I think it was a good move by the province to decide last month to extend its speculation and vacancy tax to North Cowichan, Duncan, Ladysmith and Lake Cowichan next year.
Started in 2018, the tax aims to help eliminate speculative real estate practices and turn empty units into homes for those struggling with housing affordability by penalizing property owners for leaving homes vacant.
The tax was only being used in more urban centres, like the City of Nanaimo and the Capital Regional District, but its success to date in helping keep housing prices and rents lower led to the decision to expand it into other areas, including the municipalities in the Cowichan Valley.
At a recent council meeting in North Cowichan, Mayor Al Siebring told council that after writing to Finance Minister Selina Robinson late last year asking that the municipality be included in the speculation and vacancy tax regime, he received a phone call from her a few weeks ago asking if North Cowichan was still experiencing low rental vacancy rates and increasingly higher house prices.
He told her it was and was very pleased when she included North Cowichan and other local municipalities in the tax regime shortly after their conversation.
“The hope is that it will level the playing field and encourage folks who have empty vacation homes here to rent them out to both avoid the tax and to provide additional rental housing stock in our local markets,” Siebring said.
But it appears that the tax is still not being applied to some of the more rural sections of the Cowichan Valley, like the Cowichan Lake area outside of the town, where housing prices have been going through the roof in recent years and accommodations have become increasingly scarce.
Waterfront properties in Honeymoon Bay and Mesachie Lake saw a dramatic 64 per cent increase in value, from $881,000 to $1,410,000, since last year, according the latest figures by BC Assessment released in January.
As a result, at the CVRD’s committee of the whole meeting in January, directors voted to introduce a resolution to the 2022 Association of Vancouver Island and Coastal Communities convention asking that the province consult with local governments on an evaluation of the speculation and vacancy tax, including a review of the jurisdictions in B.C. that have the tax in place and the impacts on areas adjacent to them that don’t.
Ian Morrison, director for Cowichan Lake South/Skutz Falls, told me at the time that the impacts of not having the speculation tax in place in the rural areas of the CVRD is detrimental to his electoral area, particularly in recreational and waterfront locations.
“What we are seeing happening now is a flight of money into our area because neighbouring jurisdictions have the [speculation tax], so there’s money, but not the people, coming in and investing in recreational properties in my area,” Morrison said.
“This is resulting in a slow, but steady hollowing out of how our communities are. We have people that are buying properties that are maybe spending two weeks of the summer here and are absent the rest of the time. This is driving up prices unrealistically. People are now complaining that they can’t afford to live and work here in what has historically been the least expensive place to live in the Cowichan Valley.”
It’s not clear why the government is not extending the tax to all areas of the CVRD beyond its municipalities, but it seems to be taking a slow and incremental approach to the issue and, if after a year or more, Victoria is satisfied that implementing the tax in our municipalities had the desired effect, it’s likely it will become universal in the district.
Let’s hope so because the housing crisis has been out of control for too long and anything that can help relieve the pressure on housing availability in the Cowichan Valley would be more than welcome.