Housing Sustainability: The Effects of Speculation and Property Taxes on House Prices within and beyond the Jurisdiction

Abstract

Housing plays an essential role in sustainable governance due to its socio-economic and environmental connection. However, the relationship between governance policies, market behavior, and socio-economic outcomes varies geographically and demographically. Therefore, segregated policies developed and implemented may fail to achieve their desired objectives because of the sensitivity of housing policies for their connection to human wellbeing. The effectiveness of housing policies in geographically connected regions is one of the areas that has received little attention in the Canadian context. The study follows a multi-step empirical method using a multiple linear regression model and a difference-in-difference approach to assessing the geographical variation of speculation and property taxes on housing markets. The study confirms that speculation taxes are not an effective tool in curbing house prices. Similarly, considering the role of property taxes in providing public services, delinking property taxes from a potential contributor to house prices would provide a better lens to develop local housing policies. Furthermore, the study also confirms that the housing market can be better assessed at a local scale, considering geographical influence in conjunction with investment trends.