Hello BC REALTORS®,
On April 3, Premier David Eby and Minister of Housing Ravi Kahlon released their housing action plan, “Homes For People.” While much of the plan involves many previously announced commitments and plans, there are also new areas of commitment for the provincial government. Below is a summary of new policies announced in the plan.
There are three significant announcements impacting housing supply, outlined below.
Firstly, in the fall, the province will introduce legislation that will apply to many areas of the province and will allow more Missing Middle (three or four units) on a traditional single-family detached lot, depending on the size or type of lot. The legislation will also allow for additional density permitted near large transit centres. The BC Government will work with municipalities and stakeholders on these inclusionary zoning processes.
We don’t have specifics at this time, but we know that the BC Government is looking at New Zealand’s Medium Density Residential Standards, the State of Oregon's missing middle development, and the State of California’s Home Act to inform their upcoming policy.
Secondly, in addition to the Missing Middle legislation, legislation will be introduced later this year to make secondary suites allowed in every community in BC. Beginning in early 2024, homeowners will be able to access a forgivable loan of 50 per cent of the cost of renovations, up to a maximum of $40,000 over five years. The loan can be forgiven if the homeowner meets all conditions laid out in the program, including renting their unit out at below market rates for a minimum of five years. The pilot is expected to be open to at least 3,000 homeowners for the first three years.
The third significant announcement impacting housing supply is implementation of the Housing Supply Act, which was brought into force in fall 2022. This Act allows the province to set housing targets and support engagement with select municipalities. By mid-2023, housing targets will be established in approximately eight to ten municipalities that are identified as having the greatest housing need and highest projected growth, building on existing requirements for local governments to create Housing Needs Reports that identify housing demands and supply factors.
These three announcements have the potential to be important changes that could add significantly to housing supply. BCREA has been advocating for more Missing Middle housing options across the province for a long time and we will continue to ask for adequate consultation and a permanent housing roundtable to ensure that this policy is well-implemented.
Development Process, Permitting and Approvals
In 2023, a newly dedicated single window application process will be launched for all housing-related permits overseen by the province. This is intended to speed up the process and eliminate the need for multiple applications across ministries. The new permitting model will focus on prioritizing housing projects that we need built urgently, such as Indigenous-led projects, BC Housing applications, and multiple-unit developments. These improvements will complement recommendations in the Development Approvals Process Review.
The BC Government will introduce a tax on the proceeds of property sales based on how soon they happen after the initial purchase. We do not have any more details about the tax at this time, but the Flipping Tax is likely to be redundant with the pre-existing federal anti-flipping tax rule implemented as of January 1, 2023 that treats the proceeds of homes sold in under one year as business income. BCREA will continue to advocate to ensure that the Flipping Tax has exemptions for additions to the household such as birth or adoption, the breakdown of marriage or common-law partnerships, illnesses or disabilities, work relocation, insolvency, and other necessary reasons for families to move.
The province will also consider expanding the Speculation and Vacancy Tax (SVT) to more areas with low vacancy rates and stepping up efforts to improve compliance. Expanding the SVT is unlikely to have an impact on affordability. BCREA’s Market Intelligence report from 2020 estimated the impacts of the tax. The SVT had negative impacts on home sales and prices but the impacts were temporary and appeared to be limited to Metro Vancouver. Within Metro Vancouver, it is difficult to disentangle impacts of the SVT on the rental market with impacts from the Empty Homes Tax and short-term rental regulations that were implemented around the same time. In January 2023, the SVT was expanded to include North Cowichan, Duncan, Ladysmith, Lake Cowichan, Lions Bay and Squamish. We do not expect that expanding the SVT to those communities or to additional communities will have a meaningful impact on housing attainability.
No specifics were announced on anti-money laundering measures, apart from general commitments to combatting criminal activity in the real estate market with a number of measures, including through unexplained wealth orders and new partnerships with the federal government.
The province will create a Future Ready Plan, to be released in spring 2023, to connect more people to the relevant skills and training they need to quickly find and advance their careers in the construction sector.
The province announced several new policies to impact rental housing including:
exploring new opportunities and ways to build new rental buildings, as well as expanding and maintaining existing purpose-built rental buildings,
making the renter’s tax credit permanent. This annual $400 income-tested tax credit for a renter household that makes less than $60,000 per year. Renter households that earn between $60,000 and $80,000 annually will receive an income-tested amount,
increasing funding for the BC Rent Bank that provides interest-free loans and grants to renters in BC with low to moderate incomes, and
mandating more data-sharing by short-term rental platforms.
New affordable housing announcements include:
$394 million as an initial investment to help deliver up to 10,000 units at or near transit over the next 10-15 years,
Creating more subsidized rental homes through an expansion of the Community Housing Fund,
Doubling the number of homes delivered through the Indigenous Housing Fund,
Doubling the number of homes delivered through the Women’s Transition Housing Fund,
More on-campus rooms for post-secondary students,
Work with co-op stakeholders and other partners to re-invigorate the co-op housing sector, including leveraging federal and provincial funding streams, addressing the issue of upcoming lease expirations, and examining new ways to grow the sector, and
A new homelessness framework.