Comparing Election Promises to Increase Housing Supply
TAGS: 2021 Federal Election Election Promises Increase Housing Supply
All parties are pledging to drastically increase housing supply, with the Liberal Party leading the race by pledging 1.4 million new homes; the Conservative Party pledging 1 million new homes; and the New Democrat Party (NDP) promising 500,000 new homes. While these lofty ambitions show that housing is top-of-mind for all three parties, it's important to have a closer look at the proposed policies that will enable (or not) an increase in housing supply. This article highlights a few marquee policies proposed by the three largest parties. (Note: The Green Party has not released its platform at the time of writing).
"Introduce a new Multigenerational Home Renovation tax credit for families wishing to add a secondary unit to their home for...extended family members to live with them."
BCREA endorses gentle densification in pre-existing communities, especially those around transit corridors. This measure will assist with incentivizing gentle densification, but there continues to be more that can be done, especially as many local governments have zoning restrictions on this type of housing.
"Establish an anti-flipping tax on residential properties, requiring properties to be held for at least 12 months."
Canada already has a capital gains tax for non-principal residences in Canada, which seems to make this proposed tax unnecessary.
"Introduce a Home Buyers Bill of Rights."
We are supportive of the idea of a Home Buyers Bill of Rights and the objective of increasing consumer protection. If well-implemented, ensuring total transparency on the history of recent house sale prices, moving forward with a publicly accessible beneficial ownership registry and establishing a legal right to a home inspection can further protect consumers. We are, however, concerned with the proposed ban to blind bidding. There is no evidence that this would curb a hot market or address issues of housing affordability. The true remedy to rising housing prices during a hot market would be to increase supply across the housing spectrum.
"Leverage federal infrastructure investments to increase housing supply."
This policy would implement BCREA's recommendation, although there are questions that remain. It's unclear how this would be implemented and how the federal government would hold local governments to account. However, we are hopeful that whomever forms the next government would adopt this policy.
"Remove the requirement to conduct a stress test when a homeowner renews a mortgage with another lender instead of only when staying with their current lender, as is the case today."
We support this policy as it would allow for more homeowner flexibility. We would additionally ask for reinstating 30-year amortizations and that the stress test be modified to reflect the reduced risk for longer term mortgages.
"Encourage Canadians to invest in rental housing by extending the ability to defer capital gains tax when selling a rental property and reinvesting in rental housing."
We are supportive of this recommendation as a means to encourage more development of rental housing.
"Set-up dedicated fast-start funds to streamline the application process for co-ops, social and non-profit housing."
Red tape and wait times are a huge roadblock in preventing more housing supply from taking place in a reasonable amount of time and these delays increase development costs, which are passed on to buyers. We are encouraged by this proposal and recommend that it be extended to all types of housing.
"Provide resources to facilitate co-housing and ease of access to financing by offering CMHC-backed co-ownership mortgages."
This policy is positive, and while there's anecdotal evidence that more people are considering co-ownership, co-ownership makes up only a small portion of mortgages and is unlikely to have a widespread impact.
"Double the Home Buyer's Tax Credit to $1,500."
We support this measure as it would increase consumer flexibility and buying power.
We encourage you to learn about each of your parties and your local candidates. Read each parties' full housing platform here.
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