Stipulations in federal budget will hamstring social housing opportunities, Robertson says

Catherine Rolfsen
Sun

Mayor Gregor Robertson says he will push the federal government to relax some of the “restrictive” stipulations on social housing funding in this week’s budget so new units can be built for the homeless.

“It looks like we’ll need to be creative and more aggressive at trying to ensure these dollars create housing for those in greatest need in Vancouver,” Robertson told The Vancouver Sun Wednesday.

Robertson said he was disappointed that the billions pledged for low-income and social housing in Tuesday’s federal budget is earmarked for specific projects such as seniors, disabled, and on-reserve housing or renovations to existing stock.

“It’s confounding, because our homelessness crisis, and specifically the aboriginal homelessness issue, is well-known across the country,” he said. “I don’t know why they would limit our ability to apply these dollars where they’re most needed.”

Robertson said he will be meeting with provincial Housing Minister Rich Coleman this week, and will talk to the federal government, about ways to “build some flexibility” around the directives.

THE FEDERAL BUDGET PLEDGES:

– $1 billion for renovations and retrofits of existing social housing.

– $400 million to build housing for low-income seniors.

– $75 million to build housing for people with disabilities.

– $400 million to build new and improve existing housing on reserves.

– $200 million for social housing in Yukon, the Northwest Territories and Nunavut.

Robertson figures B.C.’s share will amount to about $192 million over two years.

However, since most of the promises call for cost-sharing with the provinces, he said B.C. could see twice that, if the province can pitch in the money.

Coleman was not available for comment Wednesday.

Robertson said the money allotted for renovations will likely help the provincial government improve the 17 single-room occupancy hotels it has purchased in Vancouver since 2007.

However, it’s an open question whether the federal dollars will do anything to help 12 city-owned sites slated for social and supportive housing.

He said it’s possible some of the money earmarked for seniors and disabled housing could fund development on these sites.

As of late last year, eight of these sites were scheduled to start construction in 2009.

Robertson said he doesn’t know whether the projects will be done without money from the federal government.

“The province has made those commitments so I’m trusting that they will follow through,” he said. “I don’t know to what degree they were banking on federal contributions.”

Mark Townsend, executive director of the Portland Hotel Society, a non-profit selected to run one of the 12 sites, said he figures the sites are “now in question” since money hasn’t come from the federal government.

He called Tuesday’s budget “depressing” and the huge dollar figures misleading.

“In the broad population of our cities, that aren’t just seniors and aren’t just those with disabilities, there’s a homelessness crisis and it’s not really being addressed,” he said.

© Copyright (c) The Vancouver Sun

Budget provision also expected to help forestry by spurring demand for wood

Derrick Penner, With Files From Jeff Lee
Sun

A tax credit for home renovations worth up to $1,350 included in Tuesday’s federal budget is expected to be a boost to both British Columbia‘s residential construction sector and its now long-suffering forest industry by increasing the demand for wood products.

Homeowners will be able to claim the 15-per-cent credit on renovation work worth more than $1,000 and up to a maximum $10,000 for any home improvements, save for routine maintenance, between now and Feb. 1, 2010.

That is good news for Jeff Bain’s JKB Construction Ltd., a three-person home-reno firm based in Port Coquitlam, which saw business slow over the last couple of months in what was otherwise a busy 2008.

“[The credit] can only mean increased business,” Bain said in an interview. “I think with the stalled economy we’ve had lately everybody’s been having a few jitters and been waiting on this budget to see what’s happening with their jobs.”

And an increase in business should help employ residential construction workers who expect to see lower levels of new-home building in 2009, Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association said.

Housing starts slipped at the end of 2008, and forecasts have 2009 starts sliding anywhere from one-third to half of last year’s levels.

“When you look at what’s happened with new construction, of course we do have job losses,” Simpson, said.

With the tax credit to encourage homeowners to take on home improvements coupled with a growing pool of unemployed construction trades, home renovators “will have access to these tradespeople and be able to take on extra work. This tax credit will help that and will mean more work for tradespeople.”

Bain said the availability of tradespeople from the new-housing sector will help weed out the less-than-competent workers who have been working in home renovation.

“Last year, it became a little bit silly trying to find qualified trades,” Bain said, “and prices were escalating because everybody was so busy.”

Homeowners will be able to claim the home-renovation credit on their 2009 tax returns, which will also have an ancillary effect of drawing more home improvement projects out from the underground economy, according to Simpson.

The federal government estimates that the credit will provide about $3 billion in tax breaks to about 4.6 million families, which should offer a measure of support to B.C.’s beleaguered lumber industry.

Provincial Finance Minister Colin Hansen said home renovations consume a lot of wood products, and “the more we can build our own domestic consumption of wood products that helps forest families.” “The home renovation tax credit is not only something that puts construction workers to work, but home renovation consumes a lot of wood and I think that is good news for the forestry sector.”

Also on the home front, the government will put an extra $300 million over two years into energy retrofits, raise to $25,000 the amount first-time home buyers can borrow from RRSPs, and provide up to $750 in tax relief to help with their purchases.

RENOVATION CREDIT

From now until Feb. 1, 2010, the federal government’s Home Renovation Tax Credit will offer homeowners a tax break on fixing up their homes, which is expected to bolster employment in the construction sector and help the market for B.C. forest products. Details of how it works are below.

– the tax credit: 15 per cent

– For renovations worth more than $1,000 to a maximum $10,000

– Maximum credit: $1,350

– Homeowners claim the credit on their 2009 tax returns

– Eligible expenses include: kitchen, bathroom or basement renovations; new carpeting or flooring; building additions, decks, or retaining walls; installing furnaces or water heaters; interior and exterior painting

– Ineligible expenses include: routine maintenance, the purchase of furniture, appliances, tools and snow removal

– Estimated number of families to benefit: 4.6 million

– Total value: $3 billion

Source: Federal budget.

© Copyright (c) The Vancouver Sun

Derrick Penner
Sun

Metro Vancouver sits fourth on Demographia’s 2009 list of least affordable cities, with a median house price at 8.4 times the median income. Photograph by: Reuters, files

Metro Vancouver is one of the five least affordable cities to buy a home among major markets in half-a-dozen countries, largely because of “prescriptive” land-use policies, according to survey by a group of land-use consultants.

These “prescriptive” policies, the consultants argue in the Demographia International Housing Affordability Survey, including British Columbia’s Agricultural Land Reserve, restrict the supply of land available for building homes and drive up prices.

Metro Vancouver sits fourth on Demographia’s 2009 list of least affordable cities, with a median house price at 8.4 times the median income.

Demographia defines affordable home prices as three times a city’s median income or less.

Victoria, at seventh, Kelowna, at 19th and Abbotsford, at 25th, also made the list of “severely unaffordable” markets.

The Demographia report noted that there are fewer American cities on the 2009 least-affordable list compared with the 2008 list because of declining prices. The cities to see the steepest price drops across all nations were the ones that saw prices rise the highest and fastest.

Metro Vancouver fell behind Gold Coast in Australia, at No. 3, Honolulu, Hawaii, at No. 2, and Australia’s Sunshine Coast, which is in top spot on the least affordable list.

Demographia surveyed Canadian cities with metropolitan populations of more than 100,000, and 10 of them made it on the list of “most affordable,” with Winnipeg being the largest of them.

The survey was conducted by Wendell Cox, an urban-planning policy consultant who has done work for groups including the Frontier Centre, a Winnipeg-based think-tank, and Hugh Pavletich, a New-Zealand-based commercial property developer.

The researchers, along with urban planning professor Shlomo Angel who wrote a preface, are releasing the report today. In it, they argue for loosening of regulations that limit the amount of land available for urban development.

Protecting green spaces, either to conserve farm land or create parks, “is indeed a lofty and sensible goal,” Angel writes in the preface, but “the protection of open space is not without cost.”

Although planners try to use the higher cost of land to encourage higher density and the creation of more compact cities, Angel argues that few residents in existing neighbourhoods of such cities support increasing density.

© Copyright (c) The Vancouver Sun

USA Today

NEW YORK (Reuters) — Prices of U.S. single-family homes were down a record 18.2% in November from a year earlier, indicative of a U.S. housing market that is still in the throes of a deep recession, according to the Standard & Poor’s/Case-Shiller 20-city housing index released Tuesday.

Separately, the Conference Board said Tuesday that its consumer confidence index edged lower in January to 37.7 from a revised 38.6 in December. That’s a historic low for the widely watched barometer, as shoppers worry about their jobs and watch the value of their homes and retirement funds dwindle.

Prices in the 20 metropolitan areas tracked by S&P fell 2.2% from October as housing continues to suffer from a huge supply of unsold homes, tighter lending standards and record foreclosures.

The drop in prices on a month-over-month basis was slightly steeper than expectations, based on a Reuters survey of economists. But the annual rate of decline for the Standard & Poor’s/Case-Shiller composite index for 20 cities was not as steep as economists had expected.

S&P said its composite index of 10 metropolitan areas also fell 2.2% in November from October for a 19.1% year-over-year drop, matching the previous month’s record decline.

Prices in 11 metro areas fell at record rates from a year earlier. Prices in 14 cities fell more than 10% from November 2007.

“The freefall in residential real estate continued through November 2008,” said David Blitzer, chairman of the Index Committee at Standard & Poor’s.

“Since August 2006, the 10-city and 20-city composites have declined every month — a total of 28 consecutive months,” he said.

Prices in every region fell more than 1% from October. In eight metro areas, prices fell at a record monthly rate, Blitzer said.

Phoenix and Las Vegas were hardest hit in November, with prices down 3.4% and 3.3%, respectively. The two cities also have the worst returns over the one-year period, with prices falling 32.9% and 31.6%, respectively.

“Overall, more than half of the metro areas had record annual declines,” he said.

All 20 cities recorded monthly and annual declines in November.

As of November, average home prices are at similar levels to what they were in the first quarter of 2004. From their peak in mid-2006, the 10-city index is down 26.6% and the 20-city composite is down 25.1%.

The battered U.S. housing market is critical to the U.S. economy, with a wide-ranging impact from the construction industry to the sale of appliances and furniture. After hurting growth for multiple quarters, a continued deterioration could prolong a turnaround for the world’s largest economy, which has been in a recession since late 2007.

Copyright 2009 Reuters Limited