Tuesday, January 30, 2018

Opinion: Vancouver’s well-intentioned but flawed Empty Home Tax won’t help Vancouver Courier January 30, 2018

      Attention Vancouver property owners!
      Friday, Feb. 2 is the deadline by which you must submit a property status declaration so that city officials can determine if your property is subject to the Empty Homes Tax. Failure to declare will result in your property being deemed vacant and subject to a tax of one per cent of its assessed taxable value. For most West Side single-family properties, that’s $30,000 or more. Every year.
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       Every Vancouver homeowner must make a declaration, even those who have lived in their homes for decades and assumed the tax only applied to the vacant house down the street or empty apartment next door.
       While the city’s desire to transform what it claims are 25,495 empty or “under-utilized” dwellings into new rental units was well-intentioned, as regular readers of this column know, I have long opposed how the city has introduced this tax bylaw.
       From the onset, city lawyers knew from the experience in London and other global jurisdictions that it is extremely difficult and expensive to enforce a tax on vacant dwellings.
Consequently, Vancouver’s legal department drafted what many regarded to be a very heavy-handed bylaw, which not only taxed owners of truly empty dwellings, but also the owners of most second homes.
      When a few of these second home owners, including a former Vancouver doctor who had moved to Bowen Island but came into the city to work part-time, complained about the impact of this tax, they were told by city staff they had a choice. They could rent their homes or sell.
      Since any intelligent person could appreciate these second homes could not be rented out for a minimum 30 days at a time, this response prompted me and others to suggest that, in effect, the tax was like a jealousy tax, to appease voters who could not afford one home, let alone two.
      Nonetheless, the city refused to amend the bylaw. As a result, many of these homeowners, including a former MLA and B.C. mayor, have offered their properties for sale since they are not prepared to pay such a punitive tax.
      These homes will not suddenly become rental properties, and I am willing to bet my house that this tax will not result in anywhere near the tens of thousands of rental properties that the mayor, and other misguided souls, predict will come onto the market.
      The unreasonableness of this tax was recently illustrated by the case of a vacant lot owner who was told she too would have to pay the tax. This despite the fact the lot had always been vacant.
When she complained to city staff, she was told to apply for a permit and build a house on the property. Who knew it was also an empty lot tax?
      As this column was about to go to press, the mayor held a press conference to provide an update on the tax. At the conference, media were told that 11 per cent or 21,000 Vancouver homeowners have not yet submitted their declarations.
      When the mayor and city chief financial officer were asked how many of the 89 per cent of homeowners who had responded said their properties were vacant, we were somewhat amused when the CFO claimed the city did not yet have this information. Really?
      While I remain opposed to aspects of the Empty Home Tax, especially its application to second homes, I decided to offer two suggestions to help the city recoup some of the $7.4 million it says the program is now estimated to cost to administer.
      Since I suspect many owners of truly vacant properties are going to lie about their status, I suggested the city implement something akin to the Crime Stoppers program to encourage the public to anonymously provide tips about vacant properties, especially those that could serve as rental housing.
      I subsequently learned there already is a smartphone app to report vacant dwellings.
      I also suggested city staff liaise with the garbage collection department since if anyone knows which single-family houses are empty, it’s the waste collectors.
      The CFO acknowledged they hadn’t thought of this, but agreed it was a good idea.
      I am pleased to help.


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