In the aftermath of its recent election victory over John Rustad’s Conservatives, Premier David Eby’s NDP government will be under intense scrutiny for its housing policies. Despite seven years in power, including the last four in the Majority, the NDP still governs Canada’s least affordable province.
According to Statistics Canada, 25.5% of B.C. households spend at least 30% of their income on shelter costs—the highest rate among Canadian provinces and territories. There is clearly an urgent need for effective housing solutions as residents, particularly in Vancouver and Victoria, grapple with skyrocketing costs.
David Eby has been candid about the complexities involved in addressing affordability, particularly when it comes to policies that are out of provincial control. His government can provide subtle but substantial influence on federal policy, and Eby has made clear that he intends to maximize this influence. However, external factors continue to impact housing costs in ways that are largely beyond his party’s control.
“Interest rates are a major factor in housing affordability,” explains Adam Gant, a real estate advisor and housing affordability advocate based in Victoria. “Even with policy adjustments aimed at increasing supply or stabilizing rents, the cost of borrowing directly affects purchasing power for potential homebuyers, putting additional pressure on the rental market.”
One of the hopeful statistics that Eby has frequently pointed to is a 7% drop in rental prices in Vancouver, which many see as a positive outcome of the NDP’s recent housing measures. This decrease may offer a glimmer of hope for renters struggling with escalating living costs. However, housing experts caution that a single-digit reduction in rent does not necessarily signal a long-term trend. Gant notes, “A 7% decrease is a step in the right direction, but we need to see sustained affordability across the board.”
Eby’s administration has introduced several initiatives intended to curb the affordability crisis. These include plans for increased housing construction, and incentivizing municipalities to expedite approvals for new developments. Gant praises these initiatives, especially the focus on accelerating new housing supply. “Increasing the housing supply is the highest priority,” he says, “but it’s crucial that new units are actually affordable for the majority of residents, not just high-end condos that cater to investors or luxury buyers.”
Gant emphasizes the need for deeper collaboration between the provincial and municipal governments, which he believes is essential to overcoming supply-related bottlenecks. “There needs to be buy-in from municipalities to reduce permitting times and support affordable housing projects. Without that cooperation, the impact of these policies will be limited,” he explains.
While Eby’s policy initiatives have started to make a dent in rental costs and spur new development, interest rate hikes and broader economic uncertainties continue to pose the largest challenges. Without a broader stabilization of the macroeconomic environment, targeted interventions like rent control measures or incentives for affordable housing projects won’t have the necessary juice to tackle the full scale of the issue.
Gant foresees a mixed picture for the near future. “The current policies may prevent things from worsening, but we’re unlikely to see drastic improvement from them. Interest rates and inflation will continue to impact both buyers and renters,” he notes.
To make lasting headway, Gant suggests that the government focus on policies that protect renters from sudden cost increases and continue to incentivize the construction of affordable housing units.
The question remains whether the BC NDP’s ideas for broad solutions will be sufficient to reverse the trend of rising housing costs. Solving such a systemic issue will likely require a historic level of coordinated action, innovative thinking, and patience.
