We don’t need to further subsidize wealthy homeowners in Metro Vancouver

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      The Metro Vancouver Regional Authority is proposing changes to its fee structure, which will significantly widen the gap between housing haves and have-nots. Metro Vancouver is currently completing its annual budget and looking ahead towards a five-year financial plan. Though this is a regular task, this year’s changes propose significant setbacks to housing and affordability—especially in the face of concerted efforts by other levels of government to stimulate much-needed supply. 

      Metro Vancouver is in charge of maintaining existing infrastructure such as water, sanitary, and storm pipes, as well as regional parks. This scope also includes planning and improving our infrastructure through capital projects. Metro Vancouver’s funding comes from property taxes, utility fees for the core services of drinking water, sewerage, and waste management, and increasingly so, cost charges on new developments. 

      The Metro Vancouver board of directors are councillors and mayors around the region. They voted in mid-April 2023 to propose not only an increase to the cost charges on new developments, but also a shift in approach that will see the majority of Metro Vancouver fees go from a split between existing households and new ones to nearly all new developments by 2026. This occurred in a Special Joint Board Budget Workshop meeting, where Metro Vancouver’s Chief Administrative Officer (CAO) Jerry Dobrovolny stated that he believes this will be an organizational change for Metro Vancouver to a more “growth pays for growth” approach.

      New homes aren’t the problem

      It is true that new developments and residents require additional capacity on infrastructure. It is reasonable for the region, as well as cities, to charge fees to support the improvements that need to accompany new residents and developments.

      However, much of the costs allocated for what is called “growth” are actually not for new residents, but are actually benefits for existing homeowners. For example, many of Metro Vancouver’s upcoming capital projects that need funding include upgrades that have been planned for years and delayed, which have resulted in surmounting costs. Funding also includes maintenance and upgrades required just due to normal use of our infrastructure over time. Moreover, our region’s development has historically been very low-density, which includes some very lengthy and inefficient infrastructure systems—each with accompanying exorbitant fees to maintain and renew.

      When you look at existing households or homeowners in our region, they also tend to be more car-dependent and carbon-intensive households, further inflating costs to our urban infrastructure. The cost of these existing households and their lifestyles, as well as of the ageing infrastructure, has increasingly been unfairly punted onto new residents and new developments.

      New housing, on the other hand, is more likely to be in areas where there are existing services, such as parks, schools, and rapid transit, especially for mixed-use developments. These projects already include significant upgrades to public services and infrastructure due to city regulations, and also bring in residents who are much more likely to have fewer or no cars. This density is the type of development we need more of, and we should not be asking these new residents to carry the burden of the regional infrastructure that we all use.

      A widening wealth gap

      This proposed change would mean that instead of having the existing population pay for half of upgraded infrastructure that they will also benefit from, they would instead pay the legally mandated minimum (one per cent) and new residents would have to bear 99 per cent of the cost in the form of higher prices.

      Homeowners in the Metro Vancouver region, especially those who have owned for decades, have already long benefited from having purchased a home at low cost—along with some of the lowest property taxes in BC. They also have benefits such as the BC Home Owners grant, in addition to decades of exponential growth in their housing value and wealth due to exclusionary and restrictive zoning regulations. They already have secure, affordable housing, and they don’t need to offload more of their expenses.

      New households, on the other hand, are substantially younger, less wealthy, and more likely to be renters facing insecure and unaffordable housing. These are households who have been hard at work saving away on a downpayment, or younger generations just trying to move out of their parents’ home. These are the people we should be supporting.

      This proposal comes at a time when other levels of government have finally aligned on the need for more housing. This change would significantly discourage new housing from being built, and also weaken the federal government’s recent announcement to remove GST on new rental housing. Rough estimates show that the proposed increase in Metro Vancouver’s cost charges would eliminate approximately half of the savings on GST removal on new rental housing in the region. It adds a substantial levy on new market housing, which means many projects would no longer be feasible. 

      Growth is needed—and it must happen in our urban region, instead of sprawling at the outskirts, if we are to face the realities of population growth in a sustainable and responsible way. Growth already pays for growth. Growth should not also pay to subsidize existing wealthier residents, and definitely not at the cost of much-needed new homes in a housing shortage. This only further fuels the social inequity from our housing crisis and adds an additional setback for future generations.

      Metro Vancouver is accepting public feedback on this proposed change until 4pm on September 29. Please consider taking a moment to email dccs@metrovancouver.org or the Metro Vancouver board and asking them to reconsider this change—and instead create policies that make existing homeowners pay a fairer share.