Hamilton is investigating a new tax on empty homes to discourage speculators it says are driving up the cost of housing.

The city has a problem with wealthy buyers who purchase homes and never live in them, says Nrinder Nann, a councillor for Ward 3 in Hamilton's urban core. They fork over millions for condos and houses, and the units sit empty until they can resell them at a profit.

That makes it harder on people looking for affordable units, Nann said. She pushed Monday for the city look at establishing a similar program to Vancouver's empty homes tax. Councillors unanimously supported it.

"I've received anecdotal information from residents that they cannot find housing accommodations in our city," she said. "At the same time, there's also anecdotal information I've received from other neighbours that they know there's buildings that are sitting vacant. Not just buildings, but homes. Homes that could be rented out."

Hamilton has seen a rapid increase in housing and rental prices. A recent Social Planning and Research Council of Hamilton report shows around 20 per cent of renters spend more than half their income on shelter. The cost of rent is also outpacing inflation.

Between 2017 and 2018, the report says, Hamilton's average rents spiked 6.9 per cent — a rate higher than the provincial average. It also references a report from the Canadian Centre for Policy Alternatives showing someone earning minimum wage would have to work 54 hours a week to afford a one-bedroom apartment here.

Nrinder Nann is a Hamilton Ward 3 (central lower city) councillor. (Samantha Craggs/CBC)

Housing prices have also been on an upward trend for years, even when sales are down.

Several other councillors echoed her belief on the impact of speculation. There's no local data around how much vacant property has driven up real estate prices. But after Vancouver implemented an empty homes tax, vacant property fell by 15 per cent from 2017 to 2018. The program has also helped return just over half of previously empty homes to the rental market.

The vacancy rate there is less than one per cent. That city started taxing empty homes an extra one per cent in 2016, and recently increased it to 1.25 per cent. In the last three years, the tax has generated $39.7 million in net revenue, which the city puts toward affordable housing initiatives.

It could be challenging to identify what units are vacant, said Jason Thorne, Hamilton's general manager of planning and economic development. The city can use tax roles to track vacant units in multi-residential properties, he said, but it's trickier to track smaller buildings.

Three members of the general issues committee — Couns. Sam Merulla, Arlene VanderBeek and Maria Pearson — are landlords and declared a conflict of interest. But before he realized the conflict, Merulla was prepared to second it.

Merulla, who represents Ward 4 (east end), said developers are buying blocks of units and leaving them empty.

"They'll buy two, three, four condominiums and they'll flip them later," he said. "They are buying in bulk."

John-Paul Danko of Ward 8 (west Mountain) says it happens on the Mountain too.

"People are purchasing residential property never intending to live there," he said.

As it stands, he said, "the housing market is being driven by speculation, and (young people) have zero chance of ever entering that market."