Momentum Builds for Provincial Action on the Housing Shortage

A government-appointed expert panel in British Columbia has recommended bold changes to the way cities plan for and approve housing, echoing trends that have emerged in some American states as they look for ways to grapple with soaring costs for homes.

The Canada-British Columbia Expert Panel on the Future of Housing Supply and Affordability, which included representatives from banking, non-profit housing, private building, and the tech sector, recommended in a report that the province take the lead on housing issues because city governments are not meeting the need.

“It is…our belief that many of the most significant policy levers specifically pertaining to the supply of housing belong to local governments, which, for a number of reasons outlined in this report and elsewhere, face important barriers–notably political–preventing them from making greater progress toward a more abundant housing supply,” said the report, titled Opening Doors: Unlocking Housing Supply for Affordability. “We therefore believe that it falls on the provincial government, which is ultimately responsible for local governments, to enact many of our most impactful recommendations.”

In its recommendations, the panel said cities should be required to produce regular “housing needs reports,” with minimum targets of new homes spelled out, to meet time-limit deadlines for development approvals and to create community plans that provide a smooth runway for new housing proposals.

The panel also recommended getting rid of a type of development fee that is prevalent in Vancouver—the “community amenity contribution” that is negotiated or charged for every rezoned site. This fee revenue pays for varying mixes of services and improvements the city wants to add to the neighborhood near the new housing.

The report further stated that the role of the public hearings that accompany many new developments needs to change, because it often leads to days-long meetings where nearby residents object to everything from small apartment buildings to 60-story towers.

“We…recommend reduced reliance on site-by-site public hearings and council approvals that delay homebuilding and amplify the voices of groups opposing new housing at the expense of citywide objectives and affordability,” the report declared.

These recommendations in the recently released report are meant to tackle one of the top barriers to creating a strong supply of new housing—the “slow and unpredictable pace at which new housing, both for-profit and non-profit, receives regulatory approval from government authorities.”

The former New Democratic Party (NDP) deputy premier heading the panel, Joy MacPhail, said the group decided to make some bold and potentially controversial recommendations. But they felt it was necessary.

“This is a huge, ongoing, decades-old problem,” declared MacPhail. “The problem is not going away. And in order for our economy to thrive, we have to have housing.”

Vancouver, the largest city in British Columbia, has seen dizzying price increases in the cost of housing the last ten years, with the purchase price of everything from condos to mansions increasing at rates far greater than inflation or wage increases, while rents have also spiked upwards with a near-zero vacancy rate in the region.

A considerable amount of blame for rising costs was placed on foreign investors, particularly from China, and the Airbnb phenomenon. As a result of public attention to that issue, Vancouver instituted an Empty Homes Tax and new regulations on vacation rentals in 2017. In 2018, the province also created a speculation tax that was applied to homes being used as vacation or second homes in certain parts of the province, as well as increasing the property-transfer tax for foreign buyers.

Housing prices plateaued and even dipped for a bit but then, as with almost everywhere else in Canada, they started climbing again as the pandemic prompted a buying spree by people looking for more space.

A recent report from Scotiabank found that Canada has fewer homes per 1,000 people than any of the other G7 countries.

The question for city politicians now is whether and which of the recommendations will be put into gear.

While many of them have been calling for improvements to the housing-development process, they are also concerned that the panel did not factor in the potential complications of what they were recommending that cities change.

“My request to [the minister I met with] today is that the next phase of this report should bring in people with expertise in city processes,” said Richard Stewart, the mayor of Coquitlam, a large and rapidly growing suburb to the east of the city of Vancouver.

Mayor Stewart noted that, while statutory time limits for all stages of property development may sound good to outside ears, it is in fact filled with pitfalls. Applicants could potentially game the system by not getting needed information to city officials promptly, then turn around and demand that their application be approved because the deadline had arrived.

“It’s a license for the unscrupulous.”

According to Mayor Stewart, if the province is going to demand more from cities, he’d rather have an approach like what several American states have adopted—a housing target that each city council decides on its own how to reach—rather than prescriptive rules about deadlines and fees.

“I get concerned when provinces start to put pressure on cities.”

Those reservations aside, Mayor Stewart did like the idea of having regular reports that set out housing targets for every city in the province.

He said Coquitlam, which has exploded with new towers and mid-rise apartments in the last few years after council approved aggressive rezoning plans along its main transit line, appears to be doing more than its share of providing new homes in the region compared to some other cities.

And he said the overall thrust of the report was laudable.

“It was focusing on supply and how each of us needs to achieve a measure of the housing densities.”