Understanding the Historic Investment in Housing Affordability in BC’s 2023 Budget

In late February, the Government of B.C. unveiled its 2023 budget, which includes significant investments in housing and supports for British Columbians. This new budget confirms the government’s commitment to tackling B.C.’s housing crisis from three key sides: increased income supports, direct investment in affordable housing, and a focus on structural changes to unlock more housing construction.

Budget 2023 introduces funding for a refreshed housing strategy that will be launched this spring. The strategy will outline the steps needed to address the backlog and current demand for affordable housing using the province’s 10-year plan from 2018 as a baseline. This strategy will include an investment of $4.2 billion in operating and capital funding ($2.2 billion and $2 billion respectively) focused on three main areas.

Direct funding for new affordable homes 

The B.C. budget’s increased investments represent a leap forward towards meeting affordable housing construction targets. Those targets are set to 3,000 new units per year for the next three years across the different programs, including those focused on acquisitions. Some of the main investments include:

  • $1.7 billion to create new affordable homes: new operating and capital funding will be provided through the BC Builds and Building BC programs as well as other funding streams to boost new housing construction.
    • $1.3 billion to fund new homes through Building BC and BC Housing programs such as the Indigenous Housing Fund (IHF) and the Community Housing fund. For example, budget 2023 sets the goal of doubling the number of units created under the IHF to 3,500 units (as of March 2022, 388 units were completed and 570 were in development or initiated).
    • $394 million to acquire lands near transit-oriented developments for new affordable and market rental housing. This allocation follows the example set by the federal government, which, in the latest budget release, directed funds from the ministry of transportation to encourage affordable housing construction near transit.
    • $66 million for the Federal Rapid Housing Initiative to support the operating costs of new developments announced in rounds one and two of the program.
  • $575 million for student housing over the next three years, part of the 10-year investment of $1.1 billion to help reduce pressure in the rental market.

Investments in policy changes to protect affordability and encourage new supply

We are excited to see that budget 2023 introduces large investments to address systemic changes that BC Non-Profit Housing Association, alongside the Co-operative Housing Federation of BC and the Aboriginal Housing Management Association, has been advocating for in our civic campaigns and budget submissions. These investments include:

  • $230 million over 10 years for capital repairs and redevelopment of BC Housing’s aging stock.  This is expected to complement the work being done through the $500-million Rental Protection Fund, which was launched in January 2023. These two programs will help reduce the rate at which affordable homes are being lost in the province.
  • $57 million to improve local approval processes including new residential zoning measures, and efforts to reduce the time and cost of completing local government approval processes.
  • $11 million to help communities set housing targets as part of the implementation of the recently passed Housing Supply Act. As the 2019 needs assessment requirements are refined for the second iteration, there is an opportunity for communities to produce detailed analysis and targets through the complement of these two processes.

Budget 2023 also includes a renter’s tax credit of up to $400 for households earning less than $60,000 per year, and a portion of that for households making under $80,000 per year. Households benefiting from other income assistance streams will still be eligible for this tax credit, which is important for those individuals who receive these governments supports. This announcement must be viewed in light of the home owner grant, which in contrast provides around $570 per household and is not income tested.

Response to homelessness

Budget 2023 also puts forward increased investments to help address homelessness in the province, with over $1.5 billion in operating and capital funding across multiple programs such as:

  • $640 million in additional funding for the Supportive Housing Fund.
  • $228 million to establish new regional multi-disciplinary teams to support rapid response for regions responding to substantive encampments.
  • $182 million to further support those in temporary leased spaces as part of the pandemic response.
  • $169 million in capital dollars to create additional complex-care spaces and $97 million in operating funding to support complex-care services.
  • $109 million for BC Housing programs that provide other shelter and low-income assistance programs.
  • $44 million to help individuals living in encampments access temporary modular housing.

One of the most exciting announcements from this budget is an increase to shelter rates for the first time since 2007. The monthly shelter allowance given to those receiving income assistance has increased by $125, bringing it to $500. BCNPHA will continue to advocate for a shift in income assistance models and pegging rates to objective measures of housing and living costs in B.C.

Overall, budget 2023 brings historic levels of investment in housing affordability and is expected to create opportunities for the community housing sector to deploy its capacity. We look forward to this spring when we will receive additional detail about the government’s housing strategy and will be able to update our members on these developments.

If you are interested in taking a closer look at the budget, here are some relevant documents for our sector:

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