Good morning.
I would like to thank the committee for this opportunity to bring our recommendations forward.
The recommendations in this presentation are related to the challenges and needs within the housing sector. In the capital region of B.C., the need for affordable housing is increasing. The present housing environment prevents households at or below the median income level from achieving home ownership. The market forces are such that we have the lowest vacancy rate in the country, and one of the corresponding results is a homelessness count in Victoria alone of over 1,500 persons.
I would like to stress a few key points from our written submission and update some information using the report published by the City of Victoria entitled “Mayor's Task Force on Breaking the Cycle of Mental Illness, Addictions and Homelessness”. This report was released on October 19, 2007.
The average house price reported by the Victoria Real Estate Board for a single family home sold on the MLS system for October 2007 was $556,222, and the vacancy rate for rental apartments remains below 1%. This extremely tight housing market burdens the low- to moderate-income earners with additional hardship as they seek safe, affordable places to live.
The situation can most easily be seen when we look at the challenges faced by individuals who are homeless and living on the streets of Victoria. The mayor's task force states that homeless residents consume an inordinate amount of the social services provided due to their continued movement through the service system without obtaining the help they need. These costs can be reduced and homelessness can be eradicated through the provision of permanent supportive housing. Providing housing for homeless people is the essential foundation for a successful response to homelessness. It is estimated that there are now approximately 1,500 homeless people in the greater Victoria area. The task force is recommending that a minimum of 1,550 units of housing be built or secured in the next five years.
Although 1,550 units would make a substantial impact, they may still not provide a home for every homeless resident who needs one. The Housing Affordability Partnership, or HAP, is a unique public-private, not-for-profit group working together to address housing affordability concerns and raise awareness of emerging housing issues and opportunities in the capital region of B.C. HAP is a volunteer working partnership with representation from industry-related profit and non-profit sectors. We have recently supported and participated in the development and establishment of a regional housing trust fund to initiate the production of affordable housing, and since the establishment of the RHTF, we have seen the establishment of similar housing trust funds set up by the City of Victoria and the City of Langford. The partnership has also been involved in the development and adoption of a regional housing affordability strategy that details a region-wide framework that supports the development of affordable housing projects.
While these housing initiatives are successful and very much needed, the housing crisis cannot be adequately addressed without the private sector's developing purpose-built rental housing. This has not happened in our community for 25 years. To encourage the needed private sector development, we must remove the impediments in the federal tax structure. We must also face the fact that some 3.1 million apartments in Canada are over 30 years of age, and we are losing them to demolition or conversion by the tens of thousands per year, far exceeding the number of apartments being built. It is critical that this imbalance be addressed as quickly as possible to ensure that workers are able to afford to live in the area in which they are working.
The Housing Affordability Partnership would like to compliment our local RECO, the CHBA, ROMS BC, our Victoria Real Estate Board, as well as the rest of the partners who created the report “Why Isn't Rental Housing Being Built?” Their recommendations provided the framework for our written submission.
A few key recommendations that we strongly encourage the committee to consider are to allow the rollover of capital gains should an owner wish to sell a rental building and either buy or build a new one; rebate 100% of the GST, as is the case with other multi-unit buildings; have the same taxation rules apply to the construction and operation of rental apartment buildings as are applied to condos, hotels, and warehouses; allow landlords to apply capital cost deductions at a rate that will foster significant reinvestment in upgrading and maintaining the existing 3.1 million apartments in Canada; and apply a flat taxation rate of 15% on all revenues generated from secondary suites, rather than the application of standard taxation practices.
Our written submission has more substantial recommendations in it as well.
The Housing Affordability Partnership also stands with the Greater Victoria Chamber of Commerce, which issued a press release on October 30 that called for a more significant contribution from the Government of Canada in solving our national homelessness problem.
The chamber is also encouraging the federal government to invest more in the national housing first strategy. The federal government should immediately increase its level of funding support for affordable housing to levels experienced between 1985 and 1990.
Quality affordable housing is a cornerstone to developing healthy, economically vibrant communities across Canada. Canada is desperately in need of an affordable housing strategy. Affordable housing and homelessness have reached crisis proportions in our urban, rural, and remote communities.
We need Canada's federal government to help address these issues through additional direct funding support and significant tax changes that will empower local communities and entrepreneurs to respond effectively and quickly.
Thank you very much.