Dr. Peter Venkman: “This city is headed for a disaster of biblical proportions.” – Ghostbusters, 1984
Call Premier Christy Clark? You gotta be kidding. She’s afraid of those ghosts.
But nonetheless, Clark is holding a paranormal summer session of the BC Legislature because she is even more afraid of something else -- that she’ll be slimed by angry voters for not taking action to stop house prices from skyrocketing to completely unaffordable levels.
And what spooks Clark is the thought of losing the May 2017 provincial election as a result.
So on Monday the BC Liberals announced a surprise extra 15 per cent property tax on foreign nationals buying Metro Vancouver housing.
It’s a complete flip-flop from what Clark said just back in May: “By moving foreign owners out of the market housing prices will drop.”
It’s amazing how quickly a premier can change her mind after seeing a ghost – or more likely a series of deadly internal polls.
But this 15 per cent tax comes way, way too late. Prices already jumped 32 per cent in the past year alone and this 15 per cent property tax may not deter many foreign buyers who are fueling the rise. After all, it still leaves a 17 per cent profit every year!
And this 15 per cent property tax may not deter many foreign buyers. After all, it still leaves a 17 per cent profit every year!
Clark’s delay, and the price we pay
Horrendous housing prices are not surprising, given that the BC Liberals have steadfastly refused to deal with foreign nationals buying up billions in Metro Vancouver homes as a speculative investment, with no plans to actually live here – thereby driving prices up to astonishing levels, with detached houses in Metro Vancouver now at $1.4 million on average.
Those insane prices have resulted in a windfall revenue surplus for the province, with the property transfer tax adding an extra $605 million more than budgeted – a 44 per cent boost to $1.53 billion.
That’s a nice bit of chump change for Clark to spend in an election year trying to buy off voters who have been hearing BC’s economy is Canada’s best but still seeing no improvements in health care, education, disability benefits, social programs or – most of all – investing in much-needed non-profit housing, which has dropped off the government map entirely.
And there’s this paradox. The worse the housing prices get, the more unaffordable Metro Vancouver and the rest of BC becomes, the more money there is in it for the BC Liberals to spend getting themselves re-elected.
Plus, the real estate and development industry has donated $12 million to Clark’s party in the past 10 years – 17 per cent of the party’s income – so BC Liberals don’t want to bite the hand that feeds.
Foot dragging Clark forced to do something
But in the housing affordability crisis, Clark saw the election defeat writing on the wall and had to act – whether real estate mogul and chief BC Liberal fundraiser Bob Rennie likes it or not. And he won’t.
It was Rennie who recently said: “A foreign ownership tax of 10 per cent on a $5-million home will not stop a sale or create any affordability.”
Is Rennie right? Will a 15 per cent foreign national house tax make Metro Vancouver affordable again?
No chance. It will only slow down the bleeding caused by not taking action sooner at best.
And how far will B.C. go to help make Vancouver’s vacant homes tax – which is still very much needed with an estimated over 10,000 empty houses – have the effect it’s supposed to?
Vancouver Mayor Gregor Robertson has already publicly worried that the BC government may not give the city access to the information it needs to make the tax work.
“Without the provincial data, it will be very difficult to administer an empty homes tax,” Robertson told the Vancouver Sun last week.
“So the data sharing is an essential ingredient in putting this together. Enabling it though legislation is a good first step, but it’s not enough to make this viable. It will be really difficulty if we don’t have the right data sets from the province to administer this.”
And the BC Liberals have not responded to a request from Victoria Mayor Lisa Helps to amend legislation that would allow them to also implement a vacant homes tax.
Another sign of BC Liberal disinterest in solutions? Geoff Plant, their former attorney general turned political pundit, has published a column saying that a vacant home tax is “neither necessary nor enforceable.”
There are 10,000 plus empty Vancouver homes. Plant calling the tax unenforceable in advance when it’s never been tried here is at best his guess. One can equally guess that Plant is voicing out loud some BC Liberal cabinet ministers’ own thought balloons.
BC Libs deregulated real estate industry
Even the government’s other legislative action this short session is to fix a problem they themselves made. They will re-regulate the real estate industry – after the BC Liberals made it self-governing in 2005, with obviously disastrous results.
And forget about my earlier proposal to ban all sales of residential property to foreign nationals for six months to cool down the market while finding solutions. The BC Liberals are too addicted to both the property tax and developer donation revenue they get from foreign sales to take really significant action like that.
So when it comes to getting rid of the spooky characters haunting our housing market, Christy Clark is no ghostbuster. She’s just running scared.