Have you considered that these people payed for their house fair and square and that it's profoundly unfair to charge them just because you and others don't like what they chose to do with it?
This isn't about a house in the woods; this is about homes in a deeply urban environment which have surrounding services and businesses that are reliant on local residents; and public services supporting both the residents and businesses that are reliant on the active use and fees/taxes generated to sustain.
Empty homes attract crime, necessitating more policing resources, empty homes do not support local businesses but drive up prices, making the area less affordable for residents and less lucrative for businesses.
The 'payment' for living in an urban environment goes beyond just the normal local taxes, it involves a participation because the resident who lives in a home in that environment contributes to the environment.
No house is an island in an urban environment (except maybe in Venice).
Participation often results the resident's (large) family moving in, with their 4-5 vehicles, increasing traffic (and pollution) and load on local services (daycare, schools, public transport, hospitals, police, fire departments), all while paying the same level of property taxes as before.
Talk to someone living in San Jose or San Francisco about their daily commute on 85 or 101. They somehow don't profess as much love for densely populated urban environments.
We have decent transit, and bike lanes everywhere. Unlike the US, many people are happy not to own cars and there are at least 4 major car shares and as of the last few months, a new bike share with convenient availability (albeit we're quite late to get one after Montreal and Toronto have had theirs for years). Many of those who do drive carpool. A lot of people also live right downtown, as we have far more residential buildings in our downtown core than most cities. Vancouver is a very centralized, dense, metropolitan city which probably has more in common with New York than Seattle, but much newer and cleaner.
I still get annoyed by traffic, as I can remember when there was barely any back in the 90's. But then every time I drive down to Seattle, I realize how good we have it in comparison.
It's not really as black and white as that. If a city, such as Vancouver, is suffering from large economic and social problems caused by foreign investors sitting on prime real estate then you have to eventually do something about it for the sake of everyone actually living in the city.
The city is for living in, else it's a dying city. This step taken by the city of Vancouver isn't reactive, the problem has been propagating for 15+ years and has started to have a very large negative impact on the people who want to live there.
I myself, and many others that I know, have moved away from Vancouver or are planning to exit because they can't find or can't afford accommodation. It's not like SF where huge salary and booming business jacks up the prices. Vancouver is just a regular city.
There is something you could do, liberalize building permits: if we can build housing, particularly tall buildings, the cost of apartments will remain low. But more importantly, liberalize rental leases.
Why would you sit on prime investment property and not rent it? Because when it comes time to sell, you may end up with a tenant who's not paying rent and whom you cannot evict. The cost may just be large enough to forego the income of having a renter. Laws meant to protect bad renters end up hurting everyone.
Or we could slap more bad laws on top of more bad laws.
How would you liberalize rental leases? The lessor can already kick someone out when they want to sell, I mean they need 2 months notice but I think that is entirely fair. Foreign investors (Chinese millionaires) don't give a crap about rental income. They don't want the headache, property is merely a cash investment hedge for them to sit on care-free.
More liberal building permits? Have you seen downtown Vancouver? There are towers everywhere. Infrastructure already cannot keep up with the pace of development in the city and surrounding it.
The city should have had a much better long term plan and not grabbed easy cash when it was available. Chinese investment was good for cleaning up Yaletown but it's gutted the city as far as I am concerned. Vancouver is a beautiful place but it's like a vapid supermodel. Nice to look at, but not something I could live with.
Wouldnt this problem sort itself out, if an area suffers a downturn because of vacant property, property loses value and then investors would pull out.
I remain very unconvinced on how this is a good thing, but i can see how easy it is to sell to capture more tax.
Long answer: New York City has historically had a policy that NYC is for New Yorkers. There are several aspects to this. One is the cooperative ("coop") structure that came about as rent control was (largely) unwound. Coops are typically owner-occupied and coops tend to have limits on renting out your property or even just not living in it that may require you to sell it. This is (IMHO) a good thing as condos, which don't tend to have the same restrictions, are often ghost buildings (the NYT has done pieces on this where occupancy rates can be 30% or lower).
This has meant that condos in the same area have tended to attract a premium of ~20% versus an equivalent coop. Condo buyers are dominated by foreign buyers paying all cash who are parking money in the US and/or buying an apartment they might occupy a few days a year.
This sort of thing is not good for the city as a whole. These residents aren't funding city services. Foreign buyers have I believe decimated neighbourhoods in other cities (eg I heard of this happening in Tel Aviv).
Now Bloomberg kinda went too far on this as he believe that you should attract the billionaires to the point that someone who owns a $100m condo (of which there are now several) pays only about 10-15x the property tax of a $1m condo. This is something that needs to be reformed.
I'm very much in favour of public policy that benefits residents be they owners or renters.
Now other commenters have pointed out one issue and that is you have to be careful you don't catch landlords in your net. Landlords provide a useful service in providing a rental stock for people to rent. There are various reasonable ways to handle this. Some options:
- Don't tax a property (extra) if it's occupied by somebody;
- Exempt landlords from the higher prices if they're a resident of the state (and paying state income taxes).
This can be a way of handling illegal hotels too. Have much higher taxes for non-active properties and reporting AirBnB type income can trigger whatever housing regulations apply so illegal hoteliers are faced with a choice of paying higher property tax if nothing else.
I sort of agree, but we're being too selective in our choice of crisis.
The people who sold that house for $1.25M also enjoy free healthcare in Canada. I have to pay 40% of my income to foot that. The average cost of our healthcare system is about $3500/citizen, but the high end of the average is typically found with older people in their 70's. Why should I have to pay 40% of my income to pay for the medical costs incurred by that old guy who sold his house for $1.25M to a Chinese investor who will pay almost nothing in Canadian income taxes?
Then, we can talk about the fact that Vancouver is mostly zoned for detached homes. We can say that if a property developer buys a bunch of detached homes and then wants to consolidate the properties to build townhouses, that it's "profoundly unfair" to try to prevent that, but that's exactly what detached home owners have done over and over again, both by lobbying and supporting those restrictive zoning laws and by speaking out against developers at city council meetings. That's why almost all new townhouse and apartment developments in Vancouver are in reclaimed commercial zones.
Let's address the whole problem all at once. Right now people who own houses are having it both ways.
> Why should I have to pay 40% of my income to pay for the medical costs incurred by that old guy who sold his house for $1.25M
Which he won't pay taxes on because it is his primary residence.
Those who happened to get shut out of the property market simply for being born on the wrong place at the wrong time are paying a much larger portion of the tax bill than those who were "lucky" enough before everything went parabolic. It's actually the opposite of a progressive tax, which Canadians claim to love so much (but the real reason they love it is because they think they're sticking it to someone else.....try and take their capital gains tax exemption away and watch their principles on taxation do a 180).
A system that depends on taxing current income vs current wealth will always suffer a possibility of being gamed by those with high wealth but low income. If not foreign moneybags, then retirees.
I am on the same boat as these people that can't afford a home with these property prices. But, I don't blame other people for having more than me. The concept of private property is that anyone can do whatever they want with their property.
That is not the concept of private property. You have never been able to do whatever you want with your property. You can't, for example, build a factory in a residential neighborhood. You can't make your property a fire, health, or safety hazard. You can't partake in activities that significantly disturb your neighbors. You can't build illegal or unpermitted construction. Your construction must follow fire and safety codes. You must follow ordinances about how tall your building can be, how big your lot has to be, and how far back from the street it can be placed. If you live in a historic neighborhood you can't decide on the materials, style, and color your house is. Your house can't be too big or too small. You can't be a slumlord. You can't build a dumpster fire in the backyard. You have to keep your house "up to code." If your property stays blighted for long enough the town will bulldoze it. (This happened to the house next door to my old house). You even may not even be able to water your lawn unless it's a Tuesday. You probably can't even let 8 of your college buddies move into your mansion[1]. If the government decides they want a courthouse or a highway where your house sits it will literally just take it away from you without asking.
About the only thing the government can't force you to do (in the United States) is quarter soldiers during peacetime.
Like the sibling comment said, you live in a society so we all have to play nice with each other.
[1] most cities forbid a large number of unrelated people from living together.
The fundamental flaw with this is, you don't exist in a vacuum. This all has effects on the city and on everyone else who lives in it. At a certain point, no, they can't do "whatever they want" because ultimately it does affect other people.
This "At a certain point" is, however, subjective. Who can say your "point" is right or wrong. Some people have more tolerance than others. Having a mob mentality of dictating what those limits are is dangerous in my opinion.
I would not oppose having a quantitative measure of how empty homes ultimately harm Vancouver's economy in the long term. I think that would be a much more constructive argument to implement measures to curb this trend.
We've kind of decided on using a democratic process, which indeed is a form of mob rule.
As for the danger of this approach....so multi-millionaires have one less global city they can buy property in completely hassle free....I think they'll find a way to survive.
"Ochlocracy ("rule of the general populace") is democracy ("rule of the people") spoiled by demagoguery, "tyranny of the majority", and the rule of passion over reason, just as oligarchy ("rule of a few") is aristocracy ("rule of the best") spoiled by corruption, and tyranny is monarchy spoiled by lack of virtue. Ochlocracy is synonymous in meaning and usage to the modern, informal term "mobocracy", which arose in the 18th century as a colloquial neologism."
Usus, fructus, and abusus have been recognized as pillars of private property since the antiquity. "Abusus" is the right to destroy or dispose of a property. Certainly that would include not using it.
But there are reasonable limits on those private property rights that are commonly accepted.
For instance, I don't have the right to set up a nightclub without permission from the city, and (if I'm not being an asshole) neighbours and other nearby residents/businesses that would be affected.
These limits come into existence because there was a problem that residents of the city felt needed action on. Leaving large numbers of properties empty is the extreme opposite end of everyone running nightclubs.
You have no right to force people to sell their assets at a low price. It's not unfair at all if they exercise their right to their private property in some way, like refusing to sell, that causes prices in the market to increase.
You missed my point. I was giving an example of a rightful exercise over one's own private property leading to market prices increasing. You don't own the market and the extent to which you have a right to influence it is limited to whatever influence your own offers, bids, purchases and sales have.
Maybe there's a justification for an empty home tax, but I don't see it in your argument.
The justification is that people are hoarding limited resources from others and not consuming them. They can still exercise whatever property rights they want. They just have to pay a fee for taking up space and not using it. If they want to participate in a real-estate pump and dump, that's fine, but the voters have decided to penalize such activity.
> You don't own the market and the extent to which you have a right to influence it is limited to whatever influence your own offers, bids, purchases and sales have.
...and to the extent that the government can influence it with taxes and tariffs, which is a perfectly acceptable form of market intervention.
>The justification is that people are hoarding limited resources from others and not consuming them.
All resources are limited. That doesn't justify robbing people of their property rights, by dictating how they shall use their own resources.
The only justification I can see for such a tax is that it involves the usage of land, and the moral arguments for absolute ownership of land being much weaker than for other types of property.
>...and to the extent that the government can influence it with taxes and tariffs, which is a perfectly acceptable form of market intervention.
Politically acceptable, morally totally unacceptable. A tax on private transactions is just extortion that has the support of the majority. Something doesn't stop being authoritarian just because it gets the stamp of political approval or majority support.
Have you considered that their choice is negatively impacting quite a lot of people, and it is profoundly unfair for them to take housing off the market and drive up prices just because they can?
Their house still occupies space where another full house could stand. Such space is in short supply within the city. It's basically a tragedy of the commons here - an abuse of a shared resource, to the detriment of most.
And it's not even an onerous requirement on the owners. They will just have to rent them out, now. And they can hire companies that will fully manage it all for them, and still make a profit, marginal as it may be. So it's actually better for them as well.
Empty homes attract crime, necessitating more policing resources, empty homes do not support local businesses but drive up prices, making the area less affordable for residents and less lucrative for businesses.
The 'payment' for living in an urban environment goes beyond just the normal local taxes, it involves a participation because the resident who lives in a home in that environment contributes to the environment.
No house is an island in an urban environment (except maybe in Venice).