Opinion: Another Groundhog Day in British Columbia for housing affordability

Jan 19 2023, 1:35 am

Written for Daily Hive Urbanized by Paul Sullivan, who is a BC property tax expert and Ryan LLC principal, which specializes in appealing commercial and residential property taxes.

The iconic Groundhog Day movie, centring around a single day repeating over and over for its beleaguered weather reporter played by comic Bill Murray, has nothing on the BC provincial government, which continues to make similarly repetitive housing promises over decades.

Only the groundhogs change as these adorable creatures have a short lifespan of only two to three years.

About 44 years ago, when Premier Bill Vander Zalm of the Social Credit Party was in power, he promised legislation in 1979 that would speed up housing permitting and zoning at municipal levels. Coincidentally, the elder Trudeau, (Pierre), was prime minister. Bill subsequently resigned under a scandal.

Former 1990s-era Premier Glen Clark of the BC NDP, who also resigned under a scandal amidst a low 21% approval rating, promised he would not step into municipal jurisdiction in his letter to the Union of BC Municipalities (UBCM) in 1996.

Later on, Clark’s former Housing Minister Mike Farnworth, now currently the BC Minister of Public Safety, voted to scrap a 2003 BC Liberals Bill 75 on Significant Projects Streamlining Act that would override municipal housing and land use development authority, and reduce red tape. That bill elicited strong opposition from municipalities, the BC NDP, and the UBCM, but support from various homebuilding groups, chambers, and the BC Business Council. It also spurred a lively debate viewable in the BC Legislature archive.

victoria times bill bander zalm housing permitting legislation

A 1979 Victoria Times newspaper clipping on then-Premier Bill Vander Zalm’s promise to speed up housing permitting and zoning at municipal levels. Click on the image for an expanded version. (Submitted)

Fast forward to 2023, the same Glen Clark, who also spent hundreds of millions of dollars on fast ferries that got sold for scrap metal, wants to run BC Housing. Its CEO, Shayne Ramsay, recently quit under questionable, even shoddy, accounting practices over a nearly $2 billion budget. A separate audit concealed by the current provincial government since November 2018 found financial irregularities by a main housing funding beneficiary, Atira Women’s Resource Society, where only “7.5% of its budget went to actual services to people,” concluded the Victoria Times Colonist. The former BC Housing CEO and Atira Housing CEO are long-time spouses.

BC residents are noticing this clear lack of housing progress amidst billions of their tax dollars being spent. According to a September 2022 survey by Angus Reid, 85% of us believe the current government is doing a “poor/very poor job” on housing affordability.

To be fair, few governments over the last few decades have been housing heroes. But, we can be somewhat cynical, when after six years in power, the new premier and former housing minister, David Eby, is now also promising to bust through those municipal logjams on housing approvals, with Bill 43, the Housing Supply Act.

Oddly, the younger Trudeau is now prime minister, and just introduced a foreign buyers’ ban on real estate in Canada, while welcoming record levels of immigrants, 432,000 in 2022. A little over half of those are considered “economic,” such as skilled workers or business investors. The rest are family reunification (parents/grandparents), refugees, or humanitarian categories.

Regardless of their immigration label, we keep throwing more people at our housing crisis, on top of additional health care and school shortages. Are governments bulk buying new tents for the growing street encampments as more people are unable to find housing? The federal government admitted spending $4.5 billion on “housing programs” with no success measurements. The New York Times blared: “Did Billions in Spending Make a Dent in Homelessness? Canada Doesn’t Know.”

Back in BC, the current provincial government’s shiny, new Bill 43 wants to see municipal “housing targets set,” requiring even more reports, and vague promises to step in by appointing an advisor or issuing a directive, based on new home achievements. The province and municipalities certainly don’t agree on the housing numbers. Inevitably, this bill faces challenges, too.

Why do we even need more “reports”? Grim housing data already exists from the Metro Vancouver Regional District’s Growth Strategy confirming chronically low municipal housing completions in our region’s cities especially. Only North Vancouver City met their committed target, according to a HAVAN analysis of available regional district and Statistics Canada data.

Any real action by government might actually threaten the real estate sector’s massive billions in a tax revenue bank machine for governments. Both residential and commercial property owners pay billions in real estate taxes, including the property transfer tax. The first-time buyer property transfer “tax break,” available only to those buying homes at $500,000 or below, means only 44 homes out of 2,289 in Vancouver would qualify.

Former BC NDP Premier Mike Harcourt criticized the current makeup of the BC NDP for its additional school tax being a “tax on tax”, one that’s paid annually by those acquiring land to build affordable, multi-family apartment housing. Who then pays that tax when the homes are eventually built and sold? You do, in the purchase price.

Commercial builders even pay a federal GST of 5% on each new purpose-built rental apartment that ultimately gets embedded in the monthly rent. Commercial owners also pay “air taxes” levied by governments on imaginary, unbuilt homes (development potential) above shops.

No wonder the BC government recently bragged about its $5 billion surplus. BC has long meant Bring Cash.

As more young people lose hope of saving enough for a down payment and see their take-home pay shrink through growing income and payroll taxes, SFU real estate finance professor Andrey Pavlov sums it up: “Current government policies prevent people from earning and keeping a good income.”

So where did all those affordable housing taxes go anyway? Most went to “general revenue,” which allows government to spend the money on whatever they like. They significantly grew government staffing and salaries on all levels, enabling a number of public servants to own not one but multiple homes and investment properties.

Public sector growth accounted for 86% of new jobs in Canada since the pandemic. Three out of every four net jobs created in BC were in government. The largest share of homeowners in BC and Nova Scotia worked in the public administration sector, which comprises federal, provincial, and municipal governments, based on Statistics Canada research.

As we welcome 2023, Vancouver again claims some of the highest rents and home prices in Canada. Lacking the production values of the Groundhog Day film, I’ve created my own little Instagram video capturing all the political promises we’ve seen over the years, starring a young woman who eventually becomes a senior, still waiting for that affordable housing.

We must create communities today, not years away. To do that, here’s my simple, five-point
checklist of solutions: reduce “fees and taxes” for homebuilders, remove red tape, mandate building approval times, incentivize rent to own, and pre-approve building designs

Let’s hope next year’s Groundhog Day has a different and happier ending for 2024.


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