This letter is intended for distribution to City Council, including the Standing Committee on Policy and Strategic Priorities.
June 28, 2017
Dear City Council of Vancouver,
Generation Squeeze has built a strong voice for Canadians in our 20s, 30s, 40s and the children we represent in the world of politics, and we have thousands of supporters in the City of Vancouver.
We are delighted that Council introduced Canada’s first Empty Homes Tax. It is a signal of the Council’s genuine commitment to address the #CodeRed problem of housing unaffordability in Vancouver.
The tax is a necessary step in addressing the problem that Vancouver’s economy fails younger generations as home prices leave our earnings behind. As reported in our recent academic study, “B.C. is the worst performing economy in Canada for younger generations,” hard work now pays off less for young residents in BC by comparison with any other province. The problem is especially bad in Vancouver.
In 1976-80, when members of today’s aging population were young adults, it took the typical 25-34 year old six years of full-time work to save a 20 per cent down payment on an average-priced home in Metro Vancouver. Now, the same aged young citizen must work 27 years if s/he is audacious enough to aspire for an average-priced home (which is far less often a house with a yard than it used to be).
After organizing the down payment, the typical younger resident of Vancouver must allocate the earnings from months of additional work each year to pay the annual mortgage on an average-priced home by comparison with 1976-80 – even at historically low interest rates.
As a result, real estate trends in Vancouver are crushing dreams of home ownership for many talented, well-educated, hard-working residents. Their consolation prize? Work a month or so more each year just to pay average rents. Rents have been on the rise due to the scarcity in supply of rental units, and the escalation that results from rising home prices generally.
That is why a Vacant Home Tax is so important now in the City of Vancouver. It has the potential to transition thousands of existing homes into the rental supply within a twelve month period, and at no cost to the public purse. By contrast, other government ambitions to build thousands of additional units cost the public purse hundreds of millions of dollars, and take years to get the supply on the market.
Given the harm being caused generations of young people in Vancouver now, it is imperative that City Council make use of all available policy levers to address the #CodeRed problem of housing unaffordability, especially those levers that can make a dent in the problem most rapidly. An Empty Home Tax is critical in this regard.
Generation Squeezed worked collaboratively with the City of Vancouver, including the Mayor’s office, to propose, shape and implement its Empty Homes Tax. We applaud the care with which staff are monitoring the implementation of the new tax in its first year.
We agree with its proposals to amend implementation of the tax in the report from Gil Kelley of June 20, 2017, including:
• An amendment for vacant unimproved lands and heritage retention projects where rezoning, development permit, or heritage alteration permit applications are under review.
• Amendments to change the definitions of residential property and registered owner to exclude child care, nursing homes etc.
• Miscellaneous minor amendments regarding the process for making a declaration so the process happens primarily online.
Equally important, we agree with the staff recommendations NOT to amend the bylaw to exclude second homes from the vacancy tax, cap the tax on high value homes, or provide further exemptions for homes listed for rent or sale.
In sum, Generation Squeeze applauds the City of Vancouver for its leadership in implementing the first Vacant Homes Tax in Canada, and we’re pleased to see that the City of Toronto is now likely to follow in your path. While such a tax will not be sufficient to solve the #CodeRed problem of housing unaffordability in our biggest urban centres, it is a necessary, and bold, step toward a comprehensive solution. Our organization offers strong support for this bold step on behalf of the thousands of allies in Vancouver who we represent, and we would be delighted to support you further with this important initiative.
Dr. Paul Kershaw
Founder, Generation Squeeze