Opinion: BC's new housing measures a mix of good, bad, and ugly, but mostly good

Apr 6 2023, 11:30 pm

Written for Daily Hive Urbanized by Trevor Hargreaves, who is the senior vice president of government relations, marketing, and communications for the British Columbia Real Estate Association.

This past Monday, Premier David Eby and BC Minister of Housing Ravi Kahlon announced a set of sweeping measures just prior to the start of a two-day provincial housing forum held by the Union of BC Municipalities. In terms of branding, the initiative — named “Homes For People” — is a tad redundant, but thankfully, much of the policy contained within is far more inspiring.

The broad approach behind the new policies is commendable and demonstrates provincial willingness to push hard with a suite of new measures in an attempt to make housing more attainable for more British Columbians. It’s notable how quickly and fiercely the Eby administration is steaming forward to revise policy while beginning to push regions and municipalities to comply.

Behind the scenes, there’s significant push and pull at play as the power dynamic shifts toward stronger leadership by the provincial government.

Historically, regional and municipal governments — especially in anti-development inclined areas — have long adopted an “it’s not us, it’s them” attitude. When he was the premier, John Horgan rarely spoke publicly about housing-related policy despite the degree of public concern. Horgan left the file squarely within the hands of his Minister Responsible for Housing, who was notably, David Eby.

In today’s political climate, Premier Eby is taking housing affordability and attainability on as a personal quest. He recognizes that no single measure will magically fix these issues, but a suite of carefully crafted change holds promising potential for the coming years. To that end, there were some strong steps forward as part of Monday’s announcement.

Housing supply measures

There are three core aspects to the announcement impacting housing supply in the province. Firstly, later this year, the province will introduce legislation applying to various areas across the province to enable additional “Missing Middle” housing. This means allowing more units on traditional single-family lots. The policy will also allow for additional density along transit lines.

The second announcement is focused on enabling secondary suites in more communities. Beginning in early 2024, homeowners will be able to access a forgivable loan of 50% of the cost of renovation, up to a maximum of $40,000 over five years. The loan can be forgiven if the homeowner meets a set of conditions, including renting their unit at below-market rates for a minimum of five years.

Lastly, the third announcement is based around further implementation of the Housing Supply Act, which was brought into force in 2022. This Act allows the province to set housing targets and support engagements with select municipalities. By mid-2023, housing targets will be established in approximately eight to 10 municipalities identified as having the greatest housing need and highest projected growth.

If these three policies are applied province-wide, with meaningful “carrots and sticks” for local governments, they have the potential to significantly boost housing supply and improve affordability across the province.

What about the rental market?

The province also announced several new policies to address the dire state of rental housing across the province. These include: exploring new opportunities and ways to build new rental buildings, as well as expanding and maintaining existing purpose-built rental buildings; more on-campus rooms for students; making the $400, income-tested renter’s tax credit permanent; and increasing funding for the BC Rent Bank that provides interest-free loans and grants to renters in BC with low to moderate incomes.

Eby also committed to more investments in non-profit housing, with the objectives of creating more subsidized rental homes, more co-op homes, and doubling the number of homes delivered by the Indigenous Housing Fund and the Women’s Transition Housing Fund Program.

Credit where it’s due, the above measures are bold, and push hard to move the dial on the complicated and difficult-to-solve issues of housing affordability and attainability.

The devil’s in the details

But enough with the taxes already. The provincial government already make out like bandits when it comes to taxing homeowners, with the current provincial surpluses almost exclusively built on the backs of property sales. In reality this is arguably profiteering from homebuyers and potentially preventing more would-be homebuyers.

Monday’s announcement included what’s likely to poll well with the uninformed masses, but in reality is a fluff announcement: A tough and shiny new “Anti-Flipping Tax.”

The question remains: where are the actual metrics around “flipping” to justify this?

Who and how many people are actually flipping properties inside of a year? Has this research even been undertaken? What about British Columbians who need to move for legitimate reasons, such as a breakdown of marriage, new work, or the addition of a child? What about “flipping” properties to add more units to housing supply?

Furthermore, the federal government already announced a new Anti-Flipping Tax rule that was implemented as of January 1, 2023, which treats profits from homes sold in under a year as business income. So, what is this additional provincial taxation supposed to achieve, aside from political posturing and sounding good from a podium? Without details it is not possible to properly analyze the impact of this measure, but we already know that the housing crisis is not one more “perfect tax” away from being solved.

In addition, the province doubled down on the Speculation and Vacancy Tax (SVT), which already exists in BC’s largest municipalities. In January of this year, it was further expanded to additional municipalities, like Lions Bay and Cowichan. A report in 2020 by the BC Real Estate Association estimated the impacts of this tax measure to have marginal effects on home sales and prices, as did the province’s own review of the SVT which was published in June 2022. Expanding the SVT to additional areas is not likely to have additional meaningful impact. Rural and Northern communities have their own unique challenges to housing attainability.

Despite these misguided forays into further taxation, the sum of these new measures is positive and will generally bring a lot of momentum to tackling the housing challenges at hand. Many specific details are still forthcoming — but to the government’s credit, much of what has been announced holds solid promise.

These announcements are just the beginning. What’s really needed next are better processes to filter potential policy ideas past sectoral expertise. The establishment of a permanent provincial housing policy roundtable is one such measure that would greatly benefit the outcomes of new housing policy and ensure that these policies are implemented effectively and avoid unintended consequences.

If a provincially led roundtable, made up of housing policy experts from the market and non-market housing sectors, were provided a process to review and provide advance feedback, and then collectively review, discuss and analyse new ideas, it would help ensure new announcements were better pre-flighted before they become law.

Process aside, the newfound Eby administration is taking strong, bold steps around housing. And amidst a provincial affordability crisis, it’s reassuring to see the premier making this a personal mission on all of our behalf.

Want to stay in the loop with more Daily Hive content and News in your area? Check out all of our Newsletters here.
Buzz Connected Media Inc. #400 – 1008 Homer Street, Vancouver, B.C. V6B 2X1 [email protected] View Rules
Guest AuthorGuest Author

+ News
+ Real Estate
+ Development
+ Politics
+ Opinions
+ City Hall
+ Urbanized