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West Shore powers home building; massive drop in Victoria and Saanich

If it wasn’t for the West Shore the region’s home builders would be sitting idle, says the executive director of the Victoria Residential Builder’s Association.
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The Customs House condo project takes shape in the Inner Harbour. Across the country, housing starts rose in June as starts of multi-family projects increased, offsetting a decline in single-detached homes.

If it wasn’t for the West Shore the region’s home builders would be sitting idle, says the executive director of the Victoria Residential Builder’s Association.

Casey Edge said while housing start data from Canada Mortgage and Housing Corporation suggests homebuilding has weathered the pandemic, the truth is home construction in big chunks of the region is depressed. “When you say new housing in the region has declined minimally overall, the reason for that is the West Shore, Langford and Colwood in particular,” he said. “Otherwise, we’d be in a hole.”

Numbers released this week by CMHC show homebuilding in the region remains fairly steady with 1,567 new homes started through the first half of this year, compared with 1,614 started through the first six months of last year.

And while Langford continues to lead the way with 553 starts so far this year, down from 592 in 2019, and Colwood posted 204 new starts this year up from 175 at this time last year, there have been massive declines in Victoria and Saanich.

“Saanich, the largest municipality in the region, used to post the second highest numbers in terms of housing starts,” said Edge. “Now Colwood has replaced them.”

Through the first half of this year Saanich has seen 101 new homes started, down from 151 at this time last year, and Victoria has fallen to just 75 starts this year versus 420 in the first six months last year. “We’re seeing massive drops in Victoria and Saanich, which have traditionally been challenging places to do business anyway,” said Edge, characterizing the two municipalities as the most obstructive when it comes to home building and development.

Edge said the piling on of fees such as development cost charges — fees charged to a developer to cover such things as sewage, transportation, water and parks infrastructure — makes it difficult to build in places such as Victoria and Saanich where land prices are already high.

Edge said it is time to stop layering on fees that can add as much as $28,000 to the cost of a new single-family home.

“Colwood and Langford on the other hand are trying to move projects forward. They understand that during a pandemic it’s important to keep people employed,” he said.

Edge said there was some good news in the CMHC numbers, as the number of single-family homes started so far this year is up slightly to 76 in the region, from 70 at this time last year.

“That’s driven by demand, employment and historically low interest rates.”

Across the country the annual pace of housing starts rose in June as starts of multi-family projects rose, offsetting a decline in single-detached homes.

The federal housing agency says the seasonally adjusted annual rate of housing starts came in at 211,681 units in June, up from 195,453 in May.

“Homebuilding has thus far been resilient through the pandemic,” said Rishi Sondhi, an economist at TD Economics, in a note to clients. “This is a much different result from some of the more bearish forecasts out there and represents a stark change from most other industries, which cratered earlier on and are just now beginning their slow recovery process.”

Exceptionally low interest rates and government support programs such as CERB may have helped boost household incomes despite a soft job market, wrote Claire Fan, economist at RBC Economics.

“Against that backdrop it is not so surprising that housing activity has been more resilient than many had been expecting.”

aduffy@timescolonist.com

— With files from The Canadian Press