Marc Lee and Alex Hemingway of the Canadian Centre For Policy Alternatives issued a report on affordable housing. It is an analysis that is worth our attention. Some of the points made by the two economists who authored the report:

• Scarce and expensive housing is eroding the province’s liveability and economy and large price rises have become a source of enormous wealth inequality. 

• The soaring prices of homes in the ownership market point to housing supply that has not kept pace with demand. On the demand side, a prolonged period of low-interest rates since 2008 increased the ability of households to borrow and contributed to sky-high housing prices in BC.

• The emergence of higher interest rates since 2022, as central banks sought to combat inflation, has similarly cooled the housing market in terms of transactions and prices. Demographic factors, including Canadians and new immigrants moving to BC, are also central drivers of housing demand.

• On the supply side, BC faces a severe shortage of both non-market housing and overall housing supply. Canada Mortgage and Housing Corporation estimates that BC needs to build 610,000 more homes by 2030 above current building trends. Surging rents are an artifact of ultra-low vacancy rates for rental housing stock.

• Where possible, landvalue increases from upzoning should be used to meet affordable housing objective…

• Public and non-profit models of housing development are much needed to deliver genuine affordability in the short run and to maintain affordability over time.

The report makes recommendations to local governments:

1. Legalize multiplexes and small apartment building in detached-housing neighbourhoods.
2. Reform public hearings.
3. Ensure market development contributes to dedicated affordable housing.
4. Implement robust renter protections.
5. Support public and non-profit housing developments.

Recommendations to the provincial government:

1. Increase housing supply targets and commit to 250,000 non-market rental units.
2. End exclusionary zoning to enable higher density in all areas.
3. Expand the Rental Protection Fund to allow non-profits to acquire and maintain affordable housing.
4. Amalgamate the Home Owner Grant and the Renter’s Tax Credit into a single income-tested housing grant forrenters and owners alike.
5. Reform property taxation
6. Tie rent controls to the unit and not to new renters

Recommendations to the federal government:

1. Recommit the National Housing Strategy to build non-market housing and end homelessness.
2. Scale up the non-profit housing sector.
3. Reform taxation of capital gains from housing by ending the principal residence deduction,or at least putting limits on the amount of untaxed capital gains from the sale of these homes.

Conclusions:

• Ultimately, tackling the housing crisis requires an all-of-the-above approach, including making large increases in non-market housing investment, accelerating zoning reform and increases to the supply of homes overall, taxing ballooning land wealth, providing cash transfers to low-income renters and strengthening tenants’ rights through stronger legal and regulatoryprotections.