Province backs off goal to build 114,000 new homes
Peter Mitham
Western Investor
Units added to the secondary rental market now part of the tally
The province says it won’t build the 114,000 affordable new housing units it intends to create by 2028.Sandor Gyarmati/Delta Optimist
According to the province, more affordable housing is a key goal of this week’s announcement that the four-year-old speculation and vacancy tax will expand to six new jurisdictions next year.
The tax, levied on the value of unoccupied or underutilized residences, will now apply to properties in Lions Bay and Squamish as well as the Vancouver Island communities of North Cowichan, Duncan, Ladysmith and Lake Cowichan. This brings to 14 the number of regional districts and municipalities where the tax applies, jurisdictions home to 73.5 per cent of the province’s residents.
The vacancy tax is one of the tools that B.C. Finance Minister Selina Robinson said the province was wielding in order to achieve the BC NDP’s long-standing ambitions to create 114,000 new affordable homes in the province by 2028.
“There is a drastic shortage of affordable housing in the province,” Robinson’s predecessor as finance minister, Carole James, said in formally announcing the goal in the 2018 provincial budget. “We are going to build the homes people need.”
But according to Robinson, not all those homes will actually be built.
While the province pledged $6.5 billion towards the creation of 114,000 housing units in 2018, Robinson told Western Investor this week that the province intends to build just a third of the total.
“The expectation is about 39,000 [units] is what we’re going to be delivering with that [$6.5 billion],” she said.
The remainder will be delivered through initiatives such as the speculation and vacancy tax, which she repeatedly described as “one tool in the toolbox” to address the need for housing and affordability.
Rather than funding new construction, the tax effectively coerces people with more than one home to rent out second properties, under pain of a 0.5 percent tax on the assessed value of their homes if they’re Canadian nationals or two per cent if they’re foreign nationals.
She said the tax has so far prompted property owners to return a total of 20,000 condos to the Metro Vancouver rental market since 2018. (The claim is based on Canada Mortgage and Housing Corp. estimates of the secondary rental market. To give credit where credit is due, some of those units may in fact have returned to the rental stock as a result of the City of Vancouver’s empty homes tax.)
But repurposing existing units isn’t enough. Recent reports by CMHC, Scotiabank and the real estate industry have flagged a sheer lack of housing relative to population as a persistent and deepening problem. The stock is essentially too small to house everyone adequately, and more needs to be built.
A report CMHC issued June 23 estimated that 570,000 new homes of all types are required in B.C. by 2030 to meet the broad range of housing demand that exists and restore any semblance of affordability to the market.
Robinson said the province has funded 34,000 new affordable homes to date. The remaining 60,000-odd units towards the province’s 114,000 goal will be built in partnership with municipalities, which will lead the creation of housing at sites – for example – adjacent to rapid transit lines.
“You’re seeing now significant action being taken … as we invest in SkyTrain out to Langley and out to Arbutus,” she said.
But the province’s performance has left observers unimpressed.
An analysis earlier this year by Marc Lee of the Canadian Centre for Policy Alternatives noted that just 11,000 units had been completed while a further 12,500 were deemed to be in progress.
“Overall, the BC government’s performance is still far too modest to make a real dent in housing affordability,” Lee concluded. “Given the crisis of affordable housing, we urge the BC government to take on more of the heavy lifting.”
Anne McMullin, president and CEO of the Urban Development Institute in Vancouver, said many of the projects funded by the province are caught up in the same municipal approval processes that have stymied developers.
She supports calls by the BC Urban Mayors Caucus for the province to set housing targets based on the municipal housing needs reports the province has required municipalities to prepare since 2019.
“[We’re] hoping to see some legislation in the fall from the province to address that,” she said.
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