The City of Vancouver is proposing a 3.9 per cent property tax hike to help pay for its 2018 budget.

It includes new spending the city says is needed on actions to "address housing supply, affordability and critical social issues."

The proposed increase amounts to an extra $87 per median single family home (assessed at $1.823 million) or $29 for a median strata unit (assessed at $609,000).

A chart by the City of Vancouver showing what a property tax bill looks like for a median single-family home in various Metro Vancouver municipalities. (City of Vancouver)

In a news release, the City of Vancouver said the average increase in the last five years was 2.3 per cent and overall tax rates were still "in the mid-range among Metro Vancouver municpalities."

The city said the majority of the tax increase will pay for ongoing city services and fixed costs such as wages, energy, rent and maintenance.

The remainder is targeted toward new investments aimed at improving the housing supply, affordability and social issues, according to the city's statement.

Funding will be aimed at a variety of initiatives, including:

Enabling the opening of 600 new units of temporary modular housing for the most vulnerable, including low-income residents.

Funding for affordable housing, including land acquisition for social housing in the Downtown Eastside and redevelopment of Rodden Lodge and the Evelyne Saller Centre.

Additional staffing to reduce wait times for development permits, including faster approvals for affordable housing.

A new Indigenous Healing and Wellness Centre in the Downtown Eastside.

Additional funding will be used to respond to the opioid crisis and improve streets, utilities, facilities and provide snow response.

The budget also includes a 7.9 per cent increase in utility fees, and two per cent increase for recreation fees.

Above inflation

Last year, the city also passed a budget with a 3.9 per cent property tax increase — the first time in many years that property taxes went up significantly more than inflation.

Vision Vancouver Coun. Heather Deal said it's necessary because about 85 per cent of the increased revenues are tied to fixed costs like rent, energy and wage increases.

"We have to remember that we're dealing with some bases that we don't have control over every day, which is wages, which is done through collective agreement, which we support as a city and also things like various fees like energy," she said.

"So, the rate of inflation is great, but we also have to tie it to our base and fixed costs."

NPA Coun. George Affleck, who announced he wouldn't be running for re-election earlier in the day, said the city could do a better job of finding ways to limit the tax increase.

"This is beyond what I think is acceptable. Whatever excuse there is, it's not good enough, and we should be doing better for the people of this city," he said.

"This makes Vancouver more unaffordable, and our goal should be the alternative."

A public hearing on the budget will be held Dec. 1 from 4:30 p.m. to 7:30 p.m., with city council set to vote Dec. 12.

The full draft of the budget is available here.

With files from Brenna Rose