BC Budget Consultation 2020

Presentation by the Victoria Residential Builders Association to the Select Standing Committee on Finance and Govt Services – Tuesday June 16, 2020 

C. Edge: Good morning, Chair and committee. Thank you for the opportunity to present today. I’m Casey Edge, executive director of VRBA with 190 members, most of which are contractors.

B.C.’s decision to establish construction as an essential service has been proven by its success combating COVID-19 while protecting jobs. Conversely, Quebec shut down construction, and Ontario halted new projects and have not achieved B.C.’s success. A recent report by the Royal Bank says B.C. will also be a leader in the recovery. Here are some recommendations to assist that.

First, cancel WorkSafeBC’s proposal to add viruses, including COVID-19, to employers’ premiums. The Employers’ Health and Safety Association says shifting public health care costs onto employers through WorkSafeBC premiums has no basis in science and would be ruinous for businesses who are unable to absorb any further costs.

Second, a home renovation tax credit can help mitigate a crisis that’s a certainty: a major earthquake on the west coast. Seismologists predict a 30 percent chance of a damaging earthquake within 50 years and a 10 to 15 percent chance of a massive earthquake. Drop, cover and hold is insufficient to address this crisis. A tax credit will improve seismic safety with anchor bolts, tie-downs and other safety measures, create much-needed skilled jobs and provide a tax revenue by requiring receipts — discouraging the underground economy. A tax credit also promotes families’ health by encouraging use of professionals for abatement of asbestos and lead, commonly used in older homes.

Third, enforce B.C.’s best practices guide for development cost charges, often ignored by municipalities. The guide says fairness, stability and certainty should be built into the DCC process, both in terms of stable charges and orderly construction of infrastructure. Stability of DCC rates will assist the development industry in the planning of the projects. Municipalities are surprising developers with triple-digit increases, significantly altering project cost estimates. For example, Saanich recently raised DCCs by 180 percent, an increase that is neither fair nor predictable.

In addition to enforcing best practices, allow DCC grandfathering or prepayment of in-stream housing applications. It can take two years or more for a development to be approved in municipalities such as Saanich and Victoria. By the time the permit is approved and DCCs are due, the projects’ original estimates do not resemble the costs. These costs would be passed on to homebuyers, if the project is viable at all.

Fourth, establish enforceable best practices for municipal rezonings and permits. There’s a disconnect between permit approval processes and federal policies driving the demand for housing. For example, Canada’s record immigration of 340,000 last year helped boost B.C.’s economy and housing demand. Twenty-one percent of homes in Canada are purchased by immigrants, representing one-fifth of the market. Seventy-five percent arrive in Canada with funds to buy a home, yet bottlenecks are created by slow and even obstructive municipal rezoning processes.

We have an obligation to provide housing for new Canadians, best accomplished through enforceable best practices and reasonable approval timelines, including best practices for community associations and their land use committees.

Finally, launch a study to amalgamate the CRD and start light rail transit to the West Shore. Housing supply challenges will continue until there is responsible regional planning. The CRD’s regional plan is only a reflection of 13 community plans, mostly designed to inhibit growth and housing density.

The exception is Langford, responsible for almost 40 percent of new housing in the CRD due to proactive and efficient approval processes. This explains why year-to-date housing starts are down only 3 percent in the CRD, while Saanich is down 33 percent and the city of Victoria has declined 90 percent. Both have reputations for slow approval processes, high costs and obstructive regulations.

LRT is necessary for future growth and job creation. The claim that greater Victoria lacks the population was proven false almost 40 years ago when Portland, Oregon, launched its LRT in 1984 with the same population as our region today.

LRT is great value, demonstrated by the new Mackenzie interchange, costing $98 million, while LRT construction to the West Shore is estimated at $280 million, including engineering. LRT moves people efficiently, reduces traffic and GHGs and identifies density for housing. Now is the time to solicit funding from the federal government to invest in this kind of infrastructure.

To sum up, cancel WorkSafeBC’s proposal to shift viruses onto employers’ premiums. Create a home renovation tax credit to mitigate damage from a major upcoming earthquake. Enforce fairness, stability and certainty in DCC best practices and establish best practices for municipal housing approvals. Study amalgamation of the CRD. Launch LRT to the West Shore.

B. D’Eith (Chair): Thank you very much, Casey and to all the panellists.

Questions from members?

B. D’Eith (Chair): I just had a quick question around the approval process, and also in trying to get more developers to build rental stock. I’m just wondering if you had thoughts about ways that we can encourage more building of rental stock around British Columbia. I know, when I talk to my constituents, that seems to be one of the single biggest problems: availability of rental stock. I’m not sure what….

Obviously, there are barriers to building. It might take up to six years, I gather, in Vancouver, to get permitting. I’m just wondering if there are other ideas that you might have in terms of encouraging more development of rental stock in the province.

C. Edge: The federal government could help introduce the capital gains rollover, which they eliminated in the ’70s. If you talk to people investing in rental, rent controls are a big disincentive.

Actually, there’s a lot of rental that’s being built in Langford, and one of the reasons for that is because they have a predictable and certain development process. A development project takes maybe up to six months in Langford. You’re looking at two years in Victoria, Saanich and some others. The process has a lot to do with it. There were rentals actually voted down in Victoria.

I think you have to look at where the housing supply problem is — the issues, the costs. It’s happening at the municipal level, and the policy of self-determination for municipalities is, essentially, a governance failure in terms of creating housing supply and responsible regional planning.

B. Ogmundson: I would echo everything that Casey is saying and just add that, especially in Metro Vancouver, the zoning is particularly difficult — and the time to build. Your project could take six years from start to finish. Those are huge, huge hurdles for rental.