While I support the city's desire to encourage owners of vacant homes to either sell them, or rent them out, I have not been a fan of the program since it inception. For one thing, it effectively disallows second homes, and its application can be grossly unfair. For example, a couple who were building a new house moved out of their home since they thought approvals to start construction were imminent. However, they were delayed, so they had to rent another place. To add insult to injury, the city charged them the EHT on top of the inconvenience caused by the city's delays and the rent they were having to pay to live in another property.
I have been assisting someone who had been trying to redevelop three vacant lots in Marpole. Yes, although it's called the Empty Home Tax, it applies to vacant land!
This gentlemen wanted to build rental suites but the lots were zoned duplex. He tried to rezone them only to be told there was no policy to allow rezoning. But there could be, so just wait. He waited and was then charged the tax. It has been a Kafkaesque nightmare for him, and for me!
So I went to Council this morning with a prepared text. Unfortunately, I could only deliver a fraction of it, but below is what I wanted to say!
Full text of Geller
presentation to Vancouver City Council regarding proposed Empty Home Tax program
modifications. (Note, only
excerpts were delivered given the 5-minute time limit.)
I thank the city for undertaking this
review. I also acknowledge and thank staff for interviewing me during the
preparation of this report.
I’m not opposed to a 5% tax on people
who deliberately keep dwellings empty.
However, since first speaking out and criticizing
this program, based primarily on its negative consequences for those maintaining
second homes in Vancouver, I have become aware of many other unintended
consequences and situations that highlight the unfairness and inappropriateness
of the tax. That’s why I’m here.
The recommendations before you are a
good starting point, but more needs to be done.
If I could take you through some of
the specific cases with which I’m aware, including one case I currently have
under appeal, I am confident you would agree this tax is oftentimes Kafkaesque,
and grossly unfair.
1. Lack of coordination between EHT Office and
Planning.
Homeowners are being charged the tax for not getting approvals by a certain
date even though the delay was caused by the planning department due to Covid,
short staffing, etc. My client is being audited even though we submitted a
formal enquiry. We had to file an appeal. Why didn’t the EHT contact the
planning department?
The elimination of the July 1 date will partially address this, but there needs to be a more equitable review process to adjudicate such situations before having to resort to the courts. I’d like to see an ombudsperson.
Inappropriate application to vacant land.
2.
Most people
are not aware that this tax applies to vacant land. This is because the city
wanted to discourage demolition of units by owners trying to avoid tax. I appreciate
this is not the place to attempt to resolve specific files, but…
I am advising a property owner of duplex zoned lots who has been wanting to build rental housing for years. He hired two architects to prepare plans, but they couldn’t be approved under the existing zoning and there was no applicable policy to allow a rezoning. The owner was told to await new zoning or program changes.
After working with two architects over five years, he was then charged the tax. We have filed appeals, but so far they have been rejected since the property owner didn’t submit a development application. He couldn’t submit an application.
When I complained about this Catch-22 situation, one planner responded “you could have built duplexes under existing zoning”.
He was right. But this program is intended to increase the supply of rental housing, not compel people to build duplexes!
We did eventually file a preliminary rezoning application under the Policy Enquiry Program in 2021 and it received a go-ahead. But by then the project was no longer feasible. Now, even though we submitted an application, the property owner is being audited for 2021! Why didn’t the EHT office call the planning department and ask if an application had been submitted?
3. Inappropriate application to second homeowners. When this program was first introduced, my major concern was its application to second homeowners. As a rabbi said to me, it should be called a jealousy tax since second homeowners are being criticized by those who can’t afford even one home!
Ironically, we should be encouraging people to keep second homes in Vancouver. They support restaurants, theatre, and don’t place demands on the school system. They don’t need year-round garbage collection!
They’re told they can have a second home. But they should rent it out for the time they are not living there. This is completely unrealistic.
As the tax increases, these homeowners are selling their homes, often to end-users. They are not creating more rental units. But then they are renting. The result is a reduction in the rental housing stock. The opposite of the program’s intention.
Many Vancouver units are owned by Americans who cannot be here for more than 6 months. Just like we can’t be out of the country for more than 6 months. Many are seniors. I would like to see 6 month and a day reduced to 4 months. Since many of these homeowners are seniors who want to see family, etc. Start with an exemption for those 55 plus, or 65 plus.
If changes are not made, the US government may well start to tax those Vancouverites who have second homes in California or Arizona!)
4. Applying empty home tax to Live/Work units! A Vancouver documentary film maker who made two films about the DTES and Woodwards projects purchased as a live/work unit decades ago in Gastown and used it as a studio/office.
He was recently charged the empty home tax on his office! Since the BC Property Assessment classification is residential for the entire project, which is the case for live/work projects throughout the region.
The tax didn’t turn his office into a rental unit. On a lawyer’s advice, he changed the BC Assessment classification. Some might say, great, he’s paying more tax. But now developers are reluctant to create live/work units, even when encouraged by city zoning.
5. Inability to communicate with auditors by email or phone.
6. Harassment and lack of trust. While there is no doubt that many homeowners are going to extraordinary lengths to avoid paying the tax, including renting to family members or friends, there is often a high level of mistrust that results in property owners feeling harassed.
To conclude, I’ve worked in this city for 5 decades. I
know that I’ve often been a vocal critic of city zoning policies, planning
procedures, etc.
However, many of the zoning and
program changes for which I have argued have finally gained currency: portable modular housing for the homeless; multi-family
along arterials; laneway housing, fee simple rowhouses, gentle density!
(Hopefully policy changes to allow balcony
improvements will soon happen.)
Now there’s a need for the city to
make this EHT program fairer and more equitable. And avoid the unintended
consequences.
·
It’s wrong to tax
people because they’ve been waiting for permits
·
It’s wrong to tax
someone who wanted to build rental suites but was being told by staff to wait
for zoning changes.
·
It’s
counter-productive to force Americans, Albertans, and people from around the
province to sell their condos and start renting units since they can keep
rental units vacant 6 or 8 months a year!
That’s why I’m here today. I hope this
has been helpful.
From a Frances Bula Globe and Mail story.
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