BC Business
Despite an affordability crisis, governments in BC are unlikely to loosen their grip on housing, which adds substantially to costs and, consequently, tax bases. One has to give Housing minister Rich Coleman his props for exposing one of the dirtiest little housing secrets in BC. That's simply that governments, especially at the municipal level, contribute substantially to this province's out-of-sight housing costs.
One has to give Housing minister Rich Coleman his props for exposing one of the dirtiest little housing secrets in BC.
That’s simply that governments, especially at the municipal level, contribute substantially to this province’s out-of-sight housing costs.
While we all like to think that our house costs are driven by all those people slavering to move here to the land of mist and rain, that’s only part of the story.
The glee that’s felt by every homeowner who watches the value of their home soar is shared by municipalities.
The muni’s love to load costs on to housing developments. Each one has a bureaucracy that has its own arcane rules as well as the standard building code. Of course, this patchwork of rules, some of them often totally absurd, adds to the cost of a home, which is then passed on to the buyer when the home is sold.
But, really, why should the municipality care? If the cost of the home is higher, so its its value, which is reflected in its municipal taxes. When home values continually rise, so does municipal revenue. This means local politicians can increase revenue without increasing tax rates, which makes for a pretty nice platform at the next election.
Coleman says he’s going to do something to stop this game, but then, he’s not exactly squeaky clean either. His government, and pretty well every provincial government before him, has enjoyed substantial revenue from various taxes it puts on housing. For, example: The tax that’s imposed on every home sale hasn’t exactly been slashed.
Perhaps his notification the the Union of BC Municipalities was spurred be recent reports of an affordability crisis in the BC real estate market. In Vancouver, the cost to sevice a mortgage on a house is higher than 70 per cent of pre-tax income.
When you consider that income taxes take almost 30 per cent of pre-tax income, you have to wonder what these homeowners are eating.
Maybe the grass on the lawns of those nice homes?