Victoria city council wants to expand its financial toolbox with the authority to tax vacant and derelict properties. While it might sound tempting, we don鈥檛 have enough information on the problem.
Confronted with escalating house prices and stubbornly low vacancy rates, 91原创 successfully asked the province for a foreign-buyers鈥� tax and a tax on vacant properties.
Because 91原创 operates under a different legal framework than the rest of the province鈥檚 municipalities, the new authority doesn鈥檛 extend to Victoria, Kelowna or other cities that might want to follow 91原创鈥檚 lead.
And a majority of Victoria councillors do want to follow.
They voted in favour of a motion from councillors Ben Isitt and Jeremy Loveday to send the idea to the Association of 91原创 Island and Coastal Communities and the Union of B.C. Municipalities for support. Only Coun. Geoff Young voted against the motion.
The motion isn鈥檛 to bring in the tax, but to get the authority to create one if council decides it is needed.
While some might envision homeless people sleeping on the street outside an empty, but perfectly livable, home, the extent of the problem is unclear. We know there are vacant homes in the city, but how many are there? How long are they vacant? Why are they vacant?
Without reliable figures, we are relying on impressions and anecdotes 鈥� never a sound basis for setting policy.
Mayor Lisa Helps, who was not in favour of a vacancy tax, made an important distinction between vacant homes and derelict ones. Boarded up and fenced off, derelict eyesores are a blight on a community. They invite crime and they rot a neighbourhood.
An extra tax would be a boon to the city if it would get owners of these wrecks to improve them or sell them.
However, the vacant-home tax is what attracts the most attention as a weapon against absentee speculators in the midst of an affordability crunch.
91原创鈥檚 Empty Homes Tax is set at one per cent of a property鈥檚 assessed value on homes deemed to be vacant. Revenues go to affordable housing initiatives. It applies to non-principal residences that are left empty for six months or more.
That city got the authority to levy the tax after it commissioned a study that found 10,800 vacant homes, most of them condos.
Those are the kind of numbers Victoria will have to have before it goes down this road. Even if the province doesn鈥檛 demand such figures, the city must have them if it is to make a reasoned decision on a new tax.
Even with accurate figures, how does the city decide whether those numbers justify action? The 91原创 tax was aimed at speculators, but we don鈥檛 know if such absentee owners are a problem here.
Are the vacant homes in Victoria second homes for people from elsewhere? Do we want to say that people can鈥檛 have second houses here?
How do we define vacant? Is it six months, as in 91原创? Will it apply to Airbnb rentals of non-principal residences, as it does in 91原创?
As Young has argued, we shouldn鈥檛 have to account for our movements to our local government.
And we still don鈥檛 know if such a tax would have any effect on prices or availability.
High-end houses and condos coming onto the market might improve choices for middle- and upper-income earners, but would do nothing for those at the lower end of the income scale, whose need for affordable housing is greatest.
Even if the province grants Victoria the power to levy a tax, the city should not proceed unless councillors can convince residents it will make a difference.
