Victoria Posts 94.5% Housing Decline Year-to-Date

According to CMHC, there has been a 94.5% decline in Victoria housing starts with only 13 units from January to March this year vs 240 in 2023. This will likely reverse in the next couple of months because the municipality is the home of large multis and one project can boost their numbers significantly. However, it also represents the cost of doing business in Victoria, which many builders avoid due to excessive regulations and fees. Significant financing and economy of scale and must be achieved to address all of the costs.

Overall, there has been a 16% decline in Greater Victoria housing starts year-to-date January – March. The total is 916 in 2024 vs 1,088 in 2023.

There are 749 units from large multi-family projects, 72 single family and 95 townhomes, duplex, etc also known as “missing middle.”  There has been a big shift to large multis due to high construction costs, government fees, taxes and regulations, and high interest rates. Monthly housing data will be skewed based on the timing/appearance of these large projects.

Most of the new housing was in Langford (537), Colwood (131) followed by Saanich (93), View Royal (69) and Sooke (52). Municipalities posting zero starts this year are Central Saanich, Highlands, and Metchosin. North Saanich has 1 new home. Sidney has 6 and Oak Bay and Esquimalt have 7 each.

It appears some municipalities may be ratcheting up regulations and fees to obstruct the province’s legislation enabling 4 to 6 units on single family lots. These range from calculating floor area to include exterior siding in Saanich to requiring additional permit approvals for soil removal in Central Saanich, despite having a building permit obviously requiring an excavation. There is a disconnect at all government levels regarding the ongoing layering of regulations and fees on new housing, putting housing further out of reach for young families.

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.

In addition, the BC government announced a new program called BC Builds, however these programs are ineffective at addressing market housing supply and affordability for the general population.

They should start by changing the Property Transfer Tax from a tax to a title transfer fee like Alberta.