British Columbia’s government-owned and operated housing agency has been operating at such an embarrassingly insufficient level that attorney general David Eby fired its board members last week, days after releasing a devastating third-party report that gave the agency failing grades.
It’s a setback for a government that has, amid an unusually intense series of calamities, managed to maintain a respectable level of public support, as Premier John Horgan recently announced that he will retire and not seek re-election in two years.
In fact, a Maru Group public opinion poll in March found that Horgan’s approval ratings had gone up another four percentage points since December; he has a 64% approval rating, making him the most popular premier in Canada.
“I think you have to give the government pretty good marks overall for performance during a period of consecutive crises, and concurrent crises,” says Simon Fraser University political science professor Stewart Prest. “You’ve got the climate crisis on top of the pandemic crisis on top of global supply chain dynamics, so you’re trying to ride out any number of issues, and there’s a common thread through all of those, which is that the province is not in a position to solve any one of those issues.
“B.C. can do its part to reduce carbon emissions, with the CleanBC plan, and all that. But when we see the Coquihalla Highway disappear and wildfires obliterate the town of Lytton, that’s a reflection of the fact that we are dealing with very powerful forces that B.C. can’t address on its own.
“So the province should get pretty good marks. It has landed in a pretty strong position and the popularity of government during Horgan’s time in office seems to reflect that.”
A Mixed Legacy on Housing
That said, on the housing file, the Horgan legacy will also be a mixed one, he says. There is that mess with B.C. Housing, a high-stakes agency. B.C. Housing oversees a $2B budget that will more than triple in the next 10 years in order to meet the province’s 30-point plan for affordable housing and supports for the homeless. It is key to the funding, development and management of a program that will provide 114,000 new homes, at a time when affordability is at peak crisis.
The recently released government-commissioned Ernst & Young report cited an agency that lacked appropriate oversight and documentation for major decisions. There were strong hints that there’d been conflicts of interest, and on social media it was once again pointed out that the CEO of BC Housing, Shayne Ramsay, is married to the CEO of Atira Women’s Resource Society, a long-standing recipient of BC Housing contracts. (BC Housing has said in the past that Ramsay isn’t involved in any decisions regarding Atira.)
The Horgan government has tackled major issues, such as early on bringing in a string of tax measures aimed at empty homes, foreign buyers and satellite families that own properties and earn the bulk of their incomes elsewhere. They increased the foreign buyer tax to 20% and introduced an additional 0.2% “school tax” on properties valued at more than $3M. On properties more than $4M, the rate is 0.4%. The owners pay the tax on the portion over $3M or $4M, not on the entire value. They also brought in a transparency registry that reveals the identities behind numbered companies, corporations and trusts that own properties.
The speculation and vacancy tax is a 2% tax on foreign buyers and satellite families that leave their properties empty for six or more months of the year. It was recently deemed a success in a government-commissioned review co-authored by University of B.C. real estate finance professor Tsur Somerville and analyst Jake Wetzel, who estimated that up to 20,000 homes were returned to the market as rental stock asa result. But the authors stopped short of drawing a line between the tax and the creation of an affordable housing market.
The “$1 Million Province”
Average home prices increased by almost 25% in the last year and are forecast to break the $1M mark in B.C., according to the BC Real Estate Association.
Andy Yan, director of Simon Fraser University’s City Program, says there’s been a major transformation of the housing market since Horgan first took office that was beyond his government’s control: it’s gone from a regional crisis to a province-wide one. For several years, Yan used to release an annual report on the “$1 million line” that showed where homes in Vancouver were priced at more than $1M. Now, residents of Fort St. John to Squamish to Spuzzum are facing affordability challenges.
“It’s become the $1 million province,” says Yan. “It’s not a failure of government, but a feature of the times. And it’s absolutely exploded across the province. It’s not even just a lack of affordability, but the disconnection between housing costs and local incomes.
“All these communities are facing their own specific housing problems. And it goes into the need for policies around demand, supply and finance,” says Yan.
“Horgan saw the highest number of housing completions in B.C. that we’ve seen in 20 years, and yet affordability is still a problem – proving that it’s not just a supply problem.”
The elusive affordability solution is perhaps why Eby -- who is also the housing minister and expected to run for premier -- is getting more aggressive on housing issues, says Prest. Eby has publicly announced he is prepared to intervene in local government decisions that delay or stop the development of affordable housing.
“I think it’s a really mixed legacy, where there is a government that is clearly engaged on the issue, and they are trying to find ways to restore an amount of affordability. They are taking actions that could have been politically risky that turned out popular, like the school tax,” he says.
“They have presided over a period of time in which we know housing is a problem, yet we haven’t seen fundamental change in the dynamics yet. And that will be part of John Horgan’s legacy, but ultimately we are not in a position to judge that legacy for some time yet.”
Prest says they’ve promised thousands of new homes and have committed billions of dollars to subsidized housing, but the question remains as to whether those projects will be realized. Change has been slow. Horgan appointed a task force on rental housing four years ago that aimed to make renting fairer and more secure. Housing advocates criticized the 23 recommendations that were produced by the task force as not going far enough. For example, landlords can still increase rents once the apartment is vacated. A change to permissible rent increases, however, was acted on immediately, so that increases are based on inflation only. That meant landlords could no longer increase rents by 2% plus the rate of inflation, but only the rate of inflation, as calculated by the government. During the pandemic, the province legislated a rent freeze and eviction moratorium. The rent freeze was lifted in January, and only allows a 1.5%increase for 2022.
But landlords are pushing for a return to the usual inflation-based rate for 2023, which, combined with interest rates and consumer inflation, could make for an even more stressful environment for renters.
Meanwhile, says Yan, incomes remain stagnant.
“It’s generational, and it’s across the province as opposed to contained and short term. The provincial government will need to work with local governments to solve this,” he says.
“This isn’t something that will be solved in one or two terms of government.”