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Politicians Should Share the Blame for Housing Crisis

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What’s wrong with these people?

Politicians and bureaucrats are different from the rest of us. When everyday folks look at homes, we see our future – a place to live, to raise a family, to relax, and, eventually, to retire. It’s an investment that will help us, a safe spot that becomes the centre of our world. We buy a home and we gather our family to us. As our children grow into adulthood, we help them find one of their own (hopefully near us, so we can enjoy those grandkids!).

When the politicians and bureaucrats look at those same homes, they see a cash cow to be milked.

How else to explain why new housing in the City of Vancouver is now subject to at least 107 taxes, fees and levies, all of which drive up the cost of housing? Our leaders now tax new condos at a rate of at least 37 per cent, making a condo that should cost $294,691 come in at a final selling price of $403,809.

At a time when real estate has become the dominant conversation in the Lower Mainland, when a news cycle can’t go by without another big affordability story, the politicians have gotten off nearly scot-free, even as they reach their hands deeper into the housing tax till.

Their demands have become ridiculous and expensive.

TransLink, for example, now requires builders to hire a Trolley Overhead Safety Watcher whenever a homebuilder is working near bus trolley lines. Someone is paid $90 per hour ($135 per hour for overtime shifts of longer than eight hours) to sit and watch the trolley bus wires. There are no special qualifications for this job; it is usually done by a retired bus driver, not an electrical expert.

This individual (whose travel time to the site is also paid by the builder) usually sits in a lawn chair, watching the wires. But even if a crane inadvertently came close or even clipped the trolley wire, the watcher has no ability to contact the crane or anyone else on site. This useless requirement adds as much as $300,000 to a building project in Vancouver.

Another example is the expensive, high-end level 2 electric vehicle charging receptacles required by the City of Vancouver for 20 per cent of parking spaces.

It’s worth remembering that there are only 3,100 electric and hybrid plug-in vehicles in all of British Columbia. There are nearly 300,000 non-electric vehicles licensed in Vancouver. Even if every single one of those electric vehicles resides in Vancouver, that still works out to just 1 per cent of vehicles. Adding that level 2 charging requirement can increase a building cost by as much as $400,000.

Read www.buildinginvancouver.com for a real-life example of the regulation and fees involved in building a single-family and laneway home near Main and 41st in the City of Vancouver. There is no reason why it should take a routine housing application like this one more than nine months to get a permit – adding more carrying costs for the builder.

On top of that lengthy permitting process, single-family home builders face a myriad of ridiculous, costly requirements. Drains and plumbing for an accessible washroom and shower must be installed on the main floor of the house; even if there is no bedroom on the main floor. And that’s on top of an installed accessible shower on the floor with the bedrooms.

All trees, even the dead ones, need a permit to be removed. And a tree plan, and an arborist review. And, sometimes, a plumber’s report. And the city still sends a staffer to look at it.

A certified energy advisor must also be hired to check plans and run a blower test when the home is built, even though it’s too late to change anything at that point.

Rather than encourage new housing, city hall seems to act like it’s a nuisance that should be eradicated – or a cash cow that should be milked for every single nickel.

Builders are charged to rent sidewalks and parking meters during construction. To “rent” the sidewalk, costs $2 per day per square metre of sidewalk. This can add as much as $100,000 to a total project cost.

If there are parking meters along the building, that costs too: builders must rent parking meter space, paying the maximum daily parking charges for the duration of construction. This can add another $50,000 to $100,000 to the cost of the project.

Rather than doing everything they can to encourage new housing – thus increasing supply and helping drive down prices – city mayors, councillors and planning departments act like housing is a nuisance to be eradicated. They seem to be trying to tax new housing out of existence, especially in the City of Vancouver.

Meanwhile, too many politicians and bureaucrats act like even more taxes is the solution to affordability problems in the Lower Mainland. Some have suggested speculation taxes and foreign investment taxes and higher taxes on pricier properties.

Everyday taxpayers should be very reluctant to go down that path. Back in 1987, the Property Transfer Tax was brought in as a luxury tax – it applied to just the top 5 per cent of property purchases. Today, it’s a major cost driver in new housing.

Today’s luxury taxes have a way of turning into tomorrow’s everyone taxes. And any increased cost, including higher taxes, makes things more expensive, not cheaper.

There are many causes of housing unaffordability in the Lower Mainland, and many need to be addressed. But politicians should not be allowed to wriggle off the hook for their contributions, and should instead aggressively cut taxes, speed up regulatory processes and help get more homes into the market.

Jordan Bateman

Jordan Bateman

Director of BC Canadian Federation of Taxpayers

BC Director - Canadian Taxpayers Federation (), Author, Husband, Dad. Plus an unapologetic Canucks, Packers & BC Lions fan.