Developers right to rip NDP’s new tax measures
If you need further evidence that every day is amateur hour in Victoria under the NDP, do yourself a favour and read the letter sent recently to Finance Minister Carole James by the Urban Development Institute, the professional group that represents B.C. property developers and planners.
Collectively, as they point out in the letter, their work contributes “almost $23 billion in annual GDP and sustains over 233,000 well-paying and family-supporting jobs across the province.” Whatever you might feel about developers, construction and real estate are the No. 1 contributor to the B.C. economy, which is why it’s important for all of us that those sectors remain healthy — at least if we want a functioning economy. You know? Jobs. Private-sector economic activity to tax so there’s money for hospitals and schools, etc.
That’s why so many British Columbians were stunned when James admitted the NDP did zero modelling of the economic impact of the class-warfare taxes they imposed on property in their recent budget.
Last week, I wrote that I’d never “heard anything more incompetent or irresponsible from a finance minister” — and that was before I’d heard the concerns of the Urban Development Institute experts.
They argue that far from improving affordability — the stated policy goal of the taxes — the UDI says the NDP approach will probably make homes more expensive, especially lower-priced housing designed for the very people the NDP wants to help.
“The increases to the Luxury Property Transfer Tax (PTT), the Foreign Buyers’ Tax (FBT), the School Property Tax, and the yet to be defined Speculation Tax, will only substantially add to the costs of residential development,” UDI president and CEO Anne McMullin writes. “All of these increased costs will ultimately be passed on to tenants and home buyers, further hurting affordability.
“We understand the focus of the increases being made to the PTT, the FBT, and the School Property Tax, are intended to target speculation and reduce foreign demand in the housing market on sites above $3 million,” she writes.
“Regrettably, these new broad tax measures will also be applied to development sites purchased to build all forms of housing, including purpose-built rental. Virtually all residential development sites are now above $3 million in Metro Vancouver, so the impacts of these tax increases will be significant and will have the unintended consequence of further undermining housing affordability.”
McMullin also took the NDP to task for not doing anything to increase the supply of housing, that would lower prices and meet the demand of newcomers to B.C., particularly Metro Vancouver.
“Our members are also disappointed that there are no substantive measures in Budget 2018 to deal with local governments on the lack of adequate zoning to meet housing demand, nor to reduce bottlenecks in the processing of permits,” she writes. “UDI has previously made recommendations on budget measures that could address this, including directly linking transit funding to increased housing density, and provincial incentives to assist municipalities with additional resources to process permits.”
McMullin also pointed out that if the NDP “is relying on partnerships with the private sector to build a substantial portion of its 114,000-affordable housing commitment,” it must “provide a stable regulatory and taxation environment” for home builders, owners “as well as lenders and equity investors, such as B.C. and Canadian pension funds who would potentially invest in new, purpose-built housing projects.”
In an editorial board meeting with The Province and The Vancouver Sun earlier this week, the UDI also brought up another concern I have raised: The federal government’s plan to increase the number of immigrants entering Canada, most of whom settle in big cities, including Toronto, Montreal and Vancouver.
While acknowledging they are not immigration experts, clearly the tens of thousands of immigrants entering Metro Vancouver annually who need housing and already overwhelm government services — as well as the estimated 140,000 students and temporary foreign workers in the region who are not included in population totals — is placing a real strain on our collective ability to provide enough homes, which is a big factor in rising property values and rents.
That’s a discussion Canadians also need to have without fear of accusations of xenophobia. Clearly we need immigrants, but how many should be debated.