cool B.C.'s hot real estate market?

An NDP government supported by the Greens would act quickly to cool British Columbia’s hot real estate market by creating more affordable housing and cracking down on speculators and tax evaders, the parties say.

But many of the specific policies they plan to implement aren’t spelled out in a signed agreement between the two parties released this week, nor are they saying how they would reconcile differences in their election platforms, particularly how property sales should be taxed to curb speculation.

The Vancouver region’s housing market was a central issue in the campaign for the May 9 election, with both the New Democrats and Greens putting forward detailed platform planks designed to calm the market and keep housing affordable.

However, the 10-page agreement between the NDP and Green lays out more than two dozen policies on other issues, but contained just one bullet point on the housing market.

New Democrat David Eby, who has served as the party’s housing critic and is seen as a strong contender for a cabinet post, cautioned against reading too much into the paucity of detail in the document about housing, noting that the NDP and Greens are largely aligned on the issue.

“There was a lot of nervousness on social media [Tuesday] about the agreement not reflecting specific housing-platform issues that people obviously care a great deal about,” Mr. Eby said Wednesday.

“There’s clearly a shared priority between the two parties of what we both see as the corrupting influence of fraud, money laundering and speculation in our housing market preventing families from getting an affordable place to live.”

During the campaign, the New Democrats proposed a 2-per-cent speculation tax on properties in the Vancouver region if their owners pay little or no taxes in B.C. The party also said it would review the province’s current 15-per-cent tax on purchases in the Vancouver area involving foreign buyers.

The Greens proposed doubling the foreign-buyer tax to 30 per cent and expanding it across the entire province.

The party’s platform also called on the province to work with the federal government to eliminate money laundering and international property speculation. Mr. Eby said the NDP will proceed with the speculation tax and will discuss further action with the Greens.

The NDP had said it would create 11,400 new units of affordable housing each year for 10 years, while the Green Party had promised $750-million a year for government-subsidized affordable housing.

Matt Toner, the co-deputy leader of the BC Greens, said any new provincial government is now in the unenviable position of “catching a falling knife” with respect to cooling the housing market, but said his party agrees with the NDP that tamping down speculation is a major priority.

“To us, it doesn’t matter whether the investor is from Sarnia or Shanghai, it’s just: if they’re looking at a property as an investment instrument, that’s problematic,” Mr. Toner said.

Working together on housing will be one of the first tests of the NDP-Green alliance, Mr. Toner said, adding there’s “no magic eight ball” to determine how that will go.

Mr. Eby, an MLA from Vancouver’s tony west side, said some other core NDP priorities are putting an end to flipping in the presale condo market, targeting those who abuse bare trusts to avoid taxes and cracking down on those who avoid the foreign-buyer tax.

Bryan Yu, a senior economist at the Central 1 Credit Union, said a potential NDP government promising to crack down on real estate speculation could lead to Metro Vancouver’s hot market pausing for the next several months – much like after the Liberals introduced the foreign-buyer tax last summer.

“It’s a large-asset purchase for any household, so when you are seeing uncertainty about policies or where it’s going, there may be a wait-and-see attitude,” Mr. Yu said. “It looks like it might slow down some of the market, especially in the apartment and townhome market.” The Greens and New Democrats have also called on relaxing zoning rules to bring more density to neighbourhoods dominated by single-family homes. Pushing cities to zone for more density could be a safe move politically for the alliance because neither party won many seats in Vancouver’s wealthiest neighbourhoods, according to Tom Davidoff, a University of B.C. economics professor who specializes in real estate.

Source of article: written by Mike Hager, Globe and Mail