Today in the Legislature I offered a number of practical steps that government could take to address Vancouver’s growing affordability crisis. It’s been more than two years now since I first raised these issues. As noted below, there are at least three dimensions to the problem: 1) government incentivized speculation; 2) preponderance of vacant homes; 3) non-enforcement of illegal realtor transactions.
First, I reintroduced a Private Member’s Bill entitled Bill M201 Land Title Amendment Act, 2016. If enacted, this bill would amend the Land Title Act to reintroduce and expand provisions that were previously in the Act. Such provisions will help determine who is purchasing property in BC. It would allow the government to determine foreign investment flows, the role corporations are playing, and whether we are seeing speculation in our market coming from other regions of Canada.
Second, while government has finally committed to take action to ensure enforcement of the Real Estate Services Act, nothing is being done to address the growing number of empty homes in Metro Vancouver. It’s beginning to happen here in the CRD as well. In addition, government has allowed a speculative tax loophole to remain open. Previously I’ve referred to this as a loophole so big you could drive a bus through it.
During question period I asked government about both of these. I asked about closing the Bare Trust loophole and whether government will introduce legislation that taxes vacant properties in urban areas in a revenue-neutral fashion to ensure that the money becomes available to pay the social costs associated with the lack of affordable housing. This would also incentivize the renting of vacant homes, thereby increasing affordability by increasing rental supply.
As you will see from the response I got from Minister de Jong (ignoring the banter with Minister Andrew Wilkinson who was heckling me), I am cautiously optimistic that we will see something in the budget to address at least some of the issued I raised. I’ll be reporting back on this after the release of the budget next Tuesday.
Below I reproduce the Question Period exchange. Following that I append the text and video of my speech as I introduced Bill M201 Land Title Amendment Act, 2016. Finally, I include a copy of the media release that we sent out today.
A. Weaver: I must admit I found that rather entertaining, if not…. I’m searching for an answer within the rebuttal there. But for more than two years now I’ve been raising the issue of affordability and speculation in the housing market.
There are at least three dimensions to this:
(1) incentivized government speculation;
(2) a preponderance of vacant homes, and
(3) non-enforcement of illegal realtor transactions.
I just reintroduced a bill to amend the Land Title Act, thereby providing government with access to critical information needed to understand who is actually buying properties in our province. Government inaction plays a substantive role in fostering speculation. The bare trust loophole that I’ve raised several times in this House for several years allows wealthy individuals and corporations to avoid registering at the land title office and so avoid paying B.C.’s property transfer tax.
A. Weaver: The Minister for Advanced Education clearly does not understand fundamental real estate, or he would actually understand here a little bit more about where I’m going with this.
Will the Minister of Finance introduce legislation to close the loophole — that we are the only province in the country that still allows to exist — by following the lead of Ontario to actually apply the property transfer tax upon change in beneficial ownership instead of change in title? And if not, why not?
The Minister of Advanced Education should know better than to actually pretend this is not an issue in British Columbia, because it is. I speak to real estate developers, I have spoken to mortgage lenders, and I know that this loophole is being used in British Columbia for speculative purposes and to avoid paying property transfer tax.
Hon. M. de Jong: I think there are two issues, and to be fair, the member has raised them at various times and today used another tool of the Legislature to highlight one of them: the collection of information. I’m going to be a little cautious about what I say today except to acknowledge that the unregistered transferring of interests in real property in British Columbia does have an impact. It also does have an impact on the amount of property transfer tax and the mechanism by which we collect the property transfer tax.
I am cautiously optimistic that when the member has an opportunity to see some of the provisions of the budget that will be tabled on Tuesday of next week, he will find at least some aspects of that document to find favour with that will respond to some of the concerns that he’s outlined today.
Madame Speaker: Oak Bay–Gordon Head on a supplemental.
A. Weaver: I hope on that day when I see that, the Hon. Minister of Advanced Education will eat some humble pie, but I suspect that may not happen.
A. Weaver: Hon. Speaker, I have to respond. The minister suggests I have a PhD in climate change. I don’t. I have a PhD in applied mathematics. This points the fact that the members opposite clearly are not able to get their facts right on so many issues.
When I was door-knocking in Coquitlam–Burke Mountain in one area a few weeks ago, I passed empty houses — empty house after empty house. I went so far as to estimate that one in three of the homes that I knocked the door on were empty. Houses, townhouses and condos that remain empty are driving up the price of real estate, making housing less and less affordable for far too many British Columbians.
Will the Minister of Finance introduce legislation similar to what’s being considered elsewhere — in particular, Sydney, Australia, where the exact same problem is happening — that taxes vacant properties in urban areas in a revenue-neutral fashion to ensure that the money becomes available to pay the social costs associated with the lack of affordable housing?
Hon. M. de Jong: I feel like a spectator at the Cambridge-Oxford regatta here.
Let me say this. I will say candidly I’m not entirely drawn to the specific example that the member cites, with respect to the Australian jurisdiction.
I will say this. I think the idea that is captured within the private member’s bill that he has tabled earlier today has merit and relates to the need and the advisability of beginning by ensuring that we have a reliable database that tells us more about what is taking place in the market.
Beyond that, I’ll have to ask the member to be patient for a few more days.
A. Weaver: It’s with great pleasure that I move introduction of a bill intituled Land Title Amendment Act, 2016.
A. Weaver: I’m pleased to be reintroducing a bill that offers government one of the tools it needs to begin to properly assess and act upon the affordability-in-housing crisis affecting Metro Vancouver and emerging here in the capital regional district as well.
There’s been significant conversation in the past few months about the role that speculation is playing in our market. The government came out with a number of documents purporting that foreign investment wasn’t a factor. These studies were vague and lacked any links to clear, rigorous evidence that supported the claim.
It’s with this in mind that I bring this bill forward today. The bill amends the Land Title Act to provide the government with the means of determining who is purchasing property in B.C. This includes both foreign investment flows — the role that corporations are playing in purchasing property — and if we have significant speculation coming from other places in Canada.
To be clear, this bill is not about identifying what specifically is driving housing prices to unsustainable rates, but, rather, to ensure that the government is informing itself so any future policy measures are based on a better understand of what is happening with our provincial real estate industry.
I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.
Bill M201, Land Title Amendment Act, 2016, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
Media Release – February 11th, 2016
Andrew Weaver questions government action in the housing market
For immediate release
Victoria, BC – Andrew Weaver, Leader of the Green Party and MLA for Oak Bay – Gordon Head, says that government policy is contributing to the rampant speculation in Vancouver’s housing market and that it could take simple steps to start addressing the issue now.
“Speculation in Vancouver’s housing market is not a new issue” says Weaver. “Suddenly, with the potential of fraud occurring the Premier has called on the Real Estate Council to take action. However there are a number of steps the Provincial government could take right now to clamp down on this out-of-control problem.”
Earlier today Weaver introduced a Private Member’s Bill titled the Land Title Amendment Act. The legislation would allow government to track the source of home purchases throughout the Province to better understand the effects that foreign and domestic speculation is having in BC.
“Tracking who owns property through a simple amendment to the Land Title Act would give government the information it needs to see the role foreign ownership is actually having in our marketplace.”
Weaver also used question period to probe the Minister of Finance about whether the government would act to close a loophole that contributes to incentivizing the speculative real estate market in B.C.
“Legal entities like the bare trust, whether by design or by omission, are helping drive the speculative real estate market in B.C.,” said Weaver. “It is essential that we begin to ratchet down on these practices so that houses aren’t simply treated as commodities, but as essential building blocks for healthy communities.”
The bare trust loophole allows wealthy individuals and corporations to avoid registering at the Land Title Office and so also avoid paying BC’s Property Transfer Tax.
Weaver also probed the Minister of Finance about any action that will be taken to follow what other jurisdictions are doing, and explore the use of a tax on vacant properties, in a revenue neutral fashion, in order to help pay for the costs associated with the lack of affordable housing.
“There are at least three dimensions to this problem in Metro Vancouver: government incentivized speculation; preponderance of vacant homes and non-enforcement of illegal realtor transactions,” said Weaver. “While it is great that this government is finally starting to pay attention to what is happening in the Lower Mainland housing market, their first step has been to call upon others for action. The reality is there are a number of actions that this government could take to address all three aspects of this issue. I’m am calling on them to take these steps.”
Press Secretary – Andrew Weaver MLA
Cell: 250 216 3382