It’s Friday and it’s over 38 degrees outside (Over 101 F) so I want to play around with this idea while waiting for some code to run:
If jurisdictions hope to tax luxury development (to discourage it, to limit it, or to redistribute the profits it produces), then they need a definition of luxury housing that will survive legal and political challenges. To that end, I’ve always wanted to brainstorm the criteria around which such a definition needs to be fashioned. It probably needs to be:
- Based on or linked to existing definitions in housing policy (consistent with existing policy).
- Legally defensible, so: non-discriminatory, reasonable (there has to be a rationale, hey, maybe even a Nexus Study 😉
- Relevant (or capable of staying relevant), so not an arbitrary number that can’t adjust in tandem with the market
- There’s a realpolitik element to it: something that doesn’t target to big a chunk of the market, but targets enough where levies on it generate meaningful revenue.
- May need to have a built form component, or at least dis-aggregated definitions by type of build: detached, attached, apartment, etc.
- The definition may need to vary between new builds and existing homes. Should historic homes be exempted? Expensive may not equal luxury if the housing is 150 years old.
Vancouver’s definition of luxury housing is anything selling for 3 times the market median. That’s roughly $3 million, last I checked. Seems a bit high?
Just thinking out loud. Would love to know the thoughts of others.