Despite falling rents and stabilized home prices, a group of angry Metro Vancouver mayors is calling on the B.C. government to back off on some of its signature housing policies.
“The province’s housing legislation has been one of the most ill-conceived, poorly thought-out policy initiatives that this province has ever suffered under,” Port Coquitlam Mayor Brad West said at a Thursday (Dec. 11) press conference. “Rather than unleashing more housing units, like the province promised, it’s unleashed chaos.”
Housing and Municipal Affairs Minister Christine Boyle says the province has no plans to back down.
“We’re not going backwards when we’re seeing that these policies are making a real difference,” she told reporters shortly after the mayors’ press conference.
It was the stated goal of the NDP government to cool off the overheating housing market by introducing a slate of legislation in 2023 aimed at getting more houses built, limiting speculation and regulating the short-term rental market.
But many people aren’t happy, with Metro Vancouver mayors and real estate industry economists ringing the alarm bells about the market reaching a tipping point where these measures aren’t helpful anymore.
A Nov. 28 letter from 16 of 20 Metro Vancouver mayors urges the province to back off by rescinding small-scale multi-unit housing legislation and abandoning housing targets.
“One size fits all does not work, and it will never work, and the public does not want this,” Burnaby Mayor Mike Hurley said.
Other mayors say that these imposed development rules don’t account for parking or infrastructure needs, wrecking neighbourhoods. Richmond Mayor Malcolm Brodie said it takes planning control away from municipalities, ordering “high-density everywhere.” Others complained about the end of public hearings for projects.
Brendon Ogmundson, chief economist for the B.C. Real Estate Association, says that to meet federal and provincial housing targets, it would require capital investment of up to $300 billion, a figure far exceeding what is possible without international financing. This is currently prohibited under federal law.
“That’s a lot of money,” he said. “It’s not an amount of capital that we can finance domestically alone.”
And he warns that the housing market is already reaching a point where there is too much inventory and developers are backing off, unable to make a profit. This is similar to what happened following the 2008 market crash, which eventually led to soaring prices.
“One of the risks that we see over the next few years is that we can’t keep developers building, and we’re going to have a drop in supply,” Ogmundson said. “And that exposes us to price accelerations.”
Rents down, sales down
Boyle highlighted the recent rent report as evidence of the province’s success. The latest figures, released on Monday, show that overall rents in B.C. are down 6.8 per cent from the same time last year, and down 8.5 per cent over the past two years. Vancouver still has the highest rents in the nation, but even those are down 15.1 per cent for purpose-built units since 2023.
She admits there is a wide range of factors responsible for this, including the decrease in federal immigration allowances. But Boyle does credit the province’s policies with helping “bend the curve” to lower housing costs.
“It’s not the only factor, but it’s making a difference, and we should keep doing that work,” she said.
From her perspective, the government ought to keep pushing these policies until the gap between incomes and housing costs narrows.
But she would not put forward any specific overall benchmarks for when housing affordability is achieved, except those already in place for municipalities to meet — such as the housing targets themselves and vacancy rates municipalities must achieve to obtain exemptions from short-term rental restrictions.
This is all having an impact on home sales, which are down about 10 per cent year-over-year as of October, and are 17 per cent below the 10-year average, according to the B.C. Real Estate Association. Prices have yet to take a major hit, up 0.8 per cent year-over-year for October.
Ogmundson said costs must be brought down to ensure a steady supply of homes is being built. While it is tough to change building material prices, which are up roughly 70 per cent since 2019, he said the provincial government can help by speeding up permitting and working with municipalities to lower development costs.
As it stands, thousands of units are being cancelled because developers can’t hit resale targets, he said. This is especially problematic because of the amount of debt developers must carry to get a project off the ground.
“We’ve had a number of developers that have gone bankrupt,” Ogmundson said.
This, along with decreasing rents, can also make investors reluctant to become landlords.
Ogmundson said he thinks that because the province is worried about repeating the cycle of what happened when housing costs took off in 2018, they have become too reluctant to open up the housing market to outside investment.
“Understandable, but I think they also need to recognize that if they have these aggressive targets that they need to be paid for,” he said.
With all this in mind, the Metro Vancouver mayors want the province to back off on targets that they argue are unattainable at this point.
“Quit sending me and council these demand letters to build more units,” said Delta mayor George Harvie. “All it does is just create more paperwork because nothing…is being built,” .