Under the new rules, homes that are not occupied for at least six months of the year are subject to a tax of one per cent of the property’s assessed value. The deadline to rent out empty dwellings was July 1.
Fazli said many of the people he has talked to are thinking of renting or selling their properties. He recently met with a woman who owns three empty properties in Vancouver — and says one of them is now listed for rent, another will be listed shortly and she is thinking of selling the third.
“This is a scenario of someone who is kind of in a panic now and needs to rent them out,” he said. […]
amazing
Why were they empty?
they’re meant to be investment properties, bought, left empty, and then sold a year or few later for huge profit as housing values continue to rise. it’s a massive part of the bc housing bubble, and why despite so much new construction it’s still so difficult to find rental housing
the fact that these landlords are panicking because they might have to actually use their housing properties as housing rather than finance capital is deeply funny
& good step towards creating more and cheaper housing for rent.
From everything I know about the situation in Vancouver, this is 100% necessary. I’m not an expert on this particular portion of the economy, but here’s what I’ve learned from following the issue over the last several years:
Years back, housing costs in Vancouver started climbing so steadily that many landowners realized it was actually more profitable to treat properties as investments instead of actual living space, buying up buildings in expectation that they’d be worth even more later. The trick is, having people living in your investments is a problem, because dealing with leases and other contracts can get in the way of selling your property at the ideal time. Real estate speculation turned out to be so lucrative, though, that owners could earn more money keeping their buildings empty than actually renting to people.
Having fewer buildings available for rent further drove up the cost of housing in Vancouver, which made housing speculation even more profitable, which pushed more owners into taking their buildings off the rental market, etc etc. Classic vicious circle. The city experiences a major construction boom in building new housing, but the new buildings are still more valuable empty than full, so the housing shortage persists.
A huge number of Vancouver landlords don’t even live in the city; many don’t even live in Canada. Vancouver housing effectively became an internationally-traded commodity, more valuable being traded from ledger to ledger than it had ever been serving its actual purpose. Of course, this made it nigh-impossible to actually live in Vancouver, especially as one of the tens of thousands of low-wage workers that make the city run. Last I checked, the average rent for a one bedroom apartment in Vancouver was close to $2000, while a 2-bedroom costs over $3000 a month.
So Vancouver became a city with enormous cost of living and a huge number of people left homeless, all the while a vast amount of perfectly suitable living space remained empty. The new tax is intended to make sure it’s no longer nearly so profitable to fill your investment portfolio with empty housing. I mean, common sense says you shouldn’t need a law like that to encourage landlords to earn money by renting their property, but capitalism is so wild it can make it more profitable to deny housing to people than to sell it to them.
(I’ve also heard talk of a tax on properties owned by people who don’t live in the city, but I have no idea if those are going anywhere or are even a good idea. The basic premise is the same, though: disincentivise landlords from trading properties as investments instead of filling them with residents. The empty building tax seems like a better method for accomplishing this.)