Nothing is quite as popular as a tax on someone else.
Vancouver Mayor Gregor Robertson knows this, and that’s why he is pitching tax hikes on overseas property buyers, despite a notable lack of data as to what impact such a tax would have on home prices and what consequences it might have for the rest of us.
This is classic political deflection from His Worship. When the populace gets upset about something — in this case, high housing prices and vacant homes — the political playbook calls for politicians to blame someone else. Anyone else.
Instead of inventing another new tax, Robertson and other politicians should take a hard look in the mirror and understand their own contribution to high housing prices.
These days, new housing is taxed at almost cigarette-like levels. There is federal GST. There’s the provincial Property Transfer Tax, which is charged every time a property changes hands and can often be embedded several times into the price.
Building a new home or buying one built in the past decade? Either directly or indirectly, you’re paying federal income tax on every sub-trade’s work, the employer’s share of employment insurance, the employer’s share of Canada Pension Plan, and federal duties and tariffs on building materials. You’re also paying provincial WorkSafeBC levies, carbon and fuel taxes to move materials to the build site, provincial income tax, and sales tax on everything from the studs to the carpet to the doorbell.
But wait, there’s more: a leaky condo levy if you’re buying a condo, and added costs from B.C.’s new energy efficiency regulations.
Then there is City Hall with their municipal, regional, school and TransLink property taxes, plus utility charges, development permit fees, subdivision fees, building permit fees, business license fees, rezoning fees, landscaping review fees, offsite servicing charges, storm water management charges, school site acquisition charges, local development cost charges, regional sewer and drainage development cost charges, community amenity contributions, and affordable housing fund contributions.
Plus there are the added costs from all the regulations. The more cumbersome a process, the more time it takes. And when you’re paying people by the hour to build your home, time equals money. When a city is micromanaging a house to the level of banning doorknobs and ordering showers be installed on floors that don’t have bedrooms, it means more expense for builders and, ultimately, buyers.
Don’t believe me? Ask someone who is actually building a home in Vancouver. Keith Roy launched www.buildinginvancouver.com to chronicle his efforts to build a house near Main and 41st. He started the process on Feb. 20, which he says made him the first person in Vancouver this year to apply to build a home. (Want more affordable housing in Vancouver? We’re going to need more people building than just Keith.)
Roy is still in the permitting phase, but already the costs are piling up. Among many other questionable requirements, the City required him to hire a “certified energy advisor.”
Why does government make building homes so expensive and difficult? And how do politicians not understand that this translates into higher costs for developers and higher prices for residents? Roy’s story should be required reading for every politician across the Lower Mainland who has ever complained about high housing costs.
We can’t tax our way to housing affordability. If we could, we would already be there, with a couple dozen different taxes and umpteen expensive regulations. We already tax housing to the max and that clearly hasn’t worked.
It’s time for Mayor Robertson to forget about deflecting blame and instead lead by example and conduct a full review of the City of Vancouver’s housing tax and regulation scheme.
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