Pressures on affordability main issue facing residential housing sector, BILD Alberta says
New federal and provincial regulations have collided with Alberta’s economic downturn to make home ownership less affordable for firsttime buyers, says Steve Bontje, incoming chair of BILD Alberta.
During his term as chair of BILD (Building Industry and Land Developers) Alberta, the new umbrella organization representing home builders, renovators and land developers, Bontje says he will work with BILD Alberta’s 1,800 member companies to encourage governments to make housing costs a primary consideration in regulation and legislation.
“We need to have some conversations with governments about the fact that these rules have had impacts on people’s abilities to afford to own their own homes,” he says. “We have to work to make sure we’re very aware of the impact that new policies and regulations can have on affordability.”
He cited the new federal mortgage rule, effective Jan. 1, that requires homebuyers to qualify for mortgages at rates two per cent higher than those contained in their mortgage documents. Ottawa imposed the new rule to cool overheated housing markets in major cities, especially Toronto and Vancouver, and to protect consumers from widely anticipated future increases in interest rates. But Bontje says Alberta real estate markets were already slowed by the 2014 slump in oil prices.
“That (federal) change took away about 20 per cent of your purchasing power,” he says. “For a young couple, two good, steady jobs may not be enough,” to save for a down payment and meet the new rules for mortgage qualification.
At the same time, recent changes to subdivision and development regulations in the Alberta Municipal Government Act have imposed new costs on the industry, which member companies are forced to pass on to homebuyers.
“Every $10,000 increase in the cost of an entry-level home keeps 20,000 Alberta households out of the housing market,” Bontje says.
He adds that depressed housing demand places downward pressure on an already labouring provincial economy.
Among his priorities, he says, “the big one is that there’s a (provincial) election coming this year (latest May 31, 2019),” and he says he wants to use that opportunity to engage politicians on housing affordability and related regulations.
BILD Alberta was formed in 2017 to provide builders and developers with a single voice, he says. It brought together 10 separate organizations, most notably the Canadian Home Builders Association (CHBA) and the Urban Development Institute (UDI).
“As the world became more complex and some of the issues became larger, it just became more important to have that one voice,” he says, adding it’s far more effective for a single organization to ask for time with a government minister than for several to ask for time to express essentially the same concerns.
Bontje is the second chair of BILD Alberta, succeeding Wendy Jabusch of Brookfield Residential.
Bontje is the managing partner of Laebon Developments, a Red Deer-based developer and builder, as well as a former president of CHBA Central Alberta and a former chair of UDI Red Deer.
Every $10,000 increase in the cost of an entry-level home keeps 20,000 alberta households outofthe housing market.