FOR IMMEDIATE RELEASE
9 October 2014
VANCOUVER — A real-estate speculator buys a Vancouver residential property for $1 million. The home is left empty, with no improvements or a single dollar flowing into the local businesses around it, and in less than a year it is sold for $1.5 million. That is a speculative profit of $500,000 — and it is a big part of the reason housing prices in Vancouver are leaving too many people who live and work here on the outside looking up.
The OneCity team and City Council candidate RJ Aquino say we need to curb rampant speculation in Vancouver with a Flipping Levy, a policy being used in cities around the world facing out-of-control housing costs: Singapore, Hong Kong, and potentially San Francisco, where it is on the ballot later this year.
“Instead of homes for people who are trying to live, work and raise a family in this city, housing in Vancouver has become a real-life Monopoly game for speculators. We need a City Council that values housing as a social good, not as a game with too few players,” said RJ Aquino. “By reining in real-estate speculators who are driving up housing costs, the Flipping Levy will help people who have been priced out of the market and too often priced out of Vancouver.”
The Vancouver Flipping Levy will be applied only to speculative profit, the difference between the initial purchase price and the resale price. It will encourage long-term home ownership and spending in the local economy by decreasing over time, disappearing after the fifth year, and by exempting the cost of renovations, green retrofits and other capital improvements.
The revenue generated by the Flipping Levy will be transferred to the Vancouver Housing Authority to create new living spaces for low- and middle-income people throughout the city.
OneCity’s proposed Flipping Levy will be 50 per cent of speculative profit in year one; 35 per cent in years two and three; and 20 per cent in years four and five. The speculative profit of $500,000 in the example above would result in a Flipping Levy of $250,000 to support affordable housing. Aquino and OneCity define affordable as housing that costs no more than 30 per cent of a household’s monthly income.
- “The average sale price of a single-family detached home is now around $1-million. Over the past five years, Vancouver homes worth $1-million to $2-million have doubled in value, according to tax-assessment records. That puts property beyond the reach of most local residents. A Vancouver family earned a paltry $68,970 total median income in 2011, putting them 23rd out of the 28 major cities in Canada.” http://www.economist.com/blogs/americasview/2014/06/housing-vancouver
- “In one stunningly profitable sale, a buyer purchased [an Olympic Village] unit for $1.27 million in August 2012 and sold it for $1.7 million in September 2012 — a $433,840 profit in one month. In another case, a unit bought for $2.2 million in October 2012 was sold for $2.6 million five months later.” http://www.timescolonist.com/news/b-c/vancouver-olympic-village-condos-flipped-for-big-bucks-1.962343
- The Flipping Levy works in concert with 20 Over 5 Housing, a policy released last week by Aquino and OneCity that calls for 20 per cent of the living spaces in new developments over five units to be reserved for low- and middle-income people throughout Vancouver. Watch and share the OneCity 20 Over 5 Housing video here: http://youtu.be/SzpaksYvUXI
Scott Colbourne, OneCity Communications Director: 778-679-1110; email@example.com