Regular readers will recall that in September I wrote a post about taxing vacant homes in St Catharines in which I discussed a number of reasons why it wasn’t a good idea and wasn’t practical. I wrote that post in response to a local newspaper article which reported on suggestions made by a local councillor.
This past Sunday (November 10th) the Toronto Star published an article which discussed the issue of vacant condos in Toronto and how other cities have applied a “vacancy tax” to try to eliminate or reduce condos sitting vacant. You can read the full article via the link below, although you’ll need a subscription to the Toronto Star since it’s behind a paywall.
The article starts by recounting an analysis conducted by a non-industry person named Jaco Joubert who decided to photograph condo buildings he could see from his own condo in the hopes of finding out how many condos were vacant. His analysis, which tracked over a thousand condos in fifteen buildings in Toronto’s core, found that approximately 5.6% of them were likely vacant. Extrapolated for the hundreds of condo buildings in Toronto, his analysis suggests thousands of condos in Toronto might be vacant, sitting idle and unused while buyers and renters struggle to find places to live.
Although by no means comprehensive or definitive, Joubert’s technique is smart, useful, and adds to the ongoing debate about housing in Toronto. Of course, there’s a million ways his approach could be challenged, and it certainly doesn’t constitute firm evidence, but from an anecdotal standpoint I think it’s sound. (And, on a personal note, his approach is particularly pleasing: it’s an idea I had years ago for studying rentals but never implemented—you snooze, you lose!)
The article continues with a discussion about taxing vacant condos, noting that Vancouver has introduced a tax and condo vacancies dropped by approximately 15%. According to the article, a City of Toronto spokesperson said a vacancy tax is under consideration.
Joubert, for his part, is renting a condo and was evicted from his previous rental because the owner wanted to turn it into an Airbnb unit. He says, “It’s simply wrong for some people who have too much money to own some extra units and instead of renting them out for housing they’re using them for other purposes like Airbnb or leaving them vacant.” I agree with him, but this is not a problem that is going to be solved easily, and perhaps never, especially in our current housing boom, since some people are always going to preferring investing in condos instead of the stock market and will buy condos with cash which means they don’t need to rent them out to pay a mortgage. But something’s gotta give, so I expect we’ll hear a lot more about condo vacancies in Toronto in the future.