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Kelowna News

WALKER: We can’t tax our way to more affordable housing

Mark Walker is a real estate agent and the broker/owner of Kelowna’s Walker Real Estate.
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February 25, 2018 - 8:30 AM



Earlier this week our provincial NDP government put out their first budget since coming to power last summer. It was hotly anticipated and it certainly produced a significant number of talking points.

A number of the measures target the real estate sector specifically, and I can understand why. I do believe we need to take action to help create more affordable housing in our province. However, I believe that the government has got the wrong end of the stick to a certain degree, and I’m concerned that these new measures won’t be as effective for the intended purpose as many hope.

Why? I do not believe that we can tax our way to lower cost housing, certainly not in any meaningful way. In my opinion, the best way to create more affordable housing is to increase the supply. The government could assist with this by looking at where they could work with municipalities to help streamline the development application process.

Of course, we want to make sure that the developments going up are well-built and well-thought out. This isn’t about cutting corners. However, right now, the process is a long, slow slog. If we could get housing to market more quickly, this would increase supply, which would in turn bring prices down. Part of the issue right now is that there’s so much demand and so little inventory.

The new taxes will help with this a little bit, but it’s an inefficient way to go about it. There’s definitely some speculation in our market, and we do have some foreign homebuyers too. However, the speculation tax is also going to hurt average Albertan couples who are looking to retire to the Okanagan, for example. I do not believe it is these folks who are responsible for the housing challenges we are seeing in our region.

Even more concerning to me are the unintended consequences that we may see from these new measures. Whenever the government starts tweaking the market conditions, there’s usually always some kind of unanticipated impact.

One thing that continues to frustrate me is the all the money the new provincial government is giving away. I’m talking eliminated bridge tolls, reducing/getting rid of MSP premiums etc. If housing is such a significant concern, why not continue taking that money and pour it into more housing supply? Every cut the government makes is money we need to find somewhere else, that’s how budgets work.

Hopefully everything works out well. We may have different opinions on how to get there, but I think fundamentally, many of us want the same things. We want our province to be prosperous, welcoming and a great place to live - truly the best place on earth! However, I think the government would have been better using their considerable power to help increase housing inventory, rather than imposing these taxation measures. The taxes may help supply a bit, but not to the degree we need.

What do you think? I’d love to hear your thoughts. Please let me know in the comments.

If you have any questions about the Kelowna real estate market, please contact me directly at 250-764-4344. It would be my pleasure to speak with you.

— Mark Walker is a real estate agent and the broker/owner of Kelowna’s Walker Real Estate. His company runs the website - Kelowna’s most comprehensive real estate search tool - and KelownaCondos - your source for all you need to know about condos in Kelowna.

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