Wednesday, June 28, 2017

City Council approves so-called Empty Home Tax without regard to owners of second homes

Today I am ashamed to be a Vancouverite. The Vision members of Council approved the Empty Home Tax bylaw with only a few housekeeping modifications, and continue to consider a second home that is occupied 179 days a year to be deemed 'empty' as far as the tax is concerned. It's nuts.

When I asked the staff person from Planning Department responsible for the report if he was aware of any example of a successful application of a vacant home program in London or elsewhere, he couldn't give me one.

When I asked why the recommended taxing second homes, he replied their consultant said anything less than a 180 day threshold was not workable, noting programs that require you to log days isn't workable. While that is not what I asked, I have now requested a copy of this consultant's report. 

At any rate, the matter has been decided and life goes on. But below, for the record, are my speaking notes . A year or two from now, I will be interested to see just how much this program ultimately costs to administer, (the estimate has tripled from an initial $2.5 M to over $7.4) and how much revenue it brings in, and how many units truly come onto the rental market. I hope I'm pleasantly surprised, but somehow I don't think I will be. But the tax has achieved its objective of pandering to those voters who feel the city must do more to address housing affordability, especially those who invaded the council chamber yesterday screaming TAX THE RICH, HOUSE THE POOR!

Empty Home Tax
·       My name is Michael Geller & I’m here speaking on my own behalf, as someone with a longstanding interest in housing policy. I’m not here as a paid consultant or as someone affected by the tax

·       I agree we are in a housing crisis and need to take action to increase supply of affordable rental housing

·       Like you and everyone in this chamber, I am disturbed by the number of empty or vacant dwellings in the city and would like to see them put to use, rather than serve as safety deposit boxes for investors

·       So why am I here today? The city has repeatedly stated the goal of this tax is to bring empty and vacant units onto the rental market.

  I am not here to talk about empty or vacant dwellings. I am here to point out that there are many occupied HOMES which under this bylaw are ‘deemed empty’ that have become collateral damage under this tax. It is unfair to start taxing them under this bylaw when they are not empty.

·       These are the second homes of BC residents, Canadians living in other parts of the country, (some of whom once lived here or have family here) and yes, Americans and Chinese and Germans and so on). They are owned by BC politicians who regularly come into Vancouver; former residents who regularly return to see family, or for medical attention.

·       Again, These properties are not empty. Some are occupied throughout year on weekends or weeks at a time; others are occupied for 4 or 5 months over the summer.

·       My point is that these homes are no more likely to be rented out for 30 days at a time than the spare bedrooms in your home are likely to be rented out.

·       As you know I have been complaining about this aspect of the tax in the media & social media. Many have criticized me for advocating for people who own two homes when so many in the city can’t even afford to rent one, adding anyone who owns a second home can afford to pay the tax.

·       However, others have noted that by going after second home owners, this appears to be little more like an envy or jealousy tax. They see it as vote pandering to those who want to tax the rich to house the poor. (I gather than some of them were here to disrupt yesterdays council meeting).

·       Let me repeat. These second homes cannot be rented out when the owners aren’t here. Your bylaw might force the owners to sell their condos, but surely that’s not your objective. (I will add for the benefit of Tom Davidoff and others that when they are sold, the owners will pay Capital Gains Tax on any appreciation.

·       I strongly believe this tax will have a better chance of success, be more cost effective to administer, and be deemed more equitable if you amend the wording of the bylaw so that it clearly distinguishes between truly empty units, and those occupied for many months each year, but less than 180 days.

·       Your staff are clever enough to draft the revisions.

  When I questioned  the staff person administering the bylaw why this tax was applying to people owning second homes, I was told second home owners had choices. When I asked what choices, I was told they could pay the tax or sell their unit.

·       I sincerely hope members of Council do not think these are reasonable choices to offer someone who has chosen Vancouver as a place to live, including the Singaporean who according to the Vancouver Sun recently offered to build an art museum for the city because he loved our city so much after keeping a home here.

·       Finally, to truly increase the supply of rental housing, I urge you to address the problem of investor-owned Airbnb’s. These are having a far greater negative impact on available rental housing stock.

·       I also urge you to approve the backlog of rental housing projects in the system. When I last checked there are hundreds of rezoning and development permit applications awaiting approval, many of which include rental housing

·       Improve the city’s zoning to reduce number of rezonings.

·       I also recommend that the city set up a matchmaking service so that those who have empty suites, and there are hundreds of them, and even empty bedrooms, can make them available to those seeking affordable homes.

Thank you for your attention.


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Susan said...

That is certainly a very bad news for the home owners who are away or on vacation but still have to pay tax for their empty houses.