Vancouver’s exorbitant house prices aren’t just locking residents out of the housing market; they’re also curtailing investment and business opportunities in the city, according to Carole James, British Columbia’s Finance Minister.
With the cost of the typical single-family home surging to a record $1.16m – about 20 times the median household income – housing affordability in Vancouver has reached a critical point. Meanwhile, the seemingly unstoppable pace of house price growth has defied all attempts at cooling, including a 15% tax on foreign buyers that was imposed by BC’s previous Liberal-led government in 2016.
The seemingly unstoppable pace of house price growth has defied all attempts at cooling, including a 15% tax on foreign buyers that was imposed by BC’s previous Liberal-led government in 2016.
“It’s become a bigger issue — it’s become an economic issue for companies that can’t find opportunities to retain and attract employees,” James said during an interview last Tuesday at Bloomberg’s headquarters in New York City. “That’s critical to companies looking to invest.”
“One tax in place isn’t going to fix the challenges that are there. We’re looking at all options. All ideas are on the table to address both demand and supply,” she added.
British Columbia’s government expects to have a more comprehensive policy in place by February, when it will present its budget. James said potential options include tax reform to discourage short-term speculation on housing, and the closing of a loophole involving bare trusts, which allows owners to cash out and new investors to purchase without paying proper property-transfer taxes.
Province-wide regulations for short-term rental operators, such as Airbnb, may also be in the works.
Vancouver, which was ranked among the global cities most at risk of a housing bubble for the second time this year, introduced tighter restrictions on short-term rentals in July. This included requiring hosts to obtain a business license and banning the letting of investment properties and basements.
In a meeting with regional municipalities, James said province-wide regulations were one of the biggest requests. “If not the top, it was one of the top issues that’s been raised by municipalities,” she said.