People who buy Vancouver housing as an investment but don't contribute to the local economy should be charged a property surtax that goes back to residents, says a prominent group of local academics.

In a sign of how concerned a growing swath of experts are that the city's housing market is distorted by foreign investment, economics and business professors at the University of British Columbia and Simon Fraser University issued a statement Monday calling for new measures to make B.C. "a less attractive target for investors who wish to avoid taxation or park cash in residential real estate."

The group of 10 professors from the universities' business schools estimate that Vancouver alone could generate $90-million by charging a 1.5-per-cent surtax on vacant properties whose owners have no or limited taxable earnings in Canada.

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The money would then be distributed back to tax-paying residents of the municipality where the surtax was collected, giving them a few hundred dollars apiece or as much as $3,000.

"I think nobody would deny there's a problem here with people who want to live here not being able to afford it," said UBC's Sauder School professor Tom Davidoff, one of the initiators of the proposal.

Prof. Davidoff acknowledged that data are still inclusive on all the factors contributing to the city's problematic housing market, where house-price increases have soared far past earnings increases for several years.

"But the beauty of this proposal is that, as you make some money that can support locals, you can find out how large the extent is of this problem."

The proposal suggests that each municipality should have the choice whether to have the surtax, which would present an interesting option for places such as Whistler, Kelowna, the Gulf Islands and other areas that have large numbers of non-resident owners from Alberta, the United States, Vancouver and elsewhere.

The group chose a property surtax rather than asking for something like a new capital-gains tax on housing profits because its members believe the surtax is more politically saleable.

Prof. Davidoff said it's clear that B.C. Finance Minister Mike de Jong doesn't want anything that would take away equity gains from local voters.

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As well, the group looked for something that didn't target only investors from one country or ethnic group, in spite of the many complaints in Vancouver that it is primarily Chinese buyers driving the market.

"This doesn't get into tricky and unpleasant questions of nation and citizenship," said another signer, UBC's Vancouver School of Economics professor Joshua Gottlieb. "It's really agnostic about the identity of the people."

Non-resident investors who, for example, rented out their units and declared their income in Canadian tax filings would be exempt from the surtax, if the earnings were equal to or more than the surtax.

The call for changes from the group of business professors is one of a growing appeal for solutions among both politicians, the public and experts to moderate a real estate market that has decoupled itself from the local economy.

Another SFU professor, Rhys Kesselman, wrote an opinion piece published last week also suggesting a surtax on homes to be paid by anyone with no B.C. income; a surtax that would increase progressively the higher the value of the property.

"Non-resident foreign owners, satellite families, tax evaders and criminals using their proceeds to buy homes would be most impacted by the surtax, since they would have paid little or no B.C. income tax to offset against their surtax," wrote Mr. Kesselman, who holds a Canada research chair in public finance.

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Like the business professors, he said that there's something fundamentally wrong with a tax system such as Canada's that taxes income so heavily but has no tax on the enormous profits that some people are making on housing.

He said it's also based on a classic principal of economics that "the collective should reap the gains from urbanization," not just individual property owners.

Vancouver Mayor Gregor Robertson has also been calling for a speculator tax and a luxury tax, but provincial politicians haven't responded favourably to that.

Instead, they are dropping many hints they will provide some new incentives for first-time home buyers when they announce this year's budget.

Prof. Davidoff said his group's proposal makes much more sense than the kind of buyers' credit that is being hinted at.

"That is what I call bringing fuel to a fire, and $5,000 to $7,000 is not going to get renters into home ownership."