Citation: Rauf, M.A.; Weber, O. Housing Sustainability: The Effects of Speculation and Property Taxes on House Prices within and beyond the Jurisdiction. Sustainability 2022, 14, 7496. https://doi.org/10.3390/ su14127496 Academic Editor: Vida Maliene Received: 7 May 2022 Accepted: 16 June 2022 Published: 20 June 2022 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affil- iations. Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). sustainability Article Housing Sustainability: The Effects of Speculation and Property Taxes on House Prices within and beyond the Jurisdiction Muhammad Adil Rauf * and Olaf Weber School of Environment, Enterprise, and Development (SEED), Faculty of Environment, University of Waterloo, Waterloo, ON N2L 3G1, Canada; oweber@uwaterloo.ca * Correspondence: adil.rauf@uwaterloo.ca 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. Keywords: housing; sustainability; property taxation; regions; real estate 1. Introduction The housing system’s multidimensionality as well as its multi-factor influence make it complex and highly sensitive to policies [1]. Moreover, the sustainability challenges imposed by a rapidly changing global socio-economic structure (such as globalization and financialization) may not be dispensed by orthodox policy instruments that cannot make housing environmentally sustainable and affordable to all [2]. Moreover, the housing system makes policies sensitive to human wellbeing. Therefore, policies developed and implemented without an integrated approach may fail to achieve their desired objectives [3]. The literature to date has identified several factors affecting the adoption of housing sustainability. These factors are generally based on household behavior, socio-economic conditions, geography, environment, policy, and policy instruments. The policy instru- ments include financial, monetary, and regulatory measures to manage consumption and public services, and to regulate market activities to meet socio-economic and environmental objectives [4,5]. However, the multilateral and dynamic nature of governance objectives and instruments used make it challenging to achieve an optimum and sustainable outcome [6,7]. For instance, the quality of public services, environmental ambiance, and energy efficiency play a key role in property values. These values are judged against housing cost and avail- ability, which influences real estate market activities [8–10]. Thus, this poses another policy challenge in balancing local economic objectives and housing affordability. Furthermore, housing regulations are not just limited to offsetting the cost and supply of housing market interventions through market control and providing subsidies; they also affect housing rent, energy consumption, and efficiency [7,11]. Sustainability 2022, 14, 7496. https://doi.org/10.3390/su14127496 https://www.mdpi.com/journal/sustainability