BC’s housing crunch means redefining affordable and middle income

Affordable housing is one of the hottest topics in politics and policy in BC today. A slew of recent legislation proves it.

The Ministry of Housing has passed three bills in the past two years (Bills 43, 46 and 47) that all focus on supply through amendments to transit-oriented areas, financing, and residential developments.

Another act, Bill 16—the Housing Statutes Amendment Act—gives municipalities some power to use their bylaw authority to mandate certain requirements that were previously only available through rezoning, with the hope of expediting the development approvals processes.

Province says 'get building'

Under the authority of the Housing Supply Act, municipalities in the CRD have been ordered to meet specific housing targets. Victoria’s target, set last Nov., is 4,902 housing units by 2028. It took the city only six months to surpass its per-year quota of 659 units.  In May, the Ministry of Housing indicated that municipalities with assigned housing targets will increase to between 68-80 municipalities by 2026/27.

However, the housing units that help meet these targets are not specifically affordable. And, the growing gaps between middle and low income, and affordable and market values are more pronounced than ever.

Affordability is further out of reach for a larger margin of the CRD’s population in a political environment where legislators are failing to apply a class analysis to what affordability actually means and for whom, and puts the concept of middle income in question.

BC Housing defines housing as affordable when paying for it takes no more than 30% of one’s gross income. The mean middle income for British Columbians is $66K. Affordable housing for a person of middle income in BC should cost roughly 20K per year. Neither rent nor a mortgage payment for a middle income earner in BC should, according to these benchmarks, exceed $1,650 per month. But reality is much different. The average rent for a one-bedroom unit in Victoria in 2023 was $2,189. The average mortgage payment in Victoria in  2023 was $2.5K, far above affordability for a middle-income earner, let alone a lower-income one.

NDP messaging around its now-shuttered $2 billion Housing Hub program was all about generating affordable housing

Jack Sandor from Saanich-based housing advocacy group Homes for Living told Capital Daily the word “affordable” gets thrown around a lot in many different contexts, and the definition is often out of line with what a lower income earner could actually afford. The NDP shot themselves in the foot by describing the units created as affordable.”

Last week, Michael Pistrin, vice-president of development and asset strategy for BC Housing told the Globe and Mail, “The whole intent of the Housing Hub was just to build more housing. “It was designed to create affordable rental housing and homeownership options for middle-income people. That’s not what it was touted as on the BC housing website which clearly states it was to create affordable rental housing and homeownership options.”

Middle class is disappearing

Growing wealth disparity in Canada, reported in April by the Financial Post as the most significant since 2015, and the erosion of its middle class means middle-income earners can feel like economic unicorns. Langford, for example, does not currently have a sufficient number of approved applicants to buy  all the units available as part of its Attainable Home Ownership Program for middle-income households because applicants have failed to meet eligibility income-level thresholds (they were either too low or too high).

Victoria Coun. Susan Kim told Capital Daily, “From where I'm sitting, I feel like they really have kind of drunk the Kool-Aid of housing, not as a right that as a public good we should be providing, but as something that we're relying on a private market to supply using public means. Housing has now been commodified and, as a result, financialized, and it's gone too far for the province, I think, to like, comfortably pump any brakes on that.”

Sandor has a decidedly optimistic take on Housing Hub’s outcomes and the housing pie distribution in general. “Managing to deliver any below-market units without actually spending any money is, in our view, an absolute win, even if the units delivered aren’t much cheaper than market rents; we spent no money and got more, cheaper housing during a housing shortage, and that’s a good thing,” he said.

Launch of the BC Builds program

Since shuttering the Housing Hub program in the wake of program abuses, Premier David Eby has launched the BC Builds program with $2 billion in government financing ($225K per unit) to encourage the construction of rental housing on lands owned by non-profits. First Nations, and community landowners such as  local health authorities, school districts, colleges and universities, faith groups, and service clubs will qualify for the financing with the guarantee that 20% of units  be listed for below-market value.

But since the concept of market value has skewed toward profit, that 20% represents a drop in the bucket of the need for truly affordable housing in the region.

Sandor has a positive spin on this, too. While he believes “much more investment in publicly owned, social, co-op, and other forms of non-market or otherwise government subsidized housing is badly needed.”

He said the market rate units created often lead to cheaper units becoming available indirectly through what's called the filtering effect. “This is a well-studied and empirically demonstrated phenomenon whereby older, cheaper units are freed up when the occupants move into the new buildings.”

Those occupants, according to BC Housing’s numbers.), are not middle income. Redefining that term may make BC’s efforts to generate actual affordable housing for a far broader swath of the population more honest or more noticeably deficient.