If adding to the supply is one of the keys to making housing affordable in British Columbia, Statistics Canada has some bad news.
New figures confirm that less — not more — housing is entering the market.
According to Statistics Canada, the value of residential building permits in B.C. dropped by 27.3 per cent in July 2023. Year-to-year, the total value of residential building permits has dropped by more than 30 per cent.
The number of residential units created in B.C. in July 2023 reflects this trend. It dropped by 29 per cent to 3,288 residential units created for a total value of just over $1.1 billion.
Residential construction dropped by 0.6 per cent for Canada in July 2023 as measured by new units created. B.C. had the worst record of all provinces and territories. Ontario led the way in terms of new units created with just over 9,200, an increase of 15 per cent.
It is important to put available figures in context. While they show month-to-month fluctuations, the general trend line is slightly pointing downward. During the first seven months of 2022, 31,121 residential units were created, according to Statistics Canada. During the first seven months of 2023, it was 28,373, a drop of almost 9 per cent.
Accounting for regional variations, this downward trend is evident across the country.
Reasons for the decline include labour shortages, rising costs of materials in the face of inflation, supply chain issues, and higher interest rates. The interest rates have complicated the pre-financing of projects — be they for ownership or for rental — while eroding affordability.
The Bank of Canada this week hit the pause button on interest rate hikes by leaving its overnight lending rate at five per cent, while leaving itself room for future increases.
Construction industry leaders such as Kevin Lee, president of the Canadian Home Builders’ Association, recently called for urgent policy changes to encourage more housing, especially rental housing, and lower barriers to home-ownership.
Closer to home, the provincial government plans to table several previously-announced pieces of legislation during the fall session of provincial legislature to create more housing with an emphasis on housing for middle-income families and a geographic concentration near public transportation.
Housing Minister Ravi Kahlon said in an interview before the release of the new numbers that other measures are also coming forward.
“There is a lot of reform around zoning, there is a lot of reform around creating certainty for proponents … that want to build, both on the cost side of their projects but also certainty on how decisions are made. That’s going to be vitally important,” he said.
“We are also looking at innovation,” he added. We are looking at how we can better streamline how decisions are made through more transparency… we are looking at innovative ways to advance pre-fabrication, because we know labour is going to be challenge.”
Other identified measures to speed up construction include the increased use of digital tools, including artificial artificial intelligence.
“So nothing is off the table,” he said. “In fact, what we have done, is that we have gone to our partners, whether they are private sector or not-for-profit, and we are taking all ideas, whether it’s from the right, left or not.”