Here are three common myths about housing:
Myth #1: Houses are unaffordable
Many buildings are affordable, but the land is not. For example, a 1960’s home on a 12,000 sq ft lot in Saanich was assessed at $904,000 by BC Assessment in July 2020. The building is $129,000 and the lot is $775,000.
Myth #2: There is no land
Land is available but often zoned years ago as large lots for single detached dwellings. Rezoning to smaller lots or higher density is required, but municipalities make this challenging and expensive.
Myth #3: Builders control prices
Prices are determined by labour, materials, and govt regulations. For example, municipalities uncontrollably increase prices layering on DCC’s, permit fees, and annual building regulations such as Step Code 3, which alone adds $30,000 to new homes. According to the CD Howe Institute, these govt fees, regulations & rezoning challenges increase housing costs by about $230,000.
Also, the value of the land determines the type of construction. It is not practical, nor marketable to build a small affordable home on large lots.
Portland recently adopted a bylaw allowing up to six units on single detached lots. Yet in many of our local municipalities, a simple duplex violates zoning.
More than 100 years ago in James Bay, homes were built on lots under 2,000 sq ft. Many are now heritage homes in a walkable, compact community. Today these lots would be illegal.
Govt tells builders where and what to build (zoning); when to build (permit approvals); how to build (building code); and how much revenue they require from the project (GST, PTT, DCC’s, permit fees, amenity contributions).
Housing affordability depends on govt allowing builders to build affordably.
This column appears Wednesdays in the Times Colonist newspaper.
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