David Eby's Empty Condo Tax

Although it has been a couple of months since I last wrote an entry on this blog, I am so upset with David Eby I just had to write.

In recent years, governments have tried to create affordable housing by introducing various taxes, as illustrated above. As a former BC Finance Minister once said to me, taxing for housing affordability is like bombing for peace. He's right.

On September 25th, I received a message from Stephen Chang, a CKNW story producer for the Jas Johal Show. He wanted to know if I had heard about David Eby's latest housing tax, an Empty Condo Tax. I couldn't believe it. It wasn't that long ago Eby wanted to convert unsold condos into Rent-to-Own units. It was completely ill-conceived. I did speak with Housing Minister Christine Boyle's Chief of Staff and shared information with him that I hoped would kill the idea. It might have.

But Stephen wanted me to know that Eby wanted to now tax these empty condos THAT WERE BEING HOARDED BY DEVELOPERS. Would I come on the show and talk about it. So I drove down from Furry Creek where I had been spending the day and connected with Jas around 4:30. 

I had to admit that it was probably great politics since I have learned over the years that the public loves empty home taxes, whether issued by Vancouver, a province like BC or Ontario, or even the federal government which once introduced an Unused Housing Tax. Fortunately, the government soon realized this was unecessary and cancelled the program.

However, I also shared with Jas some of the reasons why I opposed this tax, and the other empty home taxes - the provincial Speculation and Vacancy Tax, and he Vancouver Empty Home Tax. They always have unintended consequences. In the case of the SVT and EHT, they significantly reduce housing demand from those wanting second homes. When they apply to unsold inventory they also discourage supply and add to cost. 

I could go on but there are a few things Eby needs to be told. First, the developers are not HOARDING these units. They just can't sell them. Yes, they would sell if the price was reduced, but developers are not always at liberty to reduce prices. They are obligated to sell for a price agreed to with the lender, and if they are sold at a discount below that price, the lender can ask the developer to inject more equity. I suspect Eby has no understanding of this.

There are other reasons. Some of these units are in projects that are in receivership, or about to go into receivership. Therefore, it can take a while before the court-ordered sale can be soreted out and the units can be sold. And yes, developers are reluctant to sell below cost. I know this from first hand experience.

This action, and many of Eby's other recent promises have angered me more than I have ever been angered by politicians before. In the past, I have been an NDP voter. I liked Eby when I was first introduced to him by Milton Wong. I even donated to one of his campaigns after a meeting at Darlene Marzari's home.

I was, and still am a great fan of Glen Clark. I liked John Horgan. But I am now hoping that this election will prove to be his undoing. Otherwise, expect our economy to futher deteriorate, along with housing development activity.