STAFF REPORT: INTERIM HOUSING NEEDS REPORT

INTERIM HOUSING NEEDS REPORT

RECOMMENDATION:

THAT the report dated July 31, 2024 from the Senior Planner titled “Interim Housing Needs Report” be received;

AND THAT staff be authorized to attach the “Interim Housing Needs Report” dated July 31, 2024, as Appendix F to the Town’s 2020 Housing Needs Assessment Report;

AND FURTHER THAT staff be authorized to submit the amended 2020 Housing Needs Assessment Report to the Province to fulfill the legislative requirements.

ALTERNATIVE OPTION:

THAT Council declines to receive the “Interim Housing Needs Report” dated July 31, 2024.

AND THAT Council authorize staff to prepare a Request For Proposal (RFP) for public tender for the preparation of a new Housing Needs Report.

Staff do not recommend the alternate option for the following reasons:

• the new Housing Need Report (HNR) method is a new standardized method, based on six components of housing need and relevant data sources, including the last four census data, BC Stats and CMHC data, and applicable to all local governments;
• the free HNR calculator developed by UBC follows the HNR method established by Province and uses recent data sources, which saves municipalities time and money to calculate housing need, and allows staff to complete the work in-house;
• the Town’s existing 2020 Housing Needs Assessment Report was not used in calculating housing need for the interim HNR;
• preparing a new HNR will require significant investment of staff time, consultants and resources, and take away from other Town priorities, such as the Official Community Plan review and update. It is not a provincial requirement to complete a new Housing Needs Report at this time; and
• The next regular HNR is due by December 31, 2028. The 2024-2028 workplan has identified an update to the Housing Needs Report in 2027.

PURPOSE:

To present Council with the Interim Housing Needs Report (IHNR).

BACKGROUND:

The first legislative requirements for Housing Needs Reports were established in 2019 to require local governments to identify existing and projected gaps in housing supply. The Town of View Royal received a grant to complete a Housing Needs Assessment Report in 2020 (see Attachment 2).

A Housing Needs Report (HNR) is an important document that provides details on demographics, household incomes, existing housing stock, and various other factors. Completion of a HNR is critical in the development of a well-informed housing strategy and action plan. Under the new legislation, the IHNR will ensure that all municipalities have a consistent approach in understanding their 5 to 20 year housing needs, which will be used to inform updates to their Official Community Plan (OCP) and Zoning Bylaw, and other bylaws as required.

ANALYSIS:

As a result of the amendments to the Local Government Act (LGA) in 2023, local governments are required to complete an IHNR and report on three new items identified in the legislation. The three items are as follows:

1. The number of housing units needed currently and over the next 5 and 20 years, calculated using the HNR method provided in the Regulation;
2. A statement about the need for housing in close proximity to transportation infrastructure that supports walking, bicycling, public transit or other alternative forms of transportation; and
3. A description of the actions taken by the local government, since receiving the most recent housing needs report, to reduce housing needs.

The housing need calculated will inform local governments in their decision-making processes for updates to their OCPs, Zoning Bylaw, and other bylaws required to be updated as part of the housing legislation changes. If a local government does not wish to update their existing HNR to add the above three listed items, then they may also opt to complete a new HNR, using the new standardized HNR method provided by the Province. However, the deadline for either option is January 1, 2025.

Staff do not recommend that the Town complete a new HNR at this time as it will require significant investment of staff time, consultants and resources, and takeaway from the Town’s top priority to update the OCP. Furthermore, it is not necessary for the Town to complete a new HNR as it is not a provincial requirement and the Province has developed a free HNR calculator using recent data sources for local governments to complete IHNRs. In addition, a new HNR will require the preparation, review, and posting of a Request for Proposal (RFP), and selection of a consultant to complete the work. Given the short timeframe, it is unlikely that a consultant would have the time necessary to complete a new HNR by the provincial deadline.

Staff have confirmed with the Province that the HNR calculator does not use the Town’s existing HNR targets to calculate housing need. Therefore, utilizing the free HNR calculator to carry out the work in-house and adding an IHNR as an appendix to the Town’s existing 2020 HNR is the recommended approach discussed further below (refer to Attachment 1).

Housing Target

The Province has released the Town’s Housing Target, calculated by taking three factors: unmet need, anticipated need, and vacancy adjustment to determine the Town’s 5-year housing need. The Housing Target contains two numbers, the Housing Need and the Housing Target, which are 100% and 75% of the total new housing units, respectively. The Town’s Housing Targets are summarized in Table 1 below.

Table 1 - Housing Targets

Annual Culminative Targets

• Total 5-Year Housing Need: 780 Units
• Total 5-Year Housing Target: 585 Units

For clarity, the Housing Target Order is separate from the Interim Housing Needs Report and the housing need referenced therein will be discussed further below.

HNR Calculator (Item 1)

The HNR calculator is a free online tool¹ that may be used by municipalities to complete their 5-to-20-year housing need calculation for their IHNR in-house. The calculator was developed by Housing Assessment Resource Tools (HART), the University of BC, and the Province of BC as a tool to help local governments. The calculator pulls data from the Province of British Columbia and the Canada Mortgage Housing Corporation (CMHC) online and compiles the data necessary to calculate the housing need of each local government. The data used is from the 2006, 2011, 2016, and 2021 census years.

The HNR calculator automatically produces the housing needs required for a municipality, which is based on pre-determined formulae, that includes factors and metrics that have been established by the Province. More information about the tool and the calculations can be reviewed in the following document: Guidelines for Housing Needs Report – HNR Method Technical Guidance².

The calculator is made up of 6 components, as follows:

1. The number of housing units for households in extreme core housing need (those paying more than 50% of income for housing);
2. The number of housing units for individuals experiencing homelessness;
3. The number of housing for suppressed households;
4. The number of housing units for anticipated household growth;
5. The number of housing units required to increase the rental vacancy rate to 3%; and
6. The number of housing units that reflects additional local housing demand.

Using the HNR calculator, staff have calculated the housing need over the 5-to-20-year period below in Table 2.

Table 2 - HNR Calculator: 5 and 20 Year Housing Need for Interim Housing Needs Report

*Note: The total number of new units for each component (A – F) are first summed and then rounded to the nearest whole number, per the HNR Calculator.

The difference between the 5-Year Housing Target Order and the 5-Year Housing Need calculated through the HNR calculator is due to the ‘demand buffer’, which takes into consideration local market demand and population projections based on recent census data and will often be higher than projections used in existing reports. The ‘demand buffer’ seeks to build in the extra capacity that is needed to meet healthy market demand and help address housing needs by understanding certain community characteristics (e.g., housing location, unit size, transportation infrastructure, and amenities). The 5-Year housing need for the Town is 842 new units, and the 20-Year housing need is 2889 new dwelling units.

Constructing 842 new units in 5-years will not be difficult for View Royal to achieve given the number of housing units currently under construction or in the pipeline. However, it will be more challenging for the Town to deliver on below-market housing without senior levels of government and non-profit housing providers willingness to partner and construct affordable housing in the community.

It is important to note that the region is still facing a housing crisis and that the Town plays a role in providing housing for those that wish to live, work, and play in the greater Victoria area, as well as in the Town of View Royal. Staff note that there continue to be opportunities for infill development in the community, which will assist in both the Town’s commitment to meeting its housing target, but also in meeting the needs of current and future residents.

The Town must complete OCP and zoning bylaw updates by December 31, 2025 to allow for the number of units over 5 and 20 years identified in the IHNR by pre-zoning land.

Statement on Need for Housing near Transportation Infrastructure (Item 2)

A statement (see Attachment 1) has been prepared that highlights the importance of housing that is in close proximity to transportation infrastructure and that supports walking, bicycling, public transit, and other forms of transportation. The statement reflects the Town’s Community Vision, policies and objectives in the 2011 OCP, which recognizes the important connection between housing and transportation infrastructure in building a complete and sustainable community.

Description of Actions (Item 3)

A list of actions to address housing need that have been completed by the Town since adoption of the 2019/2020 HNR are summarized in Attachment 1 for review. The items are a list of Council motions, policy and zoning bylaw updates, capital projects, and other major projects that have been completed.

Next Steps

Following completion of the IHNR, the Town will be required to complete a ‘regular’ HNR by December 31, 2028, and every five years thereafter. Following this update, the report will be used to inform future bylaw updates, including another update to the OCP by December 31, 2030, and every five years thereafter. The Province’s decision to require an IHNR is to ensure that there is consistency⁹ between local government’s approach to their housing need calculations, which is no longer a concern with the standardized HNR calculation method used for the IHNR.

COMMUNITY IMPACT:

Increased housing supply will address the local and regional housing crisis and meet the housing needs of the community resulting in a growing number of persons living, working, and playing in the community. Increasing housing supply around transportation infrastructure provides an opportunity to make inclusive and complete neighbourhoods, address a broad spectrum of housing needs, including housing for persons at risk of homelessness and within extreme core housing need (those paying more than 50% of income for housing), ensure a range of transportation choices, and reduce greenhouse gas emissions.

FINANCIAL IMPLICATIONS:

No significant financial resources will be required to complete the interim Housing Needs Report. Staff expect project completion ahead of the January 1, 2025 deadline, which will permit additional staff time and resources to focus on other priority projects, including the OCP update.

In the 2024-2028 Financial Plan, Council allocated $22,500 to complete an update to the 2020 Housing Needs Assessment Report to fulfill the provincial requirements. The province shared the HNR standardization method, technical guidance, and free calculator in June 2024. Given that we can use this free calculator tool to complete the IHNR in-house, casino revenue no longer needs to be spent on this project. In 2028, the Financial Plan has budgeted $25,000 of casino revenue towards the next regular HNR.

ALIGNMENT

Strategic Plan: GOAL 3: Access to a broad range of housing options to meet the needs of various ages, family types and incomes

Official Community Plan: The OCP contains several policies and objectives pertaining to increasing housing supply and choice near transportation infrastructure to meet the current and future needs of the community.

PUBLIC PARTICIPATION GOAL:

The desired level of public participation for the recommended option is:

• Inform
• Consult
• Involve
• Collaborate
• Empower

TIME CRITICAL:

The completion of the IHNR is time critical, the provincial deadline is January 1, 2025.

ATTACHMENTS:

1. Interim Housing Needs Report (IHNR)
2. 2020 Housing Needs Assessment Report

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¹ Housing Assessment Resource Tools (HART) HNR Calculator Available at: https://hart.ubc.ca/bc-hnr-calculator/ ² Province of BC: Ministry of Housing – Guidelines for Housing Needs Reports – HNR Method Technical Guidance (June 2024) Available at: https://www2.gov.bc.ca/assets/gov/housing-and-tenancy/tools-for-government/uploads/hnr_method_technical_guidelines.pdf ³ Extreme Core Housing Need (ECHN) for renters and owners with a mortgage is used to estimate the number of new units required for those in vulnerable housing situations. ECHN refers to private households falling below set thresholds for housing adequacy, affordability or suitability that would have to spend 50% or more of total pre-tax income to pay median rent for acceptable housing. ⁴ Housing units and homeless is the supply of permanent housing units required for those currently experiencing homelessness at any point during the year. ⁵ Suppressed Household Formation (SHF) addresses households that were unable to form between the period of 2006 and the present due to a constrained housing environment; this includes young persons having to live at home due to lack of affordable housing supply. ⁶ Anticipated Household Growth (AHG) quantifies the additional households required to accommodate an increasing population over the next 20 years. AHG is estimated based on updated BC Statistics household projections and two growth scenarios, a local household growth scenario and regional household scenario. The average of the two scenarios is used for the AHG. ⁷ Rental Vacancy Rate Adjustment (RVRA) adds surplus rental units in an effort to restore local vacancy rates to a health and well-functioning rental housing market. ⁸ The Demand Buffer is calculation of housing units for specific community need, beyond the minimum units required to adequately house current and anticipated residents. The demand buffer is used to better account for the required number of housing units needed to meet a health market demand. ⁹ Prior to the use of the HNR calculator, local governments employed different methods to determine housing need, and datasets were collected at different times.