The new policies unveiled on Thursday, which have little hope of being put into place because the government faces defeat as early as next week, gives renewed attention to the province’s tens of thousands of renters, many of whom live in dense Vancouver-area ridings that the party lost in last month’s election.Ben Nelms/The Globe and Mail
The BC Liberals' Throne Speech focused on housing, putting forward policies designed to protect renters from unfair increases while helping them shift to home ownership.
The new policies unveiled on Thursday, which have little hope of being put into place because the government faces defeat as early as next week, gives renewed attention to the province's tens of thousands of renters, many of whom live in dense Vancouver-area ridings that the party lost in last month's election.
Premier Christy Clark promised that over the next decade, 50,000 housing units would be built with the help of the private sector for a new rent-to-own program, in which the government would keep a portion of rents for tenants to put toward a down payment later.
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In the two years leading up to the May election, the Liberals crafted different subsidies for aspiring and current home owners, but heavily criticized an NDP plan to offer a rebate to renters and did not legislate stronger protections for tenants struggling with near-zero vacancy rates in and around Vancouver.
This new program, one of several made possible by a larger-than-expected surplus, would help "middle-class renters grow equity through their monthly rent payments until they are in a position to own the home," according to the Throne Speech.
In a news conference after the speech, Ms. Clark did not provide details on how much this program would cost or how much household income renters would need to earn to qualify, noting that it would be fully costed and debated if her government does not fall before bringing in its next budget.
"We are in a much better financial position than we'd anticipated, and that means that we are able to make commitments over the longer term," Ms. Clark said of the proposed large increase in government spending on this and other social programs.
Tom Davidoff, an economist who specializes in real estate at the University of British Columbia, said the program in effect forces renters to save more, a strategy that runs counter to the Liberal Party's right-of-centre free-market ideology.
"I seriously doubt there are a lot of renters that are at their max for tax-free savings under Canadian law," he said.
"If the money is contingent on buying a home, that is a housing demand subsidy, [which is] generally a bad idea in supply challenged markets because it pushes up prices."
If, as the Throne Speech suggested, the renters must put the money toward the unit they are already occupying, issues could arise in buildings that have a mix of owners and tenants, Prof. Davidoff said.
Last year, B.C. was short almost 80,000 units of affordable rental housing, according to a coalition of non-profit and rental industry groups that pushed for change in the election campaign.
Over the next decade, the province will need about 7,000 more rental units a year to keep up with its growing population, according to the BC Rental Housing Coalition. Of those new units, more than 1,100 would be for middle-class families, the coalition estimates.
David Hutniak, CEO of LandlordBC, a rental-housing industry association that was part of the coalition, said he is worried this rent-to-own proposal would "distract" the provincial government from getting more market rental projects built.
"The need is so critical that in terms of the number of units we need right now, I would prefer to see monies put toward supporting purpose-built rental," he said.
The Liberals also promised to close a loophole that allows landlords to get around rent controls by asking tenants to agree to a specific move-out date when they sign leases. If tenants want to stay longer, landlords then demand a rent increase above the allowed limit of about three per cent.
"To better protect renters, your government will prohibit landlords from skirting rent control protections when term leases expire and make sure tenants' rights are protected while respecting a landlord's ability to make improvements to their buildings," the Throne Speech stated.
Mike Hager