Vacant land tax could affect Metro
Surrey stands to be hardest hit by plan announced this week in federal budget
This week's federal budget full of housing initiatives could affect three Metro cities that have the most vacant land.
Prime Minister Justin Trudeau floated the idea of taxing unused land as a way to spur housing construction, which could impact Surrey, North Vancouver and Langley.
Surrey tops the list with the highest number of vacant lots where there are no residential structures. The federal government said it's considering a tax for land that is zoned for residential use, and will hold consultations later this year.
Metro Vancouver is described as being constrained when it comes to building homes — it's hemmed in by water, mountains and land designated for agricultural use.
But there are more than 11,000 small and larger plots of land across the Metro area that are zoned for residential use, but sit empty, according to Andy Yan, director of Simon Fraser University's City Program.
“We know that they are vacant, but we don't know why,” said Yan, who examined 2021 Statistics Canada information.
He said that if the federal government is looking at taxing owners of vacant land, consultations should dig deeper if the goal is to facilitate the development of residential housing.
Yan said the process is akin to figuring out why empty condos are vacant in order to develop policy and exemptions with a focus on incentivizing owners to fill properties with occupants: Is it because an owner or tenant has an extended hospital stay or are they using the property only a few weeks a year?
Some vacant residential land is held as an investment for decades. Some lots are parcels of land zoned for subdivisions that have never been hooked to services such as water or sewage, making it harder for a developer to secure financing. Others are bought and sold more frequently to capitalize on rising prices.
“They can be vacant for a number of reasons. There is a whole spectrum,” said Yan.
His look at 2021 statistics found that in the City of Surrey, there are 2,580 so-called vacant land residential properties, accounting for 23 per cent of the total across Metro Vancouver. The District of North Vancouver follows with 2,145 vacant land residential properties, making up 19.5 per cent of the total in Metro Vancouver. The District of Langley has 1,235, or 11.2 per cent of the total in Metro Vancouver.
The City of Vancouver has 345. These counts don't take into consideration the size of the properties or their land value. Some, like one at the corner of Robson and Broughton streets in the West End, are just a corner lot that has been empty for decades while other developers have been trading land and building tall, residential towers around it.
Others could be hundreds of acres in size, such as the 2,000 acres of hillside land that British Pacific Properties has held and slowly developed in West Vancouver over a span of 85 years.
It will be interesting to see how a federal tax to encourage development would work with already existing provincial policies to discourage speculation or holding empty residential land, said City of Surrey planning manager Don Luymes.
“I understand the impulse to encourage development with a tax. It's also the case — and what developers say — that there are various reasons why this land is vacant. Some of it is under the control of developers and some of it is beyond them.”
Overall, the number of vacant land properties across the region is a small percentage of the total number of all property types at just 1.4 per cent.
But the federal government would be looking at them after setting a budget that has stated it will be building homes on public lands such as underused office towers or parking lots, as well as on Canada Post properties.