Infrastructure crucial piece of affordable housing puzzle
NDP can assist market by supporting cities, home builders
It is widely expected the upcoming provincial budget will reveal our new government’s priorities as they relate to housing in B.C. Expectations and anticipation grow for homeowners, builders and observers who are placing their bets on what will be announced.
For me, provincial budgets are a bit like Halloween. Naturally, I’m hoping for treats, such as commitments from government to build new infrastructure that enables new housing supply, but I’m also bracing myself for possible surprises — or tricks — that might disrupt the housing market in ways that harm new home construction and in turn harm the affordability of market housing. So what am I expecting to see? One of the key election promises made by our new provincial government was it would build 114,000 new housing units over the next 10 years or roughly 11,000 additional homes a year provincewide, primarily in the form of additional rental and co-op housing. It is highly probable there will be significant new financial commitments put toward this promise.
Should the funding come to pass, I would consider this a real treat, especially for renters. Injecting extra supply such as this — even if it’s all concentrated in rental stock — would create great relief to many. Increasing vacancy rates and reducing rents will provide critical relief and tangible benefits to the 30 per cent of B.C.’s population who are renters.
But what about the 70 per cent who own their homes?
That’s a tough question to answer because the NDP did not include any specific measures in its election platform targeted at tackling the problem of market housing affordability.
Most housing market pundits agree home prices are determined by supply and demand for housing. Local governments have the greatest control over policy measures that determine housing supply, whereas the provincial and federal government have more impact on housing demand. Having said that, all three levels of government can impact both the supply and demand for housing, just in varying degrees.
Short of providing provincial land for housing development, the most effective way for provincial governments to increase the available stock of developable land is to invest in infrastructure.
When most people hear infrastructure as it relates to housing, they think transit and that’s critical, but an equally important and necessary condition to enable new developments concerns roads, sewers and water-treatment facilities.
Getting “pipes in the ground” for new housing development often relies on the extension of existing neighbourhoods, but often, such as in the example of the Anniedale/Tynehead community that bridges North Surrey and the Township of Langley, the costs of expansion are prohibitive: Too high for any single private developer to justify and too large to fit within the existing debt structure of the city.
In cases such as these, of which there are many examples just in the Metro Vancouver area, the B.C. government could step in to either provide or guarantee the capital costs to “unlock” many thousands of new affordable market housing units for families, radically increasing the stock of new housing.
At the same time, it’s also critically important to increase the flow of new housing. In other words, make the system more efficient at city hall so new housing supply comes to market sooner.
Although cities are responsible for new development applications, issuing building permits and imposing various fees and charges, it’s the provincial government that creates the legal framework that allows city bureaucracies to function.
The provincial government could choose to shake up the status quo of existing municipal-provincial relations by re-examining and modifying existing legislation to create incentives to cities that meet regional targets for creating new housing and penalties for those that miss their targets.
Such changes could be made collaboratively with cities to agree on baseline levels of service delivery and new housing supply targets, best practices and so on with the end goal of creating more housing and faster to ultimately make market housing more affordable for the majority of working families.
I have never spoken to a mayor or senior official who objects to the idea of continually improving what they do and being held accountable for it. Perhaps the time has come to convert public promises into public policy. Now that would be a treat.
Bob de Wit is CEO of the Greater Vancouver Home Builders’ Association. Email bob@gvhba.org