How the federal budget could impact housing affordability in BC

From introducing new measures to stop foreign buyers to helping speed up approvals for new homes, Ottawa hopes to make the dream of ownership a reality – but will it work?

Paula Howley just got served notice to leave her rental home. At a time when vacancies are extremely low and costs are sky high, she’s not sure what’s next.

“I already work two jobs, my kid works, and there’s not much time to enjoy life. I’m going to be looking for a third job now,” Howley told CTV News.

Affordability for those buying and renting homes in BC has long been an issue. Now, with inflation increasing the cost of other goods, the federal government is under pressure to act.

In the budget tabled Thursday, the Liberal government plans to spend more than $10 billion to help with housing supply and affordability. Those who buy and sell a home within 12 months will pay higher taxes as a way to curb speculation. There’s $4 billion to help cities and towns approve new housing faster along with another $1.5 billion to create more affordable homes.

Paul Kershaw, UBC Professor and the affordable housing advocate behind Generation Squeeze, said more housing supply starts at the municipal level, where officials may be lobbied by residents worried about new developments.

“One of the things i’m especially excited about is the $4 billion accelerator fund, which is designed to incentivize cities to resist NIMBYism in neighborhoods where there’s low density, because we know that’s where we need to add more rental and more ‘missing middle ‘housing,” he told CTV News from Ottawa.

With more and more people coming to BC, there’s increasing pressure for housing. New immigrants are needed, Kershaw pointed out, to ensure there are enough taxpayers to support an aging population.

“The housing system then generates higher prices, which erodes affordability for younger people who are working to sustain that aging population with their taxes,” he added. “But it also produces those interesting wealth windfalls for those who’ve been in the housing market longer, namely the aging population.”

He believes until that key issue is addressed – how to stall prices while those who have reaped the benefits of a runaway market pay higher taxes – the housing affordability puzzle will remain unsolved.

Ottawa is also bringing in a two-year ban on foreign buyers in the real estate market. BC has rejected similar measures in the past.

Housing Minister David Eby said foreign buyers currently make up less than two per cent of the market.

“British Columbians shouldn’t expect a dramatic impact given the measures we’ve taken in the past – the speculation and vacancy tax and the foreign buyers tax,” he told reporters in Victoria.

There’s also support for those saving to purchase their first home. For Howley, it’s a moot point.

“Unless I get an inheritance of some sort, which I’m not expecting, I don’t think owning a home is in my future,” she said.

There may be some relief for Howley and other renters. The NDP says it negotiated $475 million to be set aside this year to provide one-time payments of $500 for renters. Although there aren’t details yet on who qualifies, the party says about a million people will be helped.

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