HOUSING ANNOUNCEMENTS CONTINUE TO ROLL IN…
EXPANSION OF 30-YEAR AMORTIZATIONS AND INCREASED INSURED MORTGAGE CAP
At a press conference this morning, Deputy Prime Minister and Minister of Finance Chrystia Freeland announced significant reforms to the Canadian mortgage market, with an expansion of 30-year amortizations to include all first-time homebuyers and buyers of all new builds, and a significant increase to the insured mortgage cap from $1 million to $1.5 million, set to take effect on December 15.
As quoted in the media release “... we are now making the boldest mortgage reforms in decades to unlock homeownership for younger Canadians. We are increasing the insured mortgage cap to reflect home prices in more expensive cities, allowing homebuyers more time to pay off their mortgage, and helping homeowners switch lenders to find the lowest interest rate at renewal.”
Designed to enhance homeownership opportunities for more Canadians, this positive development is welcomed news for members in the new-build segment, which as been reporting slow sales activity, even with mortgage rates cautiously starting to trend down. CHBA, with the support of provincial and local associations in major centres across the country, including HAVAN, has been loudly advocating for amendments to the mortgage rules to better reflect the sky-high costs of housing in markets like Vancouver and Toronto, where the average price of a new build exceeds the previous $1 million cap. With these changes, we look forward to seeing more homebuyers signing on the dotted line, spurring more activity – from sales to shovels in the ground.
In the announcement, Ottawa also announced the blueprints for a Renters’ Bill of Rights and a Home Buyers’ Bill of Rights to “help make the process of buying a home, fairer, more open, and more transparent.”
EXTENSION OF 2024 CODE ADAPTABLE DWELLING AND SEISMIC FOR IN-STREAM PROJECTS
Last Friday, the Province made a welcomed announcement, amending the Ministerial Order for the adoption of the 2024 BC Building Code, extending the application of the 2018 Code’s adaptable dwelling unit and seismic requirements for in-stream projects.
The announcement clarifies: The amended Order exempts in-stream projects that had substantial design work completed according to the 2018 BC Building Code from the application of the 2024 BC Building Code’s adaptable dwelling unit and seismic requirements until March 8, 2027, provided that certain criteria are met.
In-stream projects are projects for which:
- a development permit application and drawings have been submitted to a local authority in relation to the building before March 8, 2024, or
- a rezoning application and drawings have been submitted to a local authority in relation to the building before March 8, 2024, or
- drawings have been prepared before March 8, 2024.
Alongside CHBA-BC and other industry partners, HAVAN has been advocating for amendments to the original Order, which had originally mandated the new seismic design and adaptable-dwelling provisions be moved to March 10, 2025. However, this only allowed a 12-month period to implement the new requirements, which was unrealistic for members building larger developments, who had already completed project feasibility studies and were now deep into subsequent phases of their project designs – the cost implications would have been massive.
Back in June 2023, when the Building Standards and Safety Branch (BSSB) first proposed this change, HAVAN sent a letter during the public review phase voicing concerns about the two proposed policy changes, emphasizing the negative effect on affordability, design, with the potential decline in interest by target buyers for these accessible units. Instead, HAVAN advocated for the Province to halt the implementation to allow for more time for industry consultation and more in-depth analysis. CHBA-BC sent a separate letter to the BSSB echoing the same concerns, opposing the significant changes, citing cost premiums and affordability challenges, and impacts on design. They also provided recommendations which included a phased-in approach, better in-stream protection, and better analysis of the impacts of these changes.
Through continued direct engagements and follow-ups, HAVAN and CHBA-BC continued to challenge the 2025 deadline, bringing forward member feedback that demonstrated it would have significant negative consequences on in-stream projects, from additional costs and delays to potentially forcing projects to be put on the shelf due to reduced feasibility. This amendment is the first significant step to address our concerns.
However, projects that do not meet the exemption criteria and apply for a building permit on or after March 10, 2025, must comply with the entire BC Building Code 2024, including the adaptable dwelling unit and seismic requirements. Although the extension is welcomed, there are still concerns regarding the impacts of the seismic and adaptability code moving forward, especially on part 3 buildings.
Over the summer, HAVAN met with Accessibility Standards Canada, to discuss the adaptability code requirements, and with the Rick Hansen Foundation, including Rick Hansen himself. Discussions centered around the upcoming adaptability requirements and the challenges they pose to industry, as well as possible concessions that could be made by the Province to support the industry, including design flexibility and government incentives and bonusing – extension of the Order seemed like a distant option at that time.
It must be reiterated that HAVAN supports efforts to improve accessibility and be more inclusive of homebuyers/renters who require these adaptations, but the approach should be balanced. Increasing adaptability in new homes from 20-25% to 100% of units is significant and could have unintended consequences. An increase in unit size will mean fewer units per floor/building, which then increases costs per unit, decreasing affordability and the potential viability of projects, especially those on smaller in-fill lots. Fewer projects built means even more challenges to affordability and buyer/renter access to housing.
HAVAN will continue to monitor this, and all government initiatives, and invites feedback from members on their concerns on impact. Comments can be emailed to wendy@havan.ca
