As an industry, we have been busy trying to assess the impact of the many pieces of housing legislation introduced by the province over the course of the last eighteen months, and at the same time, municipalities, translating the provincial policies into action, are being challenged, too. We have referred to the net effect of municipalities trying to interpret the new legislation in the absence of provincial guidelines, regulations, and or manuals as “approval paralysis” – a resistance to move applications forward due to uncertainty as to how to proceed.
VOLUME OUTWEIGHS STAFF LIMITS
The situation is exasperated in that the initiatives proposed by the province require a considerable effort on the part of the municipalities to review, revise, and implement regulations based on new parameters for the Housing Needs Reports, updated OCPs and NCPs, with attributing growth costs specific to individual projects. These efforts require staff resources that were already stretched thin prior to the new provincial legislation being tabled and are further being strained by “short trigger” deadlines embodied in many of the new policies.
Applying aggressive deadlines is desirable in seeking to “build more housing faster” but the sheer volume of requirements identified in Bills 44, 46, and 47 is in many cases straining staff to their limits and beyond with the net effect of incurring delays and redirecting work that was focused on streamlining approvals. These effects are being most keenly felt in medium and smaller communities with fewer standing resources and limited opportunities to expand their workforce.
IMPACT ON FINANCE AND AFFORDABILITY
The municipalities and private sector consultants are both seeing a shortage in the availability of planners at all levels of experience with much of the noted work requiring careful, serious, and sober consideration to implement the provincial initiatives with applications per the Transit Oriented Development policy allowing for significant increases in density, multiplex proposals, and the value and applicability of charges under the “growth pays for growth” model and a fair attribution being affected.
There are also many “instream applications” that are now caught in the midst of this transition again facing not only delay but shifting costs affecting proformas and financing criteria. When coupled with approval and permitting processes that have already been measured in years, the impact is less housing to meet demand and a negative impact on affordability. It has been estimated that every 12-month delay adds between eight and fourteen percent in construction cost or $9 to $19 per sq. ft.
PUSHBACK
The many demands being placed on municipalities are also driving pushback by staff and elected officials to what they see as a provincial overreach. Many communities feel they are already working to meet some of the provincial goals, only now to have to reframe much of the work already in place. And it’s not just the smaller municipalities feeling the pressure, as noted above. Coquitlam, Richmond, and Burnaby, not identified on the so-called “naughty list” of 10 municipalities specifically targeted by the province for consistently falling short of meeting their housing needs targets, have pushed back, too.
The impacts vary from one city to another, and in addition to impacts on timing and staff resources, many cities are seeing changes to development financing and density bonusing that reflect reductions in revenues that can be measured in hundreds of millions of dollars.
HEAVY LOAD ON INFRASTRUCTURE
The unintended consequences extend also to the availability of basic services and infrastructure. This has in some cases been exaggerated to extremes, but we have seen many real-time examples of BC Hydro approvals and or upgrade requirements adding six-figure costs and delays in delivering electrical service measured in many months or even over a year. The hydro issue is also amplified by the push for 100% electrification in space and water heating, EV charging opportunities, in addition to traditional base loads but the specified service requirements set by the municipality cannot be met with existing services which particularly affects multiplex or laneway home in-fill scenarios.
UNIVERSALLY ACCESSIBLE CODE CHANGE
Other examples of unintended consequences can be found in the pending Code changes requiring all new units to be universally accessible. This change in the Code was deferred from the 2024 series of changes in the BCBC until March of 2025, a deferment that was driven by the pushback from HAVAN, our members, and other industry associations and stakeholders.
It is, however, a temporary reprieve as the province has stated that additional consultation is required but they are committed to implementing this code requirement. Universal accessibility is a lofty goal and provides inclusion for everyone with support more “aging in place.” The unintended consequences though are a direct impact on the costs, size, and or livability of new units. We have feedback from builders, architects, and designers that accommodating bathrooms, hallways, entries, and doorways will require as much as 20-25% more floor area. This additional area is based on maintaining the current standards of living spaces available to home purchasers, so, if units don’t get larger, then the floor area must be taken from those living spaces.
CMHC has been quoted as saying that making a unit accessible can be achieved for a cost of approximately $500 and I must wonder what they are counting – grab bars? If a typical 2-bedroom unit is 750 sq.ft. – 20% would add 150 sf.ft. to that unit and I would suggest that while the per square foot cost might not be applied in a linear manner, costs would be much more than $500! The proportion of the market requiring full accessibility is approximately 5 – 10% of the overall market, and it is an important aspect to consider but must be balanced against cost and impacts including structural, parking, and other elements.
While the requirement for accessibility is a little under a year away, given the lead times involved in seeking approvals and permits, what standard should be applied today to submissions that will take many months to prepare? The inevitable outcome if 100% accessibility is to prevail is delay, as the new standard is applied and applicants are forced to affect extensive revisions if some reasonable “grandfathering” is not accounted for, and the extra costs of delay and extended floor space further impact supply and affordability.
HIGHEST EFFICIENCY EQUIPMENT STANDARDS
Another Code change being considered, Highest Efficiency Equipment Standards for Space and Water Heating (HEES), may drive unintended consequences related to the mandating of all space heating and water heating equipment installed after early 2026 to be operating at 100% efficiency and be exclusively electric in terms of the energy source. This measure, while also aspirational and well-intended, does not acknowledge the aforementioned electrical capacity issues, the need for higher skill sets by contractors, and the direct cost of the equipment.
We also have direct feedback from members ranging from the North Shore to Central BC, and in the north who in seeking to fully electrify their builds, typically utilizing heat pump technologies, are seeing significant shortcomings in performance and comfort levels despite the premium prices associated with this equipment. Net of accounting for costs addressing hydro service issues, noted members have suggested costs to meet these requirements will be five figures or multiple five figures, resulting in more negative impact on affordability.
The intentions of all the issues mentioned here are ones that government and industry should be looking at and reflect a broad range of good intentions, but while we have been invited to the table to participate in “consultations” with regulatory bodies and policymakers, it often feels like the consultations are more like dictations! Our industry and members have boots on the ground, and if our feedback is taken seriously, some of the unintended consequences might be avoided or at least mitigated.
TIMING AND OPTICS
Of course, time is of the essence, and all the noted issues are important but are also complex. It is essential to defer from politics and optics to consider the many aspects affecting the changes we are seeking to adopt. Input from those who will have to implement these policy changes is vital and must be taken seriously, with the opportunity to test, and amend, as the best means to seek practical and affordable solutions.
NOT A QUICK SLAM DUNK
The scope of the housing policy changes and upcoming code changes are watershed in nature and will ultimately change the housing landscape in our area and province. This journey is not a quick slam dunk and is full of many impacts not initially or adequately considered when these new policies were introduced. The changes are complicated and will take time to sort through all of the nuances and implications which will translate into delays and direct costs, making it imperative that all stakeholders work together to mitigate those impacts to affect relevant and reasonable solutions.
HAVAN will continue to monitor and participate in the evolution of these issues as they roll out with direct feedback from our members on these matters both welcomed and required for us to frame pertinent and effective responses. Thank you to those who have provided their comments to date. Together we need to do what we can to cast the changes we will have to accommodate into manageable, balanced, and affordable models that will minimize the adverse effects of delay and increased costs. Reach out to info@havan.ca
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 …
- This editorial in the Globe and Mail discusses that while there are many good ideas in regard to housing, they need to become actionable. The closing comment says it all: “The lesson is simple: if there’s political will to turn good ideas into action, prices can be tamed.”
- We have heard the announcements about programs where the province will get directly involved in the provision of purpose-built rental and or for sale, specifically targeted to the “Missing Middle,” with preferable financing rates and opportunities to build on government-owned lands that would be made available at attractive prices. The premier in his announcement dissed our industry suggesting that since the private sector has failed to deliver – the government has had to step in. Please see this article regarding the new North Vancouver sewage treatment plant – a government project that has gone from an initial budget of $700 million to … hold on … $3.86 Billion! A difference of $3.1 Billion. Only the government can manage at this level of close cost control and oversight – a 400% plus overrun! Not very common in the private sector. Shall we review the costs for Site C?
- Hold on to your hats – the shortage of planners may trigger the adoption of PlanGPT, an AI tool specifically for planners to expedite backlogs and would fundamentally change how urban planning is executed. Are we heading for a showdown with “Skynet”?!
- This piece from Real Estate Wealth discusses Too Many Planning Layers Stall Project Approvals and addresses similar issues noted in the MMB – some quoted info stems from this source.
- The BC Utilities Commission has rejected the FortisBC application to ensure that properties that become served by RNG would remain so in perpetuity. This will materially affect FortisBC’s plan to provide as much as 15% of the energy supplied to be RNG. It remains to be seen what the next steps are, but HAVAN while supporting the need to move to lower and or zero carbon in housing does so seeking to use “all the tools in the box” to get there from here. No one energy source can currently meet the energy demands in our Province – we need to explore all options.
- Last Friday was Jay Chadha, Manager of Policy and Research, last day at HAVAN. We thank Jay for the five years of contributions to our GR efforts and as the principal producer and author of the GRU. Jay has a great passion for our industry and brought his “A” Game to all of his responsibilities with HAVAN and he was a valued member of our Team. We wish Jay all the best as he moves on to new opportunities and challenges. Cheers, Jay!
- As such, HAVAN is looking to fill the vacancy left by Jay, and we are seeking candidates engaged in housing issues and housing planning and policy interested in advocating for our members’ interests. Please view the official job posting. If members know of anyone who might be a good candidate, please forward the posting to that person or contact info@havan.ca Many Thanks.
- HAVAN’s AGM is scheduled for Wednesday, April 3, online, noon – 1pm. Details, PROXY Form, and registration here:
AGENDA:
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Approval of the October 4 Annual Election Meeting minutes
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Presentation and approval of HAVAN’s Audited Financial Statements (to be sent to members)
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Approval of the auditors
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Presentation of the BCIT Scholarships
