Affordability can deteriorate as homeowners jockey to sell their land to the highest-bidding developer, who is then motivated to get a better return by building more expensive units.
Housing Minister Ravi Kahlon pushed back Tuesday against researchers who say that allowing more density across entire municipalities alone will not make housing more affordable in hot real estate markets.
In April, Premier David Eby and Kahlon announced there will be a provincewide overhaul of municipal zoning rules so that three-to-four units will be allowed on a traditional single-family detached lot, and even higher density allowed in areas close to transit hubs.
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Housing researchers and policy analysts who have looked at the impact of doing this in New Zealand and the U.S. previously told Postmedia News that while this will increase the supply of housing and bring down rental prices, it can also have the impact of inflating land prices. Affordability can deteriorate as homeowners jockey to sell their land to the highest-bidding developer, who is then motivated to get a better return by building more expensive units.
Kahlon responded by saying that upzoning across larger areas blunts the ability for the land value of a traditional single-family detached lot to dramatically skyrocket because it has the potential to be rezoned for more units.
“What we know is that it’s spot zoning that impacts land values in a big way,” replied Kahlon.
He said that examples from New Zealand and other jurisdictions show that blanket upzoning across larger areas can temper market speculation that is fuelled by the potential for spot rezoning.
“So these measures do help create more units and more affordability,” said Kahlon. “We also appreciate that different types of housing are needed for different incomes. That’s why our housing plan is not just about upzoning large parts of the province. It’s also about directly investing in building housing for those that can’t afford it.”
Kahlon’s comments came a day before the province was expected to announce the names of around 10 municipalities that will be given provincial targets for housing construction. These will include a number, but also a mix of what different types of units are needed.
“We’ll be working with them to ensure that after six months, they’ll be able to give us updates on how they’re progressing to reach their targets,” said Kahlon.
The province will start with a list of around 10 municipalities and then later add another 10.
Kahlon said there is no municipality that is building enough housing for the population we have coming.
“The list is about making sure that everyone understands that they have a part of being part of the solution. But it’s also a mix. It will be communities that have the ability to take on growth … It’s also going to be communities who have hidden from growth, and we want to ensure that everyone knows that you can’t hide from this.”
Maple Ridge Mayor Dan Ruimy, who Tuesday hosted a housing affordability summit, said he hoped his municipality would be on the list.
“Absolutely. Whether it’s this round or the next round,” said Ruimy. “If we’re going to have, in the next decade, 30,000 people moving here, we need to be able to start to build now for that future. If we’re not doing that, then we’re going to end up having even more problems in the long run.”
He said being on the list could help to quell pushback against adding density in areas that have more traditional single-family detached lots. As well, it could be a catalyst for attracting funding from different levels of government, as well as partnerships with non-profit organizations and developers.
Burnaby Mayor Mike Hurley, who was also at the summit, said he would be shocked if Burnaby was on the list considering its track record for adding density. He added that “the devil will be in the details” in terms of what the targets set by the province will mean for municipalities on the list.
— With files from Katie DeRosa
jlee-young@postmedia.com
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