A Brief Look Ahead
Happy New Year! As we begin 2024, we know that housing remains a front-of-mind issue for British Columbians with every community across the province needing more homes.
Ambitious homebuilding agenda – In the latter half of 2023 we witnessed a flurry of announcements from Premier David Eby and Housing Minister Ravi Kahlon as the BC NDP government released its ambitious homebuilding agenda that could result in up to 293,000 new housing units over the next decade, according to a government-commissioned report. As a key stakeholder, LandlordBC looks forward to continuing to collaborate with the government to support their efforts to achieve these ambitious housing targets.
The government’s housing legislation will restrict short-term rentals, provide more density on single-family lots, relax restrictive building permitting processes and increase housing density in public transit areas. What’s particularly important is that the new eased zoning regulations are designed to de-emphasize single-family home construction and spur multi-housing units, including requirements to update zoning bylaws to allow more units to be built on properties with an emphasis on purpose-built rental housing.
The Premier and Housing Minister have both indicated that there’s “more to come” with the impending unveiling of “BC Builds” in early 2024, a multi-billion-dollar provincial housing construction program. What we know is that core to the program was a new inventory of available public land. The province instructed municipalities, Crown corporations, health authorities and other government agencies to review their portfolios and put forward any vacant or underutilized properties. Once it has a property, the government will use its low borrowing rates to help publicly finance construction with a private or not-for-profit developer.
Realty Bites – These ambitious housing targets may well run into a harsh reality that CMHC described in a December 18, 2023 report as a “perfect storm” over the last three years, namely rapidly rising interest rates, high construction and government fees, as well as taxes and levies that have complicated the financial feasibility of new rental projects. The crown corporation reported that roughly nine out of 10 of the Canada-wide rental housing developers who responded to the survey leading up to this report said that purpose-built rental projects are no longer feasible with conventional debt financing.
To further reinforce the “perfect storm” of market conditions, the report noted that developers today are responding to construction costs that are up by over 50 percent, conventional lending rates have more than doubled and government fees in markets such as Vancouver and Toronto have increased to over 25 percent of construction budget costs.
We hope that in 2024 we will see Bank of Canada respond by reducing interest rates sooner rather than later so that purpose-built rental projects are once again feasible.
RTB improving services, wait times for tenants, landlords – In a December 13, 2023 press release, Housing Minister Kahlon outlined how renters and landlords in B.C. are seeing faster and more efficient residential tenancy dispute resolutions. LandlordBC strongly believes that timely access to justice at the Residential Tenancy Branch is critical for both landlords and tenants. While there’s more work to be done, members have been telling us that they are seeing promising improvements in wait times. LandlordBC will continue to advocate in the year ahead for further service improvements at the RTB to support successful tenancies for both renters and landlords.
Let the mudslinging begin – 2024 is an election year with the provincial election scheduled for the fixed date of October 19th, 2024 (election writ to be dropped September 21st, 2024). Premier Eby has continued to insist that he has no intention to call an early election, and it would seem unlikely that he will veer from that stance.
Recent polling results* show that the ruling B.C. NDP party has 44 percent support, followed by John Rustad’s B.C. Conservatives with 26 percent, B.C. United with 17 percent and the B.C. Green party with six percent. While we should all recognize that polls are just a snapshot in time and not a predictor of what happens on election day, a very interesting battle between the B.C United party and the B.C. Conservative party is unfolding, with the impact unlikely to be known until election day.
Education is the cornerstone of what we do for our members – We have a very exciting year ahead with a mix of in-person and virtual events to accommodate our members from across British Columbia. Our first event of the year will be an in-person event on February 8th in Vancouver covering a variety of topics including an interactive presentation by Canada Mortgage and Housing Corporation (CMHC) to share CMHC’s latest insights on the rental market and the results of the 2023 CMHC Rental Market Survey. Our annual schedule will be available soon so make sure to keep an eye out for LandlordBC’s exclusive members-only e-newsletters for more information on all our upcoming events.
* Abacus Data – survey of 1,000 people taken Nov. 22-28, 2023