In December, the B.C. Court of Appeal ruled that a law passed by the provincial government to stave off opposition to the project was unconstitutional.
How much would it cost the BC government to purchase or build 40% of the residential properties to replicate what Vienna has in terms of accommodations?
Residential properties in BC have a total value of around 1.5 TRILLION dollars in 2023. 40% of that would be $600 billion.
There is no realistic way to reach even 4% social housing in BC, let alone 40%, and that’s all to achieve something that as per the article I linked, isn’t actually enough to keep the market in line.
There are better options than social housing for the province to spend money on if they wish to address this problem. With the amount of money they can reasonably spend, as per my original comment, it’s nothing but a lottery for poor people. It’s a “look, we’re doing something” which doesn’t actually benefit anyone who doesn’t receive a unit. The only path to affordable housing for everyone is to force ALL housing prices down, and a lottery will never impact that.
I’m sick and tired of the government spending my tax dollars on a policy which only helps a minute fraction of people. I want it to help everyone.
The cost of real property to governments is almost inconsequential. Governments can often get loans against assets at below inflation, and usually well below the increases in real estate market value. There are many cases of municipalities that bought property, then changed their plans and resold that property for a profit, even when factoring in maintenance, legal fees, and borrowing costs.
I’m not suggesting BC purchase $600 million in housing all at once. More non-market is a medium/long-term goal. I’m just demonstrating that governments can purchase/build real property at very little cost to their budget, since you’re worried about BC misusing your tax dollars. It “costs” a lot to buy or build property but that is paid for with debt not general funds. That debt is very cheap to finance since governments typically have good credit ratings and the debt secured against assets.
I’m also not sure why you think the government would charge market rates, I never said that.
From your other comments, you seem to want a quick and simple solution to a complex problem that has been growing for decades. I agree that LVT is a good idea and would help but it’s not a solution unto itself. And your ideas about abolishing income tax are right out of the southern states; not exactly the examples we want to follow.
They can’t though, even over time. It’s $600 BILLION, not million. That’s 5x larger than the total current provincial debt. If they issued that as bonds, it would ruin the credit rating for the province and cause massive inflation.
AND, that’s just to get us to Vienna level of social housing, which as stated in the article I linked isn’t helping keep the market under control any more.
If you want the government to issue that much debt, how exactly are they supposed to pay it back (and the interest) if they don’t charge at or near market rents? If you buy a million dollar property, even at the bank of Canada rate of 3.25%, that would be $32,500 a year in interest costs, or $2700 per month. Which means that they have to charge at least that to even service the debt, and more if they ever hope to pay it off. That’s a starting point that’s already unaffordable.
Why are you against replacing income tax with land taxes? What’s the actual reason you’re against this.
While I do want LVT, and it is quick and simple, LVT can’t actually happen anytime soon. It’s political suicide. It literally relies on destroying the equity of every single home owner. Given that residential properties are still about 65% owner occupied, and home owners tend to vote more than renters, there’s no way they will ever allow a policy like this to take away their hundreds of thousands (or millions) of dollars.
However, all these other suggestions are nothing but band aids. There’s a simple problem, you can’t have home prices stay up, and also have affordable housing. Building more housing, building more social housing, first time home buyers credits, rezoning, none of these actually reduce the prices of homes at a realistic implementation, even when done together. Until policies designed to significantly drop existing house prices are implemented, the situation will get worse.
Now, do one final calculation.
How much would it cost the BC government to purchase or build 40% of the residential properties to replicate what Vienna has in terms of accommodations?
Residential properties in BC have a total value of around 1.5 TRILLION dollars in 2023. 40% of that would be $600 billion.
There is no realistic way to reach even 4% social housing in BC, let alone 40%, and that’s all to achieve something that as per the article I linked, isn’t actually enough to keep the market in line.
There are better options than social housing for the province to spend money on if they wish to address this problem. With the amount of money they can reasonably spend, as per my original comment, it’s nothing but a lottery for poor people. It’s a “look, we’re doing something” which doesn’t actually benefit anyone who doesn’t receive a unit. The only path to affordable housing for everyone is to force ALL housing prices down, and a lottery will never impact that.
I’m sick and tired of the government spending my tax dollars on a policy which only helps a minute fraction of people. I want it to help everyone.
The cost of real property to governments is almost inconsequential. Governments can often get loans against assets at below inflation, and usually well below the increases in real estate market value. There are many cases of municipalities that bought property, then changed their plans and resold that property for a profit, even when factoring in maintenance, legal fees, and borrowing costs.
If the government dumped $600 billion into the BC real estate market, it would make the inflation from COVID look like a speedbump in comparison.
Also, the whole point of this is to reduce housing costs. If the government charges the same amount, then it won’t do fuck all.
I’m not suggesting BC purchase $600 million in housing all at once. More non-market is a medium/long-term goal. I’m just demonstrating that governments can purchase/build real property at very little cost to their budget, since you’re worried about BC misusing your tax dollars. It “costs” a lot to buy or build property but that is paid for with debt not general funds. That debt is very cheap to finance since governments typically have good credit ratings and the debt secured against assets.
I’m also not sure why you think the government would charge market rates, I never said that.
From your other comments, you seem to want a quick and simple solution to a complex problem that has been growing for decades. I agree that LVT is a good idea and would help but it’s not a solution unto itself. And your ideas about abolishing income tax are right out of the southern states; not exactly the examples we want to follow.
They can’t though, even over time. It’s $600 BILLION, not million. That’s 5x larger than the total current provincial debt. If they issued that as bonds, it would ruin the credit rating for the province and cause massive inflation.
AND, that’s just to get us to Vienna level of social housing, which as stated in the article I linked isn’t helping keep the market under control any more.
If you want the government to issue that much debt, how exactly are they supposed to pay it back (and the interest) if they don’t charge at or near market rents? If you buy a million dollar property, even at the bank of Canada rate of 3.25%, that would be $32,500 a year in interest costs, or $2700 per month. Which means that they have to charge at least that to even service the debt, and more if they ever hope to pay it off. That’s a starting point that’s already unaffordable.
Why are you against replacing income tax with land taxes? What’s the actual reason you’re against this.
While I do want LVT, and it is quick and simple, LVT can’t actually happen anytime soon. It’s political suicide. It literally relies on destroying the equity of every single home owner. Given that residential properties are still about 65% owner occupied, and home owners tend to vote more than renters, there’s no way they will ever allow a policy like this to take away their hundreds of thousands (or millions) of dollars.
However, all these other suggestions are nothing but band aids. There’s a simple problem, you can’t have home prices stay up, and also have affordable housing. Building more housing, building more social housing, first time home buyers credits, rezoning, none of these actually reduce the prices of homes at a realistic implementation, even when done together. Until policies designed to significantly drop existing house prices are implemented, the situation will get worse.
I want better for my kids.