As is widely acknowledged, single family homes are now unaffordable to most new home buyers in Metro Vancouver.
Even with a downpayment of $150,000 — plus bi-weekly payments, and an amortization period of 30 years — one would need to spend $72,000 in after-tax dollars annually to service the mortgage on an average-priced home of about $1.5 million.
The median total income for households in Metro Vancouver in 2015 was $72,662. A shift in the economic and supply dynamic is very obviously required, and with a strong dose of foresight and political will.
Another reason for change — many of these single family home neighbourhoods are near town centres, employment centres and mass transit, and could otherwise be comprised of the many families and young wage earners who want to both live in Metro Vancouver, and avoid motor vehicle ownership, long commutes, and the social costs of congestion.
One potential remedy to this problem, much-debated in its breadth and scope, is change zoning policies to allow for greater densification, so more people have more housing options per square foot in more neighbourhoods.
But it’s also not so simple; the many people who occupy single family homes still own these properties lawfully, such as single families, extended families, renters, and sometimes or one or two people (including seniors, who would be thrust into a changing real estate market).
And in some cases, as we’re learning, nobody lives in these houses at all.
Changes to zoning policy is not the only measure to be considered or, in the case of the City of Vancouver and the Province of British Columbia, proposed and enacted in a variety of ways.
A new video, sent to us by Price Tags contributor Tom Durning, dives deeply into the other big measure: taxes. New ones, and increases to existing ones.
“That’s my baby, so I can tell you what the reasoning was,” says Tom Davidoff, associate professor from UBC’s Sauder School of Business.
He does, and as Durning says, “If someone would have told me 5 years ago that this dialogue would even take place, I wouldn’t believe them.”
Davidoff has been called the driving force behind a series of new tax initiatives launch by the City of Vancouver and Province of British Columbia over the past 18 months.
Veteran local broadcast journalist Stuart McNish spoke to Davidoff as part of his series Conversations that Matter; a partial transcription from that video is excerpted below, which you can watch in full on YouTube (23 min).
So I got here from California, and California is a low property tax environment. I opened up my property tax bill, saw the number, and I said, “Oh that must be for the month.”
That was my annual bill. Then I paid my income taxes, and I said, “Ah – that’s how everything is funded.” Very high income taxes if you’re a high earner, very low property tax rates.
So I happen to write a paper with a colleague…it said, in places where it’s hard to build, where most of the value in the property is land, that’s where you want high property tax rates. In a place like Winnipeg or Dallas, all the value’s in the structure. You put a high property tax in place there, the building’s going to run away.
So relative to the rest of the world, in a place where people are lined up out the door of the permitting office begging to build, we ought to have high property taxes, ’cause it doesn’t really mess with the economy.
But we have a delicate productive economy. if you tax firms when they sell stuff, if you tax workers when they work, the skilled workers and the firms, they may not come here.
What if we had a special economic zone with no income tax, no sales taxes, and we finance everything through a property tax? It would be more attractive to be rental housing, rents would be higher, prices would be lower, we’d see a lot more density — it would be a great economy. But we’ll never get there directly.
Why? Because voting is dominated here, like everywhere else, by older homeowners. They’ve already paid their income taxes, and most of the sales tax, and now they’re reliant on their home, and property taxation is painful.
So you can’t tax voters to raise property taxes. But we saw the concern about empty homes, vacation homes, pied-a-terre, Airbnb, a lot of uses where there’s no voter in the address. So what are you giving them a low property tax for if they’re not even contributing?
Look, if somebody’s already paid a lot of income tax, you don’t want to give them a double whammy on property tax, but you’re not using the property to live and work — give me a break.
So the idea was raise property taxes. We said one and a half percent. So you’d be at a total rate of around two percent, which would be on the high end of North American property tax rates, where we ought to be. And then you’re paying two percent total property tax, I don’t think you have anything to complain about, because that’s a suitable property tax. And most of the time this is not a voter.
Now, there will be some second homeowners hit. I think that’s appropriate in a place like Vancouver. We suggested that you opt in — so if you have municipality that’s really a tourist destination you don’t want to kill the goose that laid the golden egg…telling Whistler to tell Americans get out of your condo…you’ll kill the economy.
But when the workforce can’t find a place to live, what we said is raise property taxes, but only for people who aren’t either landlords or paying income tax. So that’s the idea.
Qualcomm today unveiled three new chipsets for its mid-tier and budget platforms: the Snapdragon 632, Snapdragon 439, and Snapdragon 429. Aimed at mass-market smartphones, they feature enhanced AI capabilities along with improved connectivity, GPU performance, and power efficiency.
Highlighted in green: things that readers could figure out by themselves, but were written out anyway.
Labels close to their elements.
Highlighted in green: mentions of “artic ice”/“sea ice”
Smartphone companies are working diligently to put as many cameras in their smartphones as possible, with Huawei leading the charge with three cameras on the back of the P20 Pro.
