UDI on Housing Affordability
Over 600 citizens attended a housing forum on the evening of Wednesday, March 16 hosted by MLA David Eby. It was an opportunity for people to voice their concerns about the housing market and offer opinions for how to address housing affordability in Greater Vancouver.
The common fear amongst many at the forum was that their communities are changing and their dream of owning a home in the City is becoming increasingly unattainable. Recent reports about vacant homes, shadow flipping, and fleeing millennials prompted the emergency housing forum and the resulting call to action for the Provincial government.
The roots of the problem were stated several times by commenters at the forum. Housing demand is outpacing the supply, housing prices do not align with local incomes, and the rental housing stock is too low.
The Urban Development Institute advocates for the following solutions:
Housing Demand Outpacing Supply:
The Metro Vancouver population has been steadily increasing due to international and interprovincial migration, while new housing supply has remained fairly constant. In 2015, the population of Metro Vancouver increased by 40,000 people and there were 16,128 new housing starts.
The solution is to zone for higher densities where appropriate to accommodate growth. Transit corridors are ideal areas to support new growth. Gentle densification of existing single family neighborhoods through zoning for townhomes, duplexes, and triplexes is another way to absorb growth. In 2015 only 47 townhomes were built in the City of Vancouver. This number should be much higher considering the high demand for this alternative to the more expensive single family home.
Housing Prices Not Aligned with Local Incomes:
The Vancouver economy is strong and diversified with no shortage of exciting career opportunities. The median annual household income in Vancouver is around $73,000, which in some other cities could afford a detached home. We are not those other cities. Vancouver is a highly desirable place to live and therefore attracts people from all over the world.
International interest in Vancouver real estate is great for the economy and for people who already own property here, or for those who can afford to buy in. There is growing frustration, however, especially among people who grew up here, who feel they are being edged out of the entry level housing market by foreign capital. A CMHC study last year somewhat debunked this myth, reporting that only 3.5% of Vancouver condos are owned by foreigners. Large, multi-million dollar single family homes on the west side are attracting a much higher proportion of foreign buyers. Those homes were never, and will never be, attainable for entry level buyers.
Vancouver’s limited land base requires us to make the highest and best use of every square foot of land. It’s simply not possible for everyone to have a detached house with a yard. In fact, 25 per cent of Vancouver’s current population now occupies 65 per cent of the land. This is not sustainable. The single family neighborhoods that comprise much of our land base can and should absorb growth through densification. It is the only way to really have an impact on affordability.
Again, the solution is build more of the types of homes that local incomes can afford. This includes condos, townhomes, duplexes, triplexes, laneway homes, and rental apartments.
The Rental Stock Is Too Low:
Rental vacancy rates in Metro Vancouver dropped to 0.8% last year. Proactive measures are being taken to incentivize the construction of new purpose-built rental housing. 1,239 new rental units have been built in the City of Vancouver since 2010. An additional 1,925 are currently under construction, and 1,981 more are approved to begin construction soon. The pace of rental construction is picking up which is a good sign for the future of the rental market.