October 2, 2024 Key Housing Regulations Impacting BC’s Real Estate Landscape Right Now

As we transition into the busy fall real estate market, the importance of staying informed about key policy updates that could impact the housing landscape is top of mind. Over the past few months, several important changes were introduced at all levels of government, with a lot of attention drawn to land use, construction regulations, rental market protections and mortgage reforms. These updates are designed to address ongoing challenges in affordability and development while navigating complex issues like sustainability, energy use, and tenant rights.  

We’ve highlighted the major changes rolled out as of late to discuss their impact on British Columbia’s housing market. 

Land Use and Housing Strategies  

Some of the large recent policy changes in British Columbia and at the federal level in Canada aim to address the housing supply crisis. The Canadian government’s Public Land Bank identifies 56 federally owned properties suitable for housing development, offering long-term leases to developers instead of sales. This initiative seeks to lower housing costs by reducing land prices, with plans to expand the program through a $500 million fund to acquire more land for affordable housing. 

British Columbia’s Bill 16 introduces tools like inclusionary zoning and density bonuses to promote affordable housing. Inclusionary zoning allows governments to mandate affordable housing in new developments without rezoning, while density bonuses offer higher density in exchange for amenities. The bill also includes tenant protections to prevent displacement during redevelopment. 

Bill 47 promotes high-density development in British Columbia around transit stations by creating Transit-Oriented Development (TOD) areas. These zones maximize residential, business, and leisure spaces near transit hubs, allowing taller buildings and eliminating parking requirements for new multifamily developments. The policy aims to address the housing supply crisis and reshape neighborhoods by encouraging multifamily housing and commercial real estate. TOD areas are expected to increase land values, attract developers, and offer higher rental returns due to their proximity to transit and amenities, making them appealing for both residents and investors. 

Construction and Regulatory Changes 

British Columbia has introduced several key construction and regulatory updates to address housing supply and affordability. A major update to the BC Building Code now permits single egress stair designs in low-rise and mid-rise buildings up to six storeys, replacing the previous requirement for two stairwells. This change, aimed at increasing housing density and flexibility, particularly benefits smaller lots and transit-oriented areas. The update also enhances safety measures, including sprinkler systems and fire protections. Additionally, a new building code for adaptability will take effect on March 10, 2025, requiring 100% adaptable units in large buildings, which may lead to larger unit sizes and higher costs, but potentially at the expense of certain amenities. 

In another significant policy shift, Vancouver City Council voted to restore the option for natural gas use in new home construction, reversing a previous mandate requiring electric heating. This decision, passed narrowly, reflects concerns over energy resilience, rising costs, and pressure on BC Hydro to meet growing electricity demand. Supporters argue that natural gas offers more flexibility and affordability for builders and homeowners, while opponents warn that it undermines climate goals. Despite this reversal, natural gas for cooking remains permitted in both new and existing buildings. 

Rental Market Regulations 

British Columbia has introduced several key changes to rental market regulations aimed at protecting tenants that have raised concerns for landlords. For 2025, the province set the maximum allowable rent increase at 3.0%, down from 3.5% in 2024, tying it to inflation. This policy continues a shift to protect renters, although it remains controversial among developers who argue it limits their ability to cover rising costs. Landlords must provide at least three months’ notice before implementing any rent increase. 

Bill 14 brings significant changes to the Residential Tenancy Act (RTA), focusing on preventing bad-faith evictions and increasing landlord accountability. Starting July 18, 2024, landlords will be required to use a Landlord Use Web Portal to generate eviction notices for personal or caretaker use, with post-eviction audits. Notice periods for evictions will increase to four months, and future amendments will prohibit evictions for converting rental units to non-residential use. Additionally, landlords will need to occupy units for 12 months after an eviction, up from the previous six-month requirement. 

While these regulations aim to protect tenants, they may discourage rental investment, especially among small-scale landlords who face rising costs and increased regulatory complexity. This could exacerbate the housing supply shortage, as investor-owner landlords account for 43% of Vancouver's rental stock and have been key in supplementing the city's limited purpose-built rental market. 

Groundbreaking Mortgage Reforms on the Horizon 

In response to rising homeownership challenges, particularly for first-time buyers, the federal government has introduced a set of mortgage reforms that will take effect in December 2024. These upcoming changes include increasing the insured mortgage cap from $1 million to $1.5 million and expanding 30-year amortizations for all first-time homebuyers and new builds. These reforms aim to reduce monthly mortgage payments and make homeownership more attainable, especially in high-cost markets like Metro Vancouver. 

Additionally, the new rules will allow insured mortgage holders to switch lenders at renewal without undergoing another stress test, which is expected to increase competition and help Canadians secure better terms. While these reforms are not yet in effect, they signal a significant shift in housing policy and offer hope for increased accessibility in the near future. 

These policy changes will no doubt shape the coming months for the housing market in BC. While many of these policies have been welcomed, they also bring challenges particularly for landlords and developers already navigating increased costs and regulatory demands. 

MLA Canada will continue to stay informed on the factors that influence our real estate landscape. To stay in the know, ensure you are subscribed to our Real Estate Insider Newswire.