three per cent on the value of a home over $2 million.

Buyers of property above $2 million will still pay the existing purchase tax rates of one per cent on the first $100,000 and two per cent for homes up to $2 million but the rate rises to three per cent tax on any value above $2 million.

De Jong said the three per cent tax is estimated to raise $75 million annually, the amount the government believes it will need to offset the exemptions for new home buyers.

He said buyers will also be required to disclose their citizenship so the government can collect data on who is purchasing property.

“The government stopped collecting data that specifically identified foreign purchasers in 1998,” de Jong said. “We believe there is a legitimate need to resume that process again.”

The budget also exempts children from medical service premiums starting next January and increases disability payments by $77 a month.

The Medical Services Plan exemptions will benefit single-parent families by reducing monthly payments by up to $72.

De Jong said the budget also includes the first deposit of $100 million to its promised Prosperity Fund, which was billed three years ago to potentially grow to $100 billion with revenues from the liquefied natural gas industry.

Copyright © 2016 Key Media Pty Ltd

BC Real Estate Council hits back at media claims

Monday, February 15th, 2016

Steve Randall
Other

Reports in some media outlets regarding the number of investigations into realtors in British Columbia have been inaccurate according to the BC Real Estate Council. In a statement it says “The Council wishes to correct reports in the media regarding the numbers of investigations conducted and discipline orders issued over the past year.” It goes on to explain that all complaints it receives are investigated in order to protect the public. It also says that it takes a proactive approach to ensure that brokerages and licensees are complying with legislation.

In total, During the Council’s last fiscal year, between July 1, 2014 and June 30, 2015, it conducted 209 audits and opened investigation files on 536 complaints. There were 88 Consent Orders issued and held one hearing resulting in a discipline order against the licensee. Three individuals had their licences cancelled by the Council. Two emergency suspensions were issued. Twenty-three licensees were suspended. The Council issued 28 fines, 84 reprimands, and accepted six permanent licence surrenders. In total, the Council issued discipline orders against 111 licensees.

Copyright © 2016 Key Media Pty Ltd

Turf war reaches new heights in Vancouver?s West End

Sunday, February 14th, 2016

One co-op?s land value skyrockets by 95 per cent in one year, leaving residents shaking their heads

JOANNE LEE-YOUNG
Other

The West End is turning into the latest front in the turf wars over residential land in Vancouver.

As city planners opt for allowing higher-density to deal with soaring prices for single-family homes, their solution can threaten existing, affordable housing that residents have come to love.

In the West End there has been a slew of recent, dizzying land sales, and some of the priciest new condo towers are going up there.

At the north end of the Burrard Bridge, eight brightly painted, Victorian-era homes sit in front of a seven-storey low-rise built in the 1980s. Together, they are known as the Pacific Heights Housing Co-op. Among its 200 residents who live in 91 units are 30 families with children. The co-op includes one of the largest stocks of three-bedroom units in the West End, according to Vancouver-West End MLA Spencer Chandra Herbert, who described it as a “model of affordable and community living.”

It’s a place where sense of community is very much alive, says co-op member Zak Mathis.

“Where else can you have your neighbour knock on your door, asking to get the ladders because another neighbour’s dog is on the roof and they aren’t home?” he asked.

For years, the co-op’s property had been valued in the mid $20-million range, but in 2016, it skyrocketed 95 per cent from $26 million to $51 million.

“It was shocking,” said Jon Breisnes, another resident. “A lot of our more experienced members said, ‘That’s got to be a mistake.’”

If not, they want to know if this new assessment is a foreboding sign the co-op could eventually lose its lease with the city, which expires in 9 years. For now, it at least means an accompanying hike in property taxes that will cost each unit an additional $75 a month. Unlike homeowners, co-op members don’t have equity in a property that is going up in tandem, said Mathis.

As a first response, the co-op is asking B.C. Assessment for an appeal. It is also taking its concerns about the future to the City and will meet with councillors Geoff Meggs and Raymond Louie on Monday.

The trigger for the higher assessment seems to be the co-op’s prime location at the very bottom corner of the West End Community Plan’s Burrard corridor, which runs one block wide down Burrard, from Haro to Pacific Streets, and specifically allows for taller, residential towers.

The idea was for shiny, new buildings with much higher density allowances to sit on the outside edges of the West End on Burrard and Georgia streets, leaving laneway housing, townhouses and other infill residences to be sprinkled behind existing buildings in the West End.

And so, a few blocks from the co-op, some of Vancouver’s most architecturally striking, high-end condos with all the fixings are in progress. Reliance and The Jim Pattison Group is building One Burrard Place, a 53-storey residence with concierge service for luxury buyers. Westbank’s Vancouver House on Howe Street will be a twisting, 59-storey building. And Grosvenor Canada is applying to rezone the site of the old Il Giardino restaurant on Hornby Street for a 39-storey residence.

More recently, there has been another string of land sales in the West End that have been attracting attention for achieving even higher prices than were paid for the above projects. Some haven’t closed yet, but real estate industry sources say a set of buildings on Alberni at Nicola sold for $160 million, about twice what they sold for in 2014; and, two buildings on Nelson Street assessed at $16 million went for $60 million. Two weeks ago, the buildings at 1070 and 1080 Barclay Street, assessed at $19.8 million in 2016, were sold to local developer Bosa Properties for $58.5 million.

For all these properties, there is a stipulation within the community plan that 25 per cent of any new developments are set aside for social housing.

Still, it’s no wonder the co-op’s assessment has jumped by so much.

Jason Grant, regional assessor with B.C. Assessment, wasn’t able to speak about this specific case, but generally put it this way: “Assessments reflect the factors that purchasers and vendors consider in arriving at the negotiated price for a particular property. If zoning changes are one of the factors being considered by market participants then it is likely they will also influence the assessments.”

The city, however, maintains that even when a property falls within the Burrard Corridor, “rezoning is not an assured right,” according to assistant director of planning Kevin McNaney. He said there are a slew of considerations each time that are analyzed by city staff and put in front of council and public hearing.

For now, Breisnes and some other residents are encouraged that city councillors were willing to meet promptly. Recent news that the city is proposing to offer up to 23 mostly vacant sites for building social housing — provided the federal government will pitch in money to build them — is also heartening, he said.

“If something happened to this co-op, we would survive. (Many of us) could go elsewhere, maybe into the (Fraser) Valley, wherever we needed to go,” said Breisnes. “But we do have a swath of different members who would be affected much worse. There are seniors and others who are in care suites. They live in adapted units.”

About a third of the co-op’s members pay a subsidized rate.

Mathis conceded it’s no surprise prices are increasing downtown.

“It’s the density. I guess that’s understandable. There’s only so much land,” he said.

“But it’s also a great model here that already works,” he added, looking around a courtyard where, during a span of 10 minutes, one neighbour stopped with a message about a borrowed vacuum cleaner, and another neighbour walked into another’s unit to pick up the dog for a walk.

Other co-op members, who declined to speak on the record, see the new assessment as writing on the wall. They fear the worse of the many market forces circling the co-op’s coveted location, one block from the beach and a short walk downtown.

© Copyright (c) The Vancouver Sun

Vancouver’s property transfer tax revenues are one-quarter of B.C.’s $1.15 billion total

Saturday, February 13th, 2016

Critics ask for changes to reduce costs to homebuyers

Gordon Hoekstra
The Vancouver Sun

The B.C. property transfer tax is one-per-cent on the first $200,000 of the purchase price and two per cent on the portion of the price above that. First-time homebuyers don?t pay the tax on homes under $475,000. The formula has not changed since 1987. Photograph by: Mark van Manen, Vancouver Sun

Vancouver accounted for nearly one-quarter of the government’s $1.15-billion windfall from B.C.’s property transfer tax in the past fiscal year.

The $266.5 million collected in the City of Vancouver in the property transfer taxes from 16,635 transactions in the 2014-2015 fiscal year ending in March 31 shows how Metro Vancouver’s overheated market is increasing this tax revenue for the B.C. government.

The remaining top-five sources of property transfer tax revenues were: Surrey ($100.8 million) Richmond ($75.7 million), Burnaby ($56.7 million) and West Vancouver ($51.2 million).

The top five municipalities accounted for $551 million in property tax transfers in 2014-15, more than half the total.

The information was revealed in a freedom of information request from an individual posted on the B.C. government’s open information website.

The take from 2014-2015 is up from $937 million in 2013-2014 and $889 million in 2012-2013, according B.C.’s public accounts.

The tax haul is expected to grow in the 2015-16 fiscal year that ends March 31.

University of B.C. economist Tsur Somerville said the municipal breakdown is not surprising in the least, as sales are reaching all time highs in the Lower Mainland and prices have been rising, up about 15 per cent year over year.

He said one worry about the rising property transfer revenues is that they are fundamentally cyclical revenues, and he believes they will go down at some point.

“I worry that you get a situation where the government becomes addicted to this revenue stream and therefore having the market not being heated is bad for government revenues,” said Somerville, director of the Centre for Urban Economics and Real Estate at the Sauder School of Business.

“I don’t think a government that’s constantly pumping up a housing market is where we want to be. I am not saying that’s what is happening, but you certainly create the incentives for that when so much money is tied to high prices and high levels of sales. That’s not super healthy,” he said.

The B.C. Liberal government has already acknowledged that returns from the property transfer tax this year are above forecast, and largely attributed to the hot residential market in Metro Vancouver.

B.C. Finance Minister Mike de Jong has also acknowledged that the property transfer tax windfall was helping keep the province’s budget out of the red.

There is some public expectation that the Liberals will make changes to the property transfer tax when they deliver the 2016-17 budget next week.

A one-per-cent tax is paid on the first $200,000 and two per cent on the portion of the purchase price above that.

First-time homebuyers don’t pay the tax on homes under $475,000.

De Jong has hinted at raising the two per cent threshold and also suggested the government may consider a third threshold at the high end of the market that could provide relief at the lower end.

NDP housing critic David Eby said a big concern for him is that while families buying homes have to pay the property transfer tax, commercial entities use bare trusts to avoid paying the tax and realtors using so-called shadow flipping are also not paying.

For families not buying a first home, the property transfer tax on a $600,000 property would cost them $10,000.

In shadow flipping, real estate brokers use an obscure assignment clause in sales contracts to allow the property to change hands — and the price to increase — multiple times before a deal closes. The technique drives up prices and commissions.

The final buyer pays the property transfer tax on the final purchase price. Because only one sale is registered, it lets the middlemen dodge the property transfer taxes.

“It’s clear to me that the rate would be lower for everybody and still generate the same amount of revenue if the government just closed these obvious loopholes in this tax,” said Eby.

B.C. Real Estate Association spokesman Damian Stathonikos said they have been asking for some time for the province to raise the threshold on the two-per cent tax to $525,000.

The property transfer tax was introduced in 1987 as a “luxury tax,” but Stathonikos noted the thresholds have not changed since then, meaning it has turned into a revenue generator for the province.

He said the province should index any changes so the tax will move as house prices increase over time.

© Copyright (c) The Vancouver Sun

Council doing ‘nothing’ over reports

Friday, February 12th, 2016

Eby says just one of 536 complaints sent to organization in 2015 was investigated

SAM COOPER
The Vancouver Sun

NDP MLA David Eby said in the legislature Thursday the B.C. Real Estate Council is unfit to ?investigate itself.? MARK VAN MANEN/PNG

The B.C. Real Estate Council is “refusing to investigate realtors alleged to be involved in fraud and money laundering,” the NDP’s housing critic charged Thursday in the B.C. legislature.

Citing the council’s response to a recent report in The Province on a transaction involving realtor Liang Ming Wei, Point Grey MLA David Eby argued the council is unfit to “investigate itself.”

This week, Premier Christy Clark’s government asked the real estate council to investigate allegations after media reports about alleged realtor frauds, self-dealings, money laundering and obscuring of offshore buyers’ identities.

Critics, including some Vancouver realtors, have suggested that tasking a self-regulating industry group with investigating licensed members is just a public relations move to appease public anger.

On Thursday, Eby said evidence in a B.C. Securities Commission fraud hearing showed Liang Ming Wei had allegedly deposited fraudulent bank drafts in his client’s bank account among other allegedly “fraudulent actions.”

Citing the council’s response to repeated questions from The Province on Liang Ming Wei’s actions, Eby told the legislature: “They don’t call the police or Fintrac (Canada’s anti-money laundering agency). “They do nothing.” Eby said the council received 536 complaints about realtors in 2015 and investigated only one.

“With mounting evidence,” he told the legislature, “the council has failed to remove bad-apple realtors.”

Finance Minister Mike de Jong said the council takes seriously both its regulatory responsibility and the current investigation.

Meanwhile, Green party MLA Andrew Weaver introduced a private member’s bill to amend B.C.’s Land Title Act.

He said that with his proposed changes the government could better track home purchases and foreign investment.

Weaver told de Jong that by failing to close legal loopholes that allow investors to dodge B.C.’s property transfer tax, the government’s policy is “contributing to rampant speculation.”

Ontario has already moved to tax certain property investment that doesn’t include actual changes in ownership title, Weaver said.

Summarizing changes in his proposed bill, Weaver stated: “There are at least three dimensions to this problem in Metro Vancouver: Government-incentivized speculation, preponderance of vacant homes and non-enforcement of illegal realtor transactions.

“While it is great that this government is finally starting to pay attention to what is happening in the Lower Mainland housing market, their first step has been to call upon others for action.

“The reality is there are a number of actions that this government could take to address all three aspects of this issue.”

Weaver estimated that a third of the Coquitlam homes he recently canvassed in a neighbourhood are empty.

© Copyright (c) The Province

These renters were hit hardest by the financial crisis

Friday, February 12th, 2016

Patrick Clark
Other

The financial crisis turned a lot of Americans into renters, because they couldn’t keep paying their mortgage, or because high unemployment and stagnant wages in the ensuing years forced them to put off home ownership. A new report from real estate website Trulia seeks to identify the groups that lost the most purchase on the dream of home ownership during the recession.

The answer, by one measure: affluent Hispanic millennial men. In 2006, 32 percent of those households were renters. By 2014, the share had nearly doubled to 63 percent.

The above table can be read through a handful of intersecting trends. Millennials have been slower to buy their first homes than members of previous generations. The wealth gap widened along racial lines following the recession, partly because white workers’ incomes recovered more quickly, and partly because white households were more likely to own such financial assets as stocks. More affluent households were more likely to own homes in 2006, meaning their home ownership rate had further to fall.

By another measure—the share of income spent on housing—poor renters were hardest hit by the recession. Among renters, the bottom 25 percent of wage earners spent 63 percent of income on housing in 2014, up from 56 percent in 2006, the Trulia study found.

Rents increased 22 percent over the course of the study, and the average household spent a larger percent of its income on rent in 41 out of 50 metro areas the report looked at. Geography also played a role: Las Vegas, Phoenix, and Ft. Lauderdale, all hotbeds for foreclosures, were the metropolitan areas with the largest increases in the percentage of households that rent.

How will those new renters fare in the housing market in the future? On the bright side, rent increases appear to be slowing. Low down-payment loans backed by the Federal Housing Administration, mostly used by first-time buyers, are the fastest-growing segment of the mortgagemarket. The higher- earning households that became renters during the period studied have a good chance of returning to ownership, said Ralph McLaughlin, Trulia’s chief economist.

Poorer renters are less likely to return to home ownership. The bright side is that stricter lending standards are probably keeping homebuyers from borrowing money they can’t afford to repay. On the other hand, rising rents are landing heaviest on the poor.

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