About 68 percent of the net worth of homes in B.C. are owned by the top 20 percent of households, according to a study from the Canadian Centre for Policy Alternatives.
VANCOUVER – The author of a study released Wednesday says all three levels of government need to act quickly in order to stop the so-called housing affordability crisis from widening the gap between rich and poor in Metro Vancouver, reported CBC News.
The study, published by the Canadian Centre for Policy Alternatives, calls for funding for at least 5,000 units of social housing per year, higher taxes for foreign investors to discourage the practice, and a progressive property tax system where those with more expensive real estate pay a higher percentage.
Without these measures, gaining from a hot real estate market like Metro Vancouver’s is like winning the lottery, says Marc Lee, the study’s author.
“The surge in real estate prices has further increased the gap between rich and poor, creating profits for homeowners that are more like lottery winnings than a reward for hard work,” he said in a release.
Those who are lucky enough to be sitting at the higher end of the real estate market should contribute funds to social housing, he suggested.
“Those winnings should be taxed so we can build the affordable housing we need.”
But Lee emphasized these policies should not be aimed at dissuading immigrants from coming to B.C.
“We should welcome people who are immigrants, who want to live and work in the city. But I think it is a problem when we have growing amounts of absentee ownership, where people are essentially treating the city’s housing market as a place to park their capital,” he said.
About 68 percent of the net worth of homes in B.C. are owned by the top 20 per cent of households, according to the study, called Getting Serious About Affordable Housing: Towards a Plan for Metro Vancouver.
A progressive property tax system, where those who own more expensive homes pay a higher tax rate than those with less expensive homes, could raise up to $1.7 billion per year. That money can then go toward building more social housing.
In addition, the report says the Home Owner Grant contributes to the wealth gap because homeowners benefit, while renters continue contributing to property tax through rent payments.
Only those who live and work in the city should be able to purchase local real estate, says the study. The provincial government could use the property transfer tax or other reforms to discourage non-B.C. residents from buying second homes and rental properties.
