The Urban Development Institute charges that the British Columbia budget, released Tuesday, does precious little to tackle housing affordability.
“For too many years, British Columbians have coped with a housing shortage and chronically low vacancy rates of less than 1%,” Anne McMullin, UDI’s CEO, told REP. “While provincial investments in housing for the homeless are welcomed and needed, this budget doesn’t address the housing challenges for our remaining residents, including seniors, employees, students and adult children seeking homes to rent or buy.”
She added that the Vancouver region expects a million new residents and 500,000 jobs over the next two decades, however, those projected gains could eventually become compromised by the seemingly impassive budget.
“UDI believes this budget was a lost opportunity to capitalize on a forecasted downturn in housing starts, by launching an aggressive rental incentive program to boost vacancy rates with more housing options,” continued McMullin. “This is critical if we are going to achieve the government’s laudable goal of building 114,000 affordable housing units.”
Instead of catalyzing the construction of more purpose-built rental buildings, of which there’s a dearth in Greater Vancouver, UDI contends that a string of regressive policies from the provincial NDP is stifling housing starts “with little understanding of our industry’s contribution to our economy, jobs, GDP and provincial tax revenues.”
“At the same time, they forecast that home prices will likely increase in the next few years,” continued McMullin. “This is due to fewer new homes being built for a rapidly growing province, and new taxes being applied to housing projects that get passed onto renters and homebuyers.”
Among UDI’s suggestions is repealing real estate taxes that developers pay on schools, luxuries, properties and property transfers, because they invariably get passed on to homebuyers and renters. The Urban Development Institute also suggests a provincial sales tax rebate on construction materials.
To elucidate its point, UDI says that a typical new Cambie Corridor apartment is priced at $840,000, roughly $220,000 of which is comprised of government taxes and fees. Those charges increase to about $644,000 on a single-family home in Metro Vancouver. As home prices continue escalating in the years ahead, the extra charges will climb commensurately.