OAK Bay Watch Newsletter May 28, 2017
Council Meeting May 23, 2017 Report
Agenda Item 9 (Council) Strategic Priorities Fund:
This agenda item deals with grants available to municipalities under the Federal Gas Tax Fund Strategic Priorities Fund. As there are two Federal funding schemes under the Federal Gas Tax Fund Program, one for funding capital infrastructure projects and one for funding asset management, including long-term financial plans. Councilor Zhelka made a motion that staff makes their best effort to also apply for an Asset Management Grant under the 2nd scheme. If successful this would get the Municipality started on addressing the (overall) critical state of our overall infrastructure with a long-term financial plan. Councilor Murdoch also provided some support for an application under the capital plan however the motion was defeated by a 5-1 vote.
The Mayor and the other four Councilors also turned their back on an excellent submission (see Appendix 1.) by a member of the public who clearly explained this second grant would provide funding to develop the necessary long-term capital financial planning (the required next step). Other communities, like Central Saanich, already have this asset financial plan completed. Prior to the vote another resident had addressed Council supporting Councilor Zhelka’s grant application motion, stressing the urgent need to apply for all available asset management grants before the upcoming deadline, however, his request also fell on deaf ears
Council seems oblivious to the fact we need long term infrastructure planning right away. There is significant Asset Management Federal Funding available now up until June 1st, 2017. Obviously there is a lot of competition for this funding and, most likely based on this fact the press has indicated the Federal Infrastructure Initiative Funding Schemes may not be around that long. This will mean most of the high cost of starting to develop our over-all Infrastructure Plan will have to be paid for by the public. This could be in the range of $150,000 to $200,000. Filling out a Federal grant application just opens a file, supporting documentation can follow – as indicated the benefit to the public would be significant.
It is apparent by the 5-1 rejection vote Council is not heeding the many repeated (evidence based) warnings about the very poor condition that the general infrastructure is in, and how much this has placed the District at risk financially. If the effort and resources that Council has allocated for development, (that places even more stress on the infrastructure) was applied to our sewer, storm drain and roadway crises planning we would be well on the way to considering the (very expensive) 2017 Asset Management Consultant Report recommendations.
Agenda Item 11 Foreign Purchaser Property Transfer Tax (CRD requested Council input).
Councilor Zhelka made a motion and spoke in favor explaining many countries around the world restrict Foreign Ownership basically to prevent runaway real estate markets like the one currently impacting so many Canadian Families and driving many into unparalleled household debt. This has also caused so many other social problems. The Mayor said he spoke against this proposal at a CRD Meeting and stated he based his opposition on there being insufficient evidence to identify this as a problem. This sentiment was voiced by other members of Council and, the motion was defeated in another 5-1 vote.
While a tax on foreign ownership is not a universal remedy, there is certainly plenty of evidence foreign ownership is a major contributing factor. If a most middle class Canadian Families cannot buy a single-family home in Victoria, perhaps the 5 Council members who voted against the motion, can identify who is.
These is ample information available: Vancouver and Toronto (with included rent controls) has implemented this Foreign Buyers tax. Victoria recently defeated a foreign tax resolution in a 4-4 tie vote, however cited the Province should impose it across the board. Note: The 9th Victoria Council member recused herself from the vote because she was married to a realtor
The academic community has weighed in with ample evidence that shows a wave of non- resident, foreign investment in the Canadian housing market - in addition to other speculators and Investors. Obviously the Real Estate and Development industries oppose any tax that will impact profits. They constantly turn out very low statistics to show foreign purchasers are a minor problem. However a very recent extensive Ryerson University report not only suggests a foreign buyers tax but goes far beyond by recommending a surtax as well (see Times Colonist Article Appendix 2). This would affect non-income taxpayer owners who don’t contribute to the Canadian economy – a practice just highlighted by the Globe and Mail. Oak Bay and Victoria have large numbers of empty in addition to non-resident homes.
The Simon Fraser University study (Appendix 3) compiles several Reports and concludes foreign investors are a big part of the over-priced housing problem.
It is difficult to understand how the majority of Council would not take into account the reasoning other places have used for applying a Foreign owner tax. They also are experiencing over-heated Canadian real estate markets with many of their residential developments being marketed off- shore. In fact, other than Councilor Zhelka’s factual evidence there was very little debate by Council on this important topic. We now have a Planner, an assistant Planner and a Director of Planning on board – why not request additional information if you don’t have, or doubt, the information at hand.
If this is the lack of critical thinking and information we can expect from Council when making decisions on their newly funded Infill priority we are in real trouble.
Last Agenda Items: Resolutions
Councilor Ney, who was absent for the Council Meeting up to this point, was contacted electronically by speaker phone to approve the Bowker /Cadboro Bay development permit and covenant. Her vote was necessary for approval as Councilor’s Zhelka, Murdoch and Braithwaite voted against the resolutions. A 3-3 tie vote would have resulted in a defeat.
Meeting Adjourned.
*******Please help us continue to provide you with information about Community concerns and Council decisions and actions. Oak Bay Watch members also help community groups with their specific development concerns. Donate to Oak Bay Watch - even $5 or $10 dollars provides expenses for door- to- door handouts and helps us maintain our website. Oak Bay Watch is committed to ensuring the Community gets the full range of information on budget, governance and all key development issues – a well informed opinion cannot be made without this.
(Please use Donate Button at bottom of oakbaywatch.com Home Page)
Continue to keep informed please sign up for our newsletter – end of newsletter page.
_________________________________________________________________
Appendix #1.
May 23, 2017 Warren Jones, Director of Corporate Services
2167 Oak Bay Avenue, Victoria BC V8R 1G2
Mayor in Council:
Re: Council Meeting May 23, 2017
Agenda #9 – Grant Opportunity
Mr. Horan’s report on the grant opportunity is a welcome and significant initiative to augment funds for capital projects. I would, however, encourage that the second point under Options be considered. My understanding of the funding is that the project of developing a long-term capital plan would be eligible under the capacity-building projects. I understand Mr. Horan’s position; typically engineering resources contribute to but do not develop this component of asset management. For exactly this reason, Oak Bay would benefit if funding were available to take asset management to the next level – the long-term capital plan.
The reports by Moore Wilson Architects Inc./WSP and Opus International Consultants (Canada) Limited provide an excellent starting point to begin the exercise of long-term financial planning. Asset Management is a fluid process that evolves over time, gaining accuracy and insight as part of the process. It must be adaptable to changing needs or conditions while aiding to rationalize services and programming needs.
The District is in a good position to request funding for assistance with a long-term plan:
→ Goals stated in various documents (OCP, Urban Forest Strategy, Complete Streets, etc.)
→ Detailed assessment reports on infrastructure and municipal buildings are complete
→ Long-Term Financial Plan will provide an integrated asset management strategy
involving planning, finance, engineering and operations to maximize benefits,
minimize risk, and to provide levels of service to the community that are socially,
environmentally, and economically sustainable.
The deadline for applications is June 1, 2017. This is wonderful opportunity to obtain funding for projects already on the table, and hopefully to obtain funding to move asset management to the next critical stage – the long-term capital plan.
Sincerely,
Appendix # 2.
Foreign-buyer tax not enough, report saysToronto analysis touts progressive surtax on homes owned by non-payers of income tax
“The surtax essentially gets wiped out if you’re earning money locally and paying taxes locally or in Canada,” said report author Josh Gordon, an assistant professor at Simon Fraser University. It’s a system that hasn’t been implemented elsewhere, Gordon said, although it was first proposed several months ago by his colleague. Rhys Kesselman. The surtax would target foreign buyers who don’t contribute to the local labour market, as well as wealthy Canadian citizens who have “aggressively evaded taxes,” the report said.
And it would also be progressive, like income tax. The surtax would apply only to the value of a home over a certain threshold, the report said. The further you get from that threshold, the more the property is taxed. “Most importantly, the tax would alter expectations,” Gordon wrote in the report. “Torontonians would come to recognize that subsequent demand for housing would be primarily local, not foreign, and thus that prices were likely to fall.” Gordon said both the policies are related to demand in the housing market, as opposed to supply. He noted while the number of active real estate listings in Toronto has declined in recent years, the number of new listings has stayed the same. In other words, the same number of houses are going on the market; they’re just getting snapped up quickly. “This isn’t normal. A lack of supply isn’t causing this.
It’s a surge in demand, and demand that’s beyond the normal growth of population, construction and new listings of homes,” said Cherise Burda, executive director at the Ryerson City Building Institute. “I think often demand is overlooked by this cry for more supply,” she added. “We can’t build our way to affordability.” But she said supply shouldn’t be ignored altogether. “When you look at supply, it’s what type of supply you need to build.” She said developers are largely building high rises downtown, and detached houses in the “suburban periphery,” far from transit, schools and services. She said Toronto needs to build “missing middle housing”: townhouses, midrises, and stacked flats.
Figures from the B.C. government show a drop in real estate transactions in the Vancouver area after the provincial government brought in a 15 per cent tax on foreign buyers last August. However, the market had been showing signs of softening prior to introduction of the tax.
Appendix # 3
Foreign buyers crushing Vancouver home dreams as governments do little: Study /
A Report says political inaction has made it tougher for potential new buyers to break into the market
By Camille Bains, The Canadian Press Posted: May 08, 2016 9:44 AM PT Last Updated: May 08, 2016 12:48 PM PT
The Canadian and British Columbia governments are complicit in fuelling Vancouver's housing crisis as foreign Chinese buyers continue to shut local residents out of the market, a new study says.
Josh Gordon, the study's author and assistant professor in the School of Public Policy at Simon Fraser University, said people's dreams of owning a home are being crushed because they can't compete with foreign investors and no longer accept "distraction" excuses such as low interest rates for the state of the super-heated market.
"People recognize what's going on, and they're willing to call a spade a spade," he said, stressing that such views are based on reality, not racism.
Gordon said his report blames Vancouver's housing crisis on foreign buyers, particularly from China, because "this is where the evidence points, not because of some anti-Chinese animus."
Chinese investors have also spiked home prices in the Toronto region, but Vancouver has seen the highest rise in real estate due to the influx of foreign money reaching an unprecedented level in the last year, he said. Gordon noted that other countries, including Australia and Singapore, have created policies for foreign homebuyers to protect their own citizens but that hasn't happened in Canada.
BC Highrise: In the condo towers of central Vancouver, foreign ownership is 5.4 per cent, while in central Toronto it's 5.8 per cent (CBC)
The average sale price of a single-detached home in Metro Vancouver was $1.4 million in April, a 30-per-cent increase from a year earlier, according to the Real Estate Board of Greater Vancouver.
The report, titled "Vancouver's Housing Affordability Crisis: Causes, Consequences and Solutions," says political inaction has allowed the problem to grow.
"By linking the crisis unambiguously to foreign ownership and investment, documenting the major harms of the affordability crisis, and proposing a policy route out of the current mess, the report hopes to harness the city's resentment and dispel its resignation."
Mobilized and informed residents can ideally hold political leaders accountable, the report says. Mounting frustrations: Nazma Lee said she and her husband Lloyd have become increasingly frustrated because they can't afford a home as they continue renting a two-bedroom condo with their two children. Lee, a lawyer, and her husband, an engineer, were born and raised in the Vancouver area but fear that like other residents they may have to leave to buy a home elsewhere. "I do think Vancouver is being affected by massive amounts of foreign investment," she said.
Lee said it's time for the B.C. and federal governments to take "drastic measures," including tracking the source of money for real-estate investment to deal with possible money laundering. "I feel like there's a little bit of willful blindness and people know what's going on, but nobody wants to look into it because so many people are making money off real estate in Vancouver," she said.
Political plans: In March, Premier Christy Clark said the province will impose regulations to end the "shady" practice of contract flipping, allowing real estate agents to flip a property multiple times at higher prices before a deal closes as they continue making commissions while buyers avoid paying property taxes.
This year's federal budget allocated $500,000 over the next year for Statistics Canada to develop methods to track ownership of Canadian homes by foreign homebuyers.
CANADA-CHINA/HOUSING
Chinese-first signs outside a mansion under construction in a Vancouver are the kind of anecdotal information indicating foreign money is coming to Canada seeking a safe investment. But such evidence fails to indicate whether the buyers are speculative investors or domestic residents making a long-term investment. (Reuters)
The Opposition New Democrats have put forward two private member's bills, one calling for a two-per-cent speculation tax and the other to close a loophole allowing investors to avoid paying property transfer tax.
NDP housing critic David Eby said the province's commitment to reintroduce a requirement for homebuyers to disclose their citizenship on land title documents is unlikely to make any difference. "The idea that if people are misrepresenting their residency on anti-money laundering forms are going to suddenly give you frank and honest information on land titles form is a bit silly. Eby said he has met with business owners who are struggling to recruit and retain professionals because the high cost of housing is deterring people from moving to the city.
"Housing is going to be a central issue for us," Eby said of the matter that will potentially drive the NDP's election agenda before voters go to the polls in May 2017. "It's not just Metro Vancouver that's facing this challenge," he said. "There are rental vacancy rates across the province of less than one per cent."
B.C. Affordability Housing Fund
Eby said he supports a B.C. Affordability Housing Fund, proposed by the Sauder School of Business at the University of B.C., to collect a 1.5-per-cent real estate surcharge from non-resident property owners, with the money generated to be distributed to residents.
Tom Davidoff, director of the Centre for Urban Economics and Real Estate at Sauder, said that at a tax rate of $15,000 for a house worth $1 million, a minimum of $100 million a year would be raised in Vancouver alone.
He said 40 academics at the University of B.C. and Simon Fraser University have endorsed the fund, and the idea was presented to provincial government officials earlier this year.
"It's very important that we see outside investment as an opportunity," he said. "It can only be a bad thing if politicians are too stupid and lazy to not make sure everybody benefits."
Council Meeting May 23, 2017 Report
Agenda Item 9 (Council) Strategic Priorities Fund:
This agenda item deals with grants available to municipalities under the Federal Gas Tax Fund Strategic Priorities Fund. As there are two Federal funding schemes under the Federal Gas Tax Fund Program, one for funding capital infrastructure projects and one for funding asset management, including long-term financial plans. Councilor Zhelka made a motion that staff makes their best effort to also apply for an Asset Management Grant under the 2nd scheme. If successful this would get the Municipality started on addressing the (overall) critical state of our overall infrastructure with a long-term financial plan. Councilor Murdoch also provided some support for an application under the capital plan however the motion was defeated by a 5-1 vote.
The Mayor and the other four Councilors also turned their back on an excellent submission (see Appendix 1.) by a member of the public who clearly explained this second grant would provide funding to develop the necessary long-term capital financial planning (the required next step). Other communities, like Central Saanich, already have this asset financial plan completed. Prior to the vote another resident had addressed Council supporting Councilor Zhelka’s grant application motion, stressing the urgent need to apply for all available asset management grants before the upcoming deadline, however, his request also fell on deaf ears
Council seems oblivious to the fact we need long term infrastructure planning right away. There is significant Asset Management Federal Funding available now up until June 1st, 2017. Obviously there is a lot of competition for this funding and, most likely based on this fact the press has indicated the Federal Infrastructure Initiative Funding Schemes may not be around that long. This will mean most of the high cost of starting to develop our over-all Infrastructure Plan will have to be paid for by the public. This could be in the range of $150,000 to $200,000. Filling out a Federal grant application just opens a file, supporting documentation can follow – as indicated the benefit to the public would be significant.
It is apparent by the 5-1 rejection vote Council is not heeding the many repeated (evidence based) warnings about the very poor condition that the general infrastructure is in, and how much this has placed the District at risk financially. If the effort and resources that Council has allocated for development, (that places even more stress on the infrastructure) was applied to our sewer, storm drain and roadway crises planning we would be well on the way to considering the (very expensive) 2017 Asset Management Consultant Report recommendations.
Agenda Item 11 Foreign Purchaser Property Transfer Tax (CRD requested Council input).
Councilor Zhelka made a motion and spoke in favor explaining many countries around the world restrict Foreign Ownership basically to prevent runaway real estate markets like the one currently impacting so many Canadian Families and driving many into unparalleled household debt. This has also caused so many other social problems. The Mayor said he spoke against this proposal at a CRD Meeting and stated he based his opposition on there being insufficient evidence to identify this as a problem. This sentiment was voiced by other members of Council and, the motion was defeated in another 5-1 vote.
While a tax on foreign ownership is not a universal remedy, there is certainly plenty of evidence foreign ownership is a major contributing factor. If a most middle class Canadian Families cannot buy a single-family home in Victoria, perhaps the 5 Council members who voted against the motion, can identify who is.
These is ample information available: Vancouver and Toronto (with included rent controls) has implemented this Foreign Buyers tax. Victoria recently defeated a foreign tax resolution in a 4-4 tie vote, however cited the Province should impose it across the board. Note: The 9th Victoria Council member recused herself from the vote because she was married to a realtor
The academic community has weighed in with ample evidence that shows a wave of non- resident, foreign investment in the Canadian housing market - in addition to other speculators and Investors. Obviously the Real Estate and Development industries oppose any tax that will impact profits. They constantly turn out very low statistics to show foreign purchasers are a minor problem. However a very recent extensive Ryerson University report not only suggests a foreign buyers tax but goes far beyond by recommending a surtax as well (see Times Colonist Article Appendix 2). This would affect non-income taxpayer owners who don’t contribute to the Canadian economy – a practice just highlighted by the Globe and Mail. Oak Bay and Victoria have large numbers of empty in addition to non-resident homes.
The Simon Fraser University study (Appendix 3) compiles several Reports and concludes foreign investors are a big part of the over-priced housing problem.
It is difficult to understand how the majority of Council would not take into account the reasoning other places have used for applying a Foreign owner tax. They also are experiencing over-heated Canadian real estate markets with many of their residential developments being marketed off- shore. In fact, other than Councilor Zhelka’s factual evidence there was very little debate by Council on this important topic. We now have a Planner, an assistant Planner and a Director of Planning on board – why not request additional information if you don’t have, or doubt, the information at hand.
If this is the lack of critical thinking and information we can expect from Council when making decisions on their newly funded Infill priority we are in real trouble.
Last Agenda Items: Resolutions
Councilor Ney, who was absent for the Council Meeting up to this point, was contacted electronically by speaker phone to approve the Bowker /Cadboro Bay development permit and covenant. Her vote was necessary for approval as Councilor’s Zhelka, Murdoch and Braithwaite voted against the resolutions. A 3-3 tie vote would have resulted in a defeat.
Meeting Adjourned.
*******Please help us continue to provide you with information about Community concerns and Council decisions and actions. Oak Bay Watch members also help community groups with their specific development concerns. Donate to Oak Bay Watch - even $5 or $10 dollars provides expenses for door- to- door handouts and helps us maintain our website. Oak Bay Watch is committed to ensuring the Community gets the full range of information on budget, governance and all key development issues – a well informed opinion cannot be made without this.
(Please use Donate Button at bottom of oakbaywatch.com Home Page)
Continue to keep informed please sign up for our newsletter – end of newsletter page.
_________________________________________________________________
Appendix #1.
May 23, 2017 Warren Jones, Director of Corporate Services
2167 Oak Bay Avenue, Victoria BC V8R 1G2
Mayor in Council:
Re: Council Meeting May 23, 2017
Agenda #9 – Grant Opportunity
Mr. Horan’s report on the grant opportunity is a welcome and significant initiative to augment funds for capital projects. I would, however, encourage that the second point under Options be considered. My understanding of the funding is that the project of developing a long-term capital plan would be eligible under the capacity-building projects. I understand Mr. Horan’s position; typically engineering resources contribute to but do not develop this component of asset management. For exactly this reason, Oak Bay would benefit if funding were available to take asset management to the next level – the long-term capital plan.
The reports by Moore Wilson Architects Inc./WSP and Opus International Consultants (Canada) Limited provide an excellent starting point to begin the exercise of long-term financial planning. Asset Management is a fluid process that evolves over time, gaining accuracy and insight as part of the process. It must be adaptable to changing needs or conditions while aiding to rationalize services and programming needs.
The District is in a good position to request funding for assistance with a long-term plan:
→ Goals stated in various documents (OCP, Urban Forest Strategy, Complete Streets, etc.)
→ Detailed assessment reports on infrastructure and municipal buildings are complete
→ Long-Term Financial Plan will provide an integrated asset management strategy
involving planning, finance, engineering and operations to maximize benefits,
minimize risk, and to provide levels of service to the community that are socially,
environmentally, and economically sustainable.
The deadline for applications is June 1, 2017. This is wonderful opportunity to obtain funding for projects already on the table, and hopefully to obtain funding to move asset management to the next critical stage – the long-term capital plan.
Sincerely,
Appendix # 2.
Foreign-buyer tax not enough, report saysToronto analysis touts progressive surtax on homes owned by non-payers of income tax
- Times Colonist 14 Mar 2017: NICOLE THOMPSON
“The surtax essentially gets wiped out if you’re earning money locally and paying taxes locally or in Canada,” said report author Josh Gordon, an assistant professor at Simon Fraser University. It’s a system that hasn’t been implemented elsewhere, Gordon said, although it was first proposed several months ago by his colleague. Rhys Kesselman. The surtax would target foreign buyers who don’t contribute to the local labour market, as well as wealthy Canadian citizens who have “aggressively evaded taxes,” the report said.
And it would also be progressive, like income tax. The surtax would apply only to the value of a home over a certain threshold, the report said. The further you get from that threshold, the more the property is taxed. “Most importantly, the tax would alter expectations,” Gordon wrote in the report. “Torontonians would come to recognize that subsequent demand for housing would be primarily local, not foreign, and thus that prices were likely to fall.” Gordon said both the policies are related to demand in the housing market, as opposed to supply. He noted while the number of active real estate listings in Toronto has declined in recent years, the number of new listings has stayed the same. In other words, the same number of houses are going on the market; they’re just getting snapped up quickly. “This isn’t normal. A lack of supply isn’t causing this.
It’s a surge in demand, and demand that’s beyond the normal growth of population, construction and new listings of homes,” said Cherise Burda, executive director at the Ryerson City Building Institute. “I think often demand is overlooked by this cry for more supply,” she added. “We can’t build our way to affordability.” But she said supply shouldn’t be ignored altogether. “When you look at supply, it’s what type of supply you need to build.” She said developers are largely building high rises downtown, and detached houses in the “suburban periphery,” far from transit, schools and services. She said Toronto needs to build “missing middle housing”: townhouses, midrises, and stacked flats.
Figures from the B.C. government show a drop in real estate transactions in the Vancouver area after the provincial government brought in a 15 per cent tax on foreign buyers last August. However, the market had been showing signs of softening prior to introduction of the tax.
Appendix # 3
Foreign buyers crushing Vancouver home dreams as governments do little: Study /
A Report says political inaction has made it tougher for potential new buyers to break into the market
By Camille Bains, The Canadian Press Posted: May 08, 2016 9:44 AM PT Last Updated: May 08, 2016 12:48 PM PT
The Canadian and British Columbia governments are complicit in fuelling Vancouver's housing crisis as foreign Chinese buyers continue to shut local residents out of the market, a new study says.
Josh Gordon, the study's author and assistant professor in the School of Public Policy at Simon Fraser University, said people's dreams of owning a home are being crushed because they can't compete with foreign investors and no longer accept "distraction" excuses such as low interest rates for the state of the super-heated market.
"People recognize what's going on, and they're willing to call a spade a spade," he said, stressing that such views are based on reality, not racism.
- Vancouver foreign ownership research prompts cries of racism in hot housing market
- B.C. Housing studying foreign ownership in real estate market, premier says
- Vancouver housing: Council wants new tools from province His report compiles a number of other studies, including data on home-buying trends,
Gordon said his report blames Vancouver's housing crisis on foreign buyers, particularly from China, because "this is where the evidence points, not because of some anti-Chinese animus."
Chinese investors have also spiked home prices in the Toronto region, but Vancouver has seen the highest rise in real estate due to the influx of foreign money reaching an unprecedented level in the last year, he said. Gordon noted that other countries, including Australia and Singapore, have created policies for foreign homebuyers to protect their own citizens but that hasn't happened in Canada.
BC Highrise: In the condo towers of central Vancouver, foreign ownership is 5.4 per cent, while in central Toronto it's 5.8 per cent (CBC)
The average sale price of a single-detached home in Metro Vancouver was $1.4 million in April, a 30-per-cent increase from a year earlier, according to the Real Estate Board of Greater Vancouver.
The report, titled "Vancouver's Housing Affordability Crisis: Causes, Consequences and Solutions," says political inaction has allowed the problem to grow.
"By linking the crisis unambiguously to foreign ownership and investment, documenting the major harms of the affordability crisis, and proposing a policy route out of the current mess, the report hopes to harness the city's resentment and dispel its resignation."
Mobilized and informed residents can ideally hold political leaders accountable, the report says. Mounting frustrations: Nazma Lee said she and her husband Lloyd have become increasingly frustrated because they can't afford a home as they continue renting a two-bedroom condo with their two children. Lee, a lawyer, and her husband, an engineer, were born and raised in the Vancouver area but fear that like other residents they may have to leave to buy a home elsewhere. "I do think Vancouver is being affected by massive amounts of foreign investment," she said.
Lee said it's time for the B.C. and federal governments to take "drastic measures," including tracking the source of money for real-estate investment to deal with possible money laundering. "I feel like there's a little bit of willful blindness and people know what's going on, but nobody wants to look into it because so many people are making money off real estate in Vancouver," she said.
Political plans: In March, Premier Christy Clark said the province will impose regulations to end the "shady" practice of contract flipping, allowing real estate agents to flip a property multiple times at higher prices before a deal closes as they continue making commissions while buyers avoid paying property taxes.
This year's federal budget allocated $500,000 over the next year for Statistics Canada to develop methods to track ownership of Canadian homes by foreign homebuyers.
CANADA-CHINA/HOUSING
Chinese-first signs outside a mansion under construction in a Vancouver are the kind of anecdotal information indicating foreign money is coming to Canada seeking a safe investment. But such evidence fails to indicate whether the buyers are speculative investors or domestic residents making a long-term investment. (Reuters)
The Opposition New Democrats have put forward two private member's bills, one calling for a two-per-cent speculation tax and the other to close a loophole allowing investors to avoid paying property transfer tax.
NDP housing critic David Eby said the province's commitment to reintroduce a requirement for homebuyers to disclose their citizenship on land title documents is unlikely to make any difference. "The idea that if people are misrepresenting their residency on anti-money laundering forms are going to suddenly give you frank and honest information on land titles form is a bit silly. Eby said he has met with business owners who are struggling to recruit and retain professionals because the high cost of housing is deterring people from moving to the city.
"Housing is going to be a central issue for us," Eby said of the matter that will potentially drive the NDP's election agenda before voters go to the polls in May 2017. "It's not just Metro Vancouver that's facing this challenge," he said. "There are rental vacancy rates across the province of less than one per cent."
B.C. Affordability Housing Fund
Eby said he supports a B.C. Affordability Housing Fund, proposed by the Sauder School of Business at the University of B.C., to collect a 1.5-per-cent real estate surcharge from non-resident property owners, with the money generated to be distributed to residents.
Tom Davidoff, director of the Centre for Urban Economics and Real Estate at Sauder, said that at a tax rate of $15,000 for a house worth $1 million, a minimum of $100 million a year would be raised in Vancouver alone.
He said 40 academics at the University of B.C. and Simon Fraser University have endorsed the fund, and the idea was presented to provincial government officials earlier this year.
"It's very important that we see outside investment as an opportunity," he said. "It can only be a bad thing if politicians are too stupid and lazy to not make sure everybody benefits."