Thursday, August 8, 2019

Federal tax policy changes, incentives and land needed for housing affordability in Vancouver

Ahead of a national election in the Fall, the VBOT is hoping all federal parties will consider its recommendations and participate in a conversation about housing affordability in Vancouver.

The Greater Vancouver Board of Trade is calling on Ottawa to support the building of rental units to boost housing affordability in Vancouver, arguing the lack of it continues to impact businesses that cannot attract and retain workers.
In a report released Thursday, the group is recommending the federal government offer incentives and funding for more housing near rapid transit. It also suggests that Ottawa consider tax policy changes to encourage new rental construction, offer tax credits to spark the building of new rental units within existing zoning, and unlock federal land for building affordable housing.
Ahead of a national election in October, the Board of Trade is hoping all federal parties will consider its recommendations and participate in a conversation about housing affordability in Vancouver.
Specifically, the report calls for tying the federal government’s National Housing Strategy to public transit funding. This would mean providing “preferred financing rates” to “projects that are within a certain distance from a transit station.” As well, the federal government could “entice local governments to build and approve transit-oriented developments at underutilized transit stations.” Where there are “rapid transit projects that meet or exceed specific housing targets,” the feds could increase their “cost-share ratios.”
The Board of Trade thinks there might be “creative new ways to encourage rental units within existing zoning” such as a new tax credit or loan program that would give existing homeowners a financial incentive to build a secondary suite or laneway home on their property. It said: “It is estimated there are approximately 60,000 to 70,000 lots in RS/RT zones where laneway homes are allowed in the City of Vancouver. Vancouver’s 2019 Housing Annual Progress Report noted that around 4,000 permit approvals have been granted in the past 10 years.”
When it comes to altering tax policy to spark the construction of more rental units, the report recommended “removing GST on new capital investments in rental housing.”
It looked at a 117-unit project in the City of Vancouver and estimated that “removing the GST could lead to a reduction in monthly rents of between 3.04 and 6.06 per cent, depending on overall project costs.”
Lastly, it urged the federal government to make land it owns available for rental development and to commit to reinvesting any profits from current projects in Vancouver such as the Heather Street lands and Jericho lands into housing efforts elsewhere in the region.
More to come

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