Development Community wary of "uncertain minority government. Business in Vancouver October 20, 2024

Prior to last night's election results were know, BIV Journalist Glen Korstrom called to ask my thoughts on how the election outcome might impact the development community. While there are many others who are more knowledgeable and in a better position to comment, I was happy to offer some thoughts based on my recent experience with Bills 44 and 47 and changes to muncipal bylaws.

Bills 44 and 47. For one thing, if the NDP won, there was no doubt the recent Bills 44 and 47 resulting in considerably more densification in every town and city with more than 5000 people would remain in place. However, if the Conservatives won, these Bills could well be rescinded, prompting great uncertainty as to whether municipalities would also rescind the Bills.

Developers hate uncertainty. I told Glen that just as investors in the stock market hate uncertainty, developers do too. Over the past year, several of my clients have been holding off on projects not knowing the ramifications of the new legislation, especially Bill 47-Transit Oriented Development. 

Will higher densities always be allowed? How will Community Amenity Contributions be calculated? Who will determine whether additional sewer and water servicing will be required to accommodate higher densities? Is there enough electrical power to accommodate all these new developments?

Rent controls. What will happen to allowable annual rent increases if the Conservatives get in. 

No clear winner? Alternatively, what will happen if there is no clear winner and the Greens hold the balance of power? This, to my mind would be the worst possible outcome. 

Vacancy Control. For one thing, in the past, Sonia Furstenau and the Greens have wanted to implement Vacancy Controls/ This means a landlord cannot raise the rent beyond the annual limit even when a tenant moves out. This could be disasterous for many existing and new projects.When I tweeted out this sentiment, I was contacted by her office since she wanted to discuss it further. I eventually had a one-hour discussion with Adam Olson trying to explain why this would be harmful.

Before ending our conversation, I told Glen that one thing that hasn't been proposed by any party, or discussed, is whether a modified form of rent control, similar to that in Ontario that allows different increases based on whether a building is existing or new. More specifically, new Buildings, built and first occupied after November 15, 2018 are exempt from Rent Control. If the property was built and occupied after this date, landlords can raise rent by how much ever they want.

While this may be another topic for another day, below is Glen's story that appeared today.

B.C. business owners wary of "uncertain" minority government

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Photo: DARREN STONE, TIMES COLONIST.

Voters cast ballots at George Jay Elementary School in Victoria in the 2024 provincial general election

Business loves certainty and the only certainty in a minority legislature is uncertainty.

That is not good, according to business leaders. 

As of Sunday morning the BC NDP has 46 seats, the BC Conservatives have 45 seats and the BC Greens have two seats. 

Votes are not entirely counted so the result could change.

The Greens, as of now, however, hold a balance of power. This is a similar situation to 2017, when there was a minority government and the Greens threw their support behind the NDP, and signed what the two sides called a confidence and supply agreement. 

The Greens then backed the NDP and voted with them until then-NDP Premier John Horgan called a snap election in 2020, without first consulting with the Greens and breaking the promise he made to the Greens to govern for four years until the next fixed election date.

Minority governments have been few and far between in B.C. as the previous most recent minority government to 2017 was the W.A,C. Bennett minority government in 1952.

"The worst of all options would be a BC Greens-NDP coalition," Independent Contractors and Businesses Association of B.C. (ICBA) CEO Chris Gardner told BIV.

"If you listen to [BC Greens leader] Sonia Furstenau now, committing what she would want the NDP to do, I will say that it will be a very, very expensive and costly term of government for B.C."

While the Greens won two seats, Furstenau was not one of them. Rob Botterell was ahead with nearly all votes counted in Saanich North and the Islands while Jeremy Valeriote is ahead in West Vancouver Sea to Sky with nearly all votes counted.

Geller Group president Michael Geller expressed dismay to BIV about the result. His company specializes in planning and real-estate consulting for a variety of large and small residential and mixed-use projects.

"They often say the worst thing for the stock market is uncertainty, and the worst thing for the development community is uncertainty," Geller said.

"With no clear-cut decision and one that is uncertain, I think we'll see a lot of development simply stall." 

Other business leaders were hopeful.

“We hope that all parties can come to a swift agreement to form a stable government that will focus on building a strong economy," said the Canadian Federation of Independent Business’ (CFIB) director for B.C. and western economic policy, Jairo Yunis.

"Small businesses across B.C. are looking for certainty and leadership that will support their ability to grow, invest, and create jobs. We are eager to work with all parties to ensure that the needs of small businesses are prioritized in the weeks and months ahead."

Others were taken aback. 

"Things are going to get interesting," said Business Council of British Columbia (BCBC) CEO Laura Jones.

"It is so hard to predict how things will work out. We will work with everyone to really make sure that the importance of a strong economy is understood."