Local Income Taxpayers Only Pre-Sales (LITOPS)

My speech at the City of Vancouver Public Hearing on rezoning applications for a condo project where I asked the Vancouver City Council to limit pre-sales to local income taxpayers.

Your council has been approving rezoning applications, just like the one before us, at a breakneck rate. Tens of thousands of new homes have been built and many more thousands are being built, yet, the local income taxpayers continue to be priced out of the local market.

Perhaps you are not familiar with who the local taxpayers are and why we matter.

We are your teachers, nurses, construction workers, police officers, software engineers and every other worker and small business owner contributes to make Vancouver a wonderful place for us, our families, and our neighbours. At the same time, we pay taxes to fund all the great public services we enjoy: schools, hospitals, roads, bridges, our emergency services, and every other service that makes our city such a desirable place to live in.

The median household income in City of Vancouver is 67K1)2017 estimate based on City of Vancouver data from 2015 http://vancouver.ca/files/cov/2017-09-29-city-of-vancouver-2016-census-income-data-release.pdf. The median house price in the City of Vancouver is 1.2M2)http://vancouver.ca/files/cov/vancouver-2018-budget.pdf. At 18 times the median income, housing in Vancouver is now well out of reach of the local income taxpayer.

What’s causing this disconnect between local incomes and local house prices?

To find the answer, you only need to ask Mayor Robertson’s buddy and bankroller Ian Gillespie.

“Vancouver has become a safety deposit box for the global rich,” screams the headline of Westbank’s marketing article on its China website3)Original: http://www.westbankcorp.cn/media/141.html Archive:http://archive.is/jdxTy – a website that for a while was off limits to Canadians.

What Westbank is brazenly using as a marketing pitch is what experts have been telling us for decades: the world’s wealthy treat our housing market as a stock market, and our homes as commodities for speculation. And much of this money is dirty. Proceeds of transnational crime are also parked and laundered through our housing market.

The recent measures introduced to calm the housing market such as foreign buyer tax and speculation tax has driven speculators away from flipping existing homes to flipping pre-sales, as the new measures do not apply to pre-sales.

That’s where local income taxpayers only pre-sales policy comes in. By restricting all pre-sales to local income taxpayers who wish to occupy them, we can cut out toxic demand that’s making it impossible for our local income taxpayers to afford housing in Vancouver.

How it works

Every pre-sale buyer would be required to swear an affidavit confirming that they will:
a) using income that has been taxed locally to purchase the property
b) upon completion, will occupy the property as their primary residence

Strict enforcement and heavy fines will ensure compliance.

What I’m proposing is not too different to what your council has put forward as a “locals first” policy. Hawaii has had an “owner occupant” law since 1980.

Why did Hawaii promulgate such a law? In the words of Hawaii’s real estate commission’s chairperson4)http://files.hawaii.gov/dcca/reb/real_ed/re_bull2/re_bull_01_05/bull1305.pdf:

“Hawaii’s Owner-Occupant Law was promulgated in 1980 by our legislature in response to growing public concern at what was then viewed as rampant speculation by investors in the condominium presale market. Essentially, developers were offering investor buyers first priority to purchase units in their projects, resulting in resale prices unaffordable for residential buyers.”

Sounds familiar?

Mayor and council, under your watch rampant toxic speculation has distorted the market, displacing our families and destroying our communities. The real estate industry, and the politicians who are in the industry’s payroll, and the financial industry who bankroll them, are raking in obscene profits at the expense working Vancouverites.

But it’s not too late to rescue our city. By imposing “local income taxpayers only” as a condition for passing rezoning applications such as the one in front of you today, you can reconnect local housing prices to local incomes.

We can reclaim Vancouver from the transnational criminals who hold sway over our city. All we need is our leadership to look after the interests of the local citizens ahead of the interests of the real estate industry.

Thank you.

[Photo Credit: Tyler Ingram]

References   [ + ]

1. 2017 estimate based on City of Vancouver data from 2015 http://vancouver.ca/files/cov/2017-09-29-city-of-vancouver-2016-census-income-data-release.pdf
2. http://vancouver.ca/files/cov/vancouver-2018-budget.pdf
3. Original: http://www.westbankcorp.cn/media/141.html Archive:http://archive.is/jdxTy
4. http://files.hawaii.gov/dcca/reb/real_ed/re_bull2/re_bull_01_05/bull1305.pdf

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