ANNOUNCEMENTS FOR YOU, … AND YOU, … AND YOU …
Over the past few weeks, the Province of BC, with Housing Minister Ravi Kahlon, has made four noteworthy announcements addressing the housing file and the critical issue of affordable housing. These announcements deemed the most significant in a generation, align with the objectives set by the Housing Supply Act introduced nearly a year ago, emphasizing the need to expedite housing production.
- The first announcement pertains to new housing legislation aimed at facilitating the development of small-scale, multi-unit housing, including townhomes, triplexes, and laneway homes. This initiative also seeks to rectify outdated zoning rules, ultimately expediting the construction of homes.
- The second announcement involves new legislation designed to minimize construction delays and streamline processes with the goal of allocating funds efficiently for essential services, infrastructure, and amenities in growing communities.
- The third announcement focuses on legislation addressing short-term rentals (STRs). While this may have a relatively lower direct impact on our sector, the implications are yet to be fully understood. The recent increase in STR listings has introduced additional inventory to the market, potentially competing with new home sales. The conversion of these properties into long-term rentals however remains uncertain, as some owners may be hesitant due to concerns about challenging tenants and rental rate restrictions. Moreover, the federal government is also addressing STRs, with the Canada Revenue Agency (CRA) expected to alter the policy allowing STR expenses to offset STR revenue, though details are pending.
- The fourth announcement introduces legislation enabling homeowners and builders to expedite and reduce the cost of developing new housing as the province aims to create standardized designs for small-scale, multi-unit homes such as townhomes, triplexes, and laneways.
While details on these initiatives are currently lacking due to pending final regulations, it is crucial to monitor and assess their implications on the residential construction sector. Of the four initiatives, the short-term rental regulations may have the least direct impact, but their indirect effects on inventory and market dynamics are yet to be fully realized.
BILL 44: HOUSING STATUTES AMENDMENT ACT, 2023
Notwithstanding the lack of detailed information, Bill 44: Housing Statutes Amendment Act, 2023 proposes a suite of significant legislative and regulatory changes. These changes encompass secondary suites, accessory dwelling units, laneway homes, multiplex zoning, official community plans, housing needs reports, and public hearings. The outcomes of these legislative actions will undoubtedly shape the landscape of affordable housing in the province.
In the coming weeks, we will do a deeper dive into these new initiatives but for now, I would like to share some higher-level summaries that were prepared by CHBA-BC’s Carmina Tupe’. Per Bill 44:
Secondary Suites, ADU’s & Up to Six Units Allowed on a Single-Family Lot
- permit a minimum of one secondary suite or detached accessory dwelling unit/laneway home in all communities throughout BC, with some exemptions; and
- require municipalities, with over 5,000 people, to enact bylaws that would allow:
- The prescribed size of lot is 280 square metres. Lots less than 280 square metres would have a minimum 3 permitted units and lots greater than 280 metres would have a minimum of four permitted units; and
- 3-4 units on lots exclusively zoned for single-family or duplex use.
- 6 units on larger lots currently zoned for larger single-family or duplex residential lots, within a prescribed distance to transit stops with frequent service in select areas.
- parcels must be within an urban containment boundary.
Municipalities may permit additional density if desired but cannot have bylaws that allow for less than the provincially-allowed units.
Changes to Housing Needs Reports (HNR’s), Official Community Plans (OCP’s), and Public Hearings
- STANDARDIZED HOUSING NEED UPDATES & REPORTS – All local governments will need to update the Housing Needs Reports (HNR) using a standard method, for a more consistent robust understanding of local housing needs over the next 20 years;
- 5-YEAR OCP UPDATES – Municipalities must plan for and engage communities on these needs in OCPs, updated every 5 years to reflect the most recent HNRs;
- PRE-ZONING 20-YEARS OF HOUSING NEEDS – Municipalities must align zoning bylaws with OCP and HNR to pre-zone for the 20-year total amount of housing their communities needs;
- ELIMINATION OF ONE-OFF PUBLIC HEARINGS – All local governments will eliminate redundant processes and one-off public hearings that slow down housing projects that already fit with community plan;
- VANCOUVER CHARTER – the Vancouver Charter does not include the same OCP framework that the Local Government Act does. This means the zoning stage is often the only time community members can directly engage with their Council and Vancouver is exploring how the changes to the public hearing process could apply to Vancouver.
Parts of the legislation would come into force immediately following royal assent, with other parts are brought into force when applicable regulations are passed. A chronological timeline of key dates for when local governments will be provided with a policy implementation manual and then expected to comply with Bill 44 is detailed below:
- DEC 2023 – SSMUH policy manual and site standards provided to local governments
- JAN 2024 – HNR instructions provided to local governments
- JUN 2024 – Local governments must have updated their bylaws to accommodate SSMUH requirements
- JUN/JUL 2024 – OCP/zoning review/update instructions provided to municipalities
- JAN 2025 – local governments must have completed their interim HNR
- DEC 2025 – municipalities must have completed their first review and update of their OCPs and zoning bylaws, based on interim HNR
Bill 46 – Housing Statutes (Development Financing) Amendment, 2023 supports more upfront, transparent planning and address costly rezoning negotiations used to secure community amenities (i.e., ‘CACs), and Infrastructure Funding as Development Cost Charges (DCC’s). HAVAN together with CHBA BC, and UDI has consulted and advocated for “growth paying for growth” to be predictable, transparent, and fair maintaining affordability and accountability. We jointly lobbied for “check and balances” measures, and we see some of these embodied in the announced legislation, and we felt that changes to development financing had to be linked to clear and more permissive upzoning measures that are reflected in Bill 44. In summary:
Amenity Cost Charges (ACC’s) – intended to replace CAC’s which are often open-ended and subject to negotiation that can drag out for extended periods with no framework or guidelines in place. It is yet uncertain when ACCs will effectively and totally displace CACs in development financing for individual municipalities, but here are the highlights:
- allows local governments to impose charges on new development to assist in paying for capital costs of community amenities (i.e., community centers, libraries etc.)
- to implement, municipalities will need to:
- identify areas where more housing supply is planned, based on OCPs and other planning documents, and what amenities are needed to support that supply.
- determine the charge amounts following the rules set out in legislation (i.e., must be allocated between existing users and new users)
- consult on the development and charge rates
- pass a bylaw that implements the charges
- local governments can waive or reduce charges for affordable rental housing.
- The Province has the ability to exempt types of affordable housing from ACCs, as well as the authority to make regulations to limit or prescribe further requirements in relation to amenity cost charges and processes.
- The ACC framework includes checks and balances such as:
- charges can only be imposed on development that results in growth and benefits from the amenities.
- charges are restricted to one-time capital costs, which must be shared between existing and new users – developers only pay the portion assigned to new users.
- rules to ensure clarity for how the new ACCs work with other tools (i.e., DCCs) to prevent double charging.
- public accountability measures such as rules about how the charges may be spent and annual reporting.
The ACCs framework would come into force following royal assent. Regulations and guidance will be provided to support local governments in implementing the proposed changes, which will be closely monitored by the government and CHBA BC to ensure intended outcomes are met.
Changes to Development Cost Charges and Levies:
- Scope of infrastructure that DCCs and DCLs can be collected for include fire-protection facilities, police facilities, and solid-waste facilities.
- Allows local governments to collect DCCs/DCLs for provincial highway infrastructure projects under certain conditions (i.e., cost sharing arrangement in place, highway facilities service housing development to a degree, like an interchange, and highway facilities directly or indirectly enable the integrated functioning of provincial and municipal highway systems)
STANDARDIZED HOUSING DESIGN PROJECT
The last initiative announced is “… the new Standardized Housing Design Project, with the Province creating new standardized, customizable residential designs for small-scale, multi-unit housing built on single lots. These designs can be adopted by local governments and offered to builders and homeowners at a significantly below-market cost to expedite permitting and development. The Province is seeking to engage a consultant team to provide expert advice on the development of these designs.”
This is a program we have also been advocating for in an effort to streamline costs and timelines, particularly with respect to laneway homes or ADUs, and it appears that we are now on our way to realizing this opportunity. Think of it as the Vancouver Special 2.0, albeit our industry is capable of much more innovative and creative expression 50 years after VS 1.0.
The precedents go further back than the 1970’s though with homes once being available from Sears and capable of being built in a matter of a few months, and through CMHC who offered pre-approved plans after World War II to address the housing crisis at that time.
All these efforts share the same basic characteristics; pre-approved, workable floor plan, easy to build, and cost-effective. We will see what VS 2.0 looks like as it rolls out and we hope that the Province will access the experience of our members who have been leading this space for some time.
Stand by for more information on each of these aspects in the coming weeks.
HAVAN continues to work with CHBA BC and CHBA to advocate for all levels of government to work together to address the challenges of the housing industry including zoning restrictions, density limits, and NIMBYism.
Looking to stay up-to-date on Metro Vancouver’s residential housing industry? Sign up for Ron’s weekly Monday Morning Briefing and other HAVAN emails here.
QUICK BITES …
- Here is some reaction from UBCM regarding the new provincial housing initiatives; spoiler alert: not altogether on board.
This piece from CBC reviews some of the aspects of the new legislation and predicts it will take some time for on-the-ground results to manifest.
Metro Matters suggests that the natural outcome of the proposed legislation on housing will inevitably impact the need and the planning of transit moving forward.
City Hall Watch provides a comment on “industry experts” who have consulted and have been engaged in helping to shape the policies announced by the province. By no means did we realize all the things we had suggested to the roundtables and working groups we participated in, but we did see a significant change to the status quo which is so badly needed to address the housing crisis. The article tries to be somewhat disparaging and as a left-leaning publication seems to be criticizing the NDP administration (?) – nonetheless in the end I can only feel flattered.