B.C. had another difficult year for housing. Despite building thousands more apartments, rents climbed by 6.3 per cent in Vancouver, 7.7 per cent in Victoria and 8.4 per cent in Kelowna — the highest increases seen since 2018, according to the Canada Mortgage and Housing Corp.’s annual rental market survey.
Soaring inflation and interest rates have made building new housing more risky, while potential homebuyers have struggled to get mortgages. Cities and towns are still struggling with an increase in visible homelessness that started during the COVID-19 pandemic.
In 2018, B.C.’s new NDP government rolled out an ambitious housing plan that was applauded by many experts. The NDP also introduced new taxes aimed at the highest-priced properties, homeowners who keep properties empty and foreign buyers in an attempt to curb real estate speculation.
Five years later, the province is now in the middle of its 10-year housing plan. But after home prices and rents soared during the pandemic years, housing affordability hasn’t improved for the average person living in B.C.
B.C. has a new premier — one who led the charge when it came to taxing speculation, but is now emphasizing “supply, supply, supply.” David Eby has particularly focused on zoning, normally a municipal responsibility, and has pushed cities to allow more density.
Meanwhile, the BC Liberals have taken aim at the NDP for promising to build 114,000 new units of housing over 10 years, a promise they say the government is falling short of achieving. An analysis showed that just 11,013 housing units had been completed in the first three years of the NDP’s housing plan.
Here are five key housing takeaways from the 2023 budget.
A $500-million fund to buy apartment buildings
For every new affordable apartment built, between three and five are lost by longtime tenants as older apartment buildings are bought and converted to new uses or renovated. Because B.C.’s annual rent controls apply to the tenancy and not the rental units, landlords can raise rents as much as the market will bear between tenancies.
The gap between the new “market rate” rent and the rate medium- and long-term tenants pay is now so large that many tenants must pay double or more in rent if they lose their apartment and have to find a new place.
The Co-operative Housing Federation of BC, BC Non-Profit Housing Association and the Aboriginal Housing Management Association, under an umbrella group called Housing Central, have been warning about the growing loss of older, affordable rental apartments for years. Their advocacy paid off this year with the announcement of a new $500-million fund. The money is expected to be fully disbursed to buy properties within the next three years, although Housing Central hopes to keep adding money to the fund from other sources.
The fund could be used to help tenants buy their building and form a housing co-operative, or allow a non-profit operator to buy a building and maintain current rent rates.
“That's been the missing piece,” said Thom Armstrong, CEO of the Co-op Housing Federation of BC.
“The whole Housing Central team have been really advocating for that for pretty much the better part of the last four years. So that's huge.”
The new fund was announced ahead of the budget in January, and Armstrong said Housing Central has been receiving calls from potential apartment building sellers, tenants who are interesting in incorporating as a housing co-operative and REITS and pension funds who have apartment buildings in their portfolios.
Armstrong estimates the $500 million could contribute to purchasing 2,000 to 3,000 apartments. There’s no guarantee the funding will be renewed, and the federal CMHC has so far shown little interest in contributing federal funds, Armstrong said. But if Housing Central can demonstrate the model works, the program could be expanded.
$4.2 billion to build new housing
The $500 million fund to buy up older apartment buildings is just one piece of the puzzle. Another big question was whether government would pick up the pace on building the new housing it’s promised.
“The big question that we were looking for in the budget announcement was, ‘Would that be matched by investment in new supply?’” Armstrong said. “And the answer is yes, but with some details left unresolved.”
The government has announced an additional $4.2 billion over the next three years for a program called BC Builds, but Armstrong said it’s still not clear how exactly that money will be spent. Meanwhile, keeping up with soaring inflation that has increased the cost of supplies and labour will reduce government’s spending power.
“We'd asked for $4.2 billion to be moved up to get new new supply in the ground… but through no fault of the government, a lot of it is going to have to be used to deal with cost increases to meet their annual unit commitments,” Armstrong said.
Jill Atkey, the CEO of the BC Non-Profit Housing Association, said the province is still very far away from solving the housing crisis, especially for unhoused people and low-income renters.
“What it does do is move money forward in that 10-year-plan and that's very much something we were advocating for… because we know that housing from the point of investment is going to take a good five years in most cases to actually get developed,” Atkey said.
The housing sector will get a better idea of how that $4.2 billion will be spent later this spring, when more details are expected to be announced.
$400 renter tax credit
Renters have had to wait five years for the BC NDP to fulfill a 2017-era election promise to introduce a $400 tax credit for renters. The rebate is intended to match a similar credit, the homeowner grant, that has been in place for decades.
The homeowner grant — which doles out between $570 and $770, depending on where you live — is delivered to owners of properties worth up to $2.12 million at a cost of $910 million.*
The renter credit will only be available for low-to-moderate income renters. Households earning up to $60,000 can get the full $400 credit, and the income threshold is capped at $80,000. The B.C. government says the credit will apply to around 80 per cent of the province’s renters.
While the amount is modest, Amstrong said the rebate would be meaningful for low-income renters who are struggling to make ends meet.
$125 increase in shelter rate
The shelter-rate portion of social assistance cheques has been set at $375 for a single person for 16 years, leaving people on welfare with few choices when it comes to their housing. The $125 increase announced in this year’s budget was a surprise, and it is significant for both renters who rent in the private market and non-profit housing operators who house people who can only pay the shelter rate.
“It's not close to what everyone was calling for, but when you can deliver like a 30-per-cent increase on a program tool that hasn't been changed since 2007, that's really significant,” Amstrong said.
Province pushes zoning reform, density near transit
Eby has ruffled municipal feathers by threatening “provincial interventions” if city governments don’t move quickly enough to allow higher-density development.
The budget includes $11 million to implement new legislation introduced in the Housing Supply Act, which included allowing the provincial government to set housing targets in consultation with municipalities and to require them to report on their progress. Another $57 million is identified over the next three years “to unlock more homes through new residential zoning measures and by reducing the time and cost associated with local government approval issues.”
“The provincial government has to be very careful in how it balances the carrot-stick approach when it's dealing with municipal governments, because that can have a huge impact on an election, and the next election is not really that far away,” Armstrong said.
Some municipalities have expressed a concern that infrastructure is a barrier to introducing supply, Armstrong said. A $1-billion fund announced before the budget to help municipalities build out or improve infrastructure could help with developing that goodwill.
“If they can tap into a reliable stream of funding that allows them to upgrade infrastructure… it could actually be quite impactful,” Armstrong said.
Atkey said she’ll also be watching how a $400-million funding commitment to buy land near transit stations will unfold. The B.C. government introduced legislation last April to allow the province to buy land along transit line right-of-ways to build housing and community amenities, “but the mechanism to purchase that land wasn’t there,” said Atkey.
With files from Andrew MacLeod.
* Story updated on March 7 at 1:58 p.m. to correct the total amount the B.C. government spends on the homeowner grant.