As the B.C. NDP prepare to pass a raft of housing-related bills this week, mystery continues to surround how the party arrived at certain economic modelling projections being used to support the legislation.
One data analyst who served as a consultant to the province on the modelling told Postmedia that he and his colleagues were asked to sign non-disclosure agreements, which would seem to lend credence to Opposition claims of a lack of transparency ahead of the bills going to a vote.
“We did this with a team of people. But all are under the same NDA that makes it difficult to talk about details before everything has been announced,” said Jens von Bergmann, who runs MountainMath, an independent Vancouver-based data analysis company.
In response to a question about how transforming single-family properties into multi-unit homes would affect property values, Housing Minister Ravi Kahlon told the legislature on Nov. 20 that housing prices in the province could see a seven- to 14-per-cent drop over the next five years.
“We believe (the measures) will increase the availability of housing at lower price points for folks within British Columbia. In addition to multifamily homes having a lower cost of land per unit than single-family properties, economic modelling projects that these changes could reduce housing prices by seven to 14 per cent over five years because of the added supply.”
Green MLA Adam Olsen sought repeatedly over subsequent days to clarify how Kahlon arrived at that projection. He said it was “ridiculous” and “absurd” that MLAs wouldn’t be able to scrutinize the quality of the modelling report, its methodology, and the terms of reference that were given to consultants who wrote it.
“I’ve asked the minister on multiple occasions in this debate, to provide the background and information that we can look at. He won’t provide it. So what we have here is we have a situation where the only thing that we can do is take the minister on his word,” said Olsen earlier this week.
The Urban Development Institute, which represents the real estate and building industry across the province, was not involved with the modelling. But CEO Anne McMullin said she would be interested to see what assumptions were made to forecast a seven- to 14-per-cent decline in home prices over five years.
“Costs are so high, and land only accounts for about 15 per cent of costs now — from about 50 per cent only a few years ago. Costs, interest rates, fees, (and) taxes are going to have to be drastically reduced to hit those price drops,” she said.
Andrew Ramlo, vice-president of advisory services for Rennie Group, which provides analytical and strategic support for developers, investors and local and provincial governments, Crown corporations and public agencies, also said he hadn’t seen the data on which the assessments were made.
He said it is difficult to assess the province’s projection of a drop in house prices without more information. “What I can say is that, in addition to supply, there are lots of considerations and factors that will contribute to where prices go, from what inflation does and the response from the Bank of Canada to federal immigration targets, and where people choose to settle in the province. Yes, the increased supply is needed, but it is difficult to say what the ultimate impact will be on prices without recognizing these other factors.”
Some independent experts, who have not been engaged by the province for its modelling, pointed to peer-reviewed academic research about the experiences of cities such as Auckland, which saw housing prices rise by 12 per cent after zoning changes to build more “missing middle” housing.
With files from Katie DeRosa
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