Vancouver’s housing market has long stopped being affordable for most, a fact that is not lost on British Columbia’s NDP government: its first budget, released on Tuesday, includes a massive, 30-point plan expressly devoted to solving the city’s housing crisis.
The plan targets speculation, legal loopholes, and foreign buyers. It also aims to increase housing security for renters, and to build a bigger supply of affordable homes.
Several of the points, or policy initiatives, tweak existing regulations that had been introduced over the past couple of years to address runaway prices, which include a controversial foreign buyer’s tax that came into effect in 2016, and a set of Airbnb rules that will be introduced in the spring. The NDP will increase the severity of these regulations, raising the foreign buyer’s tax from 15% to 20%, and permitting strata residences (or buildings whose common spaces are co-owned by the buildings’ residents) to charge higher fines to people who break bylaws when they’re renting out their units on a short-term basis.
Such increases are needed, according to the 30-point plan, because the original regulations did not make that much of an impact. In the case of the foreign buyer’s tax, 15% “has been insufficient to stabilize the housing market,” the plan said. A comparison of Vancouver’s housing trends with those of Toronto, which adopted many of the same regulations as Vancouver, supports this sentiment. While in Toronto, the regulations seem to have actually hit both sales and prices — both have fallen in recent months — in Vancouver, sales and prices continue to climb at alarming rates.
What’s more, is that the Okanagan region (east of Vancouver) has also been seeing an increase in sales — which suggests that people who are being priced out of Vancouver are increasingly spreading out to find housing, and inflating those markets as well.
To address this, the NDP’s plan includes expanding Vancouver-centric initiatives to cover more regions of the province. In the fall, for example, a new tax on speculators will apply to Metro Vancouver, the Fraser Valley, Capital and Nanaimo Regional Districts, as well as Kelowna and West Kelowna.
Use the LowestRates.ca quoter to compare mortgage rates from Canada's leading banks and brokers.Get started
“We are applying this new speculation tax broadly to ensure we don't simply push speculators into neighbouring markets,” the plan reads.
Other initiatives in the NDP’s plan respond to more recent developments. Most notably, the NDP has asked the federal government to form a working group on tax evasion, money-laundering, and housing. This initiative was likely introduced in response to a disturbing Globe and Mail exposé published last week, which found that Vancouver drug traffickers were shadow lending to wealthy homebuyers from China — and effectively driving up home prices in the process. Other reports, including one by Sam Cooper of the Vancouver Sun, have shown that real estate in B.C. is being distorted by money laundering and offshore capital.
Vancouver is one of the most expensive places to live in Canada. In January — a month when sales typically pick up from December, but is still a few months off from peak homebuying season — the price of an average home sat at a staggering $1,056,500, according to stats from the Canadian Real Estate Association. This average includes all home types, such as single detached homes and condos.
“Prices for renting and buying have surged past local incomes, leaving people paying a greater portion of their wages towards their home," said Selina Robinson, B.C.'s Minister of Municipal Affairs and Housing, in the 30-point plan.
“It will take years of sustained action to bring housing affordability home.”