Affordable Housing Requires an Understanding of Incentives

View from Trafalgar Park

The Mayor of Victoria’s recent offer to throw another $250,000 drop into the affordable housing bucket  feels like building a sandcastle to stop a rising (inflationary) tide.

When the province spent $18.5-million for the Comfort Inn on Blanshard (assessed at $14.17-million), and a further $15-million for Paul’s Motor Inn (assessed at $8.757-million), it didn’t solve homelessness. Instead, the promise of free hotel rooms lured countless desperate souls from other cities and provinces, quickly filling the limited space available as the homeless population continued spilling into the streets.

Meanwhile, a recent report to City Council concedes that despite massive investments, we have “gained little ground in establishing more housing for young families, couples, singles and empty nesters who want to stay in Victoria.”

Tax-and-spend policies do not create wealth; they only redistribute it less efficiently. Getting into the slumlord business at the taxpayer’s expense is not a good look for our city. The resulting tax increases are passed through the local economy, reducing affordability for all.

An effective housing policy would be based on incentives to encourage supply, but not just any supply. The “Missing Middle Housing Initiative,” as presently envisioned, would prioritize density for the sake of density. Other municipalities have tried this, often to the detriment of affordability.

In 2016, when the City of Abbotsford established an infill-focused Official Community Plan known as “Abbotsforward,” land values surged as developers speculated on a construction gold rush. Today, Abbotsford’s residential neighbourhoods are less affordable than ever, and dominated by characterless monster-homes with barely a garden in sight.

To achieve a balance between increasing supply and preserving neighbourhoods, I propose meaningful tax incentives for property owners who build housing that’s genuinely affordable, and who bring that housing to the existing Victoria neighbourhoods we know and love.

How about a property tax holiday for any homeowner who builds a new, legal secondary suite for under $1,000/month? Garden suites and tiny-homes are of obvious benefit to low-income renters, and may be equally alluring to middle-income owners who need a mortgage-helper to cover rising borrowing costs.

Cheaper than buying hotels, targeted tax incentives might actually help the “young families, couples, singles and empty nesters” who struggle to call Victoria home.

Jeremy Maddock
Victoria, BC