Today we unpack and compare the main points from the four major party’s housing plans. We’ll also discuss the interesting role policy from British Columbia is playing on the national stage.
Today we unpack and compare the main points from the four major party’s housing plans. We’ll also discuss the interesting role policy from British Columbia is playing on the national stage.
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Disclaimer: This interview has been edited for clarity and length.
Jackie: Hi, my name is Jackie Lamport. Today is Thursday, August 26. Welcome to the Capital Daily Podcast. Today on the show, housing is a hot issue in the federal election, especially in places like BC, where average Canadians see homeownership as far out of their reach. So today, we compare housing policy plans for the federal parties and discuss why certain policies from our province are making it to the federal stage. Alex Hemingway is a senior economist and public finance policy analyst at the BC Office of the Canadian Centre for Policy Alternatives. Today, he joins us as we break down and analyze the major points from the housing plans of the Liberals, Conservatives, NDP and Green Party.
Alex, thank you for joining us.
Alex: Thanks for having me.
Jackie: Let's start with the Liberal plan. Considering they're currently in government, a few of their main points are putting a temporary ban on foreign buyers. They also want to provide cities with resources to build more and repair housing, which also includes converting office space into housing. Will that increase the housing supply in a meaningful way?
Alex: When I think about the housing crisis that we're in, I think there are three pillars that need to be addressed. The most important of which is to increase public investment in non-market affordable housing. Another is to increase the overall supply in the context of a housing shortage and driven by many factors, including exclusionary zoning at the municipal level and the demand side. So. we're seeing a mix of policies here in the Liberal platform, some would inflate prices, and some would deflate them like the bans on foreign ownership.
In terms of the supply side, we aren't lacking a clear vision and target for expanding that public non-market housing investment. There is an ambitious target of 1.4 million homes for overall supply, but it's quite short on details and in terms of how these specific planks of the platform would get from A to B on that front.
Jackie: Okay, they also want to make buying a house easier. They say that they will make the first-time homebuyer incentive more flexible. Has this incentive been working already, and what impact would making it more flexible have?
Alex: These types of policies, and we see similar versions in the other parties as well, that essentially make it easier for people to bring more money to the table. In the housing market, when they're bidding for housing, they can have the perverse effect of actually inflating housing prices overall because we're in this supply-constrained environment. The bigger mortgages people can bring to the table, the more tax credits and subsidies of different kinds can bring to the table, which will lead to bidding up housing prices. So it's a bit of a, I think, a red herring when it comes to resolving the housing crisis. We're talking about maybe squeezing a few more people onto the so-called housing ladder, but that comes at the cost of increased prices and doesn't do much for those who are on the outside of this market and are going to be there for some time.
Jackie: Okay, so essentially, it could just make it easier to bid, and that's about it.
Alex: Yeah, exactly, and I think that's a real concern.
Jackie: They also have a rent-to-own plan. Can you explain exactly how that would work and what your thoughts on that are?
Alex: Well, I can't explain exactly how it would work because that's a bit unclear from the language in the platform. It seems to me that through some form of subsidy to the current owner to the landlord, that there would be an arrangement where you could After a set period of time committing to a set period of time of renting a place to be able to have a right to put in a bid to purchase, but of course landlords are not going to give up the rights to the highest price they can get for their property. So ultimately, this work is going to come in the form of a subsidy to landlords.
Jackie: Is there anything else from the Liberal platform that, positive or negative, you found interesting?
Alex: One thing that's interesting but lacking detail is their housing accelerator fund. They're flagging an important issue at the municipal level: wanting to speed up the provision of new housing and speed up that housing supply. They point to some issues like permitting times and the possibility of using inclusionary zoning programs. Now, that's good. That's good in theory, but it's outside of the federal jurisdiction and how you get from A to B in terms of influencing those municipal decisions is not terribly clear in the platform.
Jackie: So, overall, they could use more clarity on all of their points. Let's move on to the Green Party. This one will be quick because they don't have a full plan, but they want to declare a national housing affordability and homelessness emergency, which would also establish a national moratorium on evictions and residential assistance. Would this be of any help in your opinion?
Alex: I have to say that this is because we haven't had a platform from the Greens. You're catching me up right now. So this is interesting to hear. It's correct to characterize the housing crisis that we have right now as an emergency and the disconnect we're seeing, and you can see this in the NDP platform as well, talking about implementing a right to housing. What we really need to see the detailed policy planks that get us from A to B of recognizing that emergency, and increasing the availability of affordable housing, increasing the supply of housing overall, and pulling back from some of the subsidies that were talking about earlier, or changes to mortgage rules that are inflating prices and making things worse.
Jackie: And it's hard to judge exactly their actions because we don't know what they would be. Going with the trend of all the parties as we will learn, they do have the idea of proposing some stronger regulations. When it comes to foreign investments, a federal empty home tax would be created that would apply to foreign and corporate property owners who leave units vacant. Would that help with the supply-demand?
Alex: So I'm all in favour of empty homes taxes, we have one here, where I'm speaking to you from and in Vancouver, we've got a kind of version of that provincially, in British Columbia, as this can help around the margins. We shouldn't see homes sitting empty during a housing crisis, but it's not ultimately going to be at a big enough scale to reverse the crisis that we're in. So, that's going to be the case of any given policy. It's helpful, but it's not going to do the job on its own.
Jackie: Well, that one was quick, given that they don't exactly have a platform. So let's move on to the Conservatives. They have released their full plan, and the first thing that pops out to me, it's a big number, they have a plan to build 1 million homes over three years. What would that do for the market?
Alex: Yeah, so that's looking at the numbers of this earlier that would increase overall supply by I think about 33%. That's a sensible thing to try and do, we do need to increase overall supply, but a big component of that has to be an investment in public non-market housing. And that's absent in the Conservative platform. And in fact, federal and provincial governments alike really pulled back from that type of investment over the past few decades; it's starting to come back slowly, but not at the scale we need. So that's missing there. I would give them credit for flagging. And one interesting point in generating that supply is tying federal infrastructure money to more dense housing near public transit lines. If you're going to find public transit, you're going to require a density near there. This is another one of those cases where there's not much meat on the bone in terms of the details of how this works, but it is a sensible policy. The downfall, though, as I say, is the lack of commitment or vision on the public affordable housing front.
Jackie: Okay, and continuing to trend, they also have some foreign investor tactics. Their plan would be to bar foreign investors who are not living or moving to Canada from buying a home for at least the next two years. How is that any different from the Liberal strategy?
Alex: Yeah, it's very similar, and you see this, and we'll get to the NDP, eventually, as well. Each party has some version of limiting foreign investment in housing. In the case of the Conservative platform, they're saying they're going to limit that investment for two years in terms of homeownership but encourage investment on the rental side of the market, which is an interesting place to land. Overall, what I would say is that it's fine to tamp down on investor speculation in housing; that's a good thing. However, this is an issue that gets a tremendous amount of attention in the housing debate. And I think it can be a bit of a distraction when we really need to focus on that public supply and overall supply piece of the puzzle.
Jackie: Again, they would also want to make it a little bit easier for new buyers. They would make tweaks to the stress test and also insurance requirements. Do you think that this would help in getting new people into the market? Or is it a similar situation, where it would just make it easier for people who already have some money to bid higher?
Alex: Well, it's similar to my comments about the Liberal platform is going to do both of those things; it will likely squeeze a few more people onto the property ladder in the process and help inflate prices along with that. Ultimately, what that's going to accomplish is that approach of just squeezing a few more people on the ladder is increased the divide we have between a big segment of the society that has their chips down on, on housing, wealth on land wealth, and another big segment of the society that's excluded from that and going to be excluded from that; that's leading to not only issues of housing insecurity, but it's a significant driver of inequality in this country, as well. So we need to get out of this framework of simply trying to move a few marginal folks onto the property ladder that's not getting at the fundamentals of the problem.
Jackie: We'll get back to that a little bit later because I want to run through and finish the NDP, but then I do have some questions specifically about that. So let's do one last question about the Conservatives. First, I did see some conversations from economists about how the party is staying away from increasing demand, which we may have typically seen in the election cycle before because it's profitable for homeowners. Do you think that they deserve credit for this kind of shift in their policy?
Alex: Well, there are there is still an element of that in their platform, that process of easing access to mortgage credit is a form of increasing demand that does prop up prices, it's it may be fair to say that they went, they didn't go as far down that road as others like the Liberals did so. So maybe there's some credit there. You may notice that I'm having trouble giving too much credit in this conversation because the scale of the housing crisis is really out of proportion with the lack of vision in any of these platforms. However, they do have some positive components in them.
Jackie: Alright, and let's go to one last one, again, super similar to the other ones, just some minor tweaks. We have the NDP; they also want to build a certain amount of homes over a certain amount of time; their goal is 500,000 over ten years. Is that more realistic, or is it not ambitious enough?
Alex: Well, there are two big things to point out here. The NDP target is different in that it is focused specifically on affordable housing, whereas the other big targets were overall housing targets. So this is one spot where the NDP is ahead of the other 500,000 units over ten years of dedicated affordable housing. We have this perpetual problem of a lack of details. It's a little bit unclear exactly what they mean by this, but there are a few pieces filled in terms of what they're calling "fast start funds," focused on co-ops and social and nonprofit housing. These are important and positive steps.
This would, and I'm going to give some credit here, be a major increase in housing investment of this kind. I'm going to say that on the scale of what's needed, it's not enough. So our research, for example, in BC at the CCPA suggests we need to be looking at about 10,000 units of non-market affordable housing every year in Metro Vancouver alone. Well, this would only get out about half of that. So, in the right direction but needing to go further on that front.
Jackie: And here we go, getting deja vu. They would also want to limit foreign buyers, and there would be in the form of a tax of 20%. How would that be different from a ban?
Alex: It's an interesting question. It's a less blunt instrument. So it means a couple of things. Where it's somewhat of dissuasion to that foreign investment, how much I think is an open question. It's a way of raising revenue as well. So that's the difference there, we're going to let some of this money come in, we're going to try and dissuade some of it with a tax, and we're going to raise some revenue in the process.
Jackie: And lastly, the NDP wants to focus on their idea of introducing or reintroducing a 30-year mortgage, and they would also double the homebuyers tax credit, again helping some people get into the market. Similar thoughts?
Alex: Yeah, so that falls in a similar category to the liberal and conservative plans to extend access to mortgages in different ways through different mechanisms. In all of those cases, as we've been talking about, that will help a few more people buy homes, but it will have that side effect of inflating prices and making things worse for those on the outside of the housing market.
Jackie: They're very similar, just in different ways that are unique to their party. But the whole thing that we see is that they want to make it easier for people who kind of can already afford homes to make their purchases; we don't see any talk about decreasing the prices or bringing down the market value of houses. Is that something that's missing here?
Alex: Yeah, that really seems to be the third rail of housing politics is to acknowledge the fact that if we're serious about affordable housing for all that does mean lower prices are at an absolute minimum, it means freezing prices for an extended period of time, well, income, incomes can catch up. And of course, that means, if you go down that route, many people are still going to be hurting for unaffordability for decades to come. So, one thing that often doesn't get talked about, I think it's getting a little more attention recently, not in the platforms, is that we have some major federal subsidies to homeownership.
One of the biggest is how the capital gains you get from increases in the land price of your primary residents are completely tax-free, and they're completely exempt from the capital gains tax. Well, that's a big source of inequality between those who own land and those who don't. And it also helps inflate prices, which makes it more difficult to get rental housing built in this country. On any given site where you might build new housing, it will be more lucrative to build owned housing that can benefit from these types of subsidies than it is to build rental housing, which doesn't.
Jackie: Is there anything major that's missing from all of these platforms that would significantly help the market?
Alex: There are pieces that move in the right direction across the different platforms. I think what's missing is a platform that combines both ambitious targets for an affordable public housing build an ambitious target for overall housing supply and one that's willing to start deflating the housing market, including by beginning to withdraw some of those out long-established subsidies to homeownership that are about increasing inequality and inflating prices. So, you could pick and choose some pieces here, but given how prominent this is as an issue for so many Canadians who are struggling, it's disappointing not to see an overall visionary platform on offer.
Jackie: I think many millennials, myself included and Gen-Z, look at these platforms and think, Okay, well, that's nice, but I still will not be able to own a home, maybe even ever, it doesn't seem possible. And this doesn't seem to make it feel like it could be.
Alex: There are policy solutions at our fingertips. When it comes to doing a big public build of housing, for example, which is going to be important, that may sound incredibly expensive to people when you hear it off the top of your head. Still, you have to keep in mind that the public housing rental income helps pay for those projects over their lives. So it's largely self-financing. You may need to subsidize it a little further to achieve deeper affordability. So we could massively expand public investment in a sustainable way and put a dent in the market.
We also need to address the issue of zoning, where most of the land in most of the cities in this country is reserved for the most expensive type of market housing, those detached, single-family houses. That's something that's got to change, that's a municipal policy, but the federal government can have a role by tying funding to reform that type of progressive land-use policy. So there are things we can do. It's a question of whether, renters, millennials, as you say, but people of all ages on the outside of this housing market can come together and get organized to pressure all the parties to increase their offer when it comes to genuinely addressing the housing crisis.
Jackie: There's something else that was interesting here that I wanted to ask you about. And that's that there's a lot of aspects from BC's policy that is making its way into the federal parties, specifically the focus on foreign buyers, we see a foreign buyers tax. Why is that so, and is there anything from BC's policies that could be beneficial to implement federally?
Alex: Yeah, I've been observing that too. And I think some of the policies that are being adopted from BC are beneficial. And it's good to see that, as you say that addressing foreign investment in housing may be a relatively marginal effect, but it's a fine thing to do. The idea of an empty homes tax is also coming out of BC. And all three parties are also of the major three parties promising a beneficial ownership registry, which means keeping track of the true ultimate owner of all the land wealth in this country, including who's behind corporate ownership; those are all positive.
Those are relative and I think there's a common denominator there that's relatively easy to do foreign investors can't vote in elections. It's hard to argue against transparency about ownership or against doing something about empty homes, it's when we come against really making some big changes in our housing system, upping that public investment in affordable housing and dealing with the issue of subsidies to homeownership dealing with that zoning issue we were talking about. You start to have some constituencies who are ready to organize against you. And there's some political cost, even if there's a big political gain on the other side of starting to tackle those issues. So I think we're ripe for a shift. In some of these debates, as that group of young people with people of all ages outside this market grows and grows increasingly frustrated.
Jackie: We have one of the hardest to get into housing markets in the country, and Vancouver Island, Vancouver, both very, very hot zones, are very difficult for young people or people who don't have the same means to get into. Do you think that the policies we're seeing come out of British Columbia are coming because we're hitting a point where we have no other choice? And it seems like the rest of the country is catching up and saying we don't have any choice but to start implementing these things that we're seeing out of necessity.
Alex: We frequently have one of the hottest, highest-priced housing markets in the country. So we're a bit of the canary in the coal mine. And I think if you look at Southwestern BC and look down to places like San Francisco if you want to see what our future is, things could get a lot worse if we don't see some real changes. On the policy side, we've seen some tweaks over the past few years, we've seen some significant increases in public investment at the provincial level, those have all helped, but they're not yet at the scale of action that's truly only to address the crisis. So this could go more than one way, and I think it's, it's an open question and the rest of the country, I think, will continue to be watching, as you say.
Jackie: Alex, thank you so much for your time today.
Alex: Thanks for having me.
Jackie: This is just the beginning of the podcast of election coverage. In the coming weeks, we'll be interviewing the candidates from the local ridings and putting your questions to them and seeing how they compare. If you want your question to be asked to your candidates, make sure to send me an email at email@example.com with your name, location and your question, and those episodes are coming soon. You can also check out our written coverage at Capital daily dossier. We already have the Victoria article out, which is focused on housing so that you can check that out again at capitaldaily.ca.
Thanks so much for joining us today. If you enjoyed the podcast, please leave a rating and a review. And also, subscribe so that you don't miss any episodes going forward. We post new shows every Monday to Friday. My name is Jackie Lamport. This is the Capital Daily Podcast. We'll talk to you tomorrow.