B.C. Budget 2020: Record housing funding, but still no renter's rebate
Credit to Author: Dan Fumano| Date: Tue, 18 Feb 2020 21:48:30 +0000
B.C.’s NDP government is increasing funding for affordable housing to record levels with this year’s budget, but there is still no sign of a renter’s rebate, a key promise of their 2017 election campaign.
While B.C. Finance Minister Carole James welcomed the “moderation” hitting B.C.’s housing market, that cooling also comes with property transfer tax revenue forecasts decreasing by hundreds of millions of dollars.
The 2020 budget provides $4.2 billion over three years for housing initiatives, described as a “record total.” That includes $958 million in program funding for housing and $396 million in capital funding for 2020-21, each of which more than double the funding levels from 2017-18. Combined program and capital funding is forecast to increase from $1.35 billion in 2020-21 to $1.41 billion in 2021-22 and $1.49 billion in 2022-23, which includes funding for building affordable homes for low- and middle-income British Columbians.
The increased investments come after B.C.’s housing market has cooled following several hot years, with 2020 marking the first time in two decades the B.C. Assessment Authority reported an overall decrease in the assessed value of real estate across the province.
B.C.’s housing market “has performed better than some estimates, with certainly some moderation occurring over this past year,” James told reporters Tuesday, citing home sales decreasing by about 1.5 per cent last year and average home sale prices dropping by about 1.6 per cent. James pitched this as a positive thing, saying: “We are, again, seeing the kind of moderation that we’re looking for.”
James believes home prices still need to come down further, and although home prices are no longer seeing the massive year-over-year “spikes” they recently saw in some B.C. markets, she said, “I don’t think there’s anyone who would say we’ve reached affordable housing in British Columbia.”
But that cooling real estate market has also come with decreased government revenue in the form of the property transfer tax. The 2019 budget had projected property transfer tax revenues to remain stable at $1.9 billion over the following three years. But this year’s budget shows it dropped to an estimated $1.54 billion for the 2019-20 fiscal year, increasing to only $1.58 billion for 2020-21.
James also talked about B.C.’s continuing “momentum in home construction,” citing almost 45,000 housing starts in 2019, the highest annual level on record. However, the 2020 budget forecasts housing starts to decrease in each of the next three years, starting with a dramatic 22 per cent drop this year.
Asked Tuesday about those projected decreases in housing construction, James said the actual numbers often outperform the government’s conservative estimates, and she expects both housing starts and sales will climb over the next year.
But despite trumpeting its record levels of investment in housing, this year’s budget, once again, contains no mention of a renter’s rebate, even though the NDP campaigned in 2017 on introducing a yearly grant for renters, similar to the one provided to homeowners.
Asked if the province might introduce a renter’s rebate before the next provincial election, planned for October 2021, James said her government is looking at “all options to be able to support tenants,” and has decreased maximum allowable rent increases and increased rent supplements for low-income seniors. However, James added, the idea of the renter’s rebate is not supported by the B.C. Green Party, whose support the NDP needs to form the current minority government.
In her speech to the legislature Tuesday, James included jabs related to the previous B.C. Liberal government’s record on housing, accusing them of “cashing in on a speculative real estate market” and “turning a blind eye” to the role of dirty money in the housing market.
“Over the last decade our province’s economy has remained strong, but many people and communities fell further behind. There was a bright future in British Columbia, but only for the few who could afford it. I am proud to say that, as a province, we are now on a different path. We are making different choices,” James said. “Mr. Speaker, the days of cashing in on a speculative real estate market at the expense of hardworking British Columbians are done. Instead of turning a blind eye to money laundering and the housing crisis, we’re acting so that everyone can afford a future in British Columbia. Money laundering in our economy must end. Our goal is to ensure balance — and it is not balanced to have an economy that is distorted by dirty money.”
The 2020 budget provides $11 million to fund B.C.’s public inquiry into money laundering, which will make recommendations related to money laundering in sectors including real estate.