BCREA Welcomes Budget 2023’s Housing Measures with Cautious Optimism
TAGS: Budget 2023 Housing Affordability Housing Policy Housing Supply Provincial Budget
On February 28, 2023, Minister of Finance Katrine Conroy delivered the BC 2023 Budget Speech, adding financial promises to bolster Premier Eby’s stated governmental priorities.
With a new premier and cabinet, which includes a separate Ministry of Housing, BCREA was hopeful that the new government’s first budget would make strong commitments to increasing housing supply.
While there are some promising new announcements and BCREA is encouraged by the government’s commitment to addressing housing affordability in the province with $4.2 billion in operating and capital funding, many details remain unclear and will be outlined in a forthcoming “refreshed housing strategy” in the spring.
Here are some Budget 2023 highlights impacting BC’s real estate sector:
Zoning Changes and Faster Permitting Process
- Budget 2023 promises to introduce zoning changes and speed up the permitting process to generate more housing supply. This reaffirms the new housing permitting strategy the provincial government announced on January 16, 2023.
BCREA has been a longstanding advocate for these housing initiatives. While the government’s plan is a positive move in the right direction, its details are elusive, and the results remain to be demonstrated.
Market Housing Supply
- $394 million in new capital funding to acquire lands for future affordable and market housing development projects along main transit corridors.
- $91 million over three years for a new pilot project that will provide financing incentives to encourage homeowners to develop new secondary suites on the property of their principal residences for long-term renters.
- A new income-tested Renter’s Tax Credit. It will provide up to $400 per year in income tax credit for households with adjusted income up to $60,000. Households with adjusted income above the $60,000 threshold will receive a gradually reduced credit, reaching zero at $80,000. The thresholds will be indexed to inflation each year.
- $575 million over three years to enable post-secondary institutions to create more student housing in high-demand areas throughout BC.
- A Rental Protection Fund (announced in January 2023) that will provide one-time capital grants to non-profit housing organizations to purchase affordable residential rental buildings and ownership co-operatives listed for sale to safeguard those rental units.
- $7 million to support the BC Rent Bank which will help provide renters with financial support to prevent eviction and homelessness.
- $15.6 million over three years for the Residential Tenancy Branch to strengthen service delivery and support the timely resolution of landlord/tenant disputes.
While BCREA is pleased with the commitments to help current low- and moderate-income renters, there was hope for more commitments to increase rental housing supply.
- Increasing BC Housing’s debt facility by $839 million to support housing programming.
- New investments for the Community Housing Fund.
- $44 million to help people who are living in encampments to access temporary modular housing.
- Funding to help double the number of units created through the Indigenous Housing Fund.
- Effective for transactions that occur on or after January 1, 2024, purchases of new purpose-built rental buildings will be exempt from the further two per cent property transfer tax that is applied to the fair market value of the residential component of a taxable transaction that exceeds $3 million.
BCREA remains cautiously optimistic that more impactful policies and details regarding the investments outlined above will be introduced in the upcoming “refreshed housing strategy” to be released in spring 2023.
For more information, please refer to the full Budget Speech here.
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