Policymakers in cities around the world are looking for workable solutions for declining housing affordability. One response is to put in place new tax foreign homebuyers, a solution that many U.S. cities are now considering.
The intended results would be to create a revenue stream to fund affordable housing initiatives, and to ease competition for domestic, local homebuyers, though, the efficacy of such taxes are yet unknown, per Zillow. Their research shows the typical international homebuyer was targeting homes at roughly $399,000 in the U.S. in the third quarter of 2017.
Against this backdrop, Asian community groups in the Vancouver area reported an increase in racist and xenophobic sentiment in the months after British Columbia’s foreign buyer tax was enacted. Public officials in British Columbia were quick to disavow this sentiment, but the experience suggests that civic leaders should at the very least be very cautious in their language and clear in relaying the expectations and intent of the policies.
