Promises, promises. Reflections on what today’s budget might offer in terms of housing affordability.
As I entered the Budget Lock-up at the provincial government cabinet offices earlier this morning, I had skating on my mind.
Last night, figure skaters Tessa Virtue and Scott Moir stepped onto the ice for what many thought would be the last time. Expectations were very high across Canada. And they delivered; they won gold.
At 1:30 pm today, Finance Minister Carole James will be taking to the ice, so to speak, to deliver the NDP’s first full budget in 16 years. Expectations are also incredibly high across the province, especially from those seeking more affordable housing and childcare. Will she deliver? Will she bring the gold?
Since the NDP government was formed last May with the support of the Green Party, there has been considerable pressure for them to do a lot to address the rampant housing unaffordability affecting the lives of many people across the province.
During the same time, the premier and housing minister Selina Robinson have told us repeatedly that housing is their number one priority, and we should wait for this budget to hear their comprehensive strategy to address both housing demand and supply.
So, what can we expect?
Managing demand: BC residents want higher taxes for foreign buyers, or even a ban on foreign buyers; higher speculation taxes; and more widespread application of an Empty Home Tax, like that in place in Vancouver.
During and since the election, the government has made promises to stem the unbridled speculation in the market. It says it will keep the 15 per cent foreign buyers tax but add a two per cent property tax surcharge on the assessed home values of property owners who do not pay tax in Canada on global incomes. It is estimated that this two per cent absentee speculators’ tax would generate $200 million annually for a housing affordability fund.
The government has also promised to put an end to ‘Bare Trustee’ legal structures, which allow wealthy individuals to avoid property purchase tax, and potentially other taxes when they buy and sell real estate; and more transparency over the beneficial ownership of properties through trusts, numbered companies, and family members.
Increasing supply: On the supply side, during the election campaign, the NDP promised to build 114,000 affordable, rental, non-profit, co-op and regular housing units over 10 years. However, since forming a government in July, it has yet to provide details on how this would be accomplished.
Many, especially those in the housing industry, have been calling upon the provincial government to get into the sandbox with municipalities and put in place measures to fast-track the tens of thousands of housing units held up in the approval system. Others have been urging the government to require higher density housing around transit nodes, as a condition of any provincial funding for transit improvements.
Increased affordability for renters: During the election campaign, the NDP promised renters a $400 a year grant which would be somewhat equal to grants received by homeowners of properties worth $1.65 million or less. While the government has been somewhat quiet on this, especially since the Green Party rightly questions why grants should be paid to wealthy renters, others are eagerly awaiting confirmation that this promise will finally be implemented.
Protection of equity: At the same time as the government is being urged to make housing more affordable, it is also being asked not to do anything that might wipe out the equity that many new homebuyers have invested in their homes. It’s a tough balancing act.
The mini-budget: In a mini-budget last September the government pledged $291 million for 2000 modular housing units for the homeless, something which pleased me since nine years earlier, I did a study for the Liberal provincial government on how temporary modular units could provide fast and relatively cost-effective homes.
The province also pledged $208 million over four years to build 1700 apartments for renters, seniors, and the disabled, and those with mental health issues.
But will there be something in this budget for ordinary ‘middle-class’ British Columbians, including nurses and school teachers who earn relatively good salaries, but are still struggling to find affordable housing near where they work, especially in more expensive municipalities?
The Speech from the Throne: Last week’s throne speech set out the government’s general intentions but included few specifics. It promised to crack down on tax fraud, tax evasion and money laundering which is believed to also be impacting BC’s real estate market.
The speech also promised stronger protections for renters and owners of manufactured homes and more money for affordable housing, “including social housing, student housing, seniors housing, Indigenous housing and affordable rentals for middle-income families.”
So, it is within this context that many of us will await details of the budget, especially in terms of addressing affordability. While media will hear the budget measures during a lock up this morning, British Columbians will start hearing the details at 1:30 this afternoon.I cannot wait to see how many of these promises will be kept, and whether the government has truly created a comprehensive strategy to address both the demand and supply factors affecting affordability. Stay tuned.