On July 29, 2016, the Provincial Government passed Bill 28 – Miscellaneous Statues (Housing Priority Initiatives) Amendment Act, 2016, which amended four legislative acts. Of particular interest to the Surrey Board of Trade is the establishment of a Housing Priority Initiatives special account.
“I have some members very concerned about some of their transactions that have yet to be completed prior to August 2. And I have some members who applaud Monday’s legislation aimed to calm the real estate market,” said CEO Anita Huberman. “It seems to me that we need to wait a bit for accurate data to come forward as to the impacts of the changes.”
In May, the Surrey Board of Trade put forward a resolution to the BC Chamber of Commerce AGM to address the lack of housing for skilled workers.
“As most of the foreign purchasers are targeting high end housing, I’m more concerned with the housing needs of our skilled labour. Not only is most market housing out of range of young professionals, but there is a dearth of quality purpose-built rental stock,” noted Huberman.
The resolution, adopted by the members of the BC Chamber, recommended that the Provincial Government to work with the Federal Government to develop tax and other incentives for purpose built market rental housing units for low- to mid-range income levels.
“While we wait for experts to measure the impact of the foreign entities transfer tax, I would like to suggest that the funds in the new account be used as that carrot for developers to build quality rental stock for mid-income workers – those earning between $30k to $60k or more. There’s a big gap in the market just ready for innovative developers with the right financial incentive,” said Huberman.
The Surrey Board of Trade’s policy resolution relied on a number of studies including the facts below to identify a large housing gap. This would be an opportunity to address housing needs until the housing market has demonstrably calmed sufficiently for local residents.
Quick facts and their sources:
- Lower Mainland median income: $63,000 (Vancity, May 2014, Help wanted: salaries, affordability and the exodus of labour from Metro Vancouver)
- Average 2-bedroom rent: $1,287, requiring an income of $51,480 (Noah Zon, 2015, Renewing Canada’s Social Architecture: Access to Affordable Housing)
- 64,900 new rental units needed in next 10 years (Metro Vancouver, 2015, Housing and Transportation Cost Burden Study)
- 21,400 low income (<$30k) rentals
- 25,400 low to moderate income ($30-$50k)
- 18,100 market rentals for $50k+
- Current rental rate in Vancouver – nearly 0; 0.8% in Surrey (CMHC)