BC Voters Guide: Housing
Will party promises restore housing affordability?
Last updated October 13, 2024
Housing has created massive intergenerational unfairness in BC.
Most young people must now work for two decades to save a 20% down payment on an average-priced BC home — up from around five years when today’s seniors started out. With ownership out of reach for far longer (if not forever), more younger people turn to rentals to make a home. This is also a tough slog, since average rents have skyrocketed alongside rising prices for home ownership.
Average home prices would need to fall by hundreds of thousands of dollars to become affordable for today’s young adults — a drop at which most current homeowners would balk. Since homeowners are the majority of voters, politicians also tend to focus on protecting homeowner equity (aka retirement ‘nest eggs’).
We should be honest about what this means. We’re asking younger people to sacrifice their financial security and standard of living to protect older people who’ve banked on the equity they’ve gained from rising home prices to fund their retirements. This is a profound expression of intergenerational solidarity. Younger people deserve credit (possibly compensation) for safeguarding housing wealth accumulation and retirement security for today’s seniors.
All political parties have a stake in solving these intergenerational housing tensions. Here are the questions we're asking as we evaluate parties for our Good Ancestor Proficiency Report Card. Keep reading for our answers.
- Do the parties offer a concrete plan to restore housing affordability — not just a slogan?
- Do parties commit to the goal that home prices should stall?
- Do parties resist blaming housing unaffordability only on “easy villains”?
- Do parties resist lobbyists for short-term rentals?
- Do parties change zoning to disrupt NIMBYism?
- Do parties ask current homeowners to contribute some of the wealth windfalls they gain from zoning changes?
- Do parties have plans to rein in costs in the regular housing market — not just rely on non-market housing to deliver affordability?
Do the parties offer a concrete plan to restore housing affordability — not just a slogan?
Good ancestors know that catchy phrases aren’t enough to address the many factors underpinning our housing woes.
At Generation Squeeze, we think a comprehensive plan to restore housing affordability must follow three paths simultaneously: scale up non-profit housing; fix the regular market; and break our cultural addiction to high and rising home prices. No party platform is yet proposing the full range of measures we need to accomplish these three objectives, but progress is being made by some parties.
As the incumbent government, the NDP have an advantage — they’ve had years to implement a range of housing initiatives. While Gen Squeeze is at the front of the line in arguing that their housing plan still needs to be improved (see the remainder of our analysis below), we recognize that BC now constructively deploys more tools in the housing policy toolbox than any other jurisdiction, and is implementing a more comprehensive housing plan than any BC government in decades (including when Mr. Horgan was NDP Premier).
For this reason, we award a proficient grade to the NDP platform. It ‘offers better policy than before, but more is needed’ to create a viable plan to restore housing affordability forever, and reduce housing wealth inequalities.
The Green party has a strong plan to grow investments in non-profit housing, and offers some general concepts about how to break our addiction to rising home values through its brief discussion on reducing the “commodification” (p. 26) of housing. In terms of the latter, the strongest part of the Green party’s plan is the proposal to ask British Columbians who own more than $3 million in residential housing wealth to contribute a small amount more in taxes to help pay for deeply affordable housing and other provincial benefits (more on that below).
For this reason, we assign the Greens a developing grade, signalling that the party is indeed making ‘incremental progress’.
The Conservatives have updated the housing ideas on which they are campaigning, which is good news, because the party was nearly silent on this issue when the campaign started. However, the platform continues to have a heavy emphasis on describing the problems the party aims to solve, while remaining light on concrete details about what it would actually do to restore housing affordability.
The only Conservative housing policy proposal fleshed out in detail is the so-called Rustad Rebate. The description sounds impressive. What you may have heard is that British Columbians will eventually be able deduct up to $3,000 of monthly rent or mortgage payments from their taxable income. Wow, does that mean the Conservatives are promising to reduce people’s housing costs by $36,000 a year?
Nope. As with so many things, the devil is in the details.
The BC Conservative proposal would allow someone to reduce the provincial income taxes they pay by 5% of $36,000. In other words, by 2029, the Rustad Rebate would save someone up to $1,800 a year. For people who pay high rents and large mortgages, that savings will be nice to have. But you won’t get any savings until 2026, because the tax credit wouldn’t be available until that year. Plus, it would start by offering $900 in savings, and grow incrementally toward the eventual $1,800 limit by 2029.
To compete with the Rustad Rebate, the NDP is offering a so-called middle-class income tax cut (p. 14) of $500/person or $1,000 per household for which 90% of British Columbians will be eligible. (We’re not sure how 90% of residents can be ‘middle class’ but that’s a discussion for another time).
The key point when it comes to factoring the Conservative’s ‘Rustad Rebate’ into an assessment of their housing policy is that one tax break is not a housing plan.
A real housing plan talks about how to dial down harmful kinds of demand in the housing market; how to dial up affordable supply of homes that have enough bedrooms to raise a family, with energy efficiency to combat climate change; and to treat renters as first-class, not second-class, neighbours.
A real housing plan talks about how to scale up the supply of non-profit housing, and protect the non-profit units we already have.
A real housing plan must discuss how the government aims to use policy incentives to dissuade everyday British Columbians from banking on endlessly rising home values to plan for retirement and accumulate wealth.
The BC Conservative plan offers very few concrete details about how it would contribute to any of these objectives. Worse still, as we describe below, the Party leader often talks about rescinding incremental progress that earlier governments have made. For this reason, we award the BC Conservatives a grade of regressing for this criterion.
Do parties commit to the goal that home prices should stall?
Good ancestors are committed to stalling home prices, so earnings can begin to catch up.
We can’t solve housing unaffordability in BC until we’re clear about when the housing market is healthy, and when it’s not.
Industry and media too often portray the housing market as strong when prices rise, and weak when they stall. This only makes sense if we’re treating housing primarily as an investment, rather than a place to call home. To remedy harmful unaffordability, we should describe the housing market as strong when prices don’t rise, and weak when they do.
The Green Party platform is “proficient” on this theme, arguing that “The BC government needs to introduce more measures to cool the market in order to make housing more affordable for everyone.” Admittedly, we are being generous by presuming that “cooling” the market means home prices (minimally) stall. The party justifies this position on the grounds that “British Columbia remains the worst economy in Canada when it comes to earning enough to cover one of the biggest costs of living — housing. This means BC’s economy is especially problematic for young people, newcomers and others who struggle to afford housing here.” Here, the Greens are echoing an earlier analysis from Generation Squeeze.
By comparison, the Conservatives are silent on this goal, as is the NDP.
That said, we should also give credit where credit is due. Since many of us blame politicians for failing to manage the housing market when prices skyrocket, we ought to give them partial credit when prices stall — as they have done recently in BC. While there’s no denying that average home prices are up 37% since the NDP took power in 2017, they have dipped 3% since David Eby became Premier in late 2022.(In comparison, average Ontario home prices are up 52% since Premier Ford took office in 2018, although they have also stalled for the past few years).
Were the NDP to embrace this achievement in their platform by affirming their goal is for home prices to stall indefinitely so earnings have a chance to catch up, we would change our grade from “ignoring” to “extending.”
Do parties resist blaming housing unaffordability only on “easy villains”?
Good ancestors tackle the complex root causes of unaffordability.
This problem shows up in BC Conservative statements on housing, but it’s also a risk for the BC NDP and Greens.
So far, the Conservatives housing position features the following statement: “Encourage a stable and predictable housing market. This means getting prices under control by promoting the development of new housing supply while cracking down on illegal money laundering that has inflated prices and facilitated criminal activity.”
Money laundering has been a harmful factor in the BC housing market. But candidates also launder the truth when they suggest it’s an overarching driver of housing unaffordability. At best, it’s one incremental factor among many. We need to hear a lot more from the Conservatives before we can judge they have a credible plan to restore housing affordability.
Even if the party limits its approach to targeting easy housing villains, the list doesn’t stop at money launderers. The Conservatives could take a position on foreign buyers, speculators, owners of empty homes, NIMBYs, immigrants, municipalities that resist density… and so on.
The NDP and Greens also run aground on this theme. The NDP Strategic Plan (p. 2) repeats David Eby’s common claim that “Our housing market was allowed to serve the interests of investors and speculators for too long. And as a result, even those who earn a decent middle-class income are finding it difficult to afford a home.”
For the Greens, the easy villain is “corporate investors [that] buy properties and drive up prices” (p. 25).
The NDP and Green parties are inaccurate when they use such language — and it perpetuates a myth at the heart of our housing woes. Housing unaffordability isn’t just a problem caused by investors, speculators, or greedy developers who we can root against. Many everyday households are entangled in the root causes of our unsustainable and unaffordable housing system, because our public policies motivate us to treat housing as an investment. Many home owners welcome the rising prices that increase the value of their homes, especially because the resulting wealth helps funds their retirements.
In this era of inflation, many have been angry at grocery executives for price gouging, or energy companies for raking in excess profits. But housing is different. Corporations (and their investors) aren’t the primary owners of BC homes — regular residents are. Rising home prices have been good for many homeowners because they drive up their equity. Financial industries have found all sorts of ways to allow people to access this wealth without even having to sell, like home equity lines of credit.
We won’t solve BC’s housing affordability problems until all political parties come to terms with this hard truth: far more regular home owners have benefitted from rising home prices than have villainous investors, speculators, or developers. So it’s no surprise that the home-owning electorate hasn’t pushed politicians to stop the relentless increase in home values that began way back in 1999/2000.
In its recently released platform, the BC Greens offer some recognition of this problem (p. 65). The BC Greens are now the only party in this election campaign to propose that owners of high value homes should contribute more to deal with the affordability challenges that accompany rising home prices. The party would double the annual property surtax rates that the NDP implemented in 2018 — asking those in homes worth more than $3 million to contribute more to pay for deeply affordable housing and other social benefits so that taxes on income need not increase. For this reason, we have revised our initial assessment of the Green party from "regressing" to "developing" when it comes to looking beyond "easy villains."
Do parties resist lobbyists for short-term rentals?
Good ancestors prioritize homes for residents over short-term rentals.
Housing needs to be for homes first, investments second. Short-term rentals generally do the opposite — no matter what lobbyists imply. Listing rooms in one’s home for short-term rental purposes may be an interesting example of the “sharing economy,” but that’s not what many short-term rentals (STRs) are. Many STRs pull out entire homes (houses, condos, fully-independent basement suites, etc) from our scarce housing supply to use as hotels for tourists, rather than homes for people who work or study in BC. These owners are generally seeking to profit from a combination of the higher rents that short-term visitors pay, along with the capital gain they hope to accrue from rising home prices.
The over-commodification of housing by STRs is a contributing factor to rising home prices that drive up the costs of rent and ownership for younger people, and newcomers of any age.
It’s positive that the BC NDP have brought in relatively strong regulations that restrict the uses of housing supply, with the goal of returning many STR units to the supply of homes for locals.
There’s reason to worry about media reports indicating the BC Conservative leader “would prioritize repealing provincial restrictions on short-term rentals if elected.”
The Green Party platform includes one reference to this issue in its platform (p. 26): it promises to "implement regulations to curb the impact of short-term rentals on the availability of long-term affordable housing." We award an "emerging" assessment for this promise, which is vague by comparison with the actual regulations that have been implemented by the NDP government.
Do parties change zoning to disrupt NIMBYism?
Good ancestors recognize the role that zoning changes can play in disrupting NIMBYism.
For too many years, about one-third of Vancouver residents resided in three-quarters of the land zoned for homes, squeezing everybody else into the remaining quarter. That’s an inefficient use of land, especially when many worry about a lack of housing supply. Other municipalities experience similar patterns.
Low-density (single family) zoning enables homeowners to get behind the idea of adding density to their communities — while still resisting the prospect of doing so around their own homes. As a result, lots of development has been slowed down over the years. Anyone who finds compelling those who argue that “housing gatekeepers” are slowing down new builds should be especially concerned about low-density zoning that privileges single-detached homes or duplexes.
It’s encouraging that the NDP recently introduced new housing legislation that requires most BC municipalities to deliver more multi-unit housing like four-plexes, triplexes, townhomes, etc. This provincial change fixes old fashioned zoning rules that restricted communities from adding more homes faster. It reduces red tape, and will increase the speed that new housing projects receive permits.
The Conservative leader is reported to have said on CKNW radio in May 2024 that he would repeal these zoning changes. Should he stick to this view (it's hard to tell on the BC Conservative website), it would be a step back for building enough supply to help price young people back into the housing market, whether as renters, in co-ops or as owners. During the televised leaders debate on October 8, Mr. Rustad regularly referred to the problem of the long wait-times for new housing projects to receive permits in BC municipalities. The changes to zoning implemented by the NDP government is a big part of the solution to reduce those delays. Rolling back the zoning changes would exacerbate the very problem Mr. Rustad wishes to fix.
Repealing the new provincial zoning legislation would also be a classic case of privileging the views of existing (often older) homeowners who currently live in low density neighbourhoods, over the voices of those who may like to have a chance to live in those same communities. Younger folks generally fall into the latter group, and at Gen Squeeze, we think their voices ought to count as much as those who already own homes.
The Green party only refers to zoning once in its platform materials -- promising to "implement province-wide upzoning initiatives to end exclusionary zoning for non-market housing." We award this an "emerging" grade. To earn a stronger assessment, the BC Greens would need to speak more directly about province-wide upzoning for non-profit and missing-middle market housing -- both rental and ownership.
Do parties ask homeowners to share wealth windfalls created by zoning changes?
Good ancestors propose to collect some of the increased land value that results from zoning changes from current homeowners, not just from the developers of new homes.
When governments change zoning to permit additional density, they increase the value of the rezoned land, because more homes can be built on it. This "land lift" raises an important question. Who should keep this newly created wealth — the current owners of the land, or the public who created the wealth through the zoning change?
Presently, the BC NDP is ignoring this issue. It has no plan to collect some of the publicly created wealth-windfall from owners via changes to property taxation, or with other policy tools. Instead, the primary way wealth from up-zoning is captured is at the municipal level, when local governments levy development cost charges and related fees on developers of new housing.
We agree it’s important to have developers help pay for public amenities like water, sewer, etc. that new residences require. But it’s time to ask whether developers are being expected to cover too much of these costs as a result of the idea ‘growth should pay for growth’ espoused by some local officials.
For anyone concerned with intergenerational fairness in our housing system, this view is problematic. When land lift is collected primarily from developers, they pass on these costs to residents of new units, by increasing purchase or rental prices. For younger people working hard to claw their way into an already unaffordable housing market, this pushes the bar even higher.
Rather than fueling intergenerational tensions in housing, we should expect those running for provincial office to collect some of the new ‘land lift’ value from current homeowners — not just developers -- because they will directly benefit from the rising values generated by up-zoning. When collected to the public purse, the s hare of the wealth windfalls contributed by homeowners could be used to reduce the taxes charged to new developers to speed along construction of additional supply. They could also be used to support additional rental, affordable or social housing.
It’s a win-win-win. Home owners still get richer from zoning changes that permit more density. The portion of newly created wealth collected by governments means developers are charged lower fees, facilitating housing investment. And prospective owners and renters can access new units at lower price points.
So far the Greens are the only party to propose capturing some of the land-lift value for the public. Its initial housing promises included a section on "Reducing wealth inequality" and its platform (p. 65) proposes to "increase the taxes paid on the most expensive properties in British Columbia." The existing provincial property tax rates on the value of homes over $3 million would increased, and residents will be expected to pay these rates on the cumulative value of their property holdings -- not on a per-property basis. The platform estimates that these changes would affect 3.7% of British Columbians, and raise nearly $1 billion annually. For this policy proposal, the Greens earn a "proficient" score.
The BC Conservatives have recently added information to their platform that makes clear they reject this idea. Instead, their platform promises to search for ways to reduce the property taxes paid by owners so that they are not charged on the market value of their home after their neighbourhood is rezoned. Accordingly, we award a grade of "regressing."
Do parties have plans to rein in costs in the regular housing market — not just rely on non-market housing to deliver affordability?
Good ancestors recognize that dramatically scaling up the non-market supply of housing also requires a strong plan to rein in prices the regular housing market.
We badly need more non-market housing. Thankfully, groups like the BC Non-Profit Housing Association and the Cooperative Housing Federation of BC are working tirelessly to get these units built. They need more funding, so platforms that propose to direct additional resource to these (and related) organizations deserve praise.
But let there be no mistake. We can’t just say: “the regular market is so screwed up that we should stop relying on it to deliver housing.” It will be near impossible to scale up non-market housing (owned, co-op and rental) if parties don’t also have strong ideas about how to stall home prices in the regular market.
Scaling up non-market housing means getting the non-profit sector access to land. Some land that’s already public could be re-purposed — and the NDP and Greens have plans to do just this (we couldn’t find any relevant info from the BC Conservatives). But to build enough deeply affordable housing, communities are likely going to need to build on land that isn’t publicly owned. This means the cost of non-market units will be deeply influenced by the cost of acquiring land — the same land for which the regular housing market competes. So long as land cost keep rising, the cost of building new non-profit housing also will increase, resulting in fewer new units.
Timing is not on our side when it comes to scaling up non-profit housing supply to levels that will make a major dent in affordability. Proponents of non-market housing estimate that we need to build 25,000 new non-market units a year. Let’s imagine we achieve this target each year for the next decade, for a total of 250,000 homes. With over two million households in BC, that adds only 12% of the existing supply. Clearly, most people will have to continue to rely on the regular housing market to find and make a home.
If we are truly committed to restoring housing affordability forever, it will require a concerted effort to fix the regular housing market alongside efforts to scale up non-profit housing supply. It has to be both/and — not either/or.
The Green party was especially at risk for this weakness on its website prior to launching its full platform. Because its discussion of building more homes implied that adding non-market supply may be sufficient. For example, the party materials emphasize: “Instead of investing in corporate developers who drive up prices to make a profit, the BC government needs to significantly scale up support for new non-profit and co-op housing.” In addition to make more housing available, this could drive prices down across the board, because lower-priced “non-market” housing will compete with higher-priced, profit-driven ‘market’ housing.”
Absolutely, building non-profit housing is critically important. But the Green Party platform needs to engage more with the question of scale, because adding 250,000 units over a decade still leaves most British Columbians relying on the regular housing market to make their home.
Nevertheless, after the party released its full platform, we upgraded the BC Greens to a "developing" grade on this issue. Page 26 of its full platform includes a section that would "Address the Commodification of Housing." This section features a number of promises to dial down harmful kinds of demand in the regular market, like the use of housing for vacationers rather than residents, and discouraging various kinds of speculation. Its proposal to slow the rise in rents after a tenant vacates the unit is also important for protecting renters; but many more details are required to understand how this policy would play out.
The BC Conservative platform places little emphasis on non-profit housing; and only mentions it to question why the current government has "handed out hundreds of millions of dollars to inexperienced non-profits." So it clearly focuses its attention on the regular market to supply affordable housing.
But the Conservative platform is short on concrete policy details about how it will get new, affordable supply built in the regular market. It's best idea is to collaborate with the federal government to grow money for purpose-built rental housing, something that is already underway.
Its other focus is on reducing taxes for developers. As discussed above, a reduction to development charges levied on new housing projects may be an appropriate policy adaptation if the lost revenue is made up by expecting existing owners of affluent homes to contribute more in annual property taxes so there are still funds to subsidize the development of new, deeply affordable units. The Conservative party platform rejects this idea outright, and instead wants to explore ways to reduce the property taxes paid by owners so that they are not charged on the market value of their home after their neighbourhood is rezoned. Given these conflicting signals in the Conservative platform, we award an "emerging" grade for its efforts to wrangle the market.
The NDP has the most concrete and widest range of policy ideas to wrangle the regular housing market. It's speculation and flipping taxes are important, as is its previous implementation of annual property surtaxes on home values above $3 million (the policy the Greens promise to strengthen still further). The NDP's crack down on short-term rentals and its bold changes to zoning to allow middle-density throughout BC municipalities are important, as are efforts to contain annual rent increases that tenants face.
Most recently, the NDP has announced an interesting concept where it proposes to help 25,000 first-time buyers get into home ownership by blending private and non-market forces in new developments with partners like the Musqueam, Squamish, and Tsleil-Waututh nations. Under this plan, those 25,000 buyers would pay 60% of the market value of the new unit, and the provincial government would cover the remaining 40% of the purchase cost. The buyer would owe the remaining 40% of the purchase price at the time the unit is resold, or after 25 years. The provincial coffer would therefore get repaid and (we believe, but need to confirm) benefit from any equity gained on 40% of the unit's original sale value. This kind of "shared equity" approach is a novel one, worthy of consideration, especially if it can be scaled up.
But there is an inherent risk in this approach as well. It risks reinforcing, rather than disrupting, the cultural addiction to high and rising home values. The first-time buyer is incentivized to hope the home goes up in value to help pay the remaining 40% of the purchase price they eventually owe; and the province is incentivized to welcome rising home prices to gain a strong return on the 40% it invested.
In the end, what we really need are policy incentives that clearly discourage all British Columbians from counting on rising home values in their plans to save for retirement and gain wealth. It's one thing to pay off one's mortgage over time to build equity. That's a perfectly reasonable goal when purchasing a home. It's another thing to expect home prices to skyrocket in value at a pace that leaves earnings behind so that owners benefit from wealth windfalls. The latter is the dominant driver of housing unaffordability in BC -- one that has benefitted many older homeowners, and one that the BC NDP platform still largely ignores.
For these reasons, we award the NDP the strongest grade on this issue -- proficient. But it is not yet "extending," because the party has yet to address the elephant in the room: our housing plan in BC still incentivizes everyday households to become entangled in the expectation that home prices will rise to support their goals to accumulate wealth. This cultural addiction needs to be broken if we are to restore affordability over the long-term.
