Government of Canada "Actively Examining" Action On Short-Term Rentals

The jury is still out on whether British Columbia's recently announced actions against illegal short-term rentals will have their desired effects, but it's now received a big endorsement from Minister of Finance and Deputy Prime Minister Chrystia Freeland, who says the federal government is following suit.

At a joint press conference with Minister of Innovation, Science, and Industry François-Philippe Champagne and Treasury Board President Anita Anand on Tuesday, Freeland announced that she was designating the Ombudsman for Banking Services and Investments (OBSI) as the single external complaints body for Canada's banking sector.

She then closed her remarks by shouting out British Columbia.

"I also want to quickly address the BC government's new legislation to regulate the short-term rental market," said Freeland. "This is a positive and important step in the right direction, in an area of provincial jurisdiction."

Freeland then said what many governments around the world have said: short-term rentals need to be converted into long-term rentals.

"We know that short-term rentals through sites like Airbnb and Vrbo mean fewer homes for Canadians to rent and live in full-time, especially in urban and populated areas of our country," she said. "That is why our government is actively examining what options and tools exist at the federal level, to ensure more short-term rentals are made available as long-term rentals — as permanent homes — for Canadians to live in."

Freeland concluded by saying that the Government of Canada will have more to announce in the weeks to come.

The War On Short-Term Rentals

A day prior to Freeland's comments, the Province of British Columbia announced the Short-Term Rental Accommodations Act, which included a suite of actions such as creating a provincial registry for platforms and hosts, increasing fines for infractions, and requiring platforms to share more data.

With the announcement, BC joined a growing list of governments around North America that are cracking down on short-term rentals in the name of alleviating pressures on their respective housing markets. That list includes Barcelona, Vienna, and New York City, among others. In Canada, both Quebec and Halifax recently announced actions as well.

It's unclear what the Government of Canada can really do, however, as short-term rentals are an area of provincial jurisdiction, rather than federal jurisdiction — a reality Freeland acknowledged on Tuesday. Despite that, Freeland said housing is such a big issue that the federal government is looking at everything.

"It is so important that we are examining whether there are any tools in the federal jurisdiction that we could use, that would make a difference in this space," Freeland said. "And the reason we're so focused on it is we really do understand that housing is a very challenging issue for Canadians, and we believe that the core challenge is that there just aren't enough homes available for people to buy or for people to rent, so we're reviewing the space and we're thinking 'what can we do in both the medium-term and immediately to relieve some of the pressure."

She went on to cite an estimate that 30,000 units of housing could be added back to the market in just Vancouver, Toronto, and Montreal if action were to be taken.

"That would make a big difference," she said. "And that's why, recognizing — as we do — that this is in provincial jurisdiction, we are taking a very careful look at whether there are any tools in the federal toolbox we could use as well. But if other provinces want to follow BC's lead, that would be great for Canadians, too."



B.C. government orders 60,000 new homes built in 10 municipalities the next five years

The B.C. government has ordered 10 of the largest municipalities in the province to build more than 60,000 new units of housing over the next five years — or face consequences.

Housing Minister Ravi Kahlon announced the exact numbers for net new units in the 10 municipalities on Tuesday, months after the province first said those communities would be targeted as part of the government's push for additional housing supply. 

"We're taking action and working with municipal partners to make sure more homes are built in communities with the greatest housing need," said Kahlon in a statement.

"The targets include thousands of below-market rental units for the largest and fastest-growing communities. This means more people will be able find a home in the community they love."

The 10 municipalities are Vancouver, Victoria, Kamloops, Abbotsford, Delta, Saanich, North Vancouver District, Port Moody, Oak Bay and West Vancouver.

Overall, the number of units they're being asked to add to their housing stock in the next five years ranges from 28,900 in Vancouver to 664 in Oak Bay — but when adjusted for population, all 10 would see an increase of units between eight and 14 per cent by 2028. 

In addition, the province has put in place separate sub-targets for each municipality by year, by whether the units are rentals or ownership, by whether the rentals are market or below market, and by number of bedrooms. 

If municipalities fail to meet their targets, the government has said they retain the option of appointing an adviser or issuing a directive that could usurp the traditional jurisdiction of municipalities to oversee land use within their boundaries. 

Eby in Ottawa

Kahlon said the 10 chosen communities were selected through "an objective, thorough and measured process" that factored in metrics, including projected growth, housing and land availability, affordability, community infrastructure and "unrealized potential in developing more homes."

Premier David Eby, who has spent two days in Ottawa meeting with federal ministers and Prime Minister Justin Trudeau, says affordable housing would be made available quicker with the co-ordination of all levels of government.

He says the federal ministers were receptive to that pitch.

Eby's trip to Ottawa comes after the federal government announced a $4 billion Housing Accelerator Fund in its 2022 Budget that would provide incentive funding to local governments to encourage initiatives that lead to new housing supply.

"My understanding is the federal government is close to being able to make announcements in terms of the allocation of that funding to support growth in cities, which is very good news," Eby told reporters Tuesday.

"The challenge or the opportunity, I guess, is to co-ordinate that municipal accelerator program with the cities that our housing minister has been working with on housing targets."

The premier said he also made "very good progress" in advancing the interest of B.C. residents in his meetings with the federal ministers, noting he is "particularly happy" with his discussions around how the federal and provincial governments can work together to support the clean energy sector.



Coquitlam Approves Increases To Development Cost Charges

The City of Coquitlam has approved increases to its rates for development cost charges (DCCs), increasing the price to build in a municipality that's become very popular among developers in recent years.

In Coquitlam, development cost charges are levied on all development applications with a construction value below $150,000, and the City uses the revenue to help pay for expanding necessary infrastructure, including transportation, water, sewage, drainage, and parks.

Development projects that require rezoning are also subject to community amenity contributions (CACs), but DCCs for non-residential projects are very low, so as to not hinder economic growth.

Like many other municipalities, the City of Coquitlam reviews its DCCs regularly and adjusts the rates in order to reflect the economy and growth trends. As part of this process, the City is now raising all of its DCCs by 4.5%, reflecting the 4.5% increase in the Vancouver Consumer Price Index published by Statistics Canada in April 2023.

Following the increase, the total DCC for single-detached homes is now at $63,141 — by far the highest of any type of development. Multiplex housing forms have a total DCC of $41,448 per unit, followed by rowhouses and townhouses at $37,418 per unit, and then multi-family complexes at $23,715 per unit.

"While this increase is below the construction cost escalations observed over the past year estimated at 10%, it helps the City's rates to keep up with the inflationary cost increases in the region," staff said in a recent report.

The 4.5% increase is relatively modest when compared to other municipalities. In Vancouver, rates for DCCs were set to increase by 8.3%, until Council opted to defer the increase until 2024 in order to avoid further worsening project viability for developers.

Earlier this year, the City of Surrey also increased its rates for DCCs, by 9.3%, which are now in effect. Although Coquitlam's increase of 4.5% is much lower, the actual DCC is higher in some cases. In Surrey, the total DCC charges for non-multi-family homes do not exceed $53,154. DCCs for multi-family homes are then charged according to square footage rather than per unit like in Coquitlam.

Coquitlam City Council granted a first, second, and third reading to the bylaw amendment earlier this month, before granting a fourth and final reading Monday evening.

Applications that are currently in progress will be protected, and the new rates will come into effect on Sunday, October 1.


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