CLARITY GOES MISSING IN NDP’S HOUSING STRATEGY
Government refuses to say if it’s trying to slow escalation or reduce prices
For much of budget week, the New Democrats were pressed by the Greens to specify how big a market correction the government was seeking in the drive to make housing more affordable.
Green Leader Andrew Weaver launched the exchange during question period Wednesday, the day after the release of the budget that pledged to “stabilize” the market.
“What does stabilization actually look like?” he challenged.
Answering was Housing Minister Selina Robinson. But in declaring how proud she was to be part of a government that was finally addressing affordability, she never got around to saying what stabilization would look like. Weaver seized the opening immediately.
“Between 2015 and now, just three years, the average price of a home in Greater Vancouver increased by 60 per cent to $1.6 million. The average price of a condo increased 70 per cent to $665,000,” he returned.
“Stabilizing the housing market at present levels leaves home prices distantly out of reach for the vast majority of British Columbians, especially families with young children.”
Turning to the NDP’s own budget projections, he noted how they tended to confirm that the measures would not have a real impact on housing prices. “The government has projected property transfer tax revenues to go up and the speculation tax to come in at $200 million, both next year and the year after. How can government project increased revenues from the housing market while promising to decrease demand and reduce housing costs?”
Robinson was no more inclined to move out of her message box in fielding Weaver’s second question than in responding to the first.
“We have just announced the largest investment in affordable housing in B.C.’s history. ... Thirty different actions are going to be taken by this government.” And so on.
This being how the housing minister responded to the NDP’s partner in power sharing, one can readily imagine the extent of the evasions had the question come from the B.C. Liberals.
Later that day, during indepth debate on the budget, Weaver offered his version of what might be called the affordability gap in the province’s largest city:
“The ultimate goal of these measures should be for local incomes to more closely align with house prices. The ratio of house prices to incomes needs to be 3:1 to be considered affordable, with 5:1 being considered severely unaffordable. In the city of Vancouver the ratio is at 37:1.”
Next day the Greens tried again, this time via MLA Adam Olsen.
“I want to acknowledge that this government has taken more substantive steps than the last government was ever willing to take on housing affordability,” he began, perhaps thinking that sweettalking would elicit a more definitive response.
“However, I’m hearing a serious lack of clarity about what the government is trying to achieve with the housing plan. Are you trying to slow the escalation or trying to reduce housing prices?”
This brought Finance Minister Carole James to her feet, but she, too, dodged the Green call for specifics.
“You’re not going to fix 16 years of neglect overnight. We are looking at bringing in fairer prices, fairer housing prices and more affordability for families in British Columbia.”
Olsen tried again. “Stakeholders and experts agree that we need to responsibly deflate this bubble and bring down prices in our hot housing market to ensure that British Columbians can afford to live here. Is government simply trying to slow the escalation, or are you actually trying to reduce prices?”
James, in response, went rhetorical.
“Do we want more affordable housing in every community across this province for families? Yes, we do. Do we have a comprehensive plan that is going to address supply and demand and make sure that people can live in the communities that they work and their children go to school in? Yes, we will.”
Later Thursday I asked James if she had any specific target for what should, would or could happen to housing prices under the 30-point plan.
“We haven’t set a target,” she replied. “These are new measures. The speculation tax is going to be the first time a speculation tax has been introduced in all of Canada. Our foreign buyers tax increase, and spreading it to other jurisdictions, is new as well.”
Rather than try to predict where things might be headed, B.C. will monitor what happens in the real world of the housing market, including the impact of higher interest rates and the federal government’s new mortgage rules. Plus: “If we need to make further changes, we will.”
Even in watch-and-see mode, the finance minister discounted the scenario, floated by the Greens and others, of a bubble-bursting drop in housing prices.
“You will not see, I don’t believe, in B.C., ever a burst of the bubble in real estate. I truly believe we’re a province that people want to live in, they want to invest in, they want to be here,” James told me during an interview on Voice of B.C. on Shaw TV.
“But will we see a stabilizing of the market? Will we see more affordable housing ? We certainly hope that our measures, both supply and demand, will make sure that the prices are affordable for people, because they certainly aren’t now.”
A venture into uncharted territory in other words, with the New Democrats hoping for a Goldilocks solution, where the market correction is neither too hot, nor too cold, but just right.
The ratio of house prices to incomes needs to be 3:1 to be considered affordable. ... In the city of Vancouver the ratio is at 37:1.
ANDREW WEAVER, Green party leader