If the new federal government under Prime Minister Mark Carney truly wanted to make housing more affordable it would ease downpayment and stress-test rules; scrap GST, property transfer tax and development cost charges; allow more immigration of tradespeople and get out of the way of developers who know what they are doing.
That's according to Renee Merrifield, the founder and CEO of Kelowna-based Troika Developments and a former BC Liberal MLA (Kelowna Mission, 2020-24).
Merrifield is frustrated as a developer and a taxpayer and is speaking out after the victory of the federal Liberals in this week's general election.
Troika has developed such projects as the West Harbour planned community on the lake on the Westside just north of the bridge and the Green Square Vert condominium community in the Lower Mission.
"Federal policies and actions have made housing so expensive both for buyers and renters," she said.
"Part of the Liberal housing platform is no GST for first-time home buyers on new homes priced under $1 million. That's great until you realize it helps only a minute amount of people. First-time buyers generally aren't buying new homes anyway because they want to avoid the GST. It's like offering a glass of water in a drought -- nice in theory, but it doesn't do anything to solve the housing crisis."
Meantime, the federal Conservative housing platform promised no GST for any buyer of a new home priced under $1.3 million.
That would potentiall save a buyer $65,000 on a a new home, the equivalent of $3,000 a year savings on mortgage payments.
The federal Conservative party's Platform for Change included may other incentives to see more homes built and increase affordability for owners and renters.
They included seeing 2.3 million homes built by axing home sales taxes and incentivizing municipalities to slash development cost charges so home buyers could save up to $100,000 on an average home in some of Canada's big cities (the equivalent of $4,500 per year savings in mortgage payments).
See the housing portion of the Platform for Change on pages 9 and 10 here: https://lnkd.in/dYUyjgcH
"The Conservative policy would have had far greater reach," said Merrifield.
"And that's what we need -- far greater reach from all three levels of government to make housing more affordable for all people."
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Merrifield uses the example of a new condominium in Kelowna priced at $500,000.
If you purchase that condo and you are not a first-time buyer, you'll have to pay an additional $25,000 in GST.
You'll also be paying about $28,000 in development cost charges that the developer has to pass along to you and $5,000 in property transfer tax.
"Lessen or eliminate those taxes and development cost charges and that condo will cost less," said Merrifield.
That still wouldn't necessarily make Kelowna housing affordable, but it would be a step in the right direction.
Merrifield is also concerned that the new Liberal federal government has promised to become the largest developer in Canada to bring more desperately needed homes to market.
"The government needs to step out of the way and let us do our jobs," said Merrifield.
"We don't have a shortage of developers in Canada. But we do have a shortage of financing for developers and a shortage of labour and skilled trades. And, there's too much bureaucracy. All those things lead to unaffordability."
Merrifield suggests more qualified tradespeople immigrants be welcomed to Canada and that the "pinch-point" banking system help both developers and potential home buyers more.
Easing of down payment requirements and the mortgage stress test could help more potential first-time buyers and existing homeowners move up to a bigger and better place if they want.
One good thing the federal government has done is hyperdrive Canada Mortgage & Housing Corporation to create more rental apartments across the country by offering developers tax incentives, allowing for additional density, reducing red tape, speeding up approvals and easing strict parking provisions.
In Kelowna alone, it has resulted in a flurry of apartment building construction with more than 2,000 units coming on stream over the next year.
That's a 10% addition to the existing 24,000 rental units already in the city.
24,000 apartments also represents one-third of all Kelowna's housing stock.
The 51,000 other units are single-family homes, duplexes, townhouses and condos.
The proliferation of new apartments is meeting demand and creating competition and as a result the median monthly rent for a one-bedroom place has eased from a record-high of $2,010 last year to $1,850 currently.
While that's still too much for some, it is more affordable than it's been in the past.
The competition also means some landlords are offering one-and-two-months-free incentives if renters sign a 14-month lease.
Even if new apartments tend to be at the higher-end of rents, if existing renters move from their old place to a new one, it opens up their older (likely cheaper) apartment for a new renter that may have been previously on been living with their parents or roommates because they couldn't afford a place of their own.
Troika has gotten into more rental apartment building development with three current projects -- 500 Asher and 285 Dougall, both in Rutland, and 1110 Lawson, near the corner of Gordon Drive and Bernard Avenue.
