Wednesday April 10, 2024 | VICTORIA, BC
by Mary P Brooke | Island Social Trends
Moving from renting to home ownership “is unlikely to happen and it is not happening”.
People who own a home are carrying a huge amount of debt and those who wish to become a homeowner are on all sides forced to rent.
Yesterday in the BC Legislature, BC Green House Leader articulated some of the dynamics of renting and home ownership in BC.
He says that “dramatic intervention” is needed on behalf of the 1.5 million renters in BC. He suggests that municipalities not be expected to protect affordability and special needs housing and support displaced renters.
“The BC NDP government dropped the ball. They have forced local governments to do many things over the last six months,” said Olsen. “They ‘must’ blanket rezone, they ‘must’ support transit-oriented redevelopment,” said Olsen. He suggests that legislation directives be optional. But in fairness, the current government is hoping to quickly turn around a crisis housing situation and probably correctly feels that leaving options open won’t produce change at the speed it is require to boost housing supply in this province and enact tenant protection bylaws.
“This is where we have to come to terms with who is actually purchasing housing units.” He said that surging prices have different consequences for the different types of buyers. While housing has become decreasingly affordable for prospective first-time buyers they’ve also dramatically increased the wealth of those who already own housing, supercharging their bidding power.
He called last falls upzoming legislation as having “a devastating impact” turning single property owners into multiple property owners and almost certain downward pressures renters would feel on their chances of becoming a homeowner. Olsen predicts that precarious situations for renters will be only become greater as the new home ownership landscape emerges.
Stats Canada shows the life chances of home owners is orders of magnitude better than their renter peers, said Olsen.
Policies regarding lending and borrowing as well as policies on zoning are making life more difficult for renters, said Olsen. The rise of investor leveraging their borrowing power is predictable.
In the 10 years from 2011 to 2021 the number of condo apartments and houses rented out as investment properties grew four times faster than Canada’s overall housing stock, he outlined. The stats he quoted showed that owners of those properties almost doubled and increased their ownership of houses by almost a third.
He says that real estate investment trusts (REITS) pose an “existential threat to housing affordability and individual property ownership”, saying that contributes to a limiting impact on access to the upzoning in BC’s new legislation that allows up to four properties to be built on a former single-family lot. REITS naturally aim to grow their holdings, he says.
The growing prominence of investors in the housing market is contributing to strong demand relative to supply, heightened bidding pressures, rapid price increases and alarming imbalances in price.
Olsen reported that the Bank of Canada shows REIT investors as becoming increasingly indebted and pulling equity out of their existing properties (which contributes to upward rental rates and rapid gains in house prices).
===== RELATED:
- HOUSING NEWS SECTION
- New rental supports for BC seniors (April 9, 2024)
- Trudeau introduces Canadian Renters’ Bill of Rights (March 27, 2024)
- Province buys apartment building to stabilize 16 renters (February 28, 2024)
- BC describes BC Builds rental construction program as non-traditional (February 19, 2024)