REBGV makes three recommendations to BC government to help make homes more affordable
Home prices have been on the rise in Metro Vancouver in 2021 due, in large part, to an insufficient inventory of homes for sale to meet home buyer demand. What can the province do to help?
In September, the Real Estate Board of Greater Vancouver (REBGV) submitted three recommendations to the BC Select Standing Committee on Finance and Government Services to help increase housing supply and make homes more affordable.
Here are those recommendations.
REBGV’s housing affordability solutions
1. Use the Property Transfer Tax (PTT) revenue
Use a percentage of PTT revenue from this year to fund:
- local infrastructure to reduce cost burdens charged by local governments;
- rental projects to help stabilize rents and support renters saving to become buyers; or
- insure construction mortgages for higher risk projects that push the boundaries of what the market is developing, for example, multi-family in a single-family neighborhood.
2. Improve the PTT
The PTT, unlike mortgage insurance, cannot be financed with the mortgage and acts identically to the down payment as a barrier to buying a home. A household making $120,000 per year diligently saving 10 per cent of their income to purchase a $700,000 home would be able to buy a home a full year earlier without the PTT.
Buyers of a modest townhome in Coquitlam, a suburb seen as affordable, face a benchmark price of $847,300 which comes with a PTT price tag of $14,946 given that the price exceeds the $525,000 threshold for the buyers to qualify for the first-time home buyers’ exemption.
- Increase the First-time Home Buyers’ Program PTT exemption threshold to $750,000 from $525,000. This would minimally impact PTT revenue.
- Increase the 1% PTT threshold to $750,000 from $200,000 for all home buyers.
- Index the PTT thresholds to move with the assessed values of residential (class 1) and make annual adjustments for the First-time Home Buyers’ Program exemption threshold and Newly Built Home Exemption threshold.
3. Increase affordable housing market supply
Mandate inclusionary zoning by amending the Local Government Act and the Vancouver Charter to require local governments to:
- establish affordable market housing targets in official community plans and zoning bylaws. Developers can develop market housing only if they include, for example, 20 per cent denser affordable market housing in the development; and
- pre-zone land and infrastructure for higher-density missing middle market homes including small-lot townhouses and row houses with basement suites and laneway homes.
You can read the full submission here.