• The Canadian housing market is experiencing an unprecedented crisis. One solution being explored is the adoption of demand-side measures like Vancouver’s 2017 empty-homes tax. This E-Brief evaluates the tax’s impact on housing affordability and availability, helping policymakers balance efficient property use with ensuring a steady supply of new homes.
  • We use the difference-in-difference (DID) method to see the effect of the empty-homes tax in Vancouver. We compare how things changed before and after the tax, using data from similar areas without the tax to estimate what would have happened if Vancouver hadn’t had the tax. This helps us find out the tax’s real impact.
  • We show that the tax effectively reduced the number of empty homes without impacting new housing construction. However, it did not affect average rent. This shows that while the tax improved housing availability, it did not address affordability, indicating a need for further measures to address the wider housing crisis.

https://www.cdhowe.org/public-policy-research/ripple-effects-impact-empty-homes-tax-housing-market?