British Columbia’s NDP Government is facing a housing-shortage crisis. Its housing market is dealing with a severe shortage of affordable homes.
The February 2018 budget included a 30-point plan to address the housing shortage in Vancouver.
This plan highlights all of the issues thought to be causing the crisis, such as legal loopholes, foreign buyers, and speculations. It aims to provide Vancouver citizens with a larger supply of affordable homes. Let’s find out more…
More about the NDP’s 30-point plan
Looking at the plan in detail, we see that many of the problems stem from runaway prices in the housing market a few years ago. In the new plan, regulations for foreign buyers have become stricter with an increase to 20% in tax. Bigger fines will also be placed on law violations for those who co-own residences. Existing regulations have failed to bring about positive changes in the housing market.
Two worrying changes taking place in Vancouver have caused the plan to come into effect. The first, being the large rise in house sales and the increased price of houses, and the second, the increase in sales in Vancouver’s eastern Okanagan region. People are understandably moving out of Vancouver due to high prices, therefore causing prices in the region to rise further.
New tax and investigation of rogue lenders
The plan includes a new tax to boost Vancouver’s housing market. It will affect speculators in the Fraser Valley, Kelowna and West Kelowna, Capital and Nanaimo Regional Districts, as well as Metro Vancouver.
Also, the need for the federal government to form a team that addresses issues such as housing, tax-evasion, and money-laundering activities has been mentioned in the plan.
This could be due to the results from the recent Globe investigation. According to this investigation, many people with drug-related offences are now using millions of dollars for mortgages and loans and are known to be private lenders in the market. Some trick borrowers into taking dirty money, and borrowers are unaware of the fact that these people are not the legal lenders. Rates that these so-called ‘lenders’ charge are higher than than those from registered and licensed financiers.
Due to activities like this, Vancouver has become extremely expensive for prospective buyers. According to statistics, the average price of a home in Vancouver today is $1,056,500. This figure is simply unaffordable for the majority of city residents.
While the government’s changes take effect, the housing crisis will likely continue…