British Columbia Election 2017
Housing is a key topic for voters in the upcoming provincial election on May 9. Approximately 96% of residents live in market-provided homes across Canada, whether owned or rented. Protecting housing affordability, and ensuring that homes are within the financial reach of residents, will reduce pressures on social housing so that available units serve those in most urgent need.
2017 Election Recommendations
When British Columbians head to the polls on May 9, housing will be a top-of-mind issue for many voters. In an Insights West poll, three-in-ten residents (29%) think housing, poverty, and homelessness is the most pressing concern in the province. This is ahead of health care, the economy, and jobs.
As part of its ongoing advocacy efforts, the Canadian Home Builders’ Association of British Columbia (CHBA BC) has compiled its recommendations on housing for political parties who desire to form government in May. CHBA BC advocates for homeowners and new home buyers – and the key industry sector that supports them: home builders, developers, and renovators that live and work in British Columbia’s communities, big and small.
Strong consultation and collaboration between government and industry is one of the best ways to determine effective policies on housing for all British Columbians.
These recommendations primarily address housing affordability in market housing. Approximately 96% of residents live in market-provided homes across Canada, whether owned or rented. Protecting housing affordability, and ensuring that homes are within the financial reach of residents, will reduce pressures on social housing so that available units are there to serve those in most urgent need.
1. Increase supply
British Columbia is a desirable place to live and work. In the 2016 Census data, the municipality of Vancouver was listed as the highest population density in Canada with more than 5,400 people per square kilometre. The number of people living in British Columbia also increased 5.6% from 2011 to 2016, which is above the national average. These statistics are just one snapshot of a growing population in many urban areas of British Columbia.
To accommodate this growth, a significant focus on working with municipalities on increasing the supply of housing of all types is required by government. It shouldn’t take years to get from concept to ground-breaking. However, it also can’t be just apartments and condominiums. Research indicates that 94% of Canadians want ground-oriented, low-rise housing. Without an adequate supply of alternatives, including townhouses, row houses, and single-family homes, the competition for low-rise housing will continue to be strong and keep prices high.
Recommendations
•Collaborate with municipalities and industry to remove barriers to development, including fees, land-use policies and approval processes, so that more housing can be built faster, and with lowercarrying costs.
•Collaborate with municipalities and industry to encourage diversity in housing stock, more family-friendly housing alternatives, and increased density around transit areas.
2. Amend the Property Transfer Tax
Home prices have increased over the years. With the decades-old provincial property transfer tax (PTT) structures, so has the tax paid by buyers. In the 2016-17 first quarterly report, the revenues from the PTT increased by almost one billion dollars over expectations in Budget 2016. While some of this revenue has been transferred into affordable housing initiatives, it doesn’t impact the affordability for purchasers of market housing who have to pay the provincial taxes on their purchase price.
The province also collects the tax multiple times throughout the development life cycle; first on the sale of land to build, and once again on the price paid by the home buyers.
The Canadian Home Builders’ Association of British Columbia applauds recent changes to the PTT including the Newly Built Home Exemption for purchases up to $750,000, and the recent increase to the First-Time Home Buyers Exemption for purchases up to $500,000. However, the structure of the tax for all other purchases that do not fall within these exceptions could be amended, and will benefit all home buyers.
Currently, the tax is charged as 1% on the value up $200,000, 2% on the fair market value greater than $200,000 and up to $2 million dollars, and 3% on the portion greater than $2 million. However, when the tax was designed in the 1980s, it was possible to purchase under the $200,000 threshold. Now, with rising land values many condominiums and apartment buildings cost well over the $200,000 threshold.
Recommendation
•Raise the property transfer tax threshold to better reflect rising home prices. Raising the first tier, sothat 1% is charged on the first $525,000 will give a necessary tax break to new-home buyers.
•Ensure real estate transactions underway are exempt from any new changes to the PTT.
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