Vancouver Housing Tax Pushes Chinese to $1M Seattle Homes

It's strange that there is so much push back against foreign investment.

Rather than enact a bunch of projectionist policies, wouldn't it be better to just adapt to the investment in a way that benefits natives? After all, when foreign people want to buy something you have, that is called an export, and most people agree those are good for the economy.

If foreigners are investing in housing, local governments will receive a huge influx of tax income from property taxes. If there is no property tax, then now is the perfect time to add it (or the similar but more progressive land value tax) or increase it. The income from these taxes can be used to fund infrastructure, education, and reduce other taxes like consumption taxes.

The other thing to when demand for housing in your city is high, is to increase supply. Seattle is not full. The Seattle metropolitan area is 15,000 sq. km with a population of 3.7 million. To compare, the Tokyo metropolitan area is 13,500 sq km, with a population of 37 million. No idea about the accuracy, but this site showed that rents were more reasonable in Tokyo (which matches my own impressions): https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...

If we are going to take legislative action anyway, instead of a bunch of protectionist policies that will create long lasting opportunities for arbitrage and market inefficiencies, why not just make taxes to help the people benefit from the foreign investment and let development happen to help reduce costs long term?

Does it make sense to think of foreign real estate ownership as an export?

If so, at what point should we expect the Chinese militarily to park it's boats off the coast to protect its property?

Edit: fixed a word

> About half of the homes sold in Seattle’s suburbs are going to Chinese buyers

I suspect this is supposed to read "sold in some of Seattle's suburbs" and probably refers to Bellevue (and possibly Medina) which already has a strong Chinese community and is heavily favored by Chinese investors.

I think the push back comes from the fact that in many of these places, Government policies are very favorable to owners and investors. In California, for example, property taxes are extremely low, while sales and income taxes are the highest in the entire country. As domestic home ownership decreases, the domestic political support for such favorable policies will decrease as well. As California's home ownership rate decreases (and fiscal pressures increase), there's no doubt in my mind that proposition 13 will eventually come under attack and eventually be repealed. If property taxes were 3%, like in Texas, I don't think as many people would complain about absentee ownership since so much of the value flows back to the community each year.

It's funny that you think that they pay taxes.

>An unusually high number of Vancouver homeowners living in multi-million dollar neighbourhoods but reporting poverty-level incomes is a red flag that needs immediate government action, says NDP MLA David Eby.

>“The focus should be quite straightforward: are you paying your worldwide taxes inside British Columbia, or not?” Eby, who represents Vancouver-Point Grey, told reporters during a July 15 press conference.

>“If you’re not you should have to pay extra in order to pay for the public services that make this real estate so valuable: the environmental controls, the policing, the court system, the schools and the healthcare.”

http://www.metronews.ca/news/vancouver/2016/07/15/number-of-...

>Documents obtained by Eby also show 29 of those homeowners have also been able to take out a mortgage. “There’s a waitress that bought a $2.3 million property. And there was a casino dealer and a cashier who bought a $1.2 million property as well. Students, homemakers and waitresses, by definition, have very low or no incomes. Is this why MacKenzie Heights and other neighbourhoods throughout the Lower Mainland are reporting incredibly low incomes, despite real estate values being so high? Are the people purchasing these $1 million homes reporting poverty level incomes for tax purposes?”

http://www.news1130.com/2016/09/27/homemakers-students-own-1...