1 on 1 with BCREA CEO Trevor Koot

We’ve said it before in this video series, and we’ll say it again: One of the big keys to making housing more affordable in Canada is increasing the number of housing completions.

We need to build more year-over-year to meet housing targets and restore affordability over the long term.

So, how do we achieve this incremental growth? No doubt government investment will play a role. But an even simpler step government can take is reducing red tape and making it easier for developers to develop.

In short, we need a thorough review of housing taxes and tax-related policies at both the provincial and federal levels to see what’s necessary – and what’s causing more trouble than it’s worth.

Here are two major areas that urgently need addressing.

No. 1: Foreign Investment

BCREA Economists estimate that building the number of housing units necessary to meet long-term demand in BC could cost between 200 and 300 billion dollars. That’s a lot of money. And the reality is that a lot of that capital will need to come from outside of Canada.

However, foreign investment has been severely limited over the past few years by policies like the federal Foreign Buyer Ban and BC’s Foreign Buyer Tax.

BCREA recommends modifying these policies to allow and even encourage foreign investors to purchase pre-sale and new construction. This will help incentivize and drive development, which is a major plus for all Canadians.

No. 2: Development Cost Charges

Rising development cost charges – or “DCCs” – have become a significant barrier for new construction in many Canadian cities.

These costs threaten the financial health of many projects and often result in cancelled or delayed development.

This is why we propose that the federal government expand and reorient its Housing Accelerator Fund. If revamped, it could provide financing for municipal infrastructure in communities willing to expand housing supply.

At BCREA, we know that every government is dependent on taxes, and any housing tax cuts would need to be replaced by other sources of income. That said, alignment from all levels of government to reduce the burdens on both builders and buyers is just common sense.

Done right, it will lead to the much-needed increase in housing completions that we’re all looking for.