Money Laundering: "The Vancouver Model"

[misher]

Originally Posted by fredinno

So we should just give up on climate change, as we should to clamp down on an obvious RE bubble? The fact that sales have been falling in correlation shows it's not token.


How can you tell that, though? Also, let me get this straight- are you saying that if that money comes from selling drugs to other cities, that's ok?



That existed long before those RE taxes. Like the Carbon Tax. And Tobacco Tax. Really, even the income tax can be used to control something arbitrarily, like the 'wealth gap'.

My POV is that none of this would even be necessary if interest rates weren't as low as they were for as long as they were. That's a problem by a government-owned entity BC has no jurisdiction over.

In the end though none of this is unique to Vancouver. The whole country has had low interest rates, money laundering, etc. What is unique to Vancouver? Left wing demand focused policies and ultra high development fees. I know that correlation is not causation but the left wing Vision/NDP municipal governance was in charge for over a decade (since 2008) and during that time Vancouver home prices skyrocketed past most other Canadian cities. I still remember when Seattle and Vancouver both had the same problems and they choose opposite solutions.

We complain that Vancouver is less affordable than most cities, well what are we doing different than most cities? We keep blaming different outside forces but in reality its inside forces that are hurting us.

Give a nice 2-3 years for land use policies to take effect and....:

[Vin]

Can't the government just swoop in and confiscate those houses of people who launder dirty money? What is stopping them? Turn them into low cost rental housing.

People who are involved with the drug trade should be considered as — criminals and should be treated as such. You can't go around attempting murder with fentanyl and get away with it.

[misher]

Originally Posted by Vin

Can't the government just swoop in and confiscate those houses of people who launder money? What is stopping them?

There's a lot of work involved and a lot of legal protections, but they do once thats all jumped over.

However, it has to be proven that the money used to buy that house is laundered money from crime.

If your restaurant is cash only and you don't pay taxes on a bunch of income, and then launder the money to make it look legitimate, then buy a home, you only pay the tax you were supposed to plus a punishment.

Most of the time when you see criminals having assets seized for crime, those criminals laundered money, so we are seizing homes from money launderers. Just the official statement is we seized the home of a drug dealer because drug dealing is the main offence they committed and its only recent that money laundering has begun to be considered a serious crime.

[nds88]

Originally Posted by fredinno

How can you tell that, though? Also, let me get this straight- are you saying that if that money comes from selling drugs to other cities, that's ok?

...Like the Carbon Tax. And Tobacco Tax. Really, even the income tax can be used to control something arbitrarily, like the 'wealth gap'.

I'm not saying its OK, I am saying I am not as concerned. They're going to sell drugs anyways. In the end, I highly doubt that a significant percentage of BC "laundering" is from drug proceeds. I believe its probably mostly people like the Hua Wei lady or government officials Hua Wei types pay off to get business permits.

The carbon tax and tobacco tax are different. Its based on consumption. The tax doesnt affect half the people's wealth. It doesn't affect people's property usage (not just real estate, any sort of owned property) like how an empty homes tax does because of weaponized taxation. What's next? I live in a 3br....are they going to tax me soon because I have 2 empty rooms? What about people with empty car seats on their way to work? Will they be taxed one day because they are not car pooling to reduce carbon emissions?

Income tax too. Raise income taxes and everyone is paying more. Lower taxes and everyone is paying less. The real estate taxation appears to help one group at the expense of another.

[Changing City]

Originally Posted by misher

In the end though none of this is unique to Vancouver. The whole country has had low interest rates, money laundering, etc. What is unique to Vancouver? Left wing demand focused policies and ultra high development fees. I know that correlation is not causation but the left wing Vision/NDP municipal governance was in charge for over a decade (since 2008) and during that time Vancouver home prices skyrocketed past most other Canadian cities. I still remember when Seattle and Vancouver both had the same problems and they choose opposite solutions.

We complain that Vancouver is less affordable than most cities, well what are we doing different than most cities? We keep blaming different outside forces but in reality its inside forces that are hurting us.

If Vision is to blame for house prices skyrocketing, how do you explain prices for Richmond condo prices increasing on average 140% in the past decade, compared to about 86% price inflation in the City of Vancouver in the same period?

[Vin]

Originally Posted by Changing City

If Vision is to blame for house prices skyrocketing, how do you explain prices for Richmond condo prices increasing on average 140% in the past decade, compared to about 86% price inflation in the City of Vancouver in the same period?

A spill-over effect from underbuilt Vancouver perhaps? Richmond was previously mostly farm and industrial lands, so it is no surprise for the huge price increases. Vancouver land prices have always been expensive, so even though its 86%, that is actually over the roof. You need to post land price figures instead of percentage increases to convince others of your argument.

[nds88]

Originally Posted by Migrant_Coconut

The basic idea is that housing is a need first, a commodity second, and an offshore asset third.

I don't think its up to the NDP or Gregor Robertson to suddenly decide to rearrange into that order. We live a free market system and its not up to them to manipulate. Other people don't buy a home only for some official to suddenly decide its now a right for someone else at the homeowners expense. I don't plop down a couple hundred grand and take on 4 times that as debt because housing is a need first.

During the 2008 recession when prices dropped, no one bailed out property owners. Now if hypothetically the US enters into a major recession and pulls down global markets, I can fully accept my real estate going down. But I strongly oppose a couple of clowns running the city and province suddenly decide to weaponize taxation and legislation to manipulate prices to hurt one group so it helps another.

Overall, our prices are just catching up with major global markets. San Fran, NYC, London, Tokyo, Paris, Beijing, Shang Hai, Hong Kong and many more.....they all cost way more than here. Our rent is also relatively cheap.

[misher]

Originally Posted by nds88

I don't think its up to the NDP or Gregor Robertson to suddenly decide to rearrange into that order. We live a free market system and its not up to them to manipulate. Other people don't buy a home only for some official to suddenly decide its now a right for someone else at the homeowners expense. I don't plop down a couple hundred grand and take on 4 times that as debt because housing is a need first.

During the 2008 recession when prices dropped, no one bailed out property owners. Now if hypothetically the US enters into a major recession and pulls down global markets, I can fully accept my real estate going down. But I strongly oppose a couple of clowns running the city and province suddenly decide to weaponize taxation and legislation to manipulate prices to hurt one group so it helps another.

Overall, our prices are just catching up with major global markets. San Fran, NYC, London, Tokyo, Paris, Beijing, Shang Hai, Hong Kong and many more.....they all cost way more than here. Our rent is also relatively cheap.

I disagree with your first point but agree with your 2nd. Vision pursued policies that kept supply down and raised money from the artificially inflated prices. They used this money to buy votes. They also deliberately kept residential property taxes down leaving the commercial burden high and subsidizing them through development fees. I'm usually anti tax but the property taxes in Vancouver were ridiculously low on residential in 2016. As were the densities around major transit stations.

[whatnext]

Originally Posted by Vin

Can't the government just swoop in and confiscate those houses of people who launder dirty money? What is stopping them? Turn them into low cost rental housing.

People who are involved with the drug trade should be considered as — criminals and should be treated as such. You can't go around attempting murder with fentanyl and get away with it.

The Province is going after those involved in the money laundering case the RCMP/Feds botched through civil forfeiture:

https://vancouversun.com/business/local-...-provinces-biggest-money-laundering-case

[Migrant_Coconut]

Originally Posted by nds88

I don't think its up to the NDP or Gregor Robertson to suddenly decide to rearrange into that order. We live a free market system and its not up to them to manipulate. Other people don't buy a home only for some official to suddenly decide its now a right for someone else at the homeowners expense. I don't plop down a couple hundred grand and take on 4 times that as debt because housing is a need first.

During the 2008 recession when prices dropped, no one bailed out property owners. Now if hypothetically the US enters into a major recession and pulls down global markets, I can fully accept my real estate going down. But I strongly oppose a couple of clowns running the city and province suddenly decide to weaponize taxation and legislation to manipulate prices to hurt one group so it helps another.

LBH, the free market hasn't been truly free and unregulated since Keynes replaced Smith. Every government interferes for the good of society as a whole, otherwise you get inequality and recessions; the trick is figuring out what's necessary and what's not. This isn't Mao executing landlords or Xi suppressing his opponents or anything like that, it's just acknowledging that we've got a housing crunch and penalizing empty units and absentee owners like many other countries.

And yeah, that logic also applies to road pricing. The idea is to remove the people that don't need to drive and clear the roads for people that do. Some say social engineering, I say optimization; works fine in Singapore, China, Brazil and much of Europe - even New York and San Fran are getting on board.

... Nobody but Wall Street trading companies got help, and even then only some of them. Not sure of the relevance - it's not like renters and social homeowners saw a single penny of the bailout either.

Originally Posted by nds88

Overall, our prices are just catching up with major global markets. San Fran, NYC, London, Tokyo, Paris, Beijing, Shang Hai, Hong Kong and many more.....they all cost way more than here. Our rent is also relatively cheap.

That's the problem, isn't it? We're not on that level yet - our level is Atlanta, Hanoi, Boston, Oslo, Copenhagen. Without proximity to the PRC, that's what our market would look like.

[misher]

Originally Posted by Migrant_Coconut

LBH, the free market hasn't been truly free and unregulated since Keynes replaced Smith. Every government interferes for the good of society as a whole, otherwise you get inequality and recessions; the trick is figuring out what's necessary and what's not. This isn't Mao executing landlords or Xi suppressing his opponents or anything like that, it's just acknowledging that we've got a housing crunch and penalizing empty units and absentee owners like many other countries.

And yeah, that logic also applies to road pricing. The idea is to remove the people that don't need to drive and clear the roads for people that do. Some say social engineering, I say optimization; works fine in Singapore, China, Brazil and much of Europe - even New York and San Fran are getting on board.

... Nobody but Wall Street trading companies got help, and even then only some of them. Not sure of the relevance - it's not like renters and social homeowners saw a single penny of the bailout either.



That's the problem, isn't it? We're not on that level yet - our level is Atlanta, Hanoi, Boston, Oslo, Copenhagen. Without proximity to the PRC, that's what our market would look like.

What about if we didn’t have South Asians either? Or those damn Americans?

You can’t blame one country for their immigrants and ignore the others.

[nds88]

Originally Posted by misher

I disagree with your first point but agree with your 2nd. Vision pursued policies that kept supply down and raised money from the artificially inflated prices. They used this money to buy votes. They also deliberately kept residential property taxes down leaving the commercial burden high and subsidizing them through development fees. I'm usually anti tax but the property taxes in Vancouver were ridiculously low on residential in 2016. As were the densities around major transit stations.

Yes, I agree that the city budget should be more equitably split between residential and commercial. Commercial should still pay a larger ?multiplier?, since they are allowed to use their land to generate revenue. However, if the tax burden was shifted more to homeowners, it should be shared proportionally by all homeowners. It should not allocate more of the proportionate share to, say, homes that are worth more than $X. The school tax, which although has nothing to do with the city budget and local property tax, unfairly targets homes worth more than $3m.

I am also a huge advocate of densifying around as many skytrain hubs as we can. Commericial, Nanaimo, 29th ave is all wasted. To really achieve a livable city, then we need close access to rapid transit and amenities surrounding the hub. I'd also like to see mini-downtowns surrounded by these stations with office space, so people can have jobs close by.

The city has the ability to upzone and I am OK with them creating opportunity for new supply. The developers and market will then decide based on the new supply, what is the land worth. What does it cost to build and will the new supply affect the end user price. If there is money to be made, the developers will build and new pricing is set. This seems more fair and free market.

I'm not always anti-tax, the biggest issue I have is the use of taxation to target specific groups. This is scary and is just a modern, PC way of being able to target someone without it being about race/gender/— etc. Although someone/some group is not being physically harmed, its still a form of significant aggression. Hurting me economically is as bad as a restaurant not serving me because of my race.....I hate to say it, but I'd rather be discriminated on my race rather than having millions dry up. I don't own any single property worth more than $3m, but think its absolute BS that they pay an additional school tax. Likewise, taxing on whether someone lives in their home or not, or banning airbnb. I understand that homes can't be built overnight and this might be a solution to get immediate supply. There should be a sunset clause after X number of years this tax expires and can be re-evaluated if its still necessary. When the next recession hits, are these goofs going to undo all this burden and damage....probably not.

[nds88]

Originally Posted by Migrant_Coconut

That's the problem, isn't it? We're not on that level yet - our level is Atlanta, Hanoi, Boston, Oslo, Copenhagen. Without proximity to the PRC, that's what our market would look like.

We are consistently ranked 1st/2nd/3rd most livable city on the planet. If you want to be here, people are willing to pay. Like some tech workers I know, they are fine getting half the pay and double the expenses. They want to be here.

I recently had several tenants move out (not due to high housing, personal reasons and couples getting married) and had to get some new ones in. There are lots of applicants from newer immigrants that are coming here for work and to live. Applicants from Mexico, South America, other parts of Canada, USA, Europe....not PRC. They don't mind paying to be here.

[misher]

Originally Posted by nds88

Yes, I agree that the city budget should be more equitably split between residential and commercial. Commercial should still pay a larger ?multiplier?, since they are allowed to use their land to generate revenue. However, if the tax burden was shifted more to homeowners, it should be shared proportionally by all homeowners. It should not allocate more of the proportionate share to, say, homes that are worth more than $X. The school tax, which although has nothing to do with the city budget and local property tax, unfairly targets homes worth more than $3m.

I am also a huge advocate of densifying around as many skytrain hubs as we can. Commericial, Nanaimo, 29th ave is all wasted. To really achieve a livable city, then we need close access to rapid transit and amenities surrounding the hub. I'd also like to see mini-downtowns surrounded by these stations with office space, so people can have jobs close by.

The city has the ability to upzone and I am OK with them creating opportunity for new supply. The developers and market will then decide based on the new supply, what is the land worth. What does it cost to build and will the new supply affect the end user price. If there is money to be made, the developers will build and new pricing is set. This seems more fair and free market.

I'm not always anti-tax, the biggest issue I have is the use of taxation to target specific groups. This is scary and is just a modern, PC way of being able to target someone without it being about race/gender/— etc. Although someone/some group is not being physically harmed, its still a form of significant aggression. Hurting me economically is as bad as a restaurant not serving me because of my race.....I hate to say it, but I'd rather be discriminated on my race rather than having millions dry up. I don't own any single property worth more than $3m, but think its absolute BS that they pay an additional school tax. Likewise, taxing on whether someone lives in their home or not, or banning airbnb. I understand that homes can't be built overnight and this might be a solution to get immediate supply. There should be a sunset clause after X number of years this tax expires and can be re-evaluated if its still necessary. When the next recession hits, are these goofs going to undo all this burden and damage....probably not.

Definitely agree with a lot of what your saying. Instead of splitting the tax (50% goes to Commercial 50% goes to Residential) I think Commercial properties should have a multiplier (say x2) to their assessment and then the tax bill is split among all households by that assessment. I'm not sure about not making the taxes on homes variable since bigger homes do use up more services and it seems fair that a $5 million dollar house subsidizes a condo.

The school tax wrongly screws the city as it makes it difficult for them to raise property taxes at the same time. Money from land taxes has always been the purview of the city.

I do agree that we are using tax to target "unwanted" groups and it is getting a bit crazy. Why would a home investment be taxed more than say a mutual fund investment? But as long as we don't raise the taxes too high we should be ok. Taxes are getting a bit crazy in Canada though, we cannot raise them too much over America or we're going to screw ourselves by pushing everyone with money there. Our highest tax bracket is already much higher than theirs despite our 1% making significantly less than America's.

[Migrant_Coconut]

Originally Posted by misher

What about if we didn’t have South Asians either? Or those damn Americans?

You can’t blame one country for their immigrants and ignore the others.

Exactly which Indians or Americans are shadow flipping houses or laundering money, and who's blaming them for it? If it walks like a duck and quacks like a duck, I'm not going to point my finger at the goose.

[misher]

Originally Posted by Migrant_Coconut

Exactly which Indians or Americans are shadow flipping houses or laundering money, and who's blaming them for it? If it walks like a duck and quacks like a duck, I'm not going to point my finger at the goose.

uhhhh theres some nasty racism going on here where you think one's ethnicity makes them more likely to be a criminal so I doubt what I say will convince you but you did see the recent money laundering report right? The one that showed that provinces with more foreigners are laundering less while the ones with less like Alberta and the Prairies are laundering more? Provinces with a higher % of Caucasians launder more money according to this report. I can sarcastically say that we should send the money launderers all back to Europe.

As for purchasing a home, everyone does it, everyone generally takes the best price. I don't think things like "shadow flipping" occur that often, but when they do its because there's money to be made. And somehow I suspect that ethnicity does not enter the equation when money is to be made.

[Migrant_Coconut]

Originally Posted by nds88

I'm not always anti-tax, the biggest issue I have is the use of taxation to target specific groups. This is scary and is just a modern, PC way of being able to target someone without it being about race/gender/— etc. Although someone/some group is not being physically harmed, its still a form of significant aggression. Hurting me economically is as bad as a restaurant not serving me because of my race.....I hate to say it, but I'd rather be discriminated on my race rather than having millions dry up. I don't own any single property worth more than $3m, but think its absolute BS that they pay an additional school tax. Likewise, taxing on whether someone lives in their home or not, or banning airbnb. I understand that homes can't be built overnight and this might be a solution to get immediate supply. There should be a sunset clause after X number of years this tax expires and can be re-evaluated if its still necessary. When the next recession hits, are these goofs going to undo all this burden and damage....probably not.

Same rationale behind parking metres. If you park, you pay. Park longer, pay more. Don't pay, get ticketed. 3pm, doesn't matter what you paid, you gotta move or you'll get ticketed AND towed. There's not enough room for everybody on the road all the time.

Originally Posted by nds88

We are consistently ranked 1st/2nd/3rd most livable city on the planet. If you want to be here, people are willing to pay. Like some tech workers I know, they are fine getting half the pay and double the expenses. They want to be here.

I recently had several tenants move out (not due to high housing, personal reasons and couples getting married) and had to get some new ones in. There are lots of applicants from newer immigrants that are coming here for work and to live. Applicants from Mexico, South America, other parts of Canada, USA, Europe....not PRC. They don't mind paying to be here.

Yeah, and they're welcome. This place is plenty livable for the one percent. Nobody's slapping them with fines or kicking them out - the EHT actually allows more of them to move in.

There's plenty of other immigrants who aren't as fortunate, who're in the same place as local renters. The new taxes and regs help them too.

[Migrant_Coconut]

Originally Posted by misher

uhhhh theres some racism going on here so I doubt what I say will convince you but you did see the recent money laundering report right? The one that showed that provinces with more foreigners are laundering less while the ones with less like Alberta and the Prairies are laundering more? Provinces with a higher % of Caucasians launder more money according to this report. I can sarcastically say that we should send the money launderers all back to Europe.

As for purchasing a home, everyone does it, everyone generally takes the best price. I don't think things like "shadow flipping" occur that often, but when they do its because there's money to be made. And somehow I suspect that ethnicity does not enter the equation when money is to be made.

Correlation, not causation. I could sarcastically say the opposite, that the only non-Caucasians in Alberta and the Prairies are the money launderers. <redneck> I ain't never done heard of no Chah-nese in Kindersley! </redneck>

And when everybody does take the best price, they and their family live in it for the next twenty years, and they pay mortgage and all the taxes. I've got no beef whatsoever with anyone who actually does that.

[misher]

Originally Posted by Migrant_Coconut

Correlation, not causation. I could sarcastically say the opposite, that the only non-Caucasians in Alberta and the Prairies are the money launderers. <redneck> I ain't never done heard of no Chah-nese in Kindersley! </redneck>

And when everybody does take the best price, they and their family live in it for the next twenty years, and they pay mortgage and all the taxes. I've got no beef whatsoever with anyone who actually does that.

And yet it’s white people who sold a good chunk of the west side to Chinese. Only 20% of Vancouver real estate is owned by those of Chinese ethnicity. So shouldn’t you be mad at shadow flipping caucasians?

PS: if the place with more Chinese has less laundering that’s pretty strong correlation to prove that chinese launder less than caucasians. Better than evidence than your opinion pieces or looking as individuals cases.

[whatnext]

Originally Posted by nds88

Yes, I agree that the city budget should be more equitably split between residential and commercial. Commercial should still pay a larger ?multiplier?, since they are allowed to use their land to generate revenue. However, if the tax burden was shifted more to homeowners, it should be shared proportionally by all homeowners. It should not allocate more of the proportionate share to, say, homes that are worth more than $X. The school tax, which although has nothing to do with the city budget and local property tax, unfairly targets homes worth more than $3m.

Why not. Do you think a young family starting out with two kids who just bought a condo can absorb more property tax as easily as someone sitting in a $3 million plus house?

Originally Posted by nds88

I am also a huge advocate of densifying around as many skytrain hubs as we can. Commericial, Nanaimo, 29th ave is all wasted. To really achieve a livable city, then we need close access to rapid transit and amenities surrounding the hub. I'd also like to see mini-downtowns surrounded by these stations with office space, so people can have jobs close by.

The city has the ability to upzone and I am OK with them creating opportunity for new supply. The developers and market will then decide based on the new supply, what is the land worth. What does it cost to build and will the new supply affect the end user price. If there is money to be made, the developers will build and new pricing is set. This seems more fair and free market.

You do realize that the owners of those $3 million+ houses are generally the biggest obstructers of densification, right?

Originally Posted by nds88

I'm not always anti-tax, the biggest issue I have is the use of taxation to target specific groups. This is scary and is just a modern, PC way of being able to target someone without it being about race/gender/— etc. Although someone/some group is not being physically harmed, its still a form of significant aggression. Hurting me economically is as bad as a restaurant not serving me because of my race.....I hate to say it, but I'd rather be discriminated on my race rather than having millions dry up. I don't own any single property worth more than $3m, but think its absolute BS that they pay an additional school tax. Likewise, taxing on whether someone lives in their home or not, or banning airbnb. I understand that homes can't be built overnight and this might be a solution to get immediate supply. There should be a sunset clause after X number of years this tax expires and can be re-evaluated if its still necessary. When the next recession hits, are these goofs going to undo all this burden and damage....probably not.

This is a very false and transparent way to try and equate Foreign Buyers with minorities who are genuinely discriminated against. A FBT applies to all Non-Canadians equally. You seem very concerned about property millionaires being "hurt economically" yet don't seem to care at all about the working people of Vancouver harmed economically by offshore money. A foreign millionaire has a lot more options than a single working mom about to be renovicted from her apartment in Marpole, just so someone can build "luxury condos".