Mayors speculate about tax with premier
West Kelowna Mayor Doug Findlater believes he made the best case possible against the speculation tax in his meeting with NDP Premier John Horgan.
Findlater said he tried to make the point that the tax will diminish rather than increase the supply of housing in West Kelowna, with one big project already put on hold and others at risk of being cancelled.
And he told Horgan, that when waterfront estates are excluded from consideration, the average price of a home in West Kelowna is between $400,000 and $500,000.
“That is a price that’s certainly affordable by most people who have jobs,” Findlater said Tuesday.
One of the province’s rationales for including West Kelowna as a community where the speculation tax will apply is that the city has a low apartment vacancy rate.
But Findlater said the government is using a region-wide figure, rather than one specific to West Kelowna, where he said the vacancy rate is much higher than one per cent.
A recently completed building with 240 suites still has many units available for rent, Findlater said, and there are many secondary unites for rent in single-family homes, which don’t show up in official apartment vacancy rate calculations.
Findlater and Kelowna Mayor Colin Basran met with Horgan for an hour at a hotel near the airport on Monday morning. Both made the case that the tax, aimed at the owners of properties left vacant for more than six months of the year, will be particularly harmful to their cities’ economies.
Kelowna has estimated the tax will apply to about 1,800 properties, while their West Kelowna counterparts say the number is about 600 in their community.
The government says the tax, to be charged at the rate of one per cent of a home’s assessed value, will convince people to rent out their empty homes, improving housing affordability.
Critics say it’s more likely the tax will slow construction of new homes, reduce employment, discourage tourism from out of province, and deprive municipalities of revenue they count on for services like policing, transit, and infrastructure.
“This will just drive growth to communities like the Westbank First Nation, where the tax won’t apply,” Findlater said.
“We’ve already seen one big project, Goat’s Peak with about 1,000 planned homes, put on hold because of the tax.”
For his part, Basran said characterized the meeting as cordial, but said he wasn’t optimistic the NDP government would exempt Kelowna and West Kelowna from the speculation tax, slated to take effect this fall.
The two cities are the only Interior communities where the tax will apply. Although Peachland and Lake Country are in many ways suburbs of Kelowna, and are part of the Central Okanagan regional district, those communities are not subject to the tax.