As North America’s housing crisis deepens, there is a growing gap between land and housing costs on one hand, and the amount that a growing number of potential homebuyers and renters can afford to pay on the other.
Governments have elected to subsidize this gap. The need for more subsidy dollars would seem to be never-ending. Existing funding streams, such as property taxes, are already earmarked to fund a host of essential civic programs (including water, roads, parks, fire and police services). So it follows that existing funding streams can only be tapped for affordable housing at the cost of reducing funding for other services.
The Holy Grail is of course a brand new funding stream, a completely new and hopefully rich source of money. In the past, legalized sins, particularly alcohol consumption and gambling, have proven to be just such rich ongoing revenue sources.
Enter the sin of marijuana use. In North America, its legalization is happening state by state and province by . . . no, that’s not quite right. So eager has Canada been to tap this rich source of sin tax, that the federal government has approved the whole-hogging of sin tax by all the provinces and territories at once.
As for the breakdown of how communities will hog this flow of sin tax, there are inevitably a great number of community projects with their hands out. Ultimately, decisions on how this funding stream will be tapped may depend on at least one, but as many as three levels of government.
Can the affordable housing crisis sponge up a lion’s share of these proceeds? With the cost of building new housing ever-increasing, and the market driving up the cost of land and housing, there are few other revenue streams that might support the crisis-level need for new housing, at least compared with the torrent of riches that marijuana taxes can deliver.
For an update on how a pioneering state and its largest city have handled the marijuana sin tax, as well as the role it will play in affordable housing development, read more in the Denver Post: Denver, Colorado’s biggest city, sees the most money from marijuana
