Vancouver Needs a Real Speculation Tax

RJ Aquino and Christine Boyle's opinion piece as published by the Georgia Straight:

It looks as if, eight months later, Mayor Gregor Robertson is borrowing a plank from the OneCity platform in last November’s election. Unfortunately, a few nebulous statements don’t equal a practical, achievable plan.

Robertson, together with mega condo-marketer Bob Rennie, are now beginning to talk about a “speculation tax” on house sales, though they think somebody else should do the taxing, and they’re pretty vague about how the proceeds would be used. Rennie, a top Vision Vancouver supporter, is of course also a major donor to the B.C. Liberals and Christy Clark, who recently came out against intervening in foreign investment—because efforts to slow down investor purchases might bring housing costs down.

Let’s compare the two proposals (though it’s a bit of an exaggeration to call the Rennie/Robertson musings a proposal).

On October 9, 2014, we proposed a flipping levy that would work like this:

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…

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 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.

Pretty clear.

Robertson says it’s the B.C. government which should take responsibility for such a move. Fat chance. Rennie suggests that the revenue generated (though he doesn’t put forward a plan for how to calculate the tax and the revenue or how much would be collected) would be used for small grants to first-time buyers. Would a $5,000 grant make it more possible for any middle or low-income family to buy a home in Vancouver? Of course not.

Our plan is straightforward and achievable. Significantly, it calls for revenues to be used to create rent-geared-to-income units. That’s real affordability for the families, young people, and seniors who so desperately need places to live in Vancouver.

City council continues to assert that their policies are somehow making Vancouver housing more affordable. But their solutions—including waiving development cost levies, which pay for community centres, social housing, parks, and childcare, for rentals that cost up to $1,366 per month for studio apartments—are driving low- and moderate-income residents out of the city. Vancouver needs bold solutions to the affordability crisis and so far we haven’t seen any.

RJ Aquino and Christine Boyle are founding members of OneCity Vancouver and active as community organizers. Both are young parents and they are committed to keeping Vancouver livable, affordable, and sustainable for their own families and the city's residents for generations to come.

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