The brief debate on a new real estate tax

Burnaby Heights housing reduced

On July 25 British Columbia took a step into the unknown. The government introduced a bill to impose a 15 per cent additional tax on sales of residential property — but only within Metro Vancouver, and only “where the transferee or purchaser is a foreign national, as well as certain corporations or trusts that involve foreign nationals.”

B.C. Finance Minister Mike de Jong (CBC News)

B.C. Finance Minister Mike de Jong (CBC News)

In calling a rare summer meeting of the Legislature to approve this measure, the BC Liberal government was responding to rising public anxiety around the housing market. One-year price increases for detached homes were approaching 50 per cent in parts of Metro Vancouver. The Liberals had linked this price inflation to a shortage of housing supply; this site predicted in March 2016 that they would not take dramatic action to restrain demand. The opposition New Democrats called this special legislative session “the flip-flop session.”

The government turned aside the opposition’s amendment proposals, and the bill passed in its original form on July 28, after three brief days of debate. Liberals, New Democrats and the sole Independent member, Vicki Huntingdon of Delta, all voted in favour. Nineteen of 85 members were absent, including Andrew Weaver of the Green Party.

The record of the voting, the text of the bill and a transcription of the debate are available on the Legislative Assembly website. Some notes:

  • The bill has four outcomes. First, it replaces real estate industry self-regulation with regulation by a government supervisor. Second, it enables the City of Vancouver to set up its own tax on vacant residential properties. Third, it loads a a new 15 per cent provincial tax on to foreign purchases of residential property, on top of the existing 1 to 3 per cent property transfer tax. This money is payable to the Province at the time of purchase. And fourth, revenues from the new tax will go into a new “Housing Priority Initiatives Account.”
  • Finance Minister Mike de Jong  introduced the bill and managed it through committee.  He said the 15 per cent tax rate is identical to foreign investment tax rates in Hong Kong and Singapore. He declined to make any predictions on how much money will flow in.
  • BC New Democrat housing critic David Eby

    BC New Democrat housing critic David Eby (CBC News)

    In debate, New Democrat housing critic David Eby expressed some of the same skepticism that was shown in the results of an opinion poll released in the same week. The Angus Reid poll showed 90 per cent support for the new tax among respondents, but also a high expectation that foreign buyers would find their way around the tax.

    Eby noted that foreign investors can still speculate in real estate assets through Canadian agents. “If a Canadian sets up a company that is 100 percent financed with foreign capital and buys up residential housing in Metro Vancouver, that person is exempt from the tax.”

  • The New Democrats proposed, unsuccessfully, that any municipality should be able to collect a vacancy tax, and not just Vancouver. That concept got a high level of support in the Reid poll. They also proposed, unsuccessfully, that foreign nationals with work permits should be exempt from the tax, arguing that people who are providing value to employers should not be treated as offshore speculators.
  • The government has kept one foot on the housing supply side with the creation of the new housing account, although its priorities are unclear. Minister’s de Jong said the account “has the authority to fund operating expenditures, capital investments, loans and loan guarantees related to the supply of housing and rental housing or other shelter access and support programs and initiatives.”

The implementation of the tax on August 2 triggered a turnaround in media coverage of the real estate issue. Prior to July 27, a typical story would feature a young couple in distress over the cost of housing. After August 2, reports focused on the “unfairness” of the tax for foreign buyers, and on reports that foreign and domestic customers have backed away from the B.C. real estate market.

Some observers suggest it will take three months or more to determine how the tax is going to influence the market, and to see how much money it can generate for the government’s housing account.

 

 

 

 

A Queensborough-Annacis Island walking loop

Rosedale reduced

Annacis Island, an all-industrial zone located in the Fraser River, is noted (if at all) for its large wastewater treatment plant and worsening traffic congestion.

The five-kilometre long island is a less-than-obvious place to walk; co-tourist Robert Smarz and I went to find out if it is at all tolerable for humans. We were lucky to arrive on a Friday morning before a long weekend, when traffic was light, but we had to stay alert nonetheless, as the trucks are large and there are no sidewalks.

Homes in Queensborough (New Westminster) looking out at Annacis Island

Homes in Queensborough (City of New Westminster) looking out at Annacis Island (Municipality of Delta)

No public parking either, so we began our loop at the Queensborough Community Centre on neighbouring Lulu Island, walking past marinas and river-facing homes before making a bridge crossing to industrial Annacis via Highway 91. The pedestrian link alongside the expressway traffic is noisy but short, perhaps 500 metres in length, leading to a shaded pathway that is the gateway to the island.

We crossed Cliveden Avenue, a main street, at the first lights, and ate breakfast at the Twin Bridges restaurant. We then travelled northeast, returning to Queensborough via a second and quieter bridge. Our total walking time was about 90 minutes.

Highway 91 walkway to Annacis Island

Highway 91 walkway to Annacis Island

Fraser River, 8:30 a.m.

Fraser River, 8:30 a.m.

trucks reduced

steel reducedwillows reduced

On balance, Annacis is not as ghastly as it could be, or at least not on this quiet morning. The trees and other greenery soften up a utilitarian landscape. There’s a stand of weeping willows near Audley Boulevard, along a mini-canal that might have been made for ducks. The manufacturing and service businesses come in various shapes and sizes. The UPS drivers swarm around their depot in cartoon vans.

Now, about those sidewalks. Annacis Island, with a workforce of 10,300 people, barely rates a mention in the Municipality of Delta’s 2015 Official Community Plan. One of the few references comes with the following objective:

Encourage the development of an efficient local transit system to move people to and from Delta’s town centres, key service destinations, recreational areas, and major employment areas, including industrial areas such as Tilbury and Annacis Island.

This is admirable, and in fact there’s already a bus running to the island from Skytrain as often as every 12 minutes. But any transit rider who has to walk any distance to work will be at risk from large vehicles, and this is surely a deterrent to transit use.

And for car commuters, there’s a serious traffic congestion issue (according to recurring news reports) related to the island’s position near the junction of Highways 91 and 91A. These are two of the region’s main routes for both commuter and industrial traffic, and they can become almost gridlocked during peak hours. Commuters have taken to making Annacis a short cut, using private parking lots along Cliveden Avenue as u-turn facilities. Workers on the island have complained that it can take them as long as an hour to get to either highway at the end of the day, and have appealed to the Delta municipal government to take action.

If you wanted to get at this problem in a complicated way, you could impose a congestion charge on any vehicle coming on to the island, with a quarterly rebate to island-registered employees and commercial vehicles. A simpler solution, from one of the news media chat threads, would be to ban heavy truck traffic on Annacis from 4:00 to 5:15 each afternoon. This writer suggested that long truck trailers, combined with commuter traffic, are the critical cause of the traffic tie-ups.

Surrey Leader, January 2016

Surrey Leader, January 2016; the blue route is the short cut

New homes in Queensborough, seen from the second Annacis bridge. Many of Queensborough's former industrial lands have been converted for housing.

New homes in Queensborough, seen from the second Annacis bridge. Many of Queensborough’s former industrial lands have been converted for housing.

TransLink ranks second in Canadian transit report

Speed
Langley City Councillor and urbanist Nathan Pachal has issued a report card on transit systems in Canada’s biggest urban areas.

TransLink, serving Metro Vancouver, is ranked behind Montreal but ahead of Toronto/Hamilton, Calgary,  Ottawa and Edmonton.

2016 Pachal transit report card

The report card draws on the latest data available, from 2014. Greater Montreal had the lowest operating costs per passenger trip and the highest transit use per capita of any major region. Greater Vancouver scored well on a metric called “trip intensity”, a calculation Pachal has devised to describe the alignment between transit service levels and transit demand. However, TransLink had the highest operating cost per service hour ($181.47) of any of the systems that were measured.

Pachal supported the losing side in Metro Vancouver’s 2015 transit tax referendum (as did Fraseropolis). When we met last week, however, he said that the voters’ rejection of extra money for TransLink is likely to push it to greater efficiency and  higher scores in any future report cards.

It’s notable that in every transit area except Edmonton, riders are paying more than 50 per cent of the cost of system operation. Transit critics have often proposed that fares should be higher, but it’s obvious that if fares go too high, ridership will decline along with revenues.

 

Revisiting Downtown Maple Ridge

Donair reduced

Greater Vancouver’s Livable Region Strategic Plan, adopted in 1996, identified downtown Maple Ridge as one of eight town centres of regional significance. A year or two later Maple Ridge City Council agreed to finance an ambitious town centre development with an arts centre, office complex, recreation centre and park space, all aimed at bringing people and investment to the city’s core.

The planning and execution of the project split the community and created long-term political instability. In five of the six local elections since that financing decision, the incumbent mayor has been kicked to the curb. Downtown Maple Ridge has improved; but it remains a focus for civic conflict more than civic pride. In the single election where a mayor was re-elected, his opponent staged a concerted attack on central area investment, including an “unnecessary” sewer line replacement, and collected 40 per cent of the vote.

I toured the area on a recent Saturday morning with co-tourist Bob Smarz. I’m frequently downtown, but this was my first Fraseropolis assessment of the commercial zone and nearby housing since 2012.

Maple Ridge's central area as defined on the municipal website

Maple Ridge’s central area as defined on the municipal website

On the positive side, Maple Ridge is in better shape than other historic town centres in the Fraser Valley (Chilliwack, Abbotsford, Mission, Cloverdale). There has been ongoing low-rise condo and seniors housing development around the downtown perimeter.  Most of the services needed to anchor a high-functioning urban village are in place, especially with regard to diverse and competitive food markets, good restaurants, and health and beauty services. The Saturday farmers’ market is very good, and is perhaps one of the few features that brings people to Maple Ridge from outside.

Less positively, there are still extensive vacant lands in the commercial core and south of Lougheed Highway. Key commercial spaces have changed hands since 2012, but there has been very limited construction — in a decade when six of the other seven Metro Vancouver regional town centres have been transformed.

The slow pace of development is often blamed on vagrancy and crime. There are two homeless shelters in the southwest corner of the downtown core, and their customers spend most of their time on the street. Sex trade workers ply their trade two blocks from the central square. The rate of property crimes is high, by rumour at least, and this is reported to have spurred a large chain retailer to leave the area recently for a highway location.

Haney Plaza in the Maple Ridge commercial core. The anchor structure, built as a Safeway supermarket, has been a liquidation outlet for 20 years; a second large retail space to the west has been leased by a series of discount retailers, and is currently vacant.

Haney Plaza in the Maple Ridge commercial core. The anchor structure in the centre right, built as a Safeway supermarket, has been a liquidation outlet for 20 years; a second large retail space to the west has been leased by a series of discount retailers, and is currently vacant. This site is subject to a multi-tower residential and commercial development proposal that is now several years old.

Dewdney Trunk Road, south side

Dewdney Trunk Road, south side

Just as critical for me, and for Mr. Smarz as we toured the area, is the lack of a pedestrian magnet in a commercial zone that sprawls over more than 20 city blocks. This can be blamed partly on the absence of a rapid transit line, which might tend to collect retail and high-density residential development around a central station.

In the absence of transit or a pedestrian focus, local councils have permitted the construction of car-oriented shopping centres as a way of keeping business in the city centre. The result is a patchwork of malls where customers who arrive by car are subject to ticketing if they walk off the property. The managers of Haney Plaza, shown above, have aggressively ticketed their own customers even though their parking lot is often three-quarters empty. Perhaps as a result, most small shopfronts on the opposite side of Dewdney Trunk Road are vacant.

The city government’s downtown tax incentive program has enabled cosmetic improvement in the downtown since it was launched in 2010. The website of the Business Improvement Association — another fairly recent innovation, meant to shape up the core — presents dozens of photos of new awnings, doors and windows on downtown properties.

In terms of new construction, I count two all-commercial structures added in the past five years — a pocket casino and, very recently, a mixed food market/office building. There’s a new Walmart, but it moved into the old Target, which had moved into the old Zeller’s. The new Thrifty’s Foods replaced a flea market which replaced a Safeway’s. The new film studio — a quasi-industrial use, really — moved into the old bingo hall, which spawned the new casino — smallish, but a sure money-maker for the City.

A recently-constructed plaza, 227 at Dewdney - edge-of-town development in the core

A recently-constructed plaza, 227 at Dewdney —         edge-of-town development in the core

For what it offers, the downtown core is highly dispersed, to the point where it is probably not walkable for some older residents in the perimeter. The diagonal distance from the Trattoria corner to London Drugs is 1.5 kilometres, taking the would-be shopper past the vacant shops on Dewdney Trunk and through perhaps 500 metres of vacant properties and parking lots. And for whatever reason, the core is continuing to push outwards. The new Meridian Meats market is actually in the automotive precinct, surrounded by auto glass and auto repair shops.

The City recognized the need to bring new residents into the core as long ago as 2000, but prehaps four new mid-rise residential buildings have been added to the dispersed business district since that time, and the most recent tower construction dates from the 1980s.

Fraseropolis.com supports the development of walkable urban villages. We evaluate neighbourhoods across southwestern B.C. from the perspective of the hypothetical resident who wants housing choice and the maximum range of nearby services combined with minimum automobile use. Ideally, this type of development brings diversified opportunities for locally owned businesses, stable rental situations, more customers for public transit and a reduced per capita environmental footprint. The current rapid rise in real estate values in reducing the affordability of all types of housing, but on balance it should increase the demand for smaller housing units that are close to services.

Tower development proposal, northeast of City Hall

Tower development proposal, northeast of City Hall; construction date TBD.

Baptist Church seniors housing tower, 1980s

Baptist Church seniors housing tower, 1980s

The Maple Ridge Arts Centre and Theatre (2003) seen from the central park

Maple Ridge Arts Centre and Theatre (2003) seen from the central park

 

 

The working poor in Metro Vancouver

Walmart

The Canadian Centre for Policy Alternatives, a left-leaning research centre, has published a report on the incidence of poverty among working people in Metro Vancouver.

The 35-page study by CCPA economist Iglika Ivanovna has major flaws as an advocacy piece, but it delivers the useful reminder that “having a job is not a guaranteed path out of poverty.” Continue reading

The amalgamation of cities

"Implementing reclaimed material along the banks of the woonasquatucket river." Lifted from daftdetroit.wordpress.com

“Implementing reclaimed material along the banks of the woonasquatucket river.” Lifted from daftdetroit.wordpress.com

Some of the most critical problems in B.C. urban life can be linked to our multi-municipality system of regional government. The lack of a sustainable funding formula for public transit in Metro Vancouver, for example, can be blamed in part on years of dithering by mayors. Our local housing and homelessness policies are a mish-mash, with some municipalities clearly offloading social problems onto others.

In Ontario, a “common sense” provincial government took the drastic step of eliminating many mayors and councils in the late 1990s. The most populous region, Toronto, imploded from six cities into a single mega-city. In Ottawa, 11 municipalities merged into one. Across Ontario, 229 municipalities, or more than a quarter of the total, were wiped from the map to achieve cost savings and more efficient decision-making. Continue reading

Touring B.C.’s Southern Interior

 

Hedley

Hedley

A recent four-day trip through the South Okanagan, Central Kootenays and the Shuswap Valley reminded me of the benefits of slowing down. I would have liked to really get to know these landscapes and villages — what you see here are only glimpses. Thanks to co-tourist Dominic Kotarski for bringing his global perspective, and to the excellent Hume Hotel for a welcome in Nelson.

Many of these towns — Princeton, Hedley, Midway, Greenwood, Kaslo, New Denver — were at their peak in 1900 or before that, riding a boom in silver. Our guide at the volunteer-run historical centre at Sandon said the now-abandoned town was “the Fort McMurray of its age,” the place where young men came to make their fortune. Continue reading