During the run-up to the 2013 provincial election, much of the real estate industry was reconciled to the prospect of the BC NDP winning the reins of power. They might not have been happy, but they knew what they were getting.
Eric Carlson, founder of Anthem Properties Group (now rebranded as Anthem), delivered to Urban Development Institute members a scathing summary of the party’s years in power in the 1990s: “fast ferries, Casinogate, four premiers in one term, eight deficit budgets, the worst economic performance in B.C.’s modern history.”
But with an agreement between the province’s NDP and BC Green Party poised to topple Premier Christy Clark when the legislature resumes sitting this month, B.C. faces a return to familiar political terrain.
The question is, will those who sought an alternative to the delayed and tepid housing policies the BC Liberals introduced get what they wanted?
High housing costs haven’t gone away, and with spring sales pointing to renewed pressure on both prices and supply, discontent isn’t about to disappear, either.
“This problem is galvanizing many young people to seek change in housing policy,” Paul Kershaw, an associate professor in the University of British Columbia’s School of Population and Public Health best known for his leadership of housing advocacy group Generation Squeeze, said prior to the May 9 election that reduced the BC Liberals to minority standing.
Kershaw wanted to see signs of real change in the platforms of all parties, dismissing the steps Clark’s government took as “nowhere near sufficient.”
Now, the governing agreement struck by the so-called “GreeNDP” coalition has committed to “making life more affordable” in B.C. by “increasing [the] supply of affordable housing and tak[ing] action to deal with the speculation and fraud that is driving up prices.”
It also promises to address affordability through a guaranteed-income program in its first budget.
There are few details, though the pledge reflects the NDP platform, which called for building 114,000 new homes over a 10-year period as well as a task force to combat the use of B.C. real estate to launder money and commit fraud. The focus on supply pleases Bob de Wit, CEO of the Greater Vancouver Home Builders’ Association, whose members will benefit from a rise in construction.
“Unfortunately, [the plan is] not enough to begin to solve the supply challenge that we have in Metro Vancouver,” he said, adding that getting the necessary approvals will also take time. “Even though it sounds like a big number, [it’s] really scratching the surface of what’s needed.”
Kershaw also questions how a potential GreeNDP government would implement the plans, but he takes heart from the strong signal voters sent to the BC Liberals that home prices need to be brought in line with incomes.
This is where the aggressive tax policies of the Greens, muted in the coalition agreement, encourage him.
Kershaw likes the Greens’ pledge to make the tax on residential purchases by foreign nationals provincewide and boost it to 30%, as well as taxing capital gains in excess of $750,000 on residential properties owned for less than five years. With three Green MLAs holding the balance of power, he sees potential for change.
“Right now, we have outdated policies restricting supply, especially in our urban centres, and then simultaneously we have this outdated policy around taxation which shelters housing wealth,” he said. “The one outdated policy limits supply, the other outdated policy exacerbates demand, and the two of those things then drive home prices out of reach.”
He would like to see the wealth in principal residences taxed more aggressively than it is now, to burst ballooning residential prices.
Rolling out aggressive taxation measures on residential or other forms of property is not likely to sit well with those who hold land, not to mention investors. However, on the precipice of a new legislative session, the British Columbia Real Estate
Association (BCREA) believes the commercial sector has little to fear.
Its commercial leading indicator (CLI) is cresting all-time highs, thanks to strong investment activity and business confidence.
“The rising CLI mirrors the overall robust trend in the provincial economy,” BCREA economist Brendon Ogmundson said in releasing the data the same day Clark vowed to face a new session of the legislature. “The commercial real estate sector stands to benefit from B.C.’s strong economic growth through increased demand for commercial space and the attraction of investment dollars.” •
