Photo by Brian Addison. Above: construction of luxury housing looms over DTLB.
Just last year, Vancouver was believed to be the city with the most overwhelming bubble of overpriced housing—and this wasn’t coming from a housing nonprofit or governmental resource. This is coming from the Union Bank of Switzerland (UBS).
Vancouver dropped their home sales—and I mean by 39.5% year-over-year after the tax was initiated (2015-16) while dropping prices:
Vancouver began looking at who was buying homes and who was actually living in them—and they discovered that foreign buyers, looking for a quick investment on a low Canadian dollar, were buying up properties at rates that their own residents couldn’t keep up with or compete with on the market. Deeming it a crisis, British Columbia opted to tax these foreign buyers. Not slightly but at 15%.
But it wasn’t a fix.
While it worked initially, it only momentarily caused a drop in housing costs—eventually prompting another skyrocket, with Vancouver hitting a record median cost for homes: over $800K in US dollars.
Paris is tired of talking about a housing crisis and is tackling it head on with a promise to build 7,000 new units every year—this in a city that has literally no space. It means converting an old Ministry of Defense building into housing. It means doubling their budget to buy properties.
This foreign tax isn’t a one-size-fits-all solution (like many proposed housing solutions) but the most important aspect of all this is that British Columbia is trying to figure something out; it is trying to examine a market that is spiraling in favor toward the most wealthy rather than just shrugging and saying, “That’s the market for ya!”
Berlin and Paris are even getting more aggressive and offering solutions that might just override Vancouver’s foreign tax: not allowing foreign investors period.
Paris is attacking this by buying properties as fast as it can—something Long Beach should look into after it sold all its empty lots in the Long Range Property Management Program in 2015 and 2016. Yes: the City of Long Beach no longer owns a single parcel of empty land any longer.
Paris bought a massive department store building and will be converting it into housing, including affordable units, with just a two-minute walk from the city center. It is also creating hundreds of affordable units in the city’s wealthiest areas: the city opened an affordable housing development with 113 new homes that are a ten-minute walk from the Arc de Triomphe in 2016 and this year, opened 76 apartments set aside for young people in the Espace Beaujon, a youth arts center sitting along one of Paris’s most packed-with-people-and-shops streets.
In Berlin, “neighborhood protection” laws allow those already invested in their neighborhood a right of pre-emption if the sale of a building in an area of high housing stress risks displacing its tenants.
Even more? Paris is tired of talking about a housing crisis and is tackling it head on with a promise to build 7,000 new units every year—this in a city that has literally no space. It means converting an old Ministry of Defense building into housing. It means doubling their budget to buy properties.
“We want to avoid having two Parises, even if it is expensive to do so,” said Paris Habitat Commissioner Ian Brossat.
Wait… You mean you don’t want your city divided between the haves and the have-nots? What. A. Concept.
Meanwhile, over in Berlin, residents are blocking the sale of buildings to foreign investors, forcing the sales to go to a state-owned housing association committed to affordable rents.
Yup, in Berlin, “neighborhood protection” laws allow those already invested in their neighborhood to “a right of pre-emption if the sale of a building in an area of high housing stress risks displacing its tenants,” according to urban design and housing writer Feargus O’Sullivan.
45 apartments and six commercial units have been blocked from sale since September of last year.
“Should Berlin’s and Paris’s plans prove popular with voters, affordability-driven buyouts of private real estate could become more common in many European cities,” wrote O’Sullivan. “In Berlin, the verdict seems to be so far, so good. In a city where most citizens still rent, the move to buy private property for the state is not an inherently controversial one.”
The housing market isn’t solution-less when it comes to figuring how to make it more affordable—even if you’re a giant metropolis on the water like Vancouver. *cough* Los Angeles County. *cough*
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