Metro Vancouver is facing a housing crisis on every level – house prices are ridiculously high, the rental market is expensive and scarce, and the number of homeless people has exploded.
But as housing prices have become wildly separated from incomes and houses are seen more as global investments than as places to live, what might it take to make housing “affordable” again? It’s a question the new NDP government has promised to tackle. Solving this won’t be easy, but it’s essential to B.C.’s future.
Metro Vancouver statistics show that more than 3,000 people are homeless, a number that is up by one-third since the last count, and a further 60,000 households are at economic risk of homelessness.
Insecure, expensive and sub-par housing is at least one factor driving journalist Jessica Barrett, who has written often about the lack of affordable housing in Metro Vancouver, to leave the city and return to her hometown of Edmonton.
The 35-year-old has been in B.C. for her entire adult life, arriving as a 19-year-old. But she would like to start a family, buy a house, have a garden – all the usual things.
“My life in Vancouver has been basically every year and a half to two years, a complete reset – new job, new relationship, new everything,” Barrett said. “I just keep hitting the same wall. The jobs that I was getting weren’t really treating me the way I thought they would, the place where I’m living isn’t really ideal or stable and my support network keeps shifting.”
Housing search took four months
She didn’t want to look for another place, alone. Her last search, with her boyfriend, Colter Smyth, took four months.
“It got to a point where we thought, we could take this place if we Airbnb one room. We could take this place, but it doesn’t get any sunlight or there is no outside space or there’s no space for the dog,” Barrett said. “I was trying to find a place that actually ticked all the boxes. Things that seem very extravagant for Vancouver, but they’re actually not.”
Eventually, the pair found a coach house in Shaughnessy that is 600 square feet and rents for $1,700 a month. The landlord plans to raise the rent now that they’re leaving.
Barrett knew one day she would leave, because she wants to start a family and says that’s out of reach in Vancouver.
“Me having kids in Vancouver was never going to be a thing, I’ve known that for a long, long time. No matter which way you crunch the numbers, it’s just not possible.” Barrett said.
She’s not alone in that perspective.
Census figures show the number of children living in Vancouver is falling, even as the overall population grows.
NDP-Green agreement promises to deal with speculation and fraud
As some homeowners win the lottery while renters fall further behind, the agreement between the new NDP government and their Green Party partners promises to “make housing more affordable by increasing supply of affordable housing and take action to deal with the speculation and fraud that is driving up prices.”
The Liberal government introduced a 15-per-cent foreign buyers’ tax last July, which slowed the market, but did little to dampen prices.
Solutions being bandied about include everything from expanding and increasing the foreign buyers’ tax, implementing a capital gains tax, redesigning a progressive property purchase tax where the rate increases as the property’s value goes up or increasing the property transfer tax above a certain threshold.
![Carole James is B.C.'s finance minister.](/sites/default/files/styles/scale_width_lg_1x/public/img/2017/09/27/170927-ts-carolejames-bcndpphoto.jpg?itok=upfQU9l8)
Big changes necessary, but not expected soon
Marc Lee, senior economist with the Canadian Centre for Policy Alternatives, says major changes are needed to make housing more affordable in B.C., but he doesn’t expect any big moves from the NDP government in the near future.
He would like to see either a progressive property tax – which could be set to rise at any threshold and be deferred until a property is sold – or a capital gains tax on homes when they are sold. Lee emphasized that the exemption for a capital gains tax could be set at any level and if another home is purchased, the purchase amount could be credited against the capital gain.
“I would like to think that these types of changes are possible, but I don’t really know how aggressively the new government is prepared to move on this,” Lee said. “To lean in on Metro Vancouver and B.C.’s housing affordability problem requires significant resources and significant changes to taxes, regulations and policies, so we will see.”
He says a more likely change the NDP might institute in the near term is to change the homeowner’s grant into a refundable tax credit that applies to everyone. Such a credit could be a compromise between the NDP’s proposed renter’s credit, which is not popular with the Greens, and the Green promise to tie the homeowner’s grant to income.
![Adam Olsen is the B.C. Green party critic and advocate for housing.](/sites/default/files/styles/scale_width_lg_1x/public/img/2017/09/27/170927-ts-adam_olsen-submitted.jpg?itok=OXw58emO)
What’s been done so far?
The new NDP government’s budget update calls for 3,700 new units of affordable housing, boosts funding for the Residential Tenancy Branch and improves information sharing with the federal government, Finance Minister Carole James said in a statement provided in response to the National Observer’s questions.
“These changes are an initial step to help fight tax evasion, reduce fraud, and ensure people are paying the right amount of tax,” James said. “This is just a start. We are working to develop a comprehensive plan to make housing more affordable for people, to close speculation loopholes, and reduce tax fraud and money laundering in B.C. real estate.”
James said she is reviewing the tax system and evaluating existing and proposed housing tax measures.
The NDP party’s election platform called for an annual two-per-cent “absentee speculators’ tax” towards building affordable housing.
Adam Olsen, MLA for Saanich North and the Islands, is the Green Party’s spokesperson, critic and advocate for housing.
He said housing is B.C.’s No. 1 issue and that he has heard from citizens and leaders throughout B.C. who all expressed “an overwhelming sense of despair over housing.”
“The province we live in is in very serious trouble if people are feeling vulnerable in their homes,” Olsen said. “I’m going to be advocating government to take substantive action, but doing it in a controlled way so that we can understand what the implications are and what the impacts are.
“We can take a sledgehammer to this and really damage people’s investments.”
Olsen expects significant changes including action on this issue between now and November, when the government's first session ends.
The civic and federal governments also have a noteworthy role to play in housing – the Vancouver city council introduced a one-per-cent vacancy tax this year and the federal government is set to release a national housing strategy this fall.
Young people like Barrett are this province’s future. It’s going to take big, bold moves to fix the housing crisis and keep them here. There are no easy answers – there is no magic pill — to bring housing prices back down to Earth and provide adequate options for renters, but some strong intervention is clearly necessary to keep our province both viable and livable.
Tracy Sherlock writes about the B.C. government each week. Contact her with news tips at [email protected].
Comments
The real estate bubble isn't the only reason housing is expensive. Just building houses today is also very expensive. Houses are much more complex then ever before due to required energy efficiency measures and associated regulation, plus increased wind, seismic, fire, snow load, and flood protection, and the cost of these measures will only increase with the new BC Step Code. These are generally good measures, but they make new houses into complex systems, but with each house unique there is no economy of scale in their application. Additionally builders must now be trained to a much higher level to hold the required contractor license and insurance. Finally, busy local government building departments are sometimes out of step with the BC building code, often enough demanding builders take steps, such as extra engineering and other "designated professional" costs, that are not necessarily required under the code. This is because of a now ingrained fear of liability exposure by those local governments. Finally, raw land costs are much more expensive, and our Agricultural Land Commission, its regulatory framework and governance is broken.
Some ideas for solutions:
1/ Increase energy efficiency in housing (vie R2000, Net-Zero, Leede, Built-Green etc.) will ultimately reduce the overall demand for new large-scale energy infrastructure (e.g. Site C), which will translate into huge avoided-cost savings for government and utilities. Cancelling Site C and putting the cash instead into built-environment (including housing) energy efficiency incentives and subsidies might be a worthwhile trade-off.
2/ The Province now requires local governments to adhere more strictly to the BC Building code, but they are being slow in doing so. For those governments who comply, the Province should indemnify them from liability by sticking to the BC regulations, which should reduce rampant "over-engineering" and "local exception" building costs.
3/ We can adapt to new realities of home ownership, but only if we see ourselves doing so in a good light. We need to promote smaller, better designed homes, including factory-built and modular homes and their associated neighbourhoods; and we need to free up land and create local bylaws allowing well-serviced, green and leafy "tiny" and "small modular" home "parks" that vastly improve on our mental model of what a "trailer park" is (sorry Bubbles).
4/ The "front-end-loaded costs" of more efficient housing is now very high. Government should break BC Hydro's monopoly on energy sales and allow Energy Service Companies (ESCOs) to operate in BC without requiring expensive and usually fruitless BCUC exemption applications for such services. Additionally, Government, BC Hydro, Fortis, and other regulated energy providers can bring back meaningful incentives and subsidies for energy efficient heating and ventilation systems, efficient building envelopes, air-source heat-pumps, home EV charging, and eventually for self-generation via roof-top solar hot water and solar photo-voltaic systems.
5/ Banks are skittish over lending or issuing mortgages for contractors and owner-builders with raw land and a plan. Government could reduce risk by a variety of methods to get these projects moving faster.
Thank you for you comments.