John Rustad wants to dump gasoline on BC's housing fire

John Rustad was in the midst of a political comeback for the ages, one that saw him kicked out of his old party, take over as leader of a new one and ride the popularity of Pierre Poilievre’s anti-carbon tax message to the top of the polls. He even made the leader who kicked him out of BC United, Kevin Falcon, bend the knee and surrender to him in one of the most public political humiliations in Canadian history. 

Then Rustad opened his mouth. 

I’m not talking about the comments unearthed by the NDP from July where Rustad, in talking with an anti-vaccine group suing BC public health officer Dr. Bonnie Henry, claimed that she was using “the so-called vaccine” for “control on the population.” I’m not talking about the remarks he made during a recent appearance on the Dr. Jordan B. Peterson podcast about climate change, where he said “it’s a sad reality, but how is it that we’ve convinced carbon-based beings that carbon is a problem?” And I’m certainly not talking about his Facebook comment from 2022 where he suggested “the masses have bought into a lie” and “the CO2 theory does not hold water.” 

No, I’m talking about his announcements and pronouncements on housing, which should be the defining issue in this provincial election. He began by declaring his fealty to the very same municipal gatekeepers that his pal Pierre Poilievre has sworn to defeat, telling delegates at last week’s Union of BC Municipalities conference that “we need to make sure that we support local government and local democracy and not have it taken away and have it run out of Victoria, as has been done with the current government.”

It was taken away, of course, because B.C. municipalities have been far more interested in protecting the rights (and property values) of existing homeowners than promoting the sort of density and affordability so desperately needed in the province. Their constant filibustering has been a key driver of the housing crisis and has produced the highest average rents and most unaffordable real estate in North America. As policy analyst Alex Hemingway noted, “If cities like Vancouver are willing to finally end the apartment ban on their own, that would be welcome, but their records are not encouraging. There is a strong democratic case for provincial action on zoning.”

The BC NDP, to its credit, finally took some of that action. Its Bill 44 — the one Rustad has vowed to replace — requires municipalities to allow the construction of up to four units on single-family lots, with those near transit now upzoned to six units. The NDP government also issued so-called “housing target orders” to key municipalities, which include both the number and configuration of units they need to build along with a promise of amenity bonuses (new bike lanes, parks, and other infrastructure spending) if they hit their target. 

This all builds on the supply-side measures the BC NDP have been working on for years, many of which are targeted at the so-called “missing middle” between single-family houses and multi-family towers. It’s working, too. As the Globe and Mail’s Frances Bula noted, permits were issued for over 22,000 more new units in B.C. in early 2024 than there were in the same period in 2023. “That’s double the Canadian increase for that period,” she wrote. “And those high numbers come on top of two bumper years for the province, with permits for 54,000 and 49,000 units in 2022 and 2023.”

This isn’t the only successful NDP housing policy Rustad wants to reverse. He also plans to repeal the restrictions on short-term rentals that came into effect province-wide in May that require listings on platforms like Airbnb or VRBO to be located in the homeowner’s residence or a secondary suite on the property. A new study suggests these new rules have had their desired impact, with rents already declining and renters poised to save an estimated $592 million annually by 2027.

But perhaps the worst housing idea Rustad has shared is his pledge to create a new tax deduction of up to $3,000 per month for mortgage and rent payments. Never mind, for the moment, that this would cost the provincial treasury $3.5 billion in foregone revenue that will have to be made up for with cuts or taxes elsewhere if the BC Conservatives have any intention of actually balancing the budget. As University of Toronto economist Rob Gillezeau noted on Twitter, “the main impact of this hugely expensive tax change would be to dramatically inflate both home prices and rents. I’m sure we’d also see lots of tax planning activities designed to exploit this.”

To recap: Rustad plans to repeal pro-supply legislation, eliminate rules that take much-needed rental units off the market, and pour gasoline across the full breadth of an already overheated housing market. If you were explicitly trying to design a set of housing policies that would produce as much inflationary pressure as possible, you couldn’t do much better than this. 

In a province like British Columbia, where housing affordability remains an existential threat for far too many people, this should be disqualifying. Yes, it’s bad enough when a political leader plays footsie with anti-vaccine activists and denies both the underlying science of climate change and the need to meet it with action. But actively trying to make housing more expensive, and enriching existing homeowners in the process, might be even worse.