The BC govt tweaked the Speculation Tax but this doesn’t address the fundamentally flawed policy undermining our economy and jobs.
Increasing supply, not taxes will improve affordability.
The Sightline Institute, a Seattle-based think tank, says improving supply has worked in other cities like Houston. Flexible zoning and efficiency are critical.
A recent Australian report says, “Zoning regulations provide benefits, but they also restrict housing supply and hence raise prices.” Zoning raised prices 73% in Sydney, 69% in Melbourne and 42% in Brisbane.
Choking land availability for housing leads to higher prices. If we are going to restrict housing to urban containment zones, affordability requires higher density and efficient approval processes. Yet the province refuses to require regional planning in the CRD.
Density is discouraged in many municipalities by EDPA policies & anti-development groups influencing councils, even when a project meets OCP guidelines.
Langford creates the most affordable new housing by processing permits in less than half the time of many municipalities. They also support small lot subdivisions often discouraged in many municipalities.
Yet, CRD local govts avoid Langford’s effective practices.
The fact is three levels of govt encumber the market with regulation and fees over which builders have no control. Govts tell us where and what to build (zoning); when to build (permits); how to build (building code); and how much revenue they require.
Saanich received $1 million surplus from inspection fees and Victoria’s development fees generated $500k surplus in 2016. The Property Transfer Tax and GST generate billions of dollars for provincial and federal coffers.
Encouraging supply creates affordability and jobs, while oppressive taxes like the Speculation Tax do the opposite.
The problem is not the market, it’s govt.
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There is one more point to make about the Speculation Tax that may be the most important. It goes beyond taxing wealth (income tax), goods & services (GST, PST) even property (PTT). It taxes private life where govt demands to know time spent in vacation home or work condo. It’s intrusively over the line & if not constitutionally illegal, should be.