It’s been a busy month for government policymakers. As the conversation around housing affordability continues to evolve, several new and key policy changes have recently been announced that could significantly influence Vancouver's housing market. “The flurry of recent federal and provincial policy shifts is encouraging from a political alignment perspective, but the lag for significant change to materialize means that affordability and housing options will remain tight in the short to medium term,” outlined Garde MacDonald, Director of Advisory at MLA Canada. In this roundup of the most recent developments, MLA Advisory delves further into these changes and shares what they mean for developers, homebuyers and homeowners.
NEW LEGISLATION TO ENCOURAGE DEVELOPMENT NEAR TRANSIT
The British Columbia government has proposed new legislation aimed at accelerating the creation of homes by encouraging development in transit-oriented areas. This move targets the removal of outdated regulations that hinder developments near major transit stations and bus exchanges. Approximately $400 million has been allocated by the Province of B.C. for constructing housing units near transit hubs over the next 15 years, aiming to transform these areas into livable communities. The initiative is expected to allow for approximately 100,000 new homes in Transit-Oriented Development (TOD) areas across 30 municipalities in year one.
Impact: This legislation is poised to reshape the urban landscape by concentrating development in transit-accessible areas. For developers, this opens up new opportunities for high-density projects, potentially leading to more efficient land use, a faster development timeline and increased funding availability for projects in these areas. Homeowners may see an increase in property values in these areas due to improved accessibility and amenities and more housing options emerging near transit hubs, potentially easing the affordability crisis in the long run.
However, it could also mean increased competition and changes in community dynamics.
CITY OF VANCOUVER ELIMINATES MINIMUM PARKING REQUIREMENTS
In a significant policy shift, the City of Vancouver is eliminating minimum vehicle parking requirements for new buildings in the West End and Broadway areas. It is expected to benefit smaller sites, reduce carbon emissions, increase housing and job space supply, and potentially improve affordability. The changes will not affect accessible and visitor parking requirements.
Impact: Developers will likely welcome this change as it reduces construction costs and allows for more creative use of space. Homeowners might experience increased on-street parking demand, although this move aligns with the city's broader goals of reducing carbon emissions and promoting public transit use.
FEDS PROMISE TO BUILD MORE HOMES ON PUBLIC LAND
The Canadian federal government plans to build over 28,000 homes on its properties, with a broader goal of constructing about 29,200 homes on public lands by 2029. This initiative is in response to Canada’s need for 3.5 million additional homes to restore affordability to the housing market. The Canada Lands Co. aims to include at least 20% affordable housing within each project.
Impact: This initiative could provide a significant boost to housing supply, particularly in terms of affordable housing. Developers might see new partnership opportunities with the government, while homeowners could benefit from an increased variety of housing options.
HOUSING BILL OVERSIGHT AND ITS FINANCIAL IMPLICATIONS
Recent legislation to boost multi-unit housing in British Columbia may lead to municipalities losing millions in contributions from developers for amenities and community services. The legislation would largely eliminate the municipal rezoning process, which would hinder municipalities' ability to negotiate with developers for community contributions such as cash or amenities.
Impact: This change could result in a financial strain for municipalities, potentially affecting the quality and availability of community amenities as well as increasing infrastructure costs. Developers might face less financial burden in the short term, but the long-term community impacts remain unknown.
BC GOVERNMENT OVERHAULS FEES PAID BY DEVELOPERS
New legislation in British Columbia aims to streamline the process for real estate developers engaging with municipal governments around community amenity contributions (CAC) in exchange for adding density. The changes would also see development cost charges (DCCs) and development cost levies (DCLs) reformed.
Impact: This overhaul is likely to provide greater predictability and efficiency for developers during the planning process. However, the shift away from the "growth pays for growth" model could have broader implications for how public services and infrastructure are funded.
CANADA TO STABILIZE IMMIGRATION LEVELS
Canada's decision to maintain immigration levels at 500,000 permanent residents annually until 2026 is seen as a balancing act between economic growth and addressing housing affordability. While increased immigration has helped to address labour shortages, it has also added to housing affordability concerns.
Impact: While this stabilization is essential to address economic health and labour shortages, it doesn't fully address the underlying affordability issues. Developers might not see a drastic change in demand, but homeowners and prospective buyers could face continued challenges in finding affordable housing options.
The recent flurry of housing policy changes in Canada and B.C. indicates how keen governments are to course-correct the issues within today’s housing market. These policies collectively aim to address affordability, increase supply, and reshape communities, albeit with varying degrees of direct impact on developers and homeowners. As these changes unfold, staying informed and adaptable will be key for those navigating B.C.'s housing market.
If that's not enough, the Federal Government has recently announcement even more measures for accessing affordable housing through its latest fiscal update. Learn more here.
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