On September 22 and 23, the Broadbent Institute hosted Progress Summit BC to chart a progressive path forward for the province in this critical election year. In the panel entitled 'Retrieving affordability: progressive policy solutions for BC’s housing crisis' panelists were asked to outline what practical, progressive, policies can ensure future generations of lower and middle-income British Columbians can live and thrive in their cities. A summary of their remarks are outlined below.
Margot Young, Professor, Allard School of Law, University of British Columbia
Housing unaffordability references two points— available resources on the one hand, and housing and rental prices, on the other. The statement that Vancouver is the third most unaffordable city in the world for housing, based on the annual Demographia Survey, reflects these two factors: median income and median house price. There are cities with more expensive housing than Vancouver but Vancouver’s lower median income raises the city’s unaffordability ranking, relative to those cities the survey looks at.
So, where can provincial policy intervene in this scenario?
Boost income supports:
The province needs to do more to address income inequality. BC has a poverty problem, long recognized, with actionable anti-poverty strategies long urged on the provincial government. Yet our provincial government has been stunningly unresponsive to this inequality crisis. We need social assistance, adequate welfare rates that put recipients above the poverty line. We also need new and better government provision of essential goods — like health care without premiums, quality public universal daycare, enhanced investment in education, and a higher minimum wage. These measures are both anti-poverty measures and affordable housing measures at the same time.
Investing in new housing stock:
The province needs to invest in new and affordable housing stock, with a focus first on those groups most marginalized by the current housing crisis. Understanding housing as a human right -which it is both ethically and legally under international law- means that in a country, and a province, as prosperous as BC the minimum floor of what the state must do in observance of its rights obligations is high.
The living conditions that inhabitants of Vancouver’s Single Room Occupancy units (SRO) experience, for example, would be in almost any other context heralded as human rights abuse. We need an intensive housing construction programme, fuelled by provincial funds, focused on social housing for those in “core housing need”.
This week’s announcement of half a billion dollars is a good start—but it needs to be a more than a one-off, pre-election, in good times only, promise. And, as it is rolled out, this money must focus on those with the most extreme housing needs, with creation of new social housing units.
Partnered with construction of new residential units must be preservation of existing affordable housing stock— both social and co-op housing, as well as purpose-built rental stock. Upgrades and maintenance of existing stock are desperately needed.
Tax reform:
We must ask our government, as well, to rejig those elements of the tax system that influence housing costs and that privilege homeowners over renters. The homeowner grant goes to all qualifying households independent of that household’s income. These could be eliminated and replaced with more progressive income tax credits or benefits based not on homeownership but on income. BC should also rethink the capital gains tax exemption homeowners get for sale of primary residences. This could be capped at a certain level, leaving income from sale of a home over that limit subject to capital gains taxation.
We might also want to think a bit more critically, or at least creatively, about home ownership as a central ambition of western life. Regulatory structuring of rental housing to look more like some of those things that are valued in home ownership — security of tenure and guaranteed maintenance, for example makes long term rental more attractive and to an extent displaces homeownership as a clear policy preference.
Jackie Wong, Writer, Editor and Journalist
Support rental housing construction:
We need to consider how we might work to re-invigorate public policy interventions that have historically made Vancouver more livable for people who can’t afford to own property.
Between 1951 and 1973, the number of rental households in Vancouver increased by 100 per cent, due in part to federal tax measures and incentives for new rental investment. From 1974 to 1986, a series of incentive programs like the Multiple Unit Rental Building Program (under the glamourous acronym, MURBP), the Assisted Rental Program (also known as ARP), and the Canadian Rental Supply Program (CRSP) further boosted rental construction. Such programs helped 40 per cent of all rental housing construction get off the ground. It nurtured non-profit and co-op housing programs as well.
Since 1986, though, one federal government after the other has moved in the opposite direction. In 1993, Ottawa memorably pulled out of funding for new social housing development. In 2006, the federal government transferred all responsibilities for social housing to the Province.
While renters continue to earn about half the average household income as homeowners, federal spending and tax expenditures continue to favour homeowners by a wide margin. We need to consider how to turn this around, or, as fellow panelist Heather Tremain argues, to get more diverse people into homeownership.
Protect renters:
In order to build capacity for lower and middle-income renters in BC, we can and should do more to protect vulnerable renters from displacement and take steps to bolster renting as an accessible, secure form of housing for people from all walks of life.
B.C.’s residential tenancy act needs revision. We could start by considering adapting aspects of Ontario’s residential tenancy act. For example:
- Ontario is one of the only provinces in Canada with a provision that doesn’t allow landlords to include “no pet” clauses in their rental agreements.
- Ontario’s residential tenancy act includes a “right of first refusal” clause for tenants facing extensive renovations in their suite. To many Vancouverites, Ontario’s “right of first refusal” clause is the solution to the frequent reno-victions (also known as evictions for renovations) that displace people from long-term homes.
Under BC’s Residential Tenancy Act, landlords can evict tenants for the purposes of renovating their suites, but Ontario’s Residential Tenancy Act allows them to stay in their suites while renovations take place. This also means that if they are displaced from their units during renovations, tenants can reoccupy the unit at a rental rate no more than what the landlord could have lawfully charged had there been no interruption in the tenant’s tenancy.
Supports for those evicted:
To address the financial duress that can result from displacement and the loss of one’s home, tenants in BC should receive better financial supports when facing lawful eviction.
We can take inspiration from the City of San Francisco, where tenants are entitled to relocation payments. Tenants evicted under the Ellis Act, for example (a hot cause for eviction on par with reno-victions in Vancouver, when a San Francisco landlord elects to quit landlording and sell the building to a developer) are entitled to financial recourse. Tenants who have lived in an Ellis Act apartment for a year or more are entitled to $5,153, and an additional $3,436 more if they are seniors or people with disabilities.
In San Francisco, eviction orders also give tenants at least 120 days notice. Seniors and people with disabilities get a full years’ warning. In BC, by contrast, tenants only receive one month’s notice and are entitled to just one months’ rent to cover costs.
Heather Tremain, CEO of Options for Homes
My expertise is in affordable homeownership, as the leader of a non-profit committed to the delivery of this form of housing. It is a type of housing that is, I would argue, a policy orphan. I would suggest that it is in fact a newish need – as the market was, until recently, accessible to moderate income Canadians.
Why should we care about this? Well I would argue that it’s not about the benefit to the individuals (while recognizing that some will benefit), but about the benefits to society.
When companies like Hoot Suite can’t attract or keep talent in Vancouver because their employees can't afford homes then the city is less competitive. When a generation of Canadians don’t have resources to finance their retirement, or have collateral to start businesses, then our economy doesn’t thrive. In 2015, Habitat for Humanity released a report that demonstrated that for every low income family they house there is $178,000 of social return (from reduced payments for social housing, to increased tax revenue, educational and health benefits, etc.)
The housing sector has been starved for the last 20+ years. The risk is that, as we see the promise of new funding on the horizon, the sector begins to compete amongst itself. I would argue that the majority of funding needs to go into the social housing solutions on the housing continuum, from shelters to supportive housing and subsidized rental.
However, when it comes to market rental and affordable home ownership, we should take a close look at the costs and benefits and where the money goes, and make smarter investments.
First of all, consider the costs of creating a rental or ownership unit. The city of Toronto recently released its Open Door report where it laid out the public costs of creating both forms of housing. It costs $195,000 for a rental unit (all of which was in the form of a grant or fees waived). Ownership units, on the other hand, require $58,000 of public support in the form of a loan to a homeowner (some of which is made up of deferral of development fees, as well as federal/provincial matching housing dollars). It should be noted that while the report notes $58,000 dollars of public support, we have never received more than $25,000 per unit. Again this is a loan – that is paid back to the City, along with appreciation, when the owner sells the unit. It is in effect, an investment, not a grant.
One of the strong arguments in favour of rentals is that they are secured for a long time – often 20 years - after which point the owner of the building (possibly a developer or Real Estate Investment Trust) can charge full market rates, or sell the units. In effect there are very large benefits to the private sector at the end of the 20 years. Options for Homes have said to government (provincial and federal) that we would be willing to retain some of our equity in our units, if matched by government, as a way to ensure long term affordability in ownership. And again if government wants a 20 year commitment, each party could retrieve their equity by letting units go to market, like the rental model at the end of that term.
Two other critical policy opportunities to generate more ownership would be the following:
1) Provide an equity pool for projects (a revolving loan fund) that could leverage the assets of non-profits delivering affordable home ownership. Given that government dollars are limited, this equity pool could be created by encouraging social impact investment in housing by having government backstop such a pool, and providing a tax credit to investors.
2) Providing access to land. Government is a significant land owner and could make land available in a preferential way for affordable housing (of all types). The province of Ontario has a policy of circulating land opportunities to qualified non-profits, before going to the open market. Other provinces, and the federal government could follow Ontario’s lead.
On the affordable ownership front there is capacity to deliver in the non-profit sector, and we can and would be willing to be a partner with government. With the support of government our assets could be leveraged to fulfill a large and growing gap in the housing continuum.
We'll be featuring content from Progress Summit BC over the coming weeks. Check out our Summit website for more.
