Housing Supply Act Discussion - Implementation & Outcomes

[chowhou]

Originally Posted by whatnext

As usual, that makes zero sense. You have a federal government forcing an expanding population on municipalities all over the country, yet they now seemingly want to punish those cities for trying to expand the infrastructure to cope with it. If the useless Fraser is so concerned than write a cheque to MetroVancouver to cover the upgrade costs. After all, his partner in incompetence, Chrystia Freeland, just magically "unlocked" $20 billion to underwrite residential mortgages.

God forbid you and I have to pay our fair share of property tax to support the city and country we live in. You can't live for free off the government teat, my esteemed lovable friend. I don't expect others to pay for my existence.

I, for one, am thankful I live in a country with a robust economy and promising future demographics. Maybe you should count your blessings. Or perhaps you'd prefer Canada be more like South Korea?

[WarrenC12]

Originally Posted by chowhou

God forbid you and I have to pay our fair share of property tax to support the city and country we live in. You can't live for free off the government teat, my esteemed lovable friend. I don't expect others to pay for my existence.

I, for one, am thankful I live in a country with a robust economy and promising future demographics. Maybe you should count your blessings. Or perhaps you'd prefer Canada be more like South Korea?

whatnext is a west side NIMBY in a SFH. When you know that, suddenly it explains everything.

[chowhou]

Originally Posted by WarrenC12

whatnext is a west side NIMBY in a SFH. When you know that, suddenly it explains everything.

My living situation isn't much different anymore but I believe (or at least I hope) my values would never let me be so self centred. West Siders and SFH owners aren't inherently required to be selfish or obstructionist. It takes a certain kind.

(NIMBYs however are inherently selfish and obstructionist, that's true.)

[whatnext]

Originally Posted by chowhou

God forbid you and I have to pay our fair share of property tax to support the city and country we live in. You can't live for free off the government teat, my esteemed lovable friend. I don't expect others to pay for my existence.

I, for one, am thankful I live in a country with a robust economy and promising future demographics. Maybe you should count your blessings. Or perhaps you'd prefer Canada be more like South Korea?

And Metro is proposing having the developers pay the fees and they will be the ones who make a cash profit. Or do you only agree with developers getting to "live for free off the government teat".

Of course, when you consider Ian Gillespie and other developers are some of the Liberal's big donors, Sean Fraser's hissy fit all starts to make sense...

[GenWhy?]

So how-bout that Housing Supply Act?

[chowhou]

Originally Posted by whatnext

And Metro is proposing having the developers pay the fees and they will be the ones who make a cash profit. Or do you only agree with developers getting to "live for free off the government teat".

Developers already pay the fees buddy, no one is saying they shouldn't pay their fair share. What's ridiculous is expecting a developer to pay for the upgrades other home owners will be using. You're the one advocating for our special interest group to get off scot free for paying for upgrades.

[GMD]

Originally Posted by Changing City

The cost of upgrading the existing systems will be covered from the existing taxes. They're not reducing, or replacing any existing property taxes, just trying to stop them rising even more. As you quoted, the article you linked to says the additional fees are related to system expansion. If new development wasn't being built, the Metro sewer and water system wouldn't be expanded. So unless developers pay more, existing taxpayers will have to subsidize the new development, as they have in the recent past.

Are you sure about this - nothing I've read on the topic makes this claim. Are they somehow dividing out the cost of a new sewage plant between the cost of making the new one bigger vs. just replacing it as is? Seems like the vast majority of that cost would be the replacement, not making the replacement a bit bigger than the old one, so why would fees need to go up so much? I would need to see some clear accounting to believe that growth is only being asked to pay for growth and not subsidize existing homeowners. The Daily hive article on this says that, "Out of the $35 billion capital plan, $11.5 billion is for projects to meet growth, and $23 billion is for non-growth related projects"

[Changing City]

Originally Posted by GMD

Are you sure about this - nothing I've read on the topic makes this claim. Are they somehow dividing out the cost of a new sewage plant between the cost of making the new one bigger vs. just replacing it as is? Seems like the vast majority of that cost would be the replacement, not making the replacement a bit bigger than the old one, so why would fees need to go up so much? I would need to see some clear accounting to believe that growth is only being asked to pay for growth and not subsidize existing homeowners. The Daily hive article on this says that, "Out of the $35 billion capital plan, $11.5 billion is for projects to meet growth, and $23 billion is for non-growth related projects"

From the Metro Vancouver website.

"The water DCCs are collected to fund growth-related expansion of regional drinking water infrastructure such as water mains, reservoirs, and treatment plants. DCCs do not pay for upgrading or maintaining existing infrastructure." (my emphasis).
[source]

"Recognizing that a significant portion of Metro Vancouver’s capital plan involves constructing larger or new infrastructure to accommodate new buildings and growth in the region, the Metro Vancouver Board endorsed moving to a DCC one-per-cent assist factor. This move embraces the principle of 'growth-pays-for-growth'.​"

"Currently, the water DCC funds 50 per cent of the cost for any new infrastructure to address population growth, with the rest paid for primarily by the general public though water sales.​​"

"Liquid waste DCCs have been in place since 1997 and currently fund all but 17.5% per cent of the cost for any new infrastructure needed to address population growth, with the rest paid for by the general public through the liquid waste levy.​"

The proposal is to reduce that 17.5% for new liquid waste infrastructure to 1%, in steps over three years, and the water DCC support will also reduce from 50% to 1%. There's a list of $6.5bn of DCC (growth related) projects in the 2021 budget, which is, as you can see, far less that the total capital plan number you quoted.

There's a Waiver or Reduction for Not-for-Profit Rental Housing.

[GenWhy?]

I'd be okay with DCCs if Vancouver got rid of its "equal item" DCLs.

[Changing City]

Originally Posted by GenWhy?

I'd be okay with DCCs if Vancouver got rid of its "equal item" DCLs.

Don't the DCCs pay for Metro Vancouver water facilities, treatment plants and sewers, and Vancouver's DCLs pay for the municipal sewers and water pipes that feed off, or into the Metro infrastucture?

[chowhou]

Originally Posted by Changing City

Don't the DCCs pay for Metro Vancouver water facilities, treatment plants and sewers, and Vancouver's DCLs pay for the municipal sewers and water pipes that feed off, or into the Metro infrastucture?

DCLs are being used to pay for far more than sewers and water pipes.

https://vancouver.ca/files/cov/2022%20An...emo%20to%20Council%20-%20June%202023.pdf

[Changing City]

Originally Posted by chowhou

DCLs are being used to pay for far more than sewers and water pipes.

I know. GenWhy referred to the "equal item" DCLs - I assume those are the ones that cover water and sewer infrastructure.

[GenWhy?]

Originally Posted by Changing City

I know. GenWhy referred to the "equal item" DCLs - I assume those are the ones that cover water and sewer infrastructure.

Comment was unclear. Was getting at re-scrapping utility DCLs for rental to get back on the waiver because rezonings still have to pay for infrastructure upgrades and site upgrades out of pocket as a requirement for Occupancy (to be operational sewer and water line capacity has to be present to get people to move in anyway).

DCCs make sense to get from new developments as growth promotes the need for new facilities.

Just irritated that there is a quadruple dip for new developments:
- property taxes
- out of pocket upgrades (sometime $1 million for a small 45 unit apartment)
- DCLs
- DCCs

[chowhou]

Originally Posted by GenWhy?

Just irritated that there is a quadruple dip for new developments:
- property taxes
- out of pocket upgrades (sometime $1 million for a small 45 unit apartment)
- DCLs
- DCCs

Just wait until they start coming out with development DLCs!

[Klazu]

Originally Posted by chowhou

https://vancouver.citynews.ca/2023/09/26/bc-housing-supply-act-targets/

These announcements are just hot air. There are no skilled trades people to build to these additional numbers and no financial incentive for construction companies to build them in the current economic macro climate.

The only way politicians can actually do something about housing is by seriously limiting demand. Supply side cannot be addressed to fix the problem.

Most likely scenario is though that our crisis will come to pass as a result of China's property crash. It will take some time for its repercussions to cause a bust here as well, but it is coming. That, or a magnitude 9 quake, whichever happens first.

[GenWhy?]

Originally Posted by Klazu

These announcements are just hot air. There are no skilled trades people to build to these additional numbers and no financial incentive for construction companies to build them in the current economic macro climate.

The only way politicians can actually do something about housing is by seriously limiting demand. Supply side cannot be addressed to fix the problem.

Most likely scenario is though that our crisis will come to pass as a result of China's property crash. It will take some time for its repercussions to cause a bust here as well, but it is coming. That, or a magnitude 9 quake, whichever happens first.

Vancouver should be able to easily meet its Provincially mandated target.

[VantageHD]

I have no doubt Kamloops will fall short. I've been waiting for the services to be installed on a 2 lot subdivision for months now.

[Changing City]

Originally Posted by GenWhy?

Vancouver should be able to easily meet its Provincially mandated target.

I saw the 28,900 number, and thought it should be OK. Then I saw the detailed numbers, and I'm not so sure.


[Housing Target Guidelines]

Fortunately the details are 'Guidelines' rather than targets. The actual Ministerial Order is even more prescriptive. For the City of Vancouver, for example, it says:

For each Progress Reporting Period as set out in Schedule C, the net new number of completed housing units will be measured annually and
cumulatively, as follows:
a. Year 1: 5,202
b. Year 2: 10,597
c. Year 3: 16,281
d. Year 4: 22,349
e. Year 5: 28,900

I wasn't sure, but the orders are about housing completions annually. That's going to be tough to achieve if we see a downturn as a result of higher interest rates, (but the Province can always revisit their order if the wider context for construction sees construction decline).

The past five years completions are an interesting comparison. (CMHC data)

2018 7,973
2019 6,315
2020 5,578
2021 6,583
2022 3,650
5 year total 30,099.

The target is for net completions - so the net gain was about 4,500 fewer units - roughly 25,500. So the target is actually for more than was built in the past 5 years. And there's pretty much nothing the city can actually do if the market falls behind like they did in 2022. (I assume that might be something to do with the construction slowdown covid introduced in 2020 and 2021).

And the guideline of 21,000 more rental completions would be way higher. 2018-2022 saw 12,720 rental completions in the City of Vancouver.

[GMD]

Originally Posted by Changing City

From the Metro Vancouver website.

"The water DCCs are collected to fund growth-related expansion of regional drinking water infrastructure such as water mains, reservoirs, and treatment plants. DCCs do not pay for upgrading or maintaining existing infrastructure." (my emphasis).
[source]

Thanks for the links. Still, not a super convincing breakdown of costs. None of the listed projects will ever be used by existing homeowners? And this is the final figure still in play today as they make the change?

But even if you accept the principle that any incremental infrastructure required for new residents should be part of a home purchase price (which I am not sure I do - it's not how we did it in the past, or how we do it for many other spending areas - (are we charging folks in the valley buying houses extra to pay for highway #1 widening?), not sure if other cities apply this same principle?)

And even if on top of that, you believe that we have perfectly captured just the incremental costs to assign to new homebuyers, it is still just one more area of life where, when the baby boomers were young and buying houses, these costs weren't applied to them, and now that they are no longer buying many houses, now it is suddenly the time that new home buyers should pay more and existing homeowners less.

Did Metro decide to make this change in approach because it seemed like existing homeowners were struggling, while people looking to buy new places were flush with cash? Because it doesn't seem that way to me. Or maybe they decided this because there are some big bills coming due and it is politically expedient not to make baby boomers pay for them - seems more likely.

[Changing City]

Originally Posted by GMD

Thanks for the links. Still, not a super convincing breakdown of costs. None of the listed projects will ever be used by existing homeowners? And this is the final figure still in play today as they make the change?

But even if you accept the principle that any incremental infrastructure required for new residents should be part of a home purchase price (which I am not sure I do - it's not how we did it in the past, or how we do it for many other spending areas - (are we charging folks in the valley buying houses extra to pay for highway #1 widening?), not sure if other cities apply this same principle?)

And even if on top of that, you believe that we have perfectly captured just the incremental costs to assign to new homebuyers, it is still just one more area of life where, when the baby boomers were young and buying houses, these costs weren't applied to them, and now that they are no longer buying many houses, now it is suddenly the time that new home buyers should pay more and existing homeowners less.

Did Metro decide to make this change in approach because it seemed like existing homeowners were struggling, while people looking to buy new places were flush with cash? Because it doesn't seem that way to me. Or maybe they decided this because there are some big bills coming due and it is politically expedient not to make baby boomers pay for them - seems more likely.

Of course once they're built, new facilities will be used by all the households that connect to them. But they wouldn't have been needed without extra homes and businesses being added. If they just needed renewing at some point, property taxes would pay for that.

Yes it's a change - as I noted. Your point about Highway 1 is irrelevent because Metro can't charge people to widen Highway 1, but should developers get effectively subsidized by being allowed to build housing outside Greater Vancouver for residents to commute by car into the GVRD? Maybe we need road pricing to make it fairer for all.

The baby boomers part is bs. They were born roughly 1946-1965, so they're aged 58-77. Around 262,000 households owning their home in Greater Vancouver had heads of household born in that timeframe in 2021, and there were 300,820 households where the head of household was younger than that. As every single property owning baby boomer can defer their property tax, if they wish to, the 'big bills coming due' won't bother them.

It will bother all the Gen X and Millennial home owners, who are also much more likely to have a mortgage, and are facing higher mortgage payments and higher property taxes. That's who the politicians are trying to protect.