The hot pandemic housing market is finally being labeled as one of the first industries to see exponential hyper inflation with a projected 9 per cent price increase in 2021. As we head into our second summer of health orders, restrictions, and printed stimulus money, the Feds underreporting of inflation in hard assets like housing has now manifested with unaffordable results.
Immediate changes to long-standing capital gains tax policies is simply exploiting the booming housing market to get hands on taxpayers hard earned home equity. A government tax grab, after printing billions in stimulus dollars, is not a solution to the housing and affordability crisis nor is it a solution to pay back the grossly mismanaged Canadian federal debt.
We need real, impactful policy that deals with the overwhelmingly apparent market catalyst fuelling this sky-high market. The provincial government has at its disposal very easy way to resolve the real underlying cause of unaffordable housing, which is “a lack of supply.”
How do we know for sure that it’s a lack of supply that is the driving this freight train of a market? It’s simple math: we have double the population competing to own the same amount of saleable private land. In 1980 BC had a population of 2,500,000 and now 40 years later, we are fast approaching a total population of 5,000,000. We have 2.5 million more people competing to live on the same amount of privately owned land in BC in just 40 years, and with more population growth from the planned future immigration increase, an affordable balanced market will most likely never happen.
Why are governing policy makers blind to the real issue or rejecting supply-side fixes in their regulation considerations? One can only assume that our policy makers are putting progressive future left-wing agendas to prioritize environmentalism over affordable housing and home ownership needs. Toronto Dominion Banks CEO, Barhat Masrani, recently stated his opinions and recommendations, and he has been calling for longer-term measures to increase the supply of housing for many years. On that front, “instead of improving we are getting worse,” he said.
There is one viable and quickly implementable solution that would make an immediate market correction in B.C. without putting further regulations on the real estate industry, home buyers or burden tax payers. That solution is to release a small percentage of Crown land holdings into the private sector to balance out the provinces supply of saleable land. At this time 94 per cent of the land in B.C. is Provincial Crown Land, of which 2 per cent of that is covered in fresh water. Federal Crown Land makes up a further 1 per cent of the province which includes First Nations lands, defense lands and federal harbors. The other 5 per cent is privately owned! That’s right, the privately owned land holdings in this province make up only 5 per cent of the entire land mass.
If the provincial government released another 2 to 3 per cent of Provincial Crown land into the private saleable holdings, we would see an immediate and lasting impact on the real estate market as supply would increase dramatically and prices would stop their continued rise.
The released Crown parcels could be ear-marked for specific types of qualifying multi-unit and single family affordable housing which could actually be affordable! In setting prices for Crown land, the province has a responsibility to not distort private land markets, but, the private land market is in need of a correction. Should only the Sovereign Crown, government, bank/mortgage lenders and the already wealthy prosper and benefit from the land in this province and not all tax paying citizens?
To conclude, the land base that is designated Crown should not be more valuable an asset than the well being, health and economic growth of its citizens and communities. This very viable option needs to be a serious discussion had by policy makers in their next zoom meeting. It’s time to try a different approach to solving the housing affordability crisis in this province. Crown land policy dictates the land is to be used to ensure the well being of it citizens, and it’s time the government put tax payers and citizens needs first.
Freddy Marks, together with his daughter Linda Marks, runs Agassiz’s 3A Group Sutton Showcase Realty. He has been a Realtor in Canada and Germany for more than 30 years, and currently lives in Harrison Hot Springs.