Real estate story of the year: Municipalities react to province's housing changes

Castanet is revisiting the top stories of an eventful 2023. Today, for our real estate story of the year, we look at the housing changes announced by the NDP throughout the year and the impact on local governments.

In the face of a widespread housing crisis, the B.C. government this year introduced a multibillion dollar plan and several pieces of legislation in order to help tackle the shortage.

Ryan Smith, City of Kelowna planning director, said the changes in housing policy — foreshadowed in the NDP’s Homes for People Plan announced in early April — represent a significant step.

“We’ll probably look back on this time 10 or 15 years from now and say this was the biggest change in provincial housing legislation and policy in our generation,” Smith told Castanet.

“Ever since the Agricultural Land Reserve in 1972, I don't think there's been as aggressive a change since then and there probably won't be, once the dust settles on this, for many years, because it will take a few years to see how this begins to play out.”

In April 2023, the province said it would be making a $4 billion investment over three years and a $12 billion investment over a decade in order to spur the construction of new homes, curb speculation, and provide financial help for renters and homeowners.

This fall, the province passed several housing-related bills, including legislation to restrict short-term rentals, permit multiplexes on single-lot homes and boost housing density in areas near public transit.

Local governments will be required to update their official community plans with consideration for the next 20 years of housing supply, and update zoning bylaws for anticipated housing needs.

Smith said the City of Kelowna is well prepared for many of the changes introduced by the provincial government.

“We were anticipating a lot of this happening, some of the transit oriented area regulations were a little more aggressive than we were than we anticipated. And then certainly, the short term rental changes, we were very concerned about short term rentals in Kelowna, and how they were impacting our housing supply,” Smith said.

“We're glad that most of the tools were implemented as they were, we wish maybe we had a little bit more local control in terms of exemptions.”

He said he expects residents will see incremental changes in the next year or so as legislation begins to take effect, with infill development beginning an outward creep from city centres.

Stephen Bentley, City of Kamloops community planning manager, said it’s difficult to say which piece of new legislation will have the greatest impact for the Tournament Capital, which was named by the province as one of the first cities which need to meet housing targets.

“Development, as much as we can regulate it, it’s market driven. And so what the development community picks up on, we don’t have that crystal ball to know that," Bentley said.

However, he noted there’s an opportunity to see more density distributed throughout the city.

“There's provincial regulation about allowing four residential units per lot. And that can be almost all residential lots in the city of Kamloops that currently might be only zoned for one or two units. Potentially, there could be four units per lot,” he said.

“That's going to have an impact throughout the city over the long term.”

Over the year, some municipalities expressed concern about blanket zoning regulations, and noted stable infrastructure funding is also needed in order to support an increase in housing density.

Coldstream Mayor Ruth Hoyte earlier this year wrote a letter asking the province take into consideration the diversity and size of communities and unique rural issues.

“We request you consider that there are other communities, just as unique as ours, for which a province-wide, ‘one-size-fits-all’ approach to increasing housing supply may not be in their best interest and may result in communities that no longer resemble the ones that people chose to live in,” Hoyte said in her letter.

Bentley said when it comes to implementing new housing-related directives, infrastructure remains one of the biggest challenges.

“We're going to have to be looking at our sewer and our water capacity, and do we have capacity for that additional housing,” he said.

The City of Kamloops has applied for a $15.6 million grant through the Canadian Mortgage and Housing Corporation’s Housing Accelerator Fund, with the money intended to help the city implement the new regulations, study its servicing needs and fund infrastructure necessary to accommodate more housing development.

Smith said Kelowna was the first city in B.C. to receive Housing Accelerator Fund money — $31.5 million — which the municipality is “very thankful for," but noted steady infrastructure funding would help most when it comes to budgeting.

He said it took "30 years of progressively more restrictive regulation and decision-making" to cause a housing crisis, and it will take several years to solve.

“I've said to my staff housing is the goal, perfection is not right now. And we'll do the best that we can, and all municipalities that are heavily impacted by the legislation will do the best that they can in the short timelines," Smith said, noting there will be some problems that pop up along the way, but it's important to keep focused on the province's intent.

"Everybody remembers the goal of all of this was to do something that was significant to try and respond to what we're calling a housing crisis."

-With files from the Canadian Press