Over the last year we have seen monumental shifts across multiple levels of government, ushering in a new period of potential. There is the potential for the Federal Government to re-engage on housing in a meaningful way, as they have shown with the enhanced GST rebate. There is the potential for the Government of B.C. to build on the framework they have set out to accelerate housing delivery over the next several years. There is also the potential for pitfalls and shortcomings that could undermine even the best-laid plans. As we look ahead to 2024, we know that there is much more work to do.

-Anne McMullin, President and CEO, UDI, speaking to the Globe & Mail about recent provincial legislative changes.

This quote succinctly describes the sentiment as we reflect on 2023. Change creates new opportunities, but also brings uncertainty. Over the last year we have seen monumental shifts across multiple levels of government, ushering in a new period of potential. There is the potential for the Federal Government to re-engage on housing in a meaningful way, as they have shown with the enhanced GST rebate. There is the potential for the Government of B.C. to build on the framework they have set out to accelerate housing delivery over the next several years. There is also the potential for pitfalls and shortcomings that could undermine even the best-laid plans. As we look ahead to 2024, we know that there is much more work to do.

Taxing Growth

Early in the year, UDI published a report titled Taxing Growth: Analysing the Taxes and Fees on New Housing Development. The report provided multi-level policy recommendations for governments to address the impacts of taxes and fees on new housing, and support the development of new housing supply in British Columbia. UDI recommended the elimination of community amenity charges, removing the GST, and streamlining development approvals processes – which were reflected in the dramatic policy shifts we saw later in the year. UDI will be looking to release more reports in 2024 on other challenges the development industry faces.

Federal Shifts

This year brought a notable shift in the Federal tone on housing. The appointment of a new Minister of Housing, Infrastructure and Communitiesfollowed by the creation of a corresponding Department, demonstrated renewed engagement on housing and infrastructure issues.

In September, results started to show when Minister Fraser announced there would be an expansion of the GST rebate for new purpose-built rental construction. This has been a key advocacy issue for UDI, and we have repeatedly made the point that GST represents one of the largest barriers to new rental delivery - including most recently in our Taxing Growth report.

Although there are still key details that need to be confirmed about the expanded rebate, this step reflects a pivotal change in the Federal Government’s position on incentivizing new housing construction.

As we look ahead to 2024, UDI will continue to build on this momentum through collaboration with other development industry associations across the country on national policies.

Housing in Focus at the Province

At the end of 2022, the Provincial Government signaled its intention to prioritize the delivery of more housing supply in BC, by passing the Housing Supply Act. This was followed by the announcement of housing targets in September of this year for ten municipal governments spread across the province.

In January, the B.C. Government announced a new “one-window” approach to provincial permitting. The Ministry of Housing and Ministry of Water, Land and Resource Stewardship are collaborating on a program to streamline provincial permit approvals and launched Permit Connect BC and the Housing Navigator Service over the summer to consolidate information on permit requirements and shepherd housing applications through the complex provincial approvals. As the Province pushes municipalities to speed up processing timelines, these initiatives recognize that the Province also needs to improve its own permitting processes. UDI has been calling on the Province for years to address its permitting backlog and speed-up approvals. Although there is still much more work to do, there seems to finally be momentum to streamline this complex process.

In November, the Province introduced Bill 44, Bill 46, and Bill 47, which included a multitude of changes for planning and development, and development financing. These pieces of legislation are poised to facilitate the most impactful changes the development industry has seen in decades. Once implemented, they could effectively remove steps from the development review process and provide builders with critical information on what they can build, accompanied by more certainty regarding expectations and development fees.

Key initiatives within the legislation include:

Bill 44 – Housing Statutes (Residential Development) Amendment Act, 2023

• Mandating more pre-zoning based on updated Housing Needs Reports that identify housing needs of a given municipality for the upcoming 20 years, which will then be used to update Official Community Plans (OCPs) and Zoning Bylaws to enable the required zoning capacity;
• Policies to promote missing middle housing, including the reformation of single-family zoned areas to increase minimum densities; and
• Elimination of Public Hearings for OCP compliant projects.

Bill 46 – Housing Statues (Development Financing) Amendment Act, 2023

• The expansion of Development Cost Charges (DCCs), and Development Cost Levies in Vancouver, so they can fund police/fire stations, solid waste facilities, and cost-shared provincial highways projects; and
• The introduction of a new financing tool, Amenity Cost Charges (ACCs), which would replace Community Amenity Contributions as a funding mechanism for certain types of amenities. These cannot be used for DCC items but will fund a range of amenities (i.e. community centres, recreational facilities, libraries, day care facilities).

Bill 47 – Housing Statutes (Transit-Oriented Areas) Amendment Act, 2023

• A Transit-Oriented Development (TOD) strategy, which provides direction on heights and densities for residential sites near current and future SkyTrain stations and bus exchanges in residential or mixed-use zones, and the removal of parking minimums in TOD Areas.

In early December, the Ministry released the regulations and policy manuals for Bill 44 and Bill 47, however there are still many unanswered questions that will determine how these changes are implemented. UDI will work with its membership and local governments on how these changes will be implemented, and identify any gaps that need to be addressed.

Earlier that same week, the Province made another highly anticipated announcement regarding the new 2024 BC Building Code. The changes will now be implemented in two phases. On March 8^th, 2024 Phase 1 will see most of the new code come into force, apart from new National seismic and Provincial adaptability standards. On March 10^th, 2025 Phase 2 will see the proposed seismic and Provincial adaptability standards come into force. UDI made consistent recommendations to the Province that it delay implementation of the seismic and adaptability requirements to allow time to address the impacts. UDI has provided additional recommendations on measures that could mitigate the impacts of Phase 2 changes, and will continue work with the Building and Safety Standards Branch on developing a mitigation strategy and cost-effective designs over the next year.

At the same time as the Province was making sweeping changes to planning, development, and building policies, UDI continued to meet regularly with BC Hydro staff to discuss the utility’s plans to improve service delivery, and review proposed options for a new customer extension fee structure. UDI will remain engaged with BC Hydro, as it works towards a target filing date of mid-2024 for the new Distribution Extension Policy to improve local power delivery and make connection costs more predictable.

DCC Breaking Point

This fall In the Lower Mainland, UDI members were faced with a proposal from the Metro Vancouver Regional District to more than triple its DCCs over the next few years. In the context of an already costly development process driven by government taxes and fees, construction materials, land and financing costs, this addition would push pro formas over the edge. We were outraged. UDI and our members wrote to the Regional District, along with the Federal, Provincial and Municipal Governments, advocating for a course-correction.

While the Metro Vancouver Board of Directors did eventually approve the increases after much debate, the Bylaw remains with the Province for review. This process has brought the issue of how infrastructure is funded and managed to the forefront of the discussion on housing delivery, and we expect it to remain an area of debate as the Province seeks to accelerate housing delivery.

Expanding our Municipal Engagement

This year, UDI established new Municipal Liaison Committees with the City of Abbotsford, City of New Westminster, and City of Port Moody[HP1] . To support our advocacy and policy work, UDI meets regularly with more than 20 municipalities across the Lower Mainland, Okanagan, and Capital Region to discuss key policies and planning processes as well as provide feedback on behalf of the development industry. UDI also meets regularly with experts within the sector to discuss a wide variety of issues that impact development with over 10 technical issues committees across B.C.

UDI would like to extend a heartfelt thank you to the Chairs and members of our Municipal Liaison and Issues Committees. Thank you for your ongoing commitment to supporting UDI’s committees and advocacy on a wide range of policy issues that affect the development community. We extend this gratitude to all of our members who have shared their insights, expertise and solutions to support our work throughout the year.

In 2024, we look forward to continuing to work closely with our municipal partners as we all navigate the significant Provincial legislative changes that were announced this year.

New Spaces

There was no shortage of change across the industry in 2023, including at UDI. In November we launched our new membership platform and website to provide improved access for all of our members. We have also moved offices in Vancouver and now located five floors down in the same building at:

650-1050 West Pender Street, Vancouver

We hope you’ve enjoyed this year-end wrap up. On behalf of the entire UDI team, have a safe and happy holiday season. We look forward to continuing to work with our members and partners in the new year!