Last Date Modified Thursday, February 1, 2018

How can a National Housing Strategy make home ownership more affordable?

During September and October, 2016, the Government of Canada asked organizations and individuals for ideas through an online engagement website.

The Real Estate Board of Greater Vancouver prepared seven solutions to make home ownership more affordable.

1. The Home Buyers’ Plan (HBP). The HBP lets first-time home buyers borrow up to $25,000 ($50,000 per couple) from their RRSP to use as a down payment

Solution: The government should index the HBP withdrawal limit to the Consumer Price Index and adjust it in $2,500 increments to prevent inflation eroding its value. The government should also extend the HBP to home owners moving – because of a divorce, a new job, or to care for relatives.

2. Help increase the supply of transit-oriented affordable homes

Solution: The federal government should fund local governments and transit authorities to buy land near transit and rezone it for higher density development. This land can be sold at below market rates to developers who can build market and rental housing geared to households earning less than $75,000. Each unit would have a covenant on title to minimize windfall profits on subsequent sales.

The federal government can also fund local governments to help defray the costs of planning and rezoning, and can form partnerships with developers, builders, and other private sector and non-profit housing providers to bring more affordably-priced units onto the market in transit-friendly locations.

3. Better understand the causes of price appreciation. What is the root cause of rising home prices? Is it demand from our growing population? Is it overseas investors?

Solution: The federal government can undertake research to explore the full range of root causes of property prices in Canada to make fact-based decisions.

4. Help increase the supply of affordable rental homes through incentives

Solutions: Allow investors to defer taxes on the recapture of previously accumulated depreciation (Capital Cost Allowance) when they sell an investment property such as a rental apartment building, and reinvest in another similar property of greater or equal value. Negotiate with provincial governments to reinstate investment programs to increase the supply of purpose-built rental housing.

5. Stop taxing home buying

Home buyers in Metro Vancouver face major home buying hurdles including saving for a down payment, finding an affordable home, and saving for taxes including the provincial Property Transfer Tax and the federal Goods and Services Tax on a new home and on services associated with buying such as legal fees.

Solution: Refrain from introducing any new taxes on home buying.

6. Consult before initiating more changes to mortgage rules

Low-ratio borrowers, including first-time buyers, are most affected by the new mortgage rules introduced in October.

Solution: Consult with a range of stakeholders including real estate boards and their REALTOR® members, who understand the needs of home buyers, before introducing new measures.

7. Create more incentives for sustainable and green housing initiatives

Green incentives and grants can help home owners make their homes energy efficient.

Solution: Create more incentives, including tax credits or grant programs at the federal level in partnership with provincial and local governments and utilities, to encourage home owners to renovate in a sustainable manner.