Totally vacant: City of Vancouver’s empty homes tax full of holes

Welcome to Snitchville.

Our city’s new official bird: The stool pigeon.

Official flower: Anything with a hidden camera.

The City of Vancouver’s proposed tax on empty homes is an empty promise rife with empty threats arising from empty headedness. It has the ugly potential to pit neighbours against each other and its claims are a conceit.

Vancouver boasts the tax will haul in a nifty $2 million – a rounding error in our effort to develop affordable housing for those in need – and that the tax will “first and foremost” compel owners to take in tenants instead of taking a tax bite of 0.5% to 2% of their appraised home value annually.

It makes these claims and rolls down this road without any evidence that a) it knows how many homes might be subject to the tax, b) it can assuredly collect more than it spends in administration and litigation and c) it can avert a culture of whistleblowing akin to Cold War-era identification of the Enemies List. This is yet another episode of Ready, Fire, Aim, of political optics trumping all.

A large part of this plan involves us ratting on each other and summoning auditors when neighbours don’t self-identify as owners of these dust-collecting assets.

So, meet the new Neighbourhood Watch. Instead of a grow-op, we will now be telling authorities about a non-op. Rather than build a bureaucracy to hasten building and renovation permits, we will build one to identify culprits and deal with the thousands who claim they deserve an exemption.

The notion that, first and foremost, this is an effort to convince homeowners to become landlords is an utter misunderstanding of human behaviour – and for that matter, of finance. Unless the city can tax a home at a higher rate than its appreciation in value – and it seemingly won’t – a numerate homeowner who doesn’t want a tenant is just going to pay or find a way to meet the minimum requirements for an exemption.

So, is it more of a revenue generator than a rental generator?

More than likely, for the city to get what it wants, it will enter the equivalent of a whack-a-mole game without enough mallets. Year by year it will not be able to keep up with the properties left vacant, and it is certain many innocent people will have their privacy invaded and be rudely asked to explain the circumstances of their ownership.

The tax will be all bark and no bite unless we turn ourselves into a city we do not much like.

The evidence to support an effective tax? A report earlier this year suggested more than 10,800 homes were vacant. But the proposed exemptions will take the number down, down, down. The lengthy list of who won’t be hit should tell us something about the all-hands-on-deck effort it will take to find those who should be.

Among those not subjected: snowbirds (often with empty homes elsewhere, it should be noted), strata-governed dwellers with non-rental bylaws (a massive category bound to grow only once the tax takes hold), rental buildings in which only one of the units is occupied (worse than it sounds, but potentially a loophole), renovators interminably waiting for their permits or the work to be completed (bad as it gets).

That latter category might be a good clue on how well we will police each other. The city itself acknowledged that 70% of the complaints it received from residents about empty homes were just owners waiting for permits. If nothing else, perhaps reporting on the empty homes might compel city hall to shake its own leg.

In the documentation accompanying the announcement last week was one detail that caught my eye. The city had earlier said that a property left vacant for a year would be deemed empty. Now it seems to have various tiers of emptiness it might tax. Public consultations on this ought to be entertaining.

An aside of sorts: in some jurisdictions when homes are left empty, owners can get a tax rebate because they’re not using services. How long before some wiseacre tries that in court?

Dear City Hall: when we tell you to do something, anything, we don’t actually mean that. We mean do something, but the right thing.

Kirk LaPointe is Business in Vancouver’s vice-president of audience and business development