Victoria council is planning to adopt a policy where 20% of units in new, large residential strata buildings must meet the city’s affordability criteria.
Victoria’s population growth has exceeded new housing starts since 2011 and this will only further obstruct supply.
The federal govt’s mortgage stress test has eliminated 20% of homebuyers’ purchasing power and council’s new costs must be absorbed on the mortgages of those buyers.
It’s not surprising that the city’s report admits more young families are moving outside of Victoria.
The shift is to Langford where 60% of all new rentals, and 40% of all new housing, were built last year while housing starts declined in Victoria.
Langford’s strong supply is due to efficient development processes creating developer confidence and significantly lower costs.
Victoria’s policy will result in higher housing prices and erode confidence.
Private development’s homebuyers already contribute enormous funding for affordable housing.
Victoria collects millions of dollars in development fees for affordable housing projects.
The provincial and federal governments collect billions of dollars in Property Transfer Tax and GST and provide affordable housing through BC Housing, CMHC and non-profits.
Clearly, Victoria’s new housing policy is out of sync with the market.
Homebuyers don’t need more municipal costs on their mortgages, already challenged by high fees, taxes and the stress test.