Affordable Housing Strategies

First of all, there is no single silver bullet that will fixing the housing affordability crisis. It will take a concerted approach. We need a full and comprehensive Housing Strategy Plan for the Province. I have found a number of potential solutions that can be implemented immediately with an in-touch and co-operative government at the Municipal, Provincial and Federal. FOREIGN NON-RESIDENT HOME BUYERS (the key word here is "non-resident"): Earlier this year, I wrote a policy which was adopted in May, 2016, at BC Chamber policy convention calling on the provincial government to conduct a full fledged study on the number of foreign non-resident home buyers in the whole province. This would be a snapshot study which includes data from past purchases that could be combined with the new LTO tracking data so we could get reliable numbers now, instead of waiting years before the new tracking provides enough data. Solutions to mitigate negative effects of foreign non-resident purchasing: 1. Implement a Targeted Property Surtax to annual property taxes that start at a threshold of property values $1M +. The rate would go up on a sliding scale starting at 1% for homes $1M+, up to 2% on homes $2M+ and 3% on properties over $3M. The surtax would be deductible against any income tax paid in the previous year or two which would mean that residents who pay income taxes will be able to offset the surtax. There could also be exemptions like an exemption for those who have contributed consistently to CPP and those who rent portions of their homes out. - This would deter new inflows of foreign capital - catch foreign and laundered money, past and present - be very difficult to evade - with a thoughtful exemption structure, very few Canadians would be negatively affected - it would bring in major revenues that could be put directly toward Affordable Housing - it is simple to administer 2. Better National tracking of Foreign Investment and foreign money laundering investigations In addition to the new tracking in the BC LTO, CMHC and CRA need to be given the resources and clout to track foreign ownership and to investigate foreign money laundering. CRA’s international division was gutted by a cut of 262 auditors. Tax laws need to be amended and CRA needs more resources to enforce them so that wealthy foreign investors pay their fair share. 3. Restrictions on Foreign Ownership to new builds only (Australia, Denmark, Swizerland, Singapore & Thailand) or limit the number of properties a non-resident/foreign buyer can purchase to one home (Switzerland & China) RENTAL SOLUTIONS: 1. Review and revise restrictive municipal Zoning Bylaw relating to rental properties. An example of a restrictive zoning bylaw in my community is as follows: “3. The owner of a single family dwelling containing a secondary suite shall be resident of either the principal dwelling unit or the secondary suite for a minimum of 9 months a year.” This means that the owner of a rental home must live in the property at least 9 months of the year and cannot own a rental home with a secondary suite that it rented to others. 2. Appx 6 ½ years ago CMHC and Canadian banks implemented restrictive rules on the purchase and financing of rental homes, making it far more difficult to buy a rental home (ie use 50% of the rental income to qualify, minimum 20% down payment and many require the mortgage to be CMHC insured which premium is added to the mortgage and others charge a surcharge to the interest rate for rental financing). Pressure CMHC and Banks to ease up on those restrictions in areas with low rental vacancies AFFORDABLE HOUSING SOLUTION: 1. Mobile Home Financing. There are many Lender who will not finance any mobile homes whether on land or in MH parks and others that do, charge higher interest rates and reduced amortizations which acts to increase mortgage payments, reducing affordability. Although I can understand the hesitation to lend on older mobile homes, newer MHs are constructed with 2x6 construction, double paned windows and have better insulation than most homes. We need Lenders to ease up on lending restrictions for the newer mobile homes. 2. Mobile Home Pad Rent: I am astounded by the cost of pad rent in mobile home parks $420/mo seem extraordinary.

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  • commented 2017-02-19 14:36:00 -0800
    A big problem with mobiles homes is that many of the parks are being re-developed. If a bank is carrying a mortgage on a mobile that will be evicted they lose their investment. as does the home owner. Hence, banks are very leery on lending money for any mobile, regardless of age.
  • commented 2016-12-14 19:35:45 -0800
    Hi Kim, Thanks for your input. As usual very well thought out.
    Bill Masse
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