The rising cost of land in Vancouver, fuelled by rampant speculation, is a major cause of Vancouver’s housing crisis. But land value increases are also created by public investments in transit and infrastructure that make communities more desirable. OneCity wants to dampen speculation while ensuring that real increases in land value create benefits for everyone.
The demand for transit services is increasing across Vancouver, and plans are underway to meet this demand. When we add a new transit station in a neighbourhood, the surrounding property starts to increase in value. Property in these areas may be purchased simply as a way to cash in on the increase in value once stations are built. This type of speculation will only increase the problem of affordable housing in our city. We need the increase in transit services, but we don't need the added cost to housing.
Changes to zoning that allow the replacement of single-family housing with an increase in housing options, such as apartments and townhomes, will also increase the value of land. We have seen this happen as single-family homes are purchased as part of a land assembly. While this adds more housing choice, it still leaves many people priced out.
People are struggling with high rents and high housing costs. At OneCity, we see a real opportunity to push back on speculation and create a new source of funding for public housing and public transit. Development of infrastructure, such as transit, can provide a way for Vancouver to reclaim a public benefit from increasing land values. A Land Value Tax will allow the city to ‘capture’ part of the wealth gained through its own public projects, like transit stations, and changes to zoning.
Homeowners and business owners work hard to maintain the value of their property by caring for and improving their property. And sometimes the value of the property increases, not because of this work, but because of changes made by the city. At OneCity, we want to use these increases to make a better city for everyone.
A Land Value Tax will decrease speculation and will lead to lessened increases in land values in areas close to projects like transit stations. Over time, it will bring in fewer funds, which we also view as a success. It would stop sharp increases in land value, meaning that low and modest-income people would be able to afford to stay in or move to Vancouver.
Importantly, the Land Value Tax would not add to the cost of businesses or residents, but would draw down from the profit made by those speculating on real estate. The tax would cover the value increase from the period starting at the implementation of the Land Value tax to the sale or redevelopment of the property. The tax would be designed to stabilize prices while funding public infrastructure and projects.
OneCity Will Implement a Land Value Capture Tax and Create More Public Housing By:
- Collaborating with Translink under the South Coast British Columbia Transportation Authority Act. It is within the city’s powers to apply a land value tax in relation to transit improvements. OneCity will work to create a land value taxation plan for areas like the Broadway Subway stations. We will use the revenue to improve transit services and fund future transit projects.
- Working within City Council and with the Provincial government to create a made-in-Vancouver Land Value Tax that can be applied to areas where land value is increased through improvements to public and private infrastructure. The existence and effectiveness of B.C. Assessment, our highly capable provincial property assessment agency, puts this province in a strong position to implement and administer this type of land value tax effectively. The money raised through this tax will be fully directed into providing social and affordable housing.
Why We Need this Land Value Capture Tax
Along the 2000 block of East Broadway in Vancouver, there’s a row of bungalows facing the busy street, For Sale signs flapping in the wind. The asking price is $3 million apiece. This is a land assembly put together by a realtor and group of landowners, eager to capitalize on the changes coming to the neighbourhood under the Grandview Woodlands area plan. They wish to sell the houses to a developer, who will build rowhouses close to a revitalized Broadway Station area. If they succeed, other landowners in the neighbourhood may follow, each personally pocketing millions of dollars just for the luck of owning land in a rezoned area - it’s a whole lot like winning the lottery. A land value tax could bring some of that wealth gain into the public’s hands instead of just a lucky few. Or, a land value tax might mean that speculation just isn’t worth it, and the houses sell for less money, which means the resulting homes built could be sold or rented for a lot less. It would also lead to renters not having to be displaced by increases in land value.
The Broadway Subway is another example. The areas around the new stations should grow and more homes should be built. But it shouldn’t just be people who can afford expensive homes benefitting from access to the subway. A land value capture would keep the cost of land from spiralling out of control; keep renters and low income communities from having to be displaced from around transit hubs; and provide funds for building affordable and rental housing.