As the current B.C. election campaign got underway, Premier David Eby quickly advanced two promises related to the ongoing housing supply and affordability crunch in British Columbia. The first was to introduce a new tax on unsold empty condominium units. The tax would start at 2% and rise by one percentage point per year. He also pledged to increase the province’s existing “speculation and vacancy tax” first introduced in 2018.
The Premier’s twin housing announcements prompted us to review the substance and sequencing of the many changes in provincial housing policy ushered in by the NDP government since it was elected in mid-2017. Literally dozens of new measures have been introduced – increased and expanded taxes and fees, more support for renters, extension of rent controls, requirements imposed on municipalities to permit more housing development, secondary suite incentives, strict limits on short-term rentals, and increased government “investments” to develop more rental and non-market housing. In June, the B.C. government teamed up with Ottawa to unveil an ill-considered proposal to use taxpayer money to buy up to 2,200 vacant condominium units to expand the supply of “affordable” housing – an idea panned by many in the development industry.
The Premier’s most recent promises highlight the NDP’s almost reflexive tendency to look to taxes, regulations and government funding as the preferred vehicles for boosting housing supply and addressing the housing needs of residents.
While the list of NDP housing policy actions is long and still growing, evidence of efficacy is harder to come by, particularly judged against the stated goals of accelerating housing supply and improving affordability.
At the margin, the province’s speculation and vacancy tax plus restrictions on short-term rentals may have slightly increased the “use” of the existing housing stock in regions subject to these policies. More funding earmarked to develop social, non-market and subsidized rental housing is adding to the stock of “below market” dwelling units, although there are concerns about cost-effectiveness (costs run up to $650,000/unit, a figure that excludes ongoing operating subsidies). Compelling municipalities to allow more small-scale, multi-unit housing should – over time – expand the supply of non-single-family housing in some cities and towns. Funding provided by the B.C. and federal governments to temporarily lower local governments’ “development cost charges” is also a welcome step.
However, assessing the full array of post-2017 provincial housing policy measures provides few reasons to believe they have been successful in expanding the aggregate supply of housing or making housing more affordable for residents. While housing prices and asking rents have dropped in many B.C. communities over the last couple of years, arguably this is mainly due to factors other than government policies – slumping population growth, higher mortgage rates, and the effects of a weak and uncertain economy. Actions taken by the provincial government have played at most a secondary role.
Housing starts – going nowhere
Based on housing starts, it is hard to conclude that the many and varied housing-related measures implemented by the province have done much to expand housing supply (see Figure 1). Over the period 2017-19, province-wide housing starts were running in the range of 40,000-50,000 per year. Starts decreased during the worst of the pandemic in 2020 before rebounding to 47,000-50,000 over 2021-23. Since then, B.C. housing starts have trended lower. For 2026-27, ICBA Economics forecasts a further decline, with annual starts hovering below 40,000.
Figure 1
Affordability trends
Housing prices have been falling in most Canadian metros since 2024, and B.C. is no exception to the pattern. But there is little evidence that B.C. government policies have been a significant factor in lowering housing prices or reducing overall home ownership costs.
The Vancouver CMA saw a one percentage point improvement in housing affordability between Q1 and Q2 of 2026, according to tracking by RBC Economics. RBC’s affordability metric captures mortgage costs, property taxes and utilities for different types of “benchmark” homes in the relevant market. Buying a home has also gotten somewhat less expensive in the Victoria region since 2024.
Still, housing affordability remains challenging in most B.C. metros, with RBC Economics noting that “Vancouver still holds the crown for Canada’s least affordable market…” Moreover, a sluggish economy and a private sector in outright recession have led to conditions in which many B.C. households are likely to see few if any gains in real incomes over the 2026-27 period. Weak income growth has negative implications for “affordability” – including in the housing market context.
Conclusion
Ultimately, fixing problems with the B.C. housing market requires a determined focus on increasing housing “supply elasticity,” streamlining regulation and reducing red tape, and fostering an economic and policy environment that encourages market-driven housing development by creating certainty and minimizing government-influenced costs. There is also a legitimate role for government in the non-market housing segment. Demonizing developers and homebuilders will not help the situation. And an endless barrage of government-imposed taxes, fees and regulatory mandates and restrictions simply won’t deliver the benefits promised by left-leaning politicians – a point driven home by B.C.’s experience in the last several years.