Experts question whether platforms strong enough to help BC housing affordability

Oct 18 2019, 2:59 pm

When Jagmeet Singh announced a bevy of promises to improve housing affordability, he stood in front of the skyline of Vancouver, where home prices are still drastically detached from average local incomes.

The NDP leader described housing as “the most pressing crisis” residents face.

“We know that right now a 29-year-old millennial who wants to buy a home would have to wait 29 years before he or she had enough money to be able to actually put down a down payment,” he said, referencing a recent study by the advocacy group Generation Squeeze.

Housing is a top election issue in the costly urban centres of British Columbia and federal parties are battling for votes with a range of real estate promises. Some platforms are stronger than others, experts say, while questioning whether any are strong enough.

The New Democrat pledge to build 500,000 affordable homes over 10 years would deliver the most units, but the party’s proposed rental benefit of up to $5,000 for as many as 500,000 households could spell trouble in markets with low vacancy rates, one expert said.

“In a market like Vancouver, if you give people $5,000 more to spend on rent, unless we build a bunch more units, we’re just getting higher rents,” said Tsur Somerville, a business professor focusing on real estate at the University of British Columbia.

The Liberal government introduced a 10-year, $55-billion national housing strategy in 2017 aimed at helping more than 500,000 families who need housing, creating up to 125,000 new units and cutting chronic homelessness by 50%.

Opinions vary on how effective the strategy has been to date, but perhaps because of this existing commitment, the Liberals have made relatively few campaign promises on housing.

The party’s promises to impose a tax of 1% on foreign buyers and to raise the value of homes eligible for the first-time homebuyer grant to $789,000 from $505,000 would have the least impact in BC, Somerville said, but they also have fewer chances of adverse effects.

“They’re not just crashing into the market and wreaking havoc,” he said. “Part of the worry about the NDP is it’s doing so much and getting so involved that there’s some concern about unintended consequences.”

The Conservatives have pledged to ease the mortgage stress test and allow 30-year mortgages for first-time homebuyers, but Somerville said these promises were likely to drive prices higher and encourage BC residents to take on more debt.

The Tories and NDP have both promised to launch an inquiry into money laundering in the real-estate sector. A provincial inquiry is already underway in BC.

The gaps in enforcement that allowed criminals to funnel an estimated $5 billion through real estate in the province last year are already well known, Somerville argued.

“I don’t think we need an inquiry. We actually need them to do things,” he said.

The NDP has also pledged a dedicated RCMP unit to investigate money laundering, a national registry to show who profits from real estate and a foreign buyers tax of 15%.

Somerville said the NDP and Liberal promises of a national tax on foreign buyers don’t make sense. Such taxes should be targeted toward specific cities, he said, because resort communities such as Whistler, depend on international investment.

Conservatives have also promised to make surplus federal land available for housing development. Somerville said the federal government has already begun doing this, but it’s tricky in BC where First Nations title is a key consideration.

The Greens, meanwhile, have pledged to eliminate the grant for first-time homebuyers, declare housing a legally protected human right and build 25,000 new and 15,000 rehabilitated units annually for the next 10 years.

The party’s housing platform feels like an “afterthought” to its climate change promises, said Mario Canseco, president of Vancouver polling firm Research Co.

Canseco said the NDP and Liberals are battling for the Lower Mainland, which Justin Trudeau’s party nearly swept in 2015. Fortunately for the New Democrats, some voters have been disappointed with the Liberals’ performance on housing, he said.

However, Canseco added it’s easier for the NDP to propose an ambitious housing platform when it’s unlikely to form a government.

The Conservatives appear to be angling for North and West Vancouver, where residents tend to have a higher household income and can save more money for a down payment, he said.

“In a way I think it’s a good strategy to try to appeal to those voters who are in the areas where you can make a dent in the Liberal fortunes, but it’s not going to be enough to attract a lot of the voters in the city of Vancouver,” he said.

None of the parties have gone so far as to promise to end homelessness, a major concern in Vancouver and a growing issue in its suburbs, noted Gerald Baier, an associate professor of political science at UBC.

“I think that most people are just going to find all the parties disappointing on the question of housing if that’s what motivates their vote,” he said.

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