Housing Summit underscores the need for local government finance reform

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Delegates at UBCM’s Housing Summit last week heard how changes to the framework for housing development and a surging provincial population will require rapid upgrading of community infrastructure throughout the province. How communities will pay for infrastructure renewal, while also taking on an increasing role in financially supporting attainable housing, are key themes in a joint effort by UBCM and the Province to review the local government finance system.
“Metro Vancouver is going to spend $20 billion over the next 15 years on wastewater treatment plants,” said Burnaby Mayor Mike Hurley at the Summit. “Who’s going to pay for that? The federal government, so far, has said no.”
Others, like Squamish Mayor Armand Hurford, noted how allowing multiple small-scale homes on a single-family lot may trigger upgrades to entire streets and neighbourhoods as such developments get underway.

The cost of infrastructure and the growing need to financially support attainable housing were identified as concerns in a 2021 UBCM report that explored leading cost drivers and the impacts of B.C.’s changing economy on the property tax system.
UBCM signed an MOU with the Minister of Finance and the Minister of Municipal Affairs in 2022 that committed the Province and UBCM to work together to identify ways to strengthen the local government finance system. The vehicle for doing so is the Local Government Finance Review Working Group.
In a milestone last summer, the Province and UBCM agreed on a problem statement, noting that “local governments report difficulty raising enough revenue from property taxes, particularly regarding infrastructure capital costs and select service delivery costs driven by senior government regulations and environmental factors.”
The Working Group is currently testing the responsiveness of the property tax to economic changes (past, current, and future), evaluating possible approaches to respond to the problem statement, and continuing to examine cost pressures for local governments as identified within the 2021 report.
One housing tool that was flagged for review in the 2021 report was funding mechanisms for growth-related infrastructure. Bill 46, Housing Statutes (Development Financing) Amendment Act, which received royal assent last fall, provides a new framework for development cost charges (DCC) and amenity cost charges (ACC) in B.C. As noted in an analysis by UBCM, the expansion of DCC categories and a defined approach to ACCs align with policies supported by UBCM’s membership, and were generally supported by a local government panel at the recent housing summit.
Local governments have noted a gap in the ability to use ACCs to fund affordable housing. The Province has committed to introducing legislation in the current session to provide tools for inclusionary zoning in response to this gap. Additional legislation to address flipping, a demand measure identified in one of the recommendations in UBCM’s 2021 report, is also expected in the coming weeks.
UBCM president Trish Mandewo will be providing an update on the Local Government Finance Review at area association meetings this spring.