Why local B.C. governments aren’t cheering on the provincial and federal ‘bailout’ of the housing sector

A week after the federal and provincial governments announced new subsidies for the development sector, mayors in British Columbia say the details are as empty as the province’s thousands of unsold condo units. 

“In the absence of clear guidance, there are rumours abound and I’m hoping that we get some clear guidance of what this actually means for local government,” said City of Langley Mayor Nathan Pachal.

“We do not know the details enough to understand how this is going to impact cities,” said New Westminster Mayor Patrick Johnstone. 

“Very large numbers announced by the federal government sometimes aren’t that large of numbers when they get distilled down to what their actual delivery is.”

Last Thursday, Prime Minister Mark Carney and B.C. Premier David Eby announced they would spend $3.2 billion over 10 years to lower development charges in multi-unit housing, and “leverage innovative financing tools” to “convert” more than 2,200 empty condo units. 

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The plan has been cheered by people in the construction and development industries as necessary to give stability and ensure that new housing supply continues to be built, while being labelled as a “bailout” by opposition politicians like federal Conservative Leader Pierre Poilievre and B.C. Green Party Leader Emily Lowan. 

In theory, local governments would be the beneficiaries of this program — development costs get lowered, empty homes get filled, and higher levels of government help them with a problem that continually vexes local politicians.

However, there are big reasons why there has been minimal endorsement of the new plan from local governments, even beyond the lack of details.

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The first is what this plan doesn’t do — directly build new non-market housing, something local governments mostly lack the budget to deliver in meaningful numbers.

“If this program helps deliver below-market units, that’s very good. But we really need to look at ensuring that some of these really traditional, rent-geared-to-income, deeply-subsidized housing projects are still getting built in the province,” said Pachal. 

Pachal and Johnstone were critical of the province investing $1.6 billion in this new plan, months after pausing or cancelling $1.4 billion in investments through the Community Housing Fund that were primarily geared toward non-profit housing projects.

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“We will get the market housing built, but we still need the federal government to get back into the business of building non-market housing,” said Johnstone.

“I’m old enough to remember when there was a mayor of Vancouver who used to say this quite often, who now has a role where I think he has his fingers on some levers,” he added, referring to federal Housing Minister Gregor Robertson. 

The second reason is that in Metro Vancouver, the new money will lower taxes on new developments — called “developer cost charges” — which local mayors had gone back and forth on in recent years as the best way to pay for the required infrastructure upgrades that come with new developments.

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The new federal and provincial funding removes that tension, which helps solve a short-term dilemma for local and regional governments — but it doesn’t provide them with additional revenue. 

Instead, said Johnstone and Pachal, it’s the latest in a long line of one-time provincial and federal programs that give financial assistance in the short term in lieu of a permanent funding mechanism. 

“These different programs tend to be sort of various iterations on the same program,” said Pachal. 

“If this helps lower the costs for new development, that’s great, but it still doesn’t solve the perennial issue we’ve had in local government for as long as I’ve been around.”

When asked for comment, B.C. Housing Minister Christine Boyle was somewhat sympathetic to those complaints while defending the overall plan.

“It doesn’t replace the need for continuous long-term funding, but it does meet a key pressure that we’ve been hearing from both local governments and industry,” she said. 

“We as a government have made historic investments in non-market housing, and we’re seeing that make a difference in communities all over the province. We know there’s a need for more of that.”

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At the same time, when it came to questions about how the conversion of empty condo units would go, she was also unsure of details. 

“We’re working with the federal government on a program design as well as funding questions,” she said. 

“I think it’s an important piece of work. We’re exploring creative tools, and I look forward to continuing it and seeing that make a difference for hard-working folks.”

However, those details aren’t expected until the fall, right around when local elections will be taking place — adding another wrinkle into the plans of municipal leaders heading into a campaign not knowing what the province’s housing policy will look like if they get re-elected. 

“There’s an old saw about how the federal government has all the money, and the provincial government has all the legislation,” said Johnstone.

“But the local government has all the problems.”