December 17, 2019 The Twelve Days of Affordable Housing in the 604 An Opinion Piece by Cameron McNeill
This holiday season as we join our loved ones, a friendly conversation may turn to discussions about our ever-growing region, our new neighbours, the new building around the corner that’s a little taller than the rest, or the always intense Vancouver affordable housing topic. To get the debates going, here are a few conversation starter points:
1. POPULATION. Greater Metro Van is growing. And growing fast by the way. Over 30,000 people per year. 100 new people every day enter the city and need a new place to call home. Do we stop growing? Do we close the doors if that is even possible? This is hardly a solution.
2. DENSITY. Without sprawling urban growth. Without adequate transit infrastructure. Without abundant availability of land. And considering expected population growth for the next 10, 20, 50 years…. There is nowhere to go but up! Either giant towers in neighbourhood centres, medium density along logical arterials, or gentle density in single family neighbourhoods.
3. BLAME GAME. Well certainly our market has had significant non-resident buyers “investing” in our real estate. I suppose that much of the world knows the 12 Days of Affordable Housing already… But very few of these homes are actually sitting empty. Note that after the Empty Homes Tax went into effect, we saw a negligible number of homes returned to market. It’s important to distinguish foreign ownership from housing sitting vacant - not the same thing. Does it matter who owns the tens of thousands of rental condo’s and homes throughout our region? And is foreign ownership really different compared to a pension fund based in Ontario owning Vancouver buildings and attempting to maximize rental returns in their portfolio?
4. TRANSIT. We need it. We need to move people and open new desirable regions to call home that are not dependant on the automobile. Perhaps government is waiting for ride-sharing and autonomous…wait, I heard there’s another problem there… And somehow it feels like ride sharing is intentionally being setup for failure! (that’s for another holiday party).
5. DESIRE. People from all over the world want to live in Vancouver. And people want to stay here. Vancouver is a pretty amazing place to live - at least according to international ratings. And of course we are free to move, but we don’t. We choose to stay and keep paying extraordinarily high housing costs and making sacrifices for the privilege to live in one of the most amazing places in the world. Not going to change.
6. RED-TAPE. When Greater Metro Vancouver needs tens of thousands of new homes to meet current and near-term growth and yet it takes 2-4 years to get a project approved plus another 2-4 years to build, we have a serious problem Houston.
7. COSTS. Construction and Municipal. Costs have never been higher and will not come down. For those waiting for cheaper building opportunities…it will not happen.
8. SCARCITY (of Land). Great Metro Vancouver’s beauty is partly because we are framed (contained) by a back drop of mountains and sea. Add an international boarder and some untouchable agricultural land and there simply is very little developable land. Expect the old to be replaced with new.
9. STIFLING. Our cities (generally under pressure from NIMBYs) have great difficulty in endorsing creative urban solutions. Add to that the general anti-development sentiment throughout the region. Combined, this stifles supply and creative solutions to provide more innovative housing options.
10. INTERNATIONAL. When the rest of the world is a mess, Canada looks pretty attractive for a place to invest or raise a family. What happens globally impacts Canada and impacts Vancouver.
11. STAGNATION. Stagnant Wage Growth that is. Our wages are significantly lower compared to Seattle and Toronto. So although our absolute housing prices are similar to Toronto our affordability index is worse and the gap is growing. Trying to keep the status quo will not improve this.
12. INTEREST RATES. When housing consumers can borrow “cheap” money they can afford to pay more, and not surprisingly prices push up. And all the smart bankers indicate that Canada will have very low interest rates for the foreseeable future. And if interest rates move up and prices go down slightly, this doesn’t really help anyone with affordability unless you’re paying cash.
Of course, this is just a starter list. I know we could drum up many more tasty contributions to the affordability discussion buffet. But maybe the real ‘problem’ is Greater Metro Vancouver is a pretty fantastic place to live and we simply have a limited ability to supply new real estate. We could make it less fantastic (reduce demand) or increase supply in a variety of ways. Maintaining status quo is not an option. I seem to recall Economics 101…
An Opinion Piece by Cameron McNeill