You can probably handle paying an extra $49 bucks, but George Affleck points out that over the past 10 years the city budget has grown 30% while population has grown 9%.
The $1.32-billion draft 2017 budget was released late Wednesday afternoon. It includes a 3.4 per cent property tax increase and other increases for utility, recreation and permit fees.
The city says the increases will go towards greater costs for existing services that are in line with inflation and new expenditures in other areas like social housing, security and the arts.
According to the city, the property and utility fee increases will amount to an extra $49 in costs for a median homeowner in Vancouver.
Read the full article over at the CBC.
Southseacompany linked to this article in the Globe and Mail that talks about the CMHCs vulnerability to rising interest rates:
The most dramatic scenario involved a severe and prolonged global economic depression that sent unemployment soaring to 13.5 per cent and triggered a 25-per-cent drop in national home prices.
In that case CMHC said its mortgage insurance business could lose more than $3.1-billion over five years. However CMHC said it would have more than 200 per cent of its required minimum capital, even after accounting for stricter capital requirements that OSFI is expected to introduce in January. Insurance companies are required to stop writing new insurance business if their capital ratio falls below 100 per cent of its required minimum level and are insolvent when their capital levels hit zero.
CMHC’s stress testing comes amid heightened concerns over the health of the Canadian housing market. Last month, the housing agency issued its first “red” warning for Canada’s housing market as a whole, saying it now sees “strong evidence of problematic conditions” in six of the country’s largest housing markets.
In yet another scenario the Crown corporation said its insurance business would lose more than $2-billion if Canada experienced a “U.S.-style” housing correction, where home prices drop by 30 per cent and the unemployment rate rises to 12 per cent.
Read the full article here.
After that irritating interruption from a hack attack, we’re back.
Meanwhile a lot of other people have gone to live somewhere else while they leave houses here empty. According to this article over at BNN the number of vacant homes in Vancouver has nearly doubled since 2001:
Mayor Gregor Robertson, who has criticized some of Mr. Yan’s tracking of foreign home ownership in his city, said this latest study reinforces his government’s commitment to penalizing those who leave properties vacant.
“Seeing data that demonstrates there may be even more underutilized homes than BC Hydro suggests gives us more reason to aggressively move on the empty homes tax,” Mr. Robertson told The Globe and Mail Tuesday.
“We certainly hear, anecdotally, concerns about empty homes in various neighbourhoods, and now the body of evidence is building, so that helps.”
The B.C. government passed legislation in the summer allowing Vancouver to impose a tax on empty homes, which the city argues are taking up housing that could be rented out.
The province has said it will consider similar requests from other cities.
Read the full article here.
Canadian debt is now almost triple the size of the national economy. How did we get here? A decade long housing boom!
While Canada boasts the lowest government debt load among Group-of-Seven countries, household debt is the highest of its peers, the Basel, Switzerland-based BIS said last month in its quarterly report. In September, Statistics Canada reported household liabilities rose to 100.5 percent of GDP, exceeding the size of its economy for the first time.
Canada was the only developed country showing early signs of stress in its domestic banking system amid “unusually high” credit growth relative to GDP, the BIS said.
“This debt overhang represents one thing and one thing only: a pervasive constraint on Canada’s economic growth potential,” David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc. said by phone from Toronto. “When you get to levels on total debt that makes even the Italians blush, you know you’re in a straitjacket.”
Read the full article over at Bloomberg.
The city of Vancouver has floated the idea of an ’empty home tax’ to help encourage the availability of rental supply. Today is the last day they will take feedback online for this idea.
If you have ideas for or against an empty home tax now is the time to have your input. What should be taxed and what should be exempt?
Best Place on Meth points out a rather obvious loophole and asks how it would be dealt with. Will there be baseline expectations for what is or isn’t market rent?
What’s to stop these owners from listing it for rent at some outrageous price that nobody will pay and then claiming they did try to rent it out?
What do you think – is the idea of an empty home tax a good or bad approach to Vancouvers housing problems?