Unpacking Rustad’s and Eby’s Big New Housing Pledges

Sure, a detailed policy platform to solve the housing crisis is good.

But to sway voters at the ballot box? It doesn’t hurt to throw in a glittering goody.

John Rustad’s BC Conservatives and David Eby’s New Democrats had already been teasing voters with gifts before the release of their platforms.

Voters are used to this. Take the tax-free home savings account, for example, offered by Justin Trudeau’s federal Liberals in the 2021 election. Sometimes renters get relief too, like the $400 rebate from former B.C. premier John Horgan’s NDP.

What are voters being offered this time around? Here’s what the duelling parties are promising, and for whom.

The Conservatives present the ‘Rustad rebate’

The Conservative party calls it the “Rustad rebate.” It would allow renters and homeowners with mortgages to claim a portion of their housing costs as an exemption from incomes when it comes to paying provincial income taxes.

It wouldn’t start until 2026 and would begin with an exemption of $1,500 per month, worth about $265 in annual savings for the average taxpayer, based on Rustad’s estimates.

The exemption is intended to increase by $500 per year, reaching a peak of $3,000 per month by 2029 — after the next provincial election. In that year, Rustad said, an average income earner would save $1,600 to $1,700 when paying their taxes.

In that final year, the program is expected to cost $3.5 billion. The party has not yet offered details on how the rebate would be funded; Rustad said they would need time to look at the budget.

The Vancouver Tenants Union, however, is not impressed, particularly in consideration of a hot housing market with high rents and low vacancies.

“It’s a tiny, tiny drop in the bucket if it were to ever happen, and it doesn’t even begin to address any of the issues that people are experiencing,” said Vancouver Tenants Union spokesperson Will Gladman.

He adds that the Conservatives’ pro-business stance — as evidenced by Rustad’s desire to lift restrictions on short-term rentals like Airbnb and comments about how rent control prevents investment — speaks to their siding with landlords over tenants.

However, the tenants union is also displeased with the BC NDP’s action on the file. Rents have soared during its time in government and it has refused to legislate vacancy control to prevent landlords from increasing rents between tenants for the same unit.

“Frankly, none of the parties are offering this in any way that will really deliver tenants what they need,” said Gladman.

He added that these days, the focus of the tenants union is primarily on organizing tenants in buildings and neighbourhoods over attempting to sway candidates’ opinions on public policy.

The NDP offers 40 per cent financing on special home purchases

The BC NDP is looking to partner with non-profit and private builders to create 25,000 homes where government will chip in 40 per cent of the financing.

For first-time buyers looking to purchase one of those homes, 40 per cent of the cost will be covered by the provincial government through a loan.

That loan has an interest rate of 1.5 per cent, with market mortgage rates currently around four to five per cent. The homebuyer would pay the province back over 25 years or earlier if they decide to sell the home.

When that sale happens, the province gets to take 40 per cent of the capital gains in exchange for its contribution.

The first example of this kind of program is the Heather Lands project, announced in September as a partnership between the province and the MST Development Corp., owned by the Musqueam, Squamish and Tsleil-Waututh, Vancouver’s three host nations.

This election goody is necessary because many of the BC NDP’s housing plans — from its zoning reforms to BC Builds — are still ongoing, says political scientist Stewart Prest, who lectures at the University of British Columbia.

“They have to say to voters: ‘Trust us, we are doing things that are going to make a difference in the long term. Meanwhile, here are some more immediate sources of relief,’” Prest said.

The program is a good deal for homebuyers looking to borrow, which means it’s a bad deal for taxpayers, says Thomas Davidoff, an associate professor at the University of British Columbia’s business school.

However, Davidoff adds that the province could break even, or even make money, from the program.

A competing tax break from the NDP?

Not long after the “Rustad rebate” was announced, BC NDP Leader David Eby announced a rebate of his own.

It has nothing to do with housing costs but functions in a similar fashion to Rustad’s.

Eby’s rebate would exempt $10,000 of individual income from annual taxes, which would translate into over $500 for the average earner in the form of a tax cut. It is intended to be accessed by 90 per cent of British Columbians.

Rustad’s plan would begin in 2026 and peak in 2029. Eby’s would start in 2025 as a one-time rebate cheque and then formally in 2026 as an annual income tax cut.

The rebate cheque would cost $1.8 billion, and the subsequent income tax cut would eliminate $1.3 billion in government revenue.

Is this good policy, or just good politics?

“These are all gifts, but I think they’re broader than they should be,” said Davidoff. “The targeting, in my opinion, should be those at the bottom of the income distribution, not the upper middle.

“But this is an election. And you know they say a program for the poor is a poor program.”

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