On May 15, the City of Vancouver council approved the Secured Rental Housing Policy. Part of the City’s Housing and Homelessness Strategy, this new city policy outlines a package of incentives for property developers to develop and build 100-per-cent purpose-built affordable rental housing in the municipality.
The City of Vancouver’s latest initiative to stimulate the construction of more affordable rental housing in the region provides a good demonstration of policy leadership for other major cities in Canada struggling with a nationwide affordability crisis, and in particular, with the supply and provision of affordable rental housing. Vancouver has recognized that purpose built rental housing is critical for the economic and social vitality of the city.
However, municipal initiatives to stimulate the construction of affordable rental housing in Canada reflect the need of municipalities to respond to what has been a significant shift in the housing policy burden of provincial and federal governments, to local government, over the past 30 years. A lack of engagement in urban and housing policy of senior governments has resulted in a steady decline of affordable rental to a point where a critical shortage of this type of housing has developed — both in the Metro Vancouver region and other metropolitan regions in Canada.
In the late 1970s, federal government tax incentives encouraged record amounts of purpose-built rental to be built in Canada — rental housing that provided affordable places for families and individuals to live close to work and urban centres. The economic and social benefits of these policies far outweighed the revenue costs to government.
Tax policy that stimulated new rental construction, while providing important housing needs for Canadians, also provided important stimulus to the national economy. In that regard, rental housing must also be part of a National Economic Strategy — which is something our group, the Canadian Rental Housing Coalition, advocates.
The economic output (the total value of goods and services) produced from the construction of one rental unit including direct, indirect and induced benefits to the economy equates to approximately $590,000. The amount of federal tax revenue generated from the construction of one rental unit is approximately equal to $22,000. More than $30,000 in municipal and provincial tax revenue is generated for every unit built, and the equivalent of four full-time jobs created.
In Metro Vancouver an additional 6,500 households require rental housing every year, yet over the last five years only 1,000 purpose-built rental units have been constructed. Affordable rental housing is also critical for small businesses in the region with John Winter, president of the BC Chamber of Commerce recently noting that, “without affordable places to live that are close to jobs and transit, employers will have trouble competing for talented workers.”
Provincial governments also have an important role to play in absorbing some of the heavy lifting in the provision of rental housing supply. Property assessment practices that overvalue rental property relative to other forms of residential use should be reviewed along with other components of the provincial tax system. Property Transfer Tax, where it exists in certain provinces, should also be reviewed to better support or incentivize the construction of new rental housing. In partnership with the private and non-profit housing sectors, as well as local government, senior governments can and must do more.
The Canadian Rental Housing Coalition was founded in Metro Vancouver by a collection of organizations that represent the development and construction industries, non-profit housing providers, Metro Vancouver and its member municipalities, building owners, and tenant’s rights advocates. The Coalition seeks to re-engage senior governments into meaningful action and involvement in rental housing policy as we continue to build Canada-wide support for this initiative. The ongoing social cohesion of Canadian cities depends on it and regional economies will greatly benefit from it.
Marg Gordon is CEO of the BC Apartment Owners and Managers Association. Wayne Wright is mayor of New Westminster and chair of the Metro Vancouver Housing Committee. They are co-chairs of the Canadian Rental Housing Coalition.
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