Vancouver City Council has voted to approve a new 1% tax on vacant homes.
Mayor Gregor Robertson along with the full slate of Vision Councillors voted for the motion, supported by Green Councillor Adrianne Carr.
All three NPA Councillors opposed the plan.
NPA Councillor Melissa De Genova says she would have considered voting yes if the plan had been modified, echoing concerns of some homeowners who say they’re being unfairly targeted for owning second “under-used” homes which they can’t afford to rent out.
“I think if underused homes [were] scrapped from it, but also an incentive-based approach would certainly be something I preferred because I feel enforcement obviously doesn’t work,” she said.
But Mayor Gregor Robertson says he thinks the plan will be effective in freeing up rental units and says the city will deal fairly with any “hardship cases” that do arise.
“Although these are second or third homes so it’s difficult to see how hardship applies if you own multiple homes in Vancouver,” he says.
“That said, obviously our staff will be tracking that very closely, there is an appeal process.”
UBC economist Tom Davidoff calls the tax a step in the right direction, but warns it might not have as big of an impact as many people are hoping.
“It makes it less attractive to own a home as a vacation home that you use only occasionally,” he says.
“[But] this will have a minor negative effect on rents and prices, I don’t think a major one because I don’t think this is a huge fraction of the market.”
Council got a detailed technical report from staff on the measure yesterday and heard from the public today.
The incentive is aimed at raising the city’s dismal rental vacancy rate – currently hovering around 0.6% – by imposing a tax of 1% of a vacant property’s value.
Speaking to Council today, homeowner Paula Chu says she wants that rate either brought down – or delayed.
“They are not hurting the people that own several condos and they’re empty and vacant and not being used, those are the people they need to go after, not somebody that owns one secondary home,” she said.
READ MORE: Vancouver inches closer to empty homes tax
Other critics argued the city should be offering a positive incentive to homeowners, rather than a punitive measure.
Eric Swanson, author of Generation Squeeze, told Council that’s a false choice.
“It becomes a bit of a grammar question – increasing a tax on those who would leave their second or third properties vacant is an incentive. It’s a concrete incentive. And so I would hope Council doesn’t get caught up in different meanings of the same word and instead focuses on the desired outcome,” he said.
The city estimates there are about 10,000 empty homes in the city, about 90% of them apartments or condos.
The tax will apply to non-principal residences and includes exceptions for snowbirds, people doing renovations, stratas with rental restrictions, and caretakers or people on sabbatical.
Owners will be required to self-declare, and use official documents to prove the occupancy status of homes.
It will kick in next year, with the first payments due in 2018.
With files from Jeremy Lye