Finance Minister Mike de Jong repeated in his Tuesday budget speech a by-now-familiar message from Victoria: It’s through increased housing starts that the affordability crisis that has gripped urban centres around the province will be eased.
And while he had much to say on the file, he offered little by way of new spending announcements to reduce the high costs of housing.
“I’ve cautioned before and I’ll say it again,” de Jong said, “we can’t just focus on getting more people into the market. On its own, without adding to the supply, that’s just going to drive prices higher.”
De Jong’s words appeared to be aimed in part at local governments, which share a role in pushing forward new construction. He said the province intended to “help ensure cities and municipalities have the capacity, incentives and performance targets needed to expedite the processing, approvals and permitting” of development applications.
About 115,000 units of housing are held up in various stages of municipal planning, review and contemplation, according to a new analysis the province commissioned from Deloitte.
De Jong said he’s developing a plan that could offer municipal governments money and other resources if they more quickly push through a backlog of housing projects in the Lower Mainland. He confirmed money is likely to be the incentive to local governments.
“But I don’t want to get ahead of myself,” he said, adding that the government first needed to speak to municipalities and work with the Union of B.C. Municipalities.
“We want to engage with communities to say how do we do this better, faster, more efficiently together,” de Jong told Postmedia News. “If it’s a question of resources do we need to train more urban-planning specialists? … Whatever you do it’s got to be tied to better results. We have in excess of 100,000 units, some of them have been awaiting consideration for six or seven years. That’s not good enough.”
The cautionary message in de Jong’s budget speech may also have been aimed at residents, and specifically those who may have been hoping for a little extra help getting into the scorching real estate market.
Announced in the budget was a razor-thin increase in the First-Time Home Buyers Program threshold. First-time buyers would now be eligible to save as much as $8,000 of the property transfer tax on a home valued up to $500,000. Previously, they could save up to $7,500 on a $475,000 home.
While the change was applauded by the Urban Development Institute, the nominal increase may underwhelm prospective first-time buyers in areas like Metro Vancouver, which saw home prices swell nearly 13 per cent last year.
In all, the province plans to spend $320 million on housing from 2017-18 to 2020-21. By comparison, B.C.’s investments totalled $600 million in 2016-17, according to the budget.
Before delivering his budget speech, de Jong told reporters home starts grew by more than 33 per cent in 2016.