A couple of changes to rules around housing construction, along with recent speeches by Premier David Eby and Housing Minister Ravi Kahlon hinting at more changes to come, have triggered hopes that this term’s NDP government is showing signs of some increased flexibility around development.
While many developers, mayors, and planners contacted by STOREYS said the measures put in place so far – or those hinted at being put in place – are positive signs, they also said they are nowhere near enough to overcome the big problems they see currently with building new housing or planning for significant new density in their cities.
Eby And Khalon In Lock Step
Both the Premier and Housing Minister talked at separate events about looking for ways to bring back investment by local residents and offshore buyers, after several years of measures designed to discourage them and amid new statistics about declining housing starts.
The province announced a dramatic scaling back last week of its new demands for adaptable housing, dropping the requirement to have it in 100% of all new multi-unit developments down to only 20%.
Both Mr. Eby and Mr. Kahlon alluded to other new measures to come, including work on encouraging municipalities to collect their development fees towards the end of a project instead of the beginning so that millions of dollars aren’t tied up for years during construction.
And the Premier said last Tuesday that he had specifically directed the Housing Minister to allow more flexibility on where and how to integrate dense new housing to cities that are working co-operatively with the province on plans to meet housing targets.
“The challenge is you have good partners like New West or Burnaby or Coquitlam or others that are building a lot of housing, and they also get caught in the dragnet, because it’s provincial legislation, it’s apparently a blunt tool,” Mr. Eby told a gathering of the BC Real Estate Association. “So one of the things I put in the Housing Minister’s mandate letter was ‘Find those cities that we’re working well with and... give them increased flexibility in how we work with them to make sure they have that ability as local governments to help design liveable cities.’”
Mr. Eby also said at that meeting that he recognizes the industry needs more access to capital to finance future projects.
“One of the things that I’ve seen in housing is there’s a huge interest that people have, and it doesn’t matter whether you’re talking about investors who are international or investors who are here in British Columbia or Ontario or whatever, to put money into the housing market,” he said. “So one of the things that we’re looking at is well, how do we harness that energy around investment, especially at a time when we’re looking for investment in the province, and the interest in investment going into housing and real estate and do it in a way that facilitates access to housing for people. How do we support more retail-level investors building more purpose-built rental, how do we support more institutional investors helping people get into first-time homeownership.”
Mr. Kahlon, speaking to a large group of people at a Greater Vancouver Board of Trade event Tuesday, also talked about his government understanding the need to get investors back into providing capital for building. The moderator at that meeting, Nch’kay Development Corporation’s Chief Development Officer, Jennifer Podmore Russell, noted that the BC Real Estate Association has estimated that billions in investment will be needed in the next 10 years to meet the province’s goals for new housing, at a time when Canada and BC have “really dissuaded international capital from coming into the housing market.”
Mr. Kahlon said the province is looking at changes sometime in the coming year.
“We’re looking at a whole host of measures right now. We are looking at the question of how we increase the available capital in the purpose-built rental space, in particular. There’s a whole host of ideas that have come forward. We’re analyzing them. I don’t have an announcement today, but we are alive to it. We’re having some conversations with our federal-government partners as well just to make sure that we’re aligned and we’re able to move together for maximum impact.”
Mr. Eby had talked in his speech about trying to get smaller investors back in as well.
“I don’t have details I can share with you right now, but we’re also looking at how do we support smaller investors that might buy their own condo and then rent it out as a private landlord but they’re reluctant because they don’t want the place damaged, what if someone doesn’t pay the rent and all those other things? Can we find a vehicle where they would be able to participate in rental housing, build purpose-built rental housing with professional management and insulate them from some of those impacts that they’re worried about in terms of the behaviour of a particular tenant.”
A New Hope
All of these pronouncements are producing some hope that the NDP government, and particularly Premier Eby, are more willing to adapt and change than they have been in the past. The news from CMHC that housing starts in Metro Vancouver dropped by 48% this February compared to last, along with dropping numbers of building permits, is likely spurring them on.
“They are listening and understanding. They are working with us,” said Anne McMullin, CEO of the Urban Development Institute, and someone who spends hours in meetings with government officials to argue for improvements to the development situation.
But others are less optimistic about whether the Premier and his government are willing to move enough.
“Just generally, the cities and the province are starting to move to make things better. But they’re moving so slow,” said Evan Allegretto, President at Intracorp BC. “With the adaptability, it’s good that it’s reduced from 100% but they shouldn’t have done any of it when we’re in the worst economic situation of the past 30 years.”
Rick Ilich, chair of the UDI board and CEO of Townline, was even more negative.
The housing industry is grateful that the province reduced their position from introducing 100% adaptability requirements on all new housing to 20%. Even the 20% will increase the cost of housing, but certainly not to the same level as 100% would have,” he wrote in an email to STOREYS from Switzerland. "So, is Premier Eby’s government listening to the housing industry more than in the past. I believe so. Are they acting on the advice they are receiving? No, not at the level that they should be if they consider affordability a priority.”
Mr. Ilich said the province needs to be far more aggressive in reducing the fees and complications of permitting in cities and regional districts, as well as stop introducing new, costly regulations itself.
On the question of trying to encourage more mom-and-pop investors back into the market, one well-known property-management-company CEO said he doesn’t think that is a good provincial policy.
“One of the problems we’ve been having is that we’ve been focused on building condos for 30 years and that has meant the total number of landlords has skyrocketed,” said Keaton Bessey, managing broker with Greater Vancouver Tenant and Property Management. “If they knew what they were doing, it would be fine. But they don’t.”
He said encouraging more single-unit investors to enter the market, rather than concentrating on getting people to invest in large purpose-built rental buildings managed by professionals, has “so many more opportunities for unplanned displacement.” Small-time landlords often lose patience with tenants and evict them for whatever reasons they can find, creating a lot of instability for renters, he said.
Ch-Ch-Ch-Ch-Changes?
In another part of the housing sector, mayors and planners said that, while they’d welcome more flexibility from the province in its demands to create huge amounts of new housing, they have had no word that there is any change so far. And they’re frustrated by that.
Richmond Mayor Malcolm Brodie said it’s still “the most invasive planning by the province in history” and called the province’s apparent desire for “anything anywhere” as inappropriate.
His city has been successful in getting delays on a couple of areas slated for new density as it argues that the infrastructure for Steveston is not adequate for a lot of new housing, while Burkeville, a small community near the airport, is technically 800 metres from the Aberdeen Canada Line station, it’s an unwalkable trip for residents because the Fraser River lies between the two points.
Similarly, in Coquitlam, planners and the mayor have been frustrated with the lack of flexibility for the city. Technically, the area around Braid Station is also supposed to accommodate housing all around it.
But, says head planner Andrew Merrill, that makes no sense, given that there are railway tracks, a river, and a major freeway all within the 800 metres of the SkyTrain station, which is where the province has said cities must allow significant new density.
As well, he said, the city would like to see fourplexes, which the province now says can go anywhere, channelled into areas where there are services and transit nearby, rather than having them sprinkled all everywhere, potentially triggering a need to upgrade sewer and water lines in areas where Coquitlam had not budgeted for that.
Coquitlam Mayor Richard Stewart said it’s been frustrating that the province has been so unwilling to bend.
He said, even though Coquitlam has been packing in density all along the Millennium Line, the province is treating his city, and others building the same way, the same as many cities doing much less.
“We ended up with one size right across the province and the ones building a hell of a lot of housing are grinding to a halt because all of their systems are having to deal with the province’s requirement for new plans.”
One mayor, Patrick Johnstone from New Westminster, said he also hadn’t heard anything about new flexibility on adding housing, but said he is fine anyway with how the system is working.
“I think there’s more flexibility built in than we’re led to believe. We are creating plans that fit into the unique geography of the city.”
But he did say there is more the province could do if it really wants to make change.
“We need more financial support for the amenities for this housing – schools, community centres.”
