Meeting the Housing Challenges of a Growing Economy

British Columbia is enjoying a robust economy with historically low unemployment rates and sound economic growth. Along with the many benefits of a strong economy, come some challenges such as rising property values. This creates pressures on all forms of housing.

Budget 2007 focuses on meeting the housing challenges of a growing economy, and takes a major step towards ensuring that every British Columbian has access to a safe, appropriate and affordable home.

Better shelter for people who are homeless

Year-round shelter beds

People who are homeless often have a variety of needs in addition to the basic requirement for a place to live. They may face challenges of mental illness or addictions, and generally need support to get off the streets into housing, and stay there long-term. As a first step in helping people who are homeless, Budget 2007 increases funding for the Emergency Shelter Program by $27 million over three years. This funding will convert nearly 300 cold wet weather beds to year round shelter beds, raising the total number of full-time shelter beds up to about 1,300 across the province. In addition, there will continue to be about 1,100 extreme weather beds that can be opened up across the province when conditions are particularly harsh or in case of emergency.

The $27 million in funding will also keep open five emergency shelters that would have otherwise closed in Nanaimo, Vancouver, Kamloops, Vernon and Abbotsford. Some additional funding will also be provided to help shelter operators deal with rising costs so that they may continue to offer shelter and supports such as counseling services and helping shelter users integrate into longer-term housing and access community services.

2006/07 supportive housing projects

In cooperation with non-profit societies, up to $38 million will be allocated in 2006/07 for social housing projects across the province, targeted to people who are homeless or at risk of being homeless. This one-time funding will provide an estimated 600 beds in shelters, transitional housing, and permanent housing and allow organizations to provide related support services to people with mental health issues, and people with drug and alcohol addictions.

For example, these funds will be used to establish the first residential addiction treatment center for male youth on Vancouver Island. The center will focus on crystal meth addicts who have successfully completed a detox process, and provide services including supportive counseling, life skills training and referrals.

Transition houses for women and their children

Transition houses provide safe and supportive temporary accommodation for women and their children who have left abusive relationships. Women leaving abusive relationships are often at risk from their abusers. Budget 2007 includes an additional $6 million (over three years) for 24/7 staffing in transition houses across the province when they need it, increasing the safety of women and their children and providing them with additional crisis assistance and support.

Enhancing income assistance

Budget 2007 contributes $106 million over four years to increase the shelter rate for people on income assistance by $50 a month, effective on March 28, 2007. This will provide people on income assistance with greater access to housing, or allow them to spend support money on food and other necessities, rather than on shelter costs.

This is the first increase to the shelter rate since 1992. British Columbia will now have the highest shelter rate in Canada for employable singles, couples and single parent families.

In addition, government is standardizing shelter and support benefits for families with children. This means that all parents — those who are employable, have a disability or have persistent multiple barriers to employment — will all receive the same supports for their children.

For example, a single parent with one child received a support benefit for their child of $141 per month if that parent was employable, but only $94 per month if that parent had a disability. Now through standardization of assistance rates for families with children, both the employable parent and the parent with a disability will receive $141 per month as the support benefit for their child.

As well, the support allowance for employable singles, including single parents, is increasing by $50 a month, to provide adequate resources for food and other necessities.

Converting social to supportive housing

The demand for supportive housing continues to increase as the population ages. To enable people to remain living in their communities longer while addressing this increased demand, Budget 2007 provides $45 million over four years to upgrade/convert up to 750 social housing units to supportive housing units, primarily for lower income seniors.

Supportive housing offers a middle option to bridge the gap between home care and residential care for those who need some assistance, but don't want or need 24-hour care. Services may include:

• Accommodation.
• Hospitality services such as meals, housekeeping, laundry, recreational opportunities and 24-hour response.
• Personal care services such as assistance with grooming, mobility and medications.

The conversion of social housing units to supportive housing involves the addition of accessibility, fire and life safety features; kitchen, dining, bathing and laundry facilities; amenity space; staff and service space. The conversion work can generally be done with the tenants in place, and many of the current occupants require the modifications and services that will be provided by supportive housing.

New support for working families

Increase to Rental Assistance Program income threshold

In October 2006, the Minister Responsible for Housing introduced a new Rental Assistance Program designed to help move lower income working families into market rental accommodations. The program provides portable, direct cash assistance to eligible lower income working families renting in the private housing market. Currently, about 15,000 families are eligible to access the program at an income threshold of $20,000. By increasing the income threshold to $28,000, the number of potentially eligible families expands by 5,800 to more than 20,000 families.

Families are eligible for the program if:

• they have at least one dependent child under the age of 19;
• their annual family income is below $28,000;
• some or all of their annual income comes from employment;
• they have less than $10,000 in assets;
• they file an annual income tax return;
• more than 30 per cent of household income is spent on rent;
• they have lived in BC for the full 12 months immediately preceding the date of application; and
• they meet the citizenship requirements for the program.

In addition to increasing the income threshold, the level of assistance provided to eligible households has been enhanced. The amount of assistance provided is calculated as a percentage (which ranges from 35-90 per cent based on income — up from 25-50 per cent) of the gap between 30 per cent of total family income and rent paid (subject to rent ceilings). The program offers four rent ceilings, based on the number of members of the family and their location (in or outside Greater Vancouver).

Some examples of assistance are:

• A family of four living in Vancouver with an income of $24,000 and paying the maximum allowable monthly rent of $875 would receive $129 per month in assistance.
• A couple with two children living in Kamloops with an income of $24,000 a year, paying $730 a month in rent would receive $61 a month in assistance.

$250 million Housing Endowment Fund initiatives

To encourage innovative solutions to homelessness and social housing issues, Budget 2007 sets aside $250 million in a new Housing Endowment Fund. The Housing Endowment Fund is a legacy that will exist in perpetuity and earn an estimated $10 million a year.

Earnings from the fund will be allocated by the Minister Responsible for Housing to fund innovative housing proposals from individuals, the non-profit housing sector, the construction industry, and others where there are opportunities to improve housing outcomes for British Columbians. These earnings will focus on new ways to meet the diverse needs of those individuals and families that are not being served through existing programs and services.

New support for homeowners

Increase First Time Home Buyers' threshold

The First Time Home Buyers' Program helps make the purchase of a first home more affordable by exempting the purchaser from the property transfer tax. Recognizing the increased cost of housing across the province, the threshold for the First Time Home Buyers' Program will be raised to $375,000 for all regions of the province. Previously the threshold was $325,000 for the lower mainland and southern Vancouver Island; all other regions were subject to a threshold of $265,000. A proportional exemption remains available for properties with a fair market value of up to $25,000 above the threshold. With the change, first time homebuyers can save up to $5,500 in property transfer tax.

Increase Home Owner Grant threshold to $950,000

Each year the Home Owner Grant program assists many individuals across the province with the cost of homeownership. The homeowner grant is a reduction of property taxes on a principal residence and is available to those who pay a minimum amount of property tax. It benefits over 990,000 households. The basic homeowner grant is $570. For seniors, those receiving certain veteran's benefits, and qualifying disabled persons the grant is $845. The grant is phased out for those whose homes are above the threshold value. This year, in response to rising assessed values, the homeowner grant threshold has been raised from $780,000 to $950,000. The increase will ensure that more than 95 per cent of homeowners continue to be eligible for the full grant. The total benefit to taxpayers of increasing the threshold is $14 million, this year.

For example, without changing the threshold, a person who owns a home that was assessed at $780,000 in 2006 and at $850,000 in 2007 would receive a homeowner grant that is $350 less in 2007 than in 2006. The change in the threshold means that the homeowner continues to receive the full grant in 2007.

Extension of Home Owner Grant eligibility

Government is also taking steps to assist lower-income seniors whose homes are assessed above the homeowner grant threshold. In 2007, government will implement a program so that low income seniors, those receiving certain veterans' benefits, and certain persons with disabilities will be eligible for the homeowner grant, regardless of the assessed value of their home. This change will help seniors to stay in their homes as long as possible.

Key eligibility criteria for the grant are that a homeowner:

• has low income — the qualifying income levels will be based on the income levels used to determine eligibility for Medical Services Plan Premium Assistance; and
• would be eligible for the homeowner grant except that their property is assessed above the $950,000 threshold.

For example, a senior lives in a home that she and her husband purchased for $70,000 in 1970 but the value has risen to $2 million in 2007. Her annual school taxes are $3,400. The senior is widowed and is living on a fixed income of $28,000. Although the value of her home is well above the threshold, she will now be eligible to receive the full homeowner grant of $845.

Lower eligibility for property tax deferment to age 55

This year government is recognizing the changing needs of society through changes to the Property Tax Deferment Program. Many people are choosing to retire earlier and government will support people in this decision by changing the eligibility age for the deferment program to 55 from 60. This program allows homeowners to defer their property taxes at a low rate of interest until the dwelling is sold or transferred to an estate.

New support for BC families

Budget 2007 builds on previous reductions in the personal income tax rate by providing a 10 per cent cut to provincial personal income taxes for people earning up to $100,000. Reductions to personal income taxes since 2001 will mean that 250,000 British Columbians now pay no provincial income tax. Lower income taxpayers, such as a part-time employee earning $20,000, have seen cuts of almost 70 per cent, while most taxpayers have seen reductions of between 30-35 per cent. For example, a family of four with two working parents, earning a combined income of $70,000 will now save more than $1,800 a year. This additional money in people's pockets will help British Columbians meet their housing challenges, and help them with the high cost of housing in BC.

Additional Social Housing Units

Upon finalization of their 2005/06 public accounts in September 2006, the federal government provided surplus funds to the provinces for aboriginal and social housing, transit and advanced education. These advances from the federal government provided $50 million for social housing in BC.

Up to 250 Provincial Homelessness Initiative units will be funded with $25 million in 2007/08 and $25 million in 2008/09. Under the Provincial Homelessness Initiative, funding is allocated to developments that integrate subsidized housing with support services for people who are homeless or at risk of homelessness, people with mental illnesses and physical disabilities, those with drug and alcohol addictions, aboriginal peoples, and youth.

Specific projects will be identified over the coming months. An example of a Provincial Homelessness Initiative project is the recently announced, 85 unit transition house development in Vancouver's Downtown Eastside named Grace Mansion. This project will provide housing and support programs to help people who have completed drug and alcohol rehabilitation programs regain their independence in the community.

Improving off-reserve housing conditions

The federal government also provided $51 million to the province to improve off-reserve housing conditions for Aboriginals. Funding under this program will be delivered through the BC Housing Management Commission in consultation with the Aboriginal Housing Management Association (AHMA), resulting in approximately 200 new units of housing for Aboriginal households across the province. It is expected that $25 million will be spent in fiscal 2007/08 and $26 million in 2008/09.

Summary

Budget 2007 responds to the housing challenges of a growing economy and takes a major step towards every British Columbian having access to a safe, appropriate and affordable place to live, by:

• increasing the number of year-round shelter beds for people who are homeless;
• providing 24/7 staffing in transition houses for women and their children leaving abusive relationships;
• increasing income assistance shelter rates by $50 per month;
• converting up to 750 social housing units to supportive housing to better meet the specialized needs of seniors and people with disabilities;
• increasing the Rental Assistance Program threshold to $28,000, making over 20,000 families potentially eligible for cash benefits;
• establishing the $250 million Housing Endowment Fund as a legacy that will provide an estimated $10 million a year in earnings available to fund new innovative ways of meeting housing challenges;
• enhancing the First Time Home Buyers' Program by raising the threshold to $375,000 across the province;
• raising the threshold for the Home Owner Grant and extending eligibility to lower income seniors, regardless of their home's assessed value;
• allowing people to defer their property taxes starting at age 55, rather than 60;
• making it more affordable for families to call British Columbia home by cutting personal income taxes by 10 per cent for people earning up to $100,000;
• creating up to 250 additional units under the Provincial Homelessness Initiative; and
• improving housing conditions for Aboriginals who live off-reserve.