data, economy, Europe, opinion

The Ghost Town Tax

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Are empty homes bad for a city?

Some people think so, and in parts of London they’ve decided to heavily tax owners of empty property:

Camden council, a Labour-run authority in north London, which covers Primrose Hill, wants to charge owners of homes that have been empty for more than two years double the normal council tax in a bid to return vacant properties to use.

The scheme has already had some impact, with owners of empty properties being charged 50 per cent extra, but the council has now suggested a further increase could bring back almost 200 homes to use. Since the council introduced a 50 per cent extra charge last year, the number of long term empty houses has fallen from 248 to 162.

Read the full article over at the Telegraph.

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Son of Ponzi
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Rent out out all the empty condos to the homeless.
bingo, homeless issue solved.
That should send a message to the overseas absentees Landlords.

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4 years 30 days ago
Son of Ponzi
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Hangseng Index is dropping 500 points right now.
HongKong stock investors will get margin calls in a few hours.
Then they will call their RE agents in Vancouver and say: Sell!

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4 years 30 days ago
g
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g
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So you will rent your $700000 condo to the homeless?You wont have a condo left,it will be trashed.

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4 years 30 days ago
J-F
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That would be an awesome thing to have here in Vancouver. It would most certainly bring down residential real estate prices & rentals. Especially downtown luxury condos. Hell maybe I could even be able to afford renting one of those luxury condos in Coal Harbour!

I would go even further by charging an extra 100% (double) in property taxes that have been empty for 1 year. If you can’t afford a very expensive home without even living in it for a whole year, then I’m sure you can afford the extra tax. Otherwise just rent or sell the darn thing at a decent price!!

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4 years 30 days ago
Aggregator
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“Rent out out all the empty condos to the homeless.”

With welfare cheques paid by taxpayers. Brilliant.

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4 years 30 days ago
tedeastside
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tedeastside
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Coal Harbor is so empty there’s tumble weeds blowing down the streets

coal harbor Canada’s worst ghost town is just another example of Vancouver’s failed city planning

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4 years 30 days ago
patriotz
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Of course BC municipalities don’t have the power to do this, and if you think Crusty is going to give them the power I’ve got an oil refinery in Kitimat to sell you.

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4 years 30 days ago
frank
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Now this would something useful our Mayor could get into. With enough public pressure, it may actually come into his vision as a problem as he glides between one Point Grey home and another.

I suggest we write or email him and explain the merits of this. If they did in the Uk, there is no reason why we cannot do this here.

http://vancouver.ca/your-government/contact-mayor-robertson.aspx

I will be doing it right now.

It takes 5 minutes.

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4 years 30 days ago
someguy
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Taxing unused property at a higher rate is standard practice in many parts of the world, especially agricultural land. Instead we get the ALR. Taxing the Coal harbor ghost town is a great idea with lots of upside, including increased commercial activity at street level.

However, if those condos all suddenly become occupied the traffic network will collapse.

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4 years 30 days ago
Interest Only
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Wholesale sales dropped 2.8 percent to C$48.8 billion ($47.1 billion), the fastest since January 2009, Statistics Canada said today in Ottawa. The decline exceeded the most pessimistic of 13 estimates in a Bloomberg survey that had a median estimate for a 0.5 percent fall.

All seven major categories tracked by the agency fell in June. Building material and supplies sales fell 3 percent to C$6.69 billion and motor vehicles and parts dropped 2.2 percent to C$8.20 billion. Agricultural supplies plunged 22.6 percent to C$2.02 billion, offsetting a similar increase the month before, to lead an 8 percent drop by miscellaneous wholesalers.

http://www.bloomberg.com/news/2013-08-20/canada-june-wholesale-sales-fall-from-record-in-widespread-drop.html

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4 years 30 days ago
registered
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“Taxing the Coal harbor ghost town is a great idea with lots of upside, including increased commercial activity at street level.”

Devil’s advocate mode: on the other side, ghost suite owners pay into municipal taxes without any added burden on municipal services. They subsidize local residents. Instead, how about further cranking up taxes on owners with rental suites? The latter are already rewarded with reduced building code compliance on the grounds of ‘reducing the city’s carbon footprint’, something ghost suites do more effectively.
Reducing the number of buyers who make the mortgage by turning houses into hotels also dampens demand for single family dwellings, spurs true and properly planned multi-tenant development and preserves the character of neighborhoods.

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jesse
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I suppose if Christy won a seat in supposed Ground Zero for under-occupied land she might have a f*ck to give. I’ve heard there’s of room to grow in West Kelowna.

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Burnabonian
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^further to the traffic comment above, I can think of a host of things that would fall down if we started actually occupying the density that we’ve been building all these years. In fact, I don’t think that that many people were ever *supposed* to live downtown. I think that it only works *because* it is a ghost town. Consider everything from the HVAC, plumbing, and elevators in these shoddy “rapid-erect” buildings, to bridges and traffic as mentioned above, to the few and already overtaxed grocery shopping options downtown, to the tendency of a certain percentage of residents to engage in the job search market, go to the doctor, send kids to school, and use public parks. When I lived downtown, I either found or heard stories of every one of these categories being maxed out by the relatively small… Read more »
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4 years 30 days ago
rent$385
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I’m normally pro free market and less tax and intervention, but I think I agree with this idea. Housing isn’t just an asset, its a fundamental component for planning communities, services, schools. Having investors keep homes vacant doesn’t help the neighborhood.

Property tax in Vancouver is so low already, instead vacant properties should be assessed a penalty of x% of assessed value. It would encourage either renting the property out or lowering the price so it actually sells.

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4 years 30 days ago
AnonNoMore
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@fixieguy ” Devil’s advocate mode: on the other side, ghost suite owners pay into municipal taxes without any added burden on municipal services.”

They also add nothing extra to the local economy, supporting no businesses. Property taxes are so low I don’t think you could say that they ‘subsidize’ locals.

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More empty homes…

Bubbles Bloom Anew in Desert as Buyers Wager on Las Vegas http://www.bloomberg.com/news/2013-08-20/bubbles-bloom-anew-in-desert-as-buyers-wager-on-las-vegas.html

“A five-bedroom house in Las Vegas sold in mid-July for $499,000, double the price it went for three months ago. In Phoenix, a similar house sold this month for $600,000, gaining $273,000 since March. ”

For those still confused as to who is bidding on these houses while hedge funds and private investors are cashing out, look no further then NAR’s Q1 report on international buyers.http://i.cubeupload.com/Liyfli.png

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4 years 30 days ago
Newcomer
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By the same logic, it might make sense to charge extra income tax on money that people keep in the bank when they could be boosting the economy by spending it.

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Turkey
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Bula rides again: Investors group acquires Olympic Village apartments.

A large Canadian investment group has bought the dozens of market rental apartments at the Olympic Village site for about $350,000 a unit.

The name of the buyer was kept out of recent court documents filed by the receiver managing the City of Vancouver-owned property. However, The Globe and Mail received confirmation that the purchaser is a fund operated by Bentall Kennedy, a real-estate advising and investment managing company.

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Softy
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“HongKong stock investors will get margin calls in a few hours.
Then they will call their RE agents in Vancouver and say: Sell!”

Hope and dreams. Pie in the sky.

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4 years 30 days ago
China Bust
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“apartments at the Olympic Village site for about $350,000 a unit.”

How does this compare to the original asking prices? If I recall correctly, one bedroom units at the OV were asking around 500k originally.

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Turkey
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Two-alarm fire at Granville high-rise under construction.

Quoth V. S. Naipaul:

`Insuranburn,’ Mr Biswas said. `How much I going to make out of that?’

`More than you would make if you don’t insuranburn. The shop is my own. The goods is yours. For the goods you ought to get about seventy-five, a hundred dollars.’

It was a large sum. Mr Biswas smiled.

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Rails
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Another sign that Vancouver wealth is not reflected in incomes. Full-scale Maclaren’s dealership to open in the city

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Rails
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(sp) Mclaren

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registered
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AnonNoMore “…I don’t think you could say that they ‘subsidize’ locals.”

Owners paying in full for services they’ll never use is subsidizing the rest, math is math.
Their initial capital outlay also went directly into the local construction economy. That expenditure equates to many years of local spending for the wage bracket renting secondary suites. The median income for renter households is ~$35K – already low at 60-65% of the income for all households – and suite rents are 20-25% less than regular apartments. While secondary suite renters may bring many benefits to the city (students come to mind), driving the economy isn’t top of the list.

http://www.metrovancouver.org/planning/development/housingdiversity/HousingDataBookDocuments/MV_Housing_Data_Book.pdf

To be clear, I don’t own in Vancouver and am OK with hammering both ghost owners and SFH-hotel owners with taxes. Singling out just one seems too ideological.

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vangrl
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BMO 5 year just bumped up from 3.59 to 3.79%

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