Greater Victoria Housing Starts Down 1% – Municipal Fees Rising

CMHC reports housing starts in Greater Victoria declined 1% January to October from 3,918 in 2022 to 3,885 units in 2023. Year-to-date, large multi-family condos/apts are up 11% this year at 3,232 units, however, single detached homes are down 45% (330 units) and missing middle (townhomes, duplexes) are down 19% (323 units). Much of the decline would be the result of higher interest rates undermining affordability in moderate housing that is more costly to build, and must command a higher price than large multi-family. In addition, municipalities continue to boost fees and regulatory costs regardless of high mortgage rates and prices.

The BC government recently announced mandatory rezonings and housing targets for some municipalities, however they also increased Development Cost Charges by including police & fire stations, sold waste treatment facilities and highways in addition to the already covered sewer and water, sidewalks, parks, etc. Previously negotiated Community Amenity Contributions were legalized like DCCs, and this will also add costs to housing. The CRD plans to add water charges of $9,045 per new single family home and $7,914 for townhomes, duplexes etc of which there is already a shortage. More charges will be applied to large multi-family projects. There needs to be a cap on rising fees and regulations.   

Some municipalities such as Saanich and Victoria are banning on-demand RNG hot water, which takes up less space and costs less to operate than an electric tank. The on-demand units are especially useful in townhomes due to space considerations. 

Victoria also requires deconstruction of single detached homes costing tens of thousands of dollars, even though wood and other materials are banned from the Hartland Landfill and are being recycled.

The Vancouver Sun did a story on Saanich’s slow, costly and obstructive approach to housing that has existed for years. The mayor says “I think Saanich has had a well-earned reputation in the past for being slow in its processes…There’s a clear gap in terms of multi-family units like duplexes, multiplexes, townhouses, and affordable non-market rental. And we certainly have some work to do to ensure that we are moving in the direction that will create that housing type.”

The Globe and Mail singled out the City of Victoria for creating a new policy to boost new missing middle housing. They said, “the city then piled on numerous rules, including building height, parking and added costs. It’s akin to opening a door and immediately bolting it shut. The result is a policy that was supposed to help get many new homes built led to development applications of zero new homes.” 

Langford leads in housing starts with 954 new homes, followed by Victoria at 838. This time last year, Victoria’s starts were 1,462 resulting this year in a 43% decline.

There is zero new missing middle housing in Metchosin, Highlands, North Saanich and Oak Bay. Central Saanich has 2 units and View Royal has 5 units.

Sooke’s housing starts have dropped 57% from 216 in 2022 to 92 in 2023. Sooke has become the new Saanich – costly and obstructive. A recent organizational review reveals significant administrative challenges.