Vancouver:
Vancouver Mayor, Gregor Robertson states that “Vancouver housing needs to be for homes first, not just treated as a commodity. We brought in an Empty Homes Tax because Vancouver has a near-zero vacancy rate and many people are struggling to find a place to rent.” This, in one of Canada’s major cities where 53% of households rent.
Vancouver has already collected $17.5 million of its $30-million in revenue anticipated from its new Empty Homes Tax. The tax is based on one-percent of assessed value of the unoccupied home, and if applicable, a late filing fee of $250, plus five-percent of the unpaid tax.
Where will this new tax revenue go? Towards alleviating affordable housing, funding Vancouver’s rent bank, providing homeless shelters, and assisting those facing eviction due to redevelopment. The first of its kind in Canada, this tax is being closely monitored by many cities around the world.
Approximately 25,000 unoccupied dwellings existed in the City of Vancouver according to the 2016 Census. An audit two years ago of residential dwelling electrical use, revealed that 10,800 units were unoccupied for a year or more. However, a recent audit has found that more than
5,000 out of 8,500 properties deemed vacant by Vancouver staff, received exemptions under rules of the new EHT bylaw. Reasons for exemptions included: residence awaiting title transfer; home under renovation or redevelopment; home used for work in Vancouver; status of owner e.g. in hospital; in long-term care; or deceased.
Of the 8,500 empty, under-utilized, or undeclared properties, approximately 61% were condos, 34% were single family homes, and other properties, five percent. The majority of empty units were located in the downtown area, followed by other desirable neighbourhoods: West End, Shaughnessy, Kitsilano, Kerrisdale and Mount Pleasant. The highest proportion of unoccupied units, (more than eight per cent), were in three neighbourhoods.
Of the 183,000 registered residential homes in Vancouver, some 3,300 properties (or 1.8 percent of all dwellings) were identified as unoccupied or under-utilized for at least six months of the year. Individual remittances ranged from $1,500 to $250,000, with $9,900 being the median amount of tax paid. The expectation is that the EHT will cost Vancouver $7.5 million to implement. Annual operating costs to complete the yearly housing audits are expected to be $2.5 million.
Victoria
February 2017. Several City of Victoria Councillors wanted the Province to give municipalities authority to levy a tax on vacant properties. The goal? To make more housing available because of soaring shelter costs, and a 0.7 percent vacancy rate; this, in Victoria, where six out of ten households rent.
The 2016 Census identified approximately 3,450 unoccupied residential dwelling units in Victoria, representing seven percent of the total number of dwelling units: 49,212. The largest proportion of unoccupied residential units was located in the Downtown Core, followed by James Bay, VicWest and Fairfield.
Interesting to note Host Compliance LLC, stated in its January 2018 City of Victoria Short-Term Rental Market Overview that of Victoria’s total number of short-term rental units (1,663), 88 percent cent were for entire homes. According to Host Compliance LLC, “This is important to note as entire home, short-term rentals are commonly considered to have the biggest impact on both the long-term rental housing market and the quality of life of nearby residents.” (p. 7) The consultant also reported that 59.5% of the entire home, short-term rental listings were rented less than 30 days per year, whereas 326 listings or 21.1%, show more than 90 days or more of annual rental activity.
Regarding neighbourhood distribution of short-term rental units, the Host Compliance LLC report indicated that 470 STRs (34.9%) were located downtown; 192 (14.3%) were in James Bay; 148 (11.0%) in Fairfield, and 124 (9.2%) in Fernwood. In other words? Approximately 3.3 per cent of Victoria’s total housing stock is currently used on a short-term rental basis. This represents a growing source of revenue for owners or investors.
The Vancouver EHT data would suggest that between 490 and 1,600 unoccupied dwelling units could be taxed at a similar rate. However, even if the median EHT amount paid was reduced from $9,900 to $5,000, Victoria’s EHT would generate between $2.5 and $8 million annually, (less 10% for operational costs). This would represent a significant contribution to the City’s Affordable Housing Fund.
Currently, no developer has even come close to that amount in community amenity contributions to the City, even though billions of dollars have now been invested the Victoria’s real estate development— primarily in the form of luxury condos in its desirable Inner Harbour locations.
Elected officials in Victoria are silent on this matter. Why?
Curbing property speculation goes against powerful, vested interests who do not have in mind the majority of Victoria households; and do not have in mind the need to pay for their fair share of wealth generated by this real estate boom.
Further Reading:
Daniel Tencer, The Huffington Post, 2 November 2017, Here are the Canadian cities with the most empty homes
Nathan Lauster and Jens von Bergmann, “Running on Empties”, Home: Free Sociology, WordPress.com, August 19, 2019. An excellent blog post regarding data related to the impact of unoccupied dwellings on housing stock in major Canadian and American cities.
Statistics Canada, December 11, 2018. “Who invests in British Columbia’s housing market?”
Mile Zero Mirror 