Of all the issues that B.C.'s NDP exploited to gain power, none was more important than its pledge to do something about the high cost of housing.
The New Democrats accused their Liberal predecessors of being in the pockets of the development community, suggesting that was the reason former premier Christy Clark and her government were so reluctant to do anything to halt the precipitous climb in real estate prices. Finally, public outrage, more than anything, persuaded the Liberals to introduce a 15-per-cent foreign-buyers tax aimed at discouraging offshore investors from pillaging the local market and driving up prices.
A move the NDP claimed was too little, too late.
During the last election, the NDP promised that, if elected, it would show none of the timidity that marked the Liberals' efforts in this regard. It would take bold, courageous action to right the market so that young people could once again imagine a middle-class existence that included owning a home.
Well, nearly six months later and we're still waiting.
In February, the New Democrats will introduce a budget that is expected to include a suite of measures designed to address the housing emergency, particularly in Metro Vancouver. Expectations are ridiculously high. And that's no one's fault but the NDP's.
However, it has now likely dawned on B.C.'s new government that there are limited levers at its disposal to assure the construction of housing stock that is affordable to entry-level buyers. Land costs in Metro Vancouver are what they are. The only way for developers to get their money back for the ridiculous amounts they are paying for parcels of land in the region is to charge a ridiculous amount per square foot for the condos they are building.
I don't see the province suddenly ordering municipalities to use land they own to build housing designed for the tastes and wallet sizes of young people trying to get a toe-hold in the market. If nothing else, the Olympic Village fiasco was a precautionary tale about the dangers that lurk when local governments venture into the real estate game.
So what will the NDP do then?
My guess is the government will focus its attention on offshore speculators and investors and the role they are playing in driving up housing costs. This will likely include a tax scheme proffered by a group of academics designed to discourage offshore buyers who don't pay tax in Canada from entering the market. Under the plan, foreign purchasers would be subject to a 1.5-per-cent (or higher) surcharge on the property they own.
I would not be surprised, either, to see the 15-per-cent foreign-buyers tax extended beyond the Lower Mainland. This is something that should have happened before now, before offshore investors had the chance to set their sights on places such as Victoria, where they have helped fuel an unseemly price surge there.
It remains to be seen whether the New Democrats, tough talking when they were in Opposition, will do anything to halt the scandalous presale marketing of condominiums to foreign buyers. In some cases, developers are selling 40 per cent of their presale product offshore, before citizens here have a chance to buy in.
Amid a housing crisis, that is unconscionable and should be stopped. It would not be difficult for the province to insist locals get a chance at presales before someone living in Beijing or Shanghai. With condominiums increasingly the housing option of choice (out of necessity) for most people, governments should ensure people living here get first crack at them.
If the NDP doesn't do anything about it, all their brave talk while in Opposition will have been just that – talk.
The NDP faces two major challenges on the housing front: One is around skyrocketing costs; the other is public trust.
As I say, I'm not sure the government can do a lot to change broader price levels in the market, without interventions that would look almost communistic in nature. And any modern NDP government that hopes to get re-elected is not going to do that.
Which leaves the matter of public confidence in the real estate sector more broadly. This, as much as anything, has fuelled the public animus we currently see, the feeling that the system is rigged in favour of the wealthy, here and abroad. This is where, at little cost to the treasury, the government can clamp down on the shady industry practices (shadow flipping anyone?) we have witnessed recently.
More than anything, the government needs to make sure citizens working and paying taxes here have a greater chance of owning a home than someone living on the other side of the world.
Gary Mason