NANAIMO — While some areas of the mid-island scored a reprieve from the NDP’s proposed speculation tax, Nanaimo remains under the microscope due to the city’s “housing crisis.”
On Monday, NDP Finance Minister Carole James unveiled details and changes to the proposed tax, exempting Parksville and Qualicum, redefining the local boundary to include Nanaimo-Lantzville. The tax, designed to cool housing prices and clamp down on property speculation, was first announced as applying to the entire Regional District of Nanaimo.
James said the government’s analysis of Nanaimo found serious issues with the rental vacancy rate and cost of housing compared to income.
“It was very clear Nanaimo is one of those communities that is facing a crisis and that’s whey they’re included. Large urban setting, facing a housing crisis, a real challenge when it comes to affordability issues and when it comes to the vacancy rate.”
The tax was widely panned by local politicians, realtors, tourism operators and developers when it was announced. Both the RDN and City of Parksville sent letters to James, demanding their jurisdictions be removed.
Parksville mayor Marc Lefebvre said he’s “delighted” to hear his city will now be exempt.
“Had it gone through the way it was intended to we would’ve suffered from a tourism and construction point of view,” he said. “For a small city like Parksville whose lifeblood is tourism, it was very heartening to hear this news.”
James said the tax, which is expected to be introduced in legislation this fall, would not hit people with cabins or vacation homes in rural areas, islands or smaller centres outside of the designated urban zones.
The proposed tax rates for Canadian citizens or permanent residents not living in B.C. would be cut from two per cent of a property’s assessed value to one per cent.
“Only those who hold multiple properties and leave them empty in our province’s major cities will be asked to contribute. Our tax on speculators focuses on people who are tying up housing stock in B.C.’s overheated housing market and taking that stock out of the communities,” James said.
While the Oceanside region rejoiced over Monday’s announcement, there was little to alleviate concerns for those in the Nanaimo area.
NDP MLA Leonard Krog heard the angst first-hand at a recent meeting hosted by the Greater Nanaimo Chamber of Commerce.
“How much money have we spent to try and attract tourists? Now we’re going to take these people, the best kind of tourist you can have, which is a permanent tourist, and turn them away…This is all money going into the economy that we’re going to lose,” realtor Charlie Parker said, speaking about out-of-province people who own homes in Nanaimo but don’t live in them full-time.
“When the economy slows down, which it is going to do…Then we’re going to be begging these people to be here,” Parker said.
Krog said the tax will help Nanaimo in two ways, firstly by generating revenue for the government to use to build affordable housing.
“Secondly, to hopefully dampen the significant rate of increase in housing prices. When you have a highly speculative market people are prepared to pay prices that are frankly unreasonable…I think that’s what we’ve seen in Nanaimo.”
Several at the table expressed shock at the government’s strategy to lower the value of homes in the province. They pitched the hypothetical scenario of a young family who only owns a small percentage of their home and would end up owing the bank more than it’s worth if the value dropped dramatically.
Krog also conceded “tourism is very important to the island economy. Clearly things that hurt tourism are bad for our local economy.”
Story written by Dominic Abassi