After last week’s federal election saw the Liberals hang onto power, some B.C. real estate experts are urging the minority government to prioritize municipal efficiency and foreign investment, and think twice about direct housing construction
Some proposals such as cutting the GST for first-time homebuyers are “low-hanging fruit” while others such as direct building and pledging billions of dollars towards prefabricated homes are more suspect, said Neil Chrystal, president and CEO of Vancouver-based Polygon Realty Ltd.
Prefabrication “speeds up the process, but to be fair, the approval timelines are the biggest time delay in getting new homes to market,” he said.
“If it takes two years to get a project approved, it’s all the costs associated with carrying land and stuff that adds more to the cost than the physical building time of a new condominium.”
In addition to lamenting municipal delays, Chrystal said mass timber, modular and prefabricated technologies could also be more expensive.
“I noticed in the platform they wanted to use [mass timber] in a lot of their programs. So far, I think that’s a more costly home,” he said.
“It’s a bit of an oxymoron to build to high standards and address affordability unless there’s significant subsidies. It’s a bold, ambitious idea but we have to truly understand what the costs are going to be, and if it’s done through federal government grants to subsidize the building of a home, that’s where our tax dollars end up going.”
Besides cutting GST for first-time homebuyers, offering low-rate financing and reducing development cost charges, Chrystal also encouraged the feds to lift the ban on foreign buyers of pre-sales.
“I think the storyline of foreign buyers driving up prices is well behind us,” he said.
“Prices remain high even with a foreign buyers’ ban in place. My suggestion would be, it’s time that the federal government encouraged investment in housing by lifting that ban as opposed to keeping it in place, because I think we’re going to build a lot of homes” that way.
The Liberal platform proposed that the federal government get “back into the business of building homes.”
Jock Finlayson, chief economist with the Independent Contractors and Businesses Association, said this would create jurisdictional headaches by falling outside the national government’s core domains.
“Are they going to create a federal Crown corporation that would actually do homebuilding?” he asked.
“Political aspiration is going to wash up on the beaches against the realities of how the industry is structured and operates, and what the national government’s real role is, which I think is a very modest one, frankly.”
Finlayson said a more proper role for the federal government would be to fund research into innovative construction processes that can be scaled up quickly.
“If [the federal government] wants to fund some research, for example, that could be done to help the industry adopt and adapt new techniques and technologies to move down that direction, that would be a good role for the national government,” he said.
“But they are not going to be driving the engine on homebuilding at the local level across Canada. There’s just no way that’s going to work. So they need to step back and moderate their ambitions.”
