When B.C.’s new government releases their first official budget on Feb. 20, they’ll also be releasing details on their long-promised “comprehensive housing strategy” that they say will “address all the levers.”
It will be a litmus test for the hordes of people who turned out to vote for the NDP because of the party’s many promises on housing affordability.
Here are some things to watch for.
Overall, will the BC NDP’s comprehensive housing strategy seem beefy? Will it actually, meaningfully adjust “all the levers”? Will it seek to ensure that housing is first and foremost used as a place to live, and not just a place to park or make money?
Housing can be a relatively complex issue, so there’s a lot to say for that initial, gut instinct. We’ll be looking to see if the BC NDP announcements seem truly bold.
Restricting harmful demand
From global and domestic speculation, to unregulated short-term rentals, a boom in migration of the mega rich, all the way to out-and-out fraud and illegal activity, it’s clear that not all demand is good demand.
How will the BC NDP’s strategy restrict harmful demand on the following fronts?
A global “wall of money” has been distorting local real estate markets in many places around the world. B.C. has been caught up in this trend. The influx of global capital over recent years has acted like gasoline on the fire, contributing to out of control prices.
After the 15 per cent foreign buyers’ tax was implemented, we saw a sharp drop in so-called foreign involved transactions in Metro Vancouver real estate.
Unfortunately, the problem then seemed to get worse in places like Greater Victoria (where the tax didn’t apply). Not only that, many foreign buyers have seemingly adjusted to the tax in Metro Vancouver, where the percentage of foreign involved transactions has been on the rise.
How will the BC NDP expand on the work of the BC Liberals to better reveal, track and stem, or redirect this influx of global capital?
Speculators, both global and domestic, have been inflating local prices by treating housing as a commodity, instead of a place to live.
Measures that target global capital will help, but there are also options to target speculation, generally, including the BC NDP’s own campaign promise to implement a 2 per cent speculation tax.
Speculation has long been blamed by the BC NDP as exacerbating the housing crisis, so what approach is their strategy going to take?
The government recently announced an agreement whereby platforms like AirBnB will actually charge tax on their short-term rental listings. So that’s nice.
But much more needs to be done. Currently, it’s been up to individual local governments to figure out a way to manage and regulate the burgeoning short-term rental industry. And in places like Vancouver, Victoria, Tofino, Nelson, Whistler and others, local approaches are taking hold.
The province could be doing much more to help, so what have they got planned?
In the spring of 2016 the BC Liberals gave the City of Vancouver the authority to tax vacant homes, a measure Gen Squeeze supports. Other local governments have been calling for similar authority. Will the BC NDP grant it?
We’ve supported the Vancouver tax and mobilized in support of a UBCM resolution on this topic. Will we see an update there?
Increasing the right kind of supply
Taking cues from groups like the BC Rental Housing Coalition and others, the BC NDP committed to build 114,000 new homes over the next ten years, in partnership with non-profit and market partners.
It hasn’t been abundantly clear exactly how they’re going to count these units, or the priority approaches they’ll take to get them built.
We’ll be looking for updates here.
When it comes to building new supply, there’s increasing alignment around the need to prioritize and incentivize purpose-built rentals, because these units provide better security for the growing percentage of B.C.’s population that rely on the rental market for housing.
In addition to their 10-year target (above), how does the BC NDP plan to work with other levels of government to get more of this supply online?
Transportation is intricately connected to housing, and many have been advocating for transit investments to be tied to specific density targets in and around transit corridors (this is an efficient way of doing things).
Will the NDP plan address this in any way?
Missing middle housing
In addition to the growing focus on purpose-built rentals, there’s also been a call for more so-called “missing middle” housing — townhomes, mid-rises, laneway/garden suites, duplexes, that kind of thing.
Because we’ve had our fair share of condo towers, and a little diversity would be nice.
Care must be taken to ensure that existing affordable housing doesn’t get lost to this type of infill development, so it will be interesting to see what the BC NDP have to say about this.
Taxing housing wealth more fairly
There’s evidence that tax policy is among the most powerful tools to get housing markets back under control.
We’ve already talked about some tax policy on the demand side, but it’s so important it needs its own category.
We all know some people have won out big time with rising home prices, while many others (including many young people) are losing.
We need to rebalance our tax system to better reflect this divergence in wealth.
Options to do this include property tax rates that increase with the value of homes, adjustments to the capital gains taxes on real estate, perhaps even pairing these with cuts to income taxes (a combo that Gen Squeeze is currently modelling).
But because we’re talking about taxing people’s lottery winnings here, this is a political hot potato.
If we had to guess, the BC NDP’s strategy will be light on this front. But maybe we’ll be pleasantly surprised?
A truly comprehensive housing strategy will cover even more ground, including a better approach to eliminating homelessness, protecting and enhancing our existing affordable housing stock, collecting better data, and more.
We’ll have a chance to discuss the full picture at our Feb. 20 event, B.C. Budget 2018: Where's the Beef?
When the new budget is released, we’ll help you understand whether the BC NDP are coming through on their big ticket affordability promises, or whether they seem to be kicking the can further down the road. Join us at our live event in Victoria B.C., or livestream from anywhere in the province!
Additional B.C. budget briefings:
- BC Budget 2018 preview
- Briefing on child care
- Briefing on medical care spending
- Briefing on generational spending gap