You get a Vancouver address, live in one of the city’s nicest neighborhoods, and use most of the city’s resources– but technically you don’t live in the City of Vancouver. We’re talking about The University Endowment Lands (UEL), an area 1/10th the size of Vancouver that consumes a large percentage of the city’s coastline, but is administered independently. This means that despite having a Vancouver address, homes there asre exempt from the recent vacancy tax.
The UEL is unincorporated land, and administered directly by the province. It receives many of its services from the City of Vancouver under contract, but has no elected municipal representation. Annual property taxes are roughly 30% lower in UEL than in the city of Vancouver. Great for real estate investors in the UEL, since property values there are really high.
Speaking of property values being really high, the UEL boasts some of the highest average home price in Greater Vancouver Area (GVA). The average UEL property value is $6,764,976, over 635% higher than the rest of the GVA. In case you’re curious, that would make the average annual vacancy fee a little over $67,000. I can see why they would place an arbitrary boundary to prevent rules passed in Vancouver from impacting property values.
Foreign Buyers In UEL
The UEL is one of the most desired neighbourhoods in Vancouver, so naturally it has attracted well heeled foreign buyers. A study conducted by Andy Yan, an urban planner and adjunct professor at UBC, determined that 88% of homes over $5 million in the neighbourhood belonged to foreign buyers. Since the average home in the UEC is well over that number, it’s probably a decent assumption to make that the majority of homes purchased in this neighbourhood are purchased by foreign buyers.
What’s Wrong With Foreign Buyers?
There’s absolutely nothing wrong with foreign buyers, but the chances of them living in the homes the buy are fairly slim. Note, foreign buyers aren’t the same as recent immigrants. Foreign buyers use homes as an investment, for the purposes of smurfing, or just a vacation home. None of these issues by themselves is a problem in most other cities, but in Vancouver it’s a little different. Space is at a premium, and locals are struggling to find a place to live. Nevermind the actual affordability issues.
The lack of vacancy tax and lower property taxes in the UEL highlights BC’s inability to install a comprehensive plan to tackle housing issues. A large part of BC’s real estate bubble is the number of loopholes that are intentionally legislated in. It gives the appearance of action, but are really just a way to shut people up while allowing the privileged few to continue to operate just out of reach.