Vernon City Councillor
For years, many local governments have been sounding the alarm bells on housing affordability and accessibility – especially here in B.C.
The City of Vernon, with the help of the Regional District of North Okanagan, partnered in completing a Housing Needs Assessment which eventually translated into a Housing Action Plan that was fully endorsed by council in 2022. This set the path for staff to implement bold and courageous changes that would streamline development while building confidence within the development community. It also addressed gaps within our current housing stock and mechanisms needed to shrink those gaps.
Out of this exercise, it became abundantly clear that local government could, and should, play a huge part in navigating this crisis; but local governments alone could not fix the growing problem.
It would require a multi-jurisdictional and multi-disciplinary approach from all levels of government to make significant strides in ensuring housing targets, which is a core need, are being achieved. It is my opinion that the City of Vernon is leading the charge in this area.
We have seen record development permits in multi-residential projects, which includes a significant portion in non-market rental units that are managed by many non-profit organizations within our community.
The latest media releases by B.C.’s provincial government have not come as a surprise – or it shouldn’t have – but these significant adjustments in how local government manages their own resources will come at a cost. For some, these changes can be seen as necessary and for certain communities that would be true. For Vernon, we are leaders in this change, but we have made strategic and responsible decisions with careful consideration of the potential impacts to neighborhoods, infrastructure, and financial burden. It is necessary that local government retain their autonomy as they are solely responsible for the outcomes within their community. The adage that the “buck stops here” has never been truer.
So, what has the B.C. government done that should have Vernon residents alarmed?
Many have read the new proposed legislation and are excited to see housing improvements.
In all honesty, who wouldn’t be thrilled to see local governments held to account for their lack of response to the growing housing crisis because it is a crisis that does require an immediate response with targeted solutions.
But are these “targeted” solutions viable and will they fix one problem only to create another.
1. Short-term rental regulations: the City of Vernon has spent numerous years reviewing our community needs to address a growing problem that has had several negative ramifications within our community.
To address these issues, we have created zoning regulations to allow STR minor zones (owner occupied homes) and created areas that allow for non-owner-occupied homes to be used as a full-time STR.
The rationale for the province’s new regulation is the perception that these homes will be added to the rental housing stock.
For some, this is a possibility but for many, this is not reality. Even if it were to be true, many homes that are currently being used as a STR are unaffordable for long-term rental markets. This is not the market that will improve housing affordability. If anything, some will be forced to sell, and those homes will be bought and not by investors. To encourage private investors to rent out their homes would require significant improvement to the Residential Tenancy Act (RTA). For many landlords, this is the biggest challenge to housing affordability as it relates to rental homes. The system is flawed, and some would even say broken when it gives the perception that the tenant has more legal rights than that of the property owner. We only must look to COVID to see why this rings true. Tenants’ refusal to pay rent, supported by the province, caused a domino effect that put significant financial pressure on landlords. Anecdotally, many landlords went without compensation for months with no support or ability to recover the loss. Some even chose to sell knowing that their home would unlikely be bought by other investors.
2. Higher densification legislation: the province, in their infinite wisdom, has unilaterally decided to remove local government control, public oversight (public hearings), and cause and effect concerns over extreme densification of existing neighborhoods with little to no consideration of the unintended consequences.
And if they did, they have chosen to ignore them.
Single-family lots are now allowed to build up to four units with no thought process to parking, infrastructure improvements, water, and sewer capacity. So, one must beg the question, who is responsible for ensuring improvements are made to meet the new demand of this proposed legislation? As one bureaucrat within the Ministry of Housing alluded to, the expectation would fall squarely on local government and thus, local taxpayers unless grant funding can be realized through other government initiatives such as the Housing Accelerator Fund. But as the CMHC liaison mentioned, there is not enough funding to manage the sheer size of investment dollars that will be required to “fix” what will obviously be a big problem. Consequently, will development cost charges (DCCs) need to be amended to build up reserves for these improvements? If this is one such mechanism, then it will have an immediate and direct impact to the development community.
3. Speculation Tax & Vacancy Tax: this adjustment should not come as a surprise to anyone. It was just a matter of time before the government noticed the problem they created when they applied the tax to the City of Kelowna but excluded Lake Country and Vernon. It was evident then as it is now that this tax will simply push investment into those communities that are in proximity to one another but who are exempt from this tax. That is a problem we should all be concerned with as it puts undue pressure on the smaller communities by displacing residents who are being pushed out of their communities due to affordability concerns. You cannot increase demand and assume the supply side will not be impacted, which almost always translates into higher property values. This has been a trend since legislation was first introduced in 2018. Many lower mainland residents uprooted their lives and moved to the interior (this includes investors) buying up property and driving up prices.
The rationale for this is that it would free up much needed rental stock. And I am sure it did – to a degree.
Their data suggests that 20,000 new homes came onto the market with this new regulation (and am I wrong to want to see that same data for our area). The condominium/apartment market vacancy rate in Vancouver at that time was 1.4 per cent.
Since the tax has been applied, their vacancy rate is now 2.2 per cent but does this info breakdown the difference between “existing” and “new” units.
But, for purpose-built rentals, the vacancy rate is unchanged despite significant investment in these markets.
Now, I am not saying action shouldn’t be taken but it is, in my opinion, imperative to have all stakeholders at the table including local government officials. It is not wise nor feasible to make such dramatic changes with no plan to support the communities who cannot afford the consequences.