Everyone knows the market is broken, but there?s less on agreement about how to fix it
Sam Cooper
The Province
With housing affordability rating as a top election issue for B.C. voters, political parties have offered a number of promises to tackle the issue of skyrocketing housing costs.
The party that wins the May 9 election will have their work cut out for them. The average price for a detached house in the city of Vancouver is $2.6 million. Across Metro Vancouver, the average single-family home costs $1.5 million. Real estate experts say prices are now rising in other B.C. cities, as workers priced out of Metro Vancouver and home sellers enjoying windfall gains leave the Lower Mainland and buy homes elsewhere.
The B.C. Liberals, NDP, and Greens all agree that supply of new homes in B.C. must be significantly increased to improve affordability. But the parties have come to different conclusions on how to increase supply and how to police speculative demand. Here is a breakdown of party proposals, in three areas:
Foreign buyers and speculation
The B.C. Liberals introduced a 15 per cent foreign buyers tax in August 2016 to calm property speculation in Metro Vancouver and have since announced that foreign buyers that are certified to work in B.C. are now exempt from the tax. Vancouver Realtor Steve Saretsky said whether the B.C. Liberals, if re-elected, will cut or reduce the tax is the subject of speculation in the real estate industry.
Ministry of Finance spokesman Jamie Edwardson said the foreign buyers’ tax helped moderate prices and create conditions that will allow housing supply to catch up to demand. Edwardson would not confirm whether the government plans to eliminate or reduce the tax.
“If you listen to (the B.C. Liberals’) language, there is a bit of, ‘The market was crazy. The tax has done what it is intended to do,’ ” UBC real estate economist Tom Davidoff said. “So if they win again, of course there is the chance the tax changes. To not see that as a possible affordability factor I think would be crazy.”
The NDP would keep the 15 per cent foreign buyers’ tax but add a two per cent property tax surcharge on the assessed home values of property owners who do not pay tax in Canada on global incomes. NDP housing critic David Eby said his party would also close a “loophole” that allows offshore speculators to buy and flip condo pre-sale contracts.
The B.C. Greens promise to attack speculation, money laundering and tax evasion that they believe are connected to offshore investment in B.C. real estate. The party would increase the foreign buyers’ tax to 30 per cent and make it provincewide, Green housing affordability spokesman David Wong, a rookie candidate in east Vancouver, told Postmedia News.
The Greens would also eliminate property transfer taxes for sales on housing units that cost under $200,000, but for others increase the tax on a sliding scale to a high of 12 per cent. The sale of a $3.5-million home would net $83,000 in transfer taxes today, but that would rise to $236,000 under the Greens’ plan.
The Greens would also add a tax on a home seller’s lifetime capital gains over $750,000 if they sell a home before five years of occupancy, Wong said.
New supply
The Liberals want to streamline building regulations so developers can build more multi-family dwellings faster. The party says it will work with municipal governments to make that happen.
The Liberals have promised $920 million to create 5,300 new units of affordable rental housing, and say the homes will be aimed at B.C.’s poorest citizens.
The NDP promises to build 114,000 affordable rental, non-profit and co-op housing units over 10 years and to expand the provision of social housing from the poor to middle-class workers who have been priced out of B.C. cities, Eby says.
The Greens will spend $750 million a year building and renovating social housing to create about 4,000 affordable housing units per year.
Rental housing
The Liberals promise to expand a home renovation tax credit plan to provide up to $20,000 to allow homeowners to build rental suites. The program will help homeowners pay down mortgages and increase rental supply, the party says.
The NDP has offered a $400 rebate for each renter household, and the party estimates the annual cost of the rebate will be $200 million. The party will also allow municipalities to create zoning where only rental housing can be built. Both the NDP and Greens promise to increase protections for renters.
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