First 10 municipalities receive 5 year housing targets (flickr.com)

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Ministry of Housing

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Backgrounders

More information about the housing targets

In May 2023, the Housing Supply Act came into force to help increase the amount and pace of new housing by giving the Province authority to set housing targets for 47 municipalities.

The Ministry of Housing has committed to review 16 to 20 municipalities for housing target assessment each year to address supply and affordability of housing. The ministry consults municipalities to understand community housing needs and set targets with careful consideration for local planning and land use. 

The Province is prioritizing housing targets for municipalities that are experiencing the greatest housing pressures. Each group of municipalities is selected using an empirical index: https://news.gov.bc.ca/files/Selection_Index_Indicators.pdf

The first 10 municipalities were announced in May 2023 and consulted during July and August of this year. Another eight to 10 municipalities will be announced this year.

The Province has issued housing target orders for the first 10 municipalities by ministerial order, which sets out the total minimum number of net new housing units that must be completed each year over a five-year period. Net new means new units that are ready for move in, minus units that were lost through demolition.

Housing targets will be measured after the first six months, then annually by net new units completed and actions taken by the municipality to meet the targets. If the cumulative annual housing target has not been met, the municipality will be required to submit planned actions they will take within two years to meet the target.

If a municipality has not met a target and is not making satisfactory progress toward meeting the housing target, the minister of housing may appoint an adviser and/or issue a directive. The adviser’s role would include reviewing the actions, policies, practices and progress of the municipality toward meeting the target.

Methodology for setting housing targets

The Province’s estimate of a municipality’s housing needs is compared to a municipality’s most recent housing needs report. Targets are set at 75% of the higher of the two estimates. Municipalities are encouraged to achieve 100% of the total target to ensure they are meeting their community’s housing needs.

The Province’s estimate is based on a standardized methodology that counts how many units are needed to address the shortage of housing today and to respond to population growth over the next five years. This approach relies on data from publicly available sources, including BC Stats, Statistics Canada and the Canada Mortgage and Housing Corporation.

A. Supply to address extreme core housing need; plus

B. Supply to permanently house people experiencing homelessness; plus

C. Supply to address suppressed household formation; plus

D. Anticipated supply needed over the next five years, plus

E. Adjustment to restore rental supply to a healthy vacancy rate of 3%; equals

Province’s estimate of 100% of housing supply needed.

This approach relies on data from publicly available sources, including BC Stats, Statistics Canada, the Canada Mortgage and Housing Corporation, and the Integrated Data Project (IDP) for Preventing and Reducing Homelessness.  

Component A: Extreme Core Housing Need

By tenure, this measure quantifies housing needs for households for a select community. Data for 2021 from Statistics Canada and data for 2006-2016 is available through the custom data provided for local government Housing Needs Reports through the Ministry of Housing. 

Due to lower rates of core housing need in 2021 due to the impact of Canada Emergency Response Benefit on core and extreme housing needs, calculating an average approach provides a reasonable estimate of extreme core housing need.

Learn More: 

Statistics Canada's Core housing need and extreme core housing need data is available online: 
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=9810024701&pickMembers%5B0%5D=1.1&pick

Impact of Canada Emergency Response Benefit on core and extreme housing needs:
https://www150.statcan.gc.ca/n1/daily-quotidien/220721/dq220721b-eng.htm

Component B: Homelessness

Component B estimates homelessness in the select community. There are data limitations to quantifying homelessness through any method and homelessness levels can vary between communities for a variety of reasons. This approach allocates homelessness proportionally among communities in a region, ensuring that each community works toward creating housing to support this population.

Regional homelessness data as captured by the Integrated Data Project is applied to the select local government based on its proportion of the regional population. 

Component C: Suppressed household formation

This methodology adjusts for a higher household formation rate (through adjusting “headship rates”) in a community using a previous baseline year (i.e., 2006) to reduce any suppressed households in 2021. A headship rate is defined as the ratio of the number households of a primary household maintainer age to the total population of an age group, which indicates the likelihood of household formation in each of the age groups.

Component D: Household growth

A range of household growth is projected using two growth rate scenarios: the Local Growth Rate Scenario and the Regional Growth Rate Scenario. Household growth is projected for 2023 to 2028. The median of the two scenarios informs the anticipated units component of the total housing needs estimate.

Component E: Vacancy rate adjustment

This component accounts for the number of units required to bring the vacancy rate to 3% in communities where the vacancy rate is currently below that level. The calculation for determining the supply needed to account for vacancy rate adjustments uses CMHC vacancy rates in the primary rental market to estimate the number of vacant rental units (across both primary and secondary rental markets).