Are you mad? Do something about it
The coming months of 2011 will provide an interesting ground for special interests pandering to politicians fighting for their futures. My recent favourite is Terry David Mulligan running booze across the Alberta line in an attempt to change the province’s arcane prohibition liquor transport ban. In terms of real estate, there are a few issues that have garnered attention of late, mostly around Vancouver’s chronic affordability issues, so much so even the City’s elite have started to take notice.
In election years politicians on both sides of a debate love a wedge issue. On this front real estate seems prime for garnering some of their attention. Christy Clark won her seat in Point Grey by not too large a margin, to the point where she is considering running elsewhere. Point Grey is close to ground zero when it comes to the international housing bubble, fueled by debt, speculators, and foreign capital investment. High prices are nice, even for locals, but this has limits. We have heard anecdotes of resident surgeons leaving Vancouver, not for higher-paying jobs, but for more affordable real estate. Parents in well-heeled neighbourhoods are starting to realize their children are unable to afford to live close to them. Then there are people who have been unwilling to take large debt loads and have chosen to rent, or simply move away from the city into the suburbs or to another metropolitan area altogether. Having an exodus of well-educated Vancouverites is not something in the long-term interests of a city that has delusions of being the next New York. The long-term health of the City I would hope to be in everyone’s interest.
So the questions for readers are:
- Are recent house price movements in Vancouver enough to be a political issue?
- What politicians would you specifically contact?
- What groups of people would like to see governments do something about high prices?
- What can provincial and civic politicians even do about it?
It’s worth thinking about what would be required for politicians to act to attempt to curb high prices in Vancouver, in other words, how should the problem of high prices be framed to make it a potential vote-winner and loser. Writing a rant to your MLA may be one strategy, but in an election year, a more concentrated, reasoned, and strategic effort may elicit better results. What do you think?
May 18th, 2011 at 6:28 am
"What can provincial and civic politicians even do about it?"
They could increase property taxes. More specifically, and better, they should change provincial legislation to allow the tax to be charged on the land value only – ie. untax buildings.
An annual land value tax would be discounted from current prices, decreasing housing prices. If the revenue were used to decrease other taxes, then people could as easily afford the higher annual tax (in effect this would be an income transfer from interest payments to banks to taxes for the government). Furthermore, a land value tax is economically efficient (doesn't distort incentives to work) while other taxes that are inefficient could be reduced.
A higher land value tax would also mean that future price appreciations would go increasingly to government revenue, thereby decreasing the incentive for speculation – this could pop the current speculative bubble, bringing down prices.
A land value tax is also fair, because the value of land is given by the community – demand for land increases because of population growth, growth in incomes (ie good jobs nearby), public infrastructure, natural beauty or fertility, etc. Why should private landowners benefit from that instead of the community?
“My wife and I moved here 2.5 years ago from London UK. We are giving Vancouver another year, and if prices don’t return to sanity, we’re out of here.” | Vancouver Real Estate Anecdote Archive Says:
May 17th, 2011 at 4:06 pm
[...] at vancouvercondo.info May 16th, 2011 at 10:07 pm – “My wife and I moved here 2.5 years ago from London UK, (I am Cdn). We are giving [...]
May 17th, 2011 at 10:55 am
sweet. limey
May 16th, 2011 at 7:38 pm
@Eddie:
You mean the province that elected, what, 5 Cons MP's? Have you been sleeping in a cave since Mulroney or Chretien was PM? Why would Harper give a hoot about Quebec voters now that he has a majority without their support?
If anything, the Cons will be more inclined to try to prop up house prices than before the election since they have way more MP's from Toronto now.
May 16th, 2011 at 4:11 pm
@jesse:
“LOL Do you think that jurisdictions where prices are not out of whack with incomes and rents have no government involvement? Please.”
Where did I say that?
May 16th, 2011 at 3:05 pm
This is what happens when we invite the richest, most evil assholes from around the world:
http://www.vancouversun.com/West+Vancouver+woman+…
God help us
May 16th, 2011 at 2:29 pm
@Eddie: Contacting Quebec politicians? Good idea! In the Vancouver area, you have a good mouthpiece through NDP MPs, who are currently barricading their gains in la belle province.
May 16th, 2011 at 2:21 pm
Paul B where are you? Are the numbers that bad?
May 16th, 2011 at 2:07 pm
My wife and I moved here 2.5 years ago from London UK, (I am Cdn). We are giving Vancouver another year, and if prices don't return to sanity, we're out of here. We are both professionals and well-paid by Vancouver standards. But we did the math and for an "investment" in a home in Van, prices would have to rise 10% annually to match what we can make by taking our down-payment and investing it conservatively. So in the meantime, we are letting this all wash over us, and happily renting. But Vancouver needs to wake up and see that what's happening is of ZERO benefit to the city and is going to make it a much worse place.
May 16th, 2011 at 2:01 pm
Let Quebec voters know that the Feds are considering bailing out the western bubble. That'll take care of everything!
May 16th, 2011 at 1:29 pm
Problem is, 65% of metro population own, 35% rent. Depends on how much of the 65% is willing to want to have home prices come down.
May 16th, 2011 at 12:50 pm
Want lower prices? Let the bubble pop on it's own.
If the politicians get involved they will use our money to build a safety net to keep prices from falling.
They will throw a bone to the most vocal group in the form of social housing.
May 16th, 2011 at 12:12 pm
speaking of mad … I want to run down the streets screaming sometimes in this little town
' Chinese spreading wealth make Vancouver homes pricier than NYC '
Vancouver's Royal Pacific Realty had such a surge of business during the first two weeks of February that agents and assistants worked day and night shifts to find homes for Chinese buyers visiting during the Lunar New Year.
"It was unprecedented," said Royal Pacific Chief Executive Officer David Choi. "I called them sleepwalkers."
http://www.vancouversun.com/business/Chinese+spre…