By Haley Grewal
Home ownership is an ideal for most, a reality for some and a dream for others. In Vancouver Canada, owning a home remains a dream for most. This dream is further becoming a fantasy for working members of the city, including doctors, nurses, lawyers, firefighters, police officers, and teachers. Prices have increased to astronomical levels in the single family home market and condo market for a number of years, and even with a major correction, this dream will remain out of reach for the vast majority. There is demand to live in the city but limited supply according to some. So the answer is clear! Build more — right? However, this oversimplification of a general supply and demand principle applied to the housing market vastly distorts what is happening in the city.
Consider that from 2011 to 2016 the City of Vancouver population increased from 603,502 people to 631,486, a 4.6% increase (2011, 2016 Census). During this period, the number of private dwellings increased from 286,742 to 309,418. This means for every resident moving to the city, 0.8 homes were constructed and completed. Taking into consideration the homes being built were not built to house one person, its safe to say there is enough housing being built for new residents looking at overall numbers. Toronto during the same period completed 0.6 homes for each new resident over the same 5 year period. To put this into perspective, if Vancouver’s pace of construction was equal to that of Toronto’s over the same 5 year period, there would be 5,573 less housing units built in the city.
The new Oakridge developments are priced at $800k+ which suits the needs of those that can afford it, but ultimately it raises the question of what do we do with our teachers, lawyers, doctors, police officers, fire fighters — people essential to the social fabric of our communities — if the city is designated for 1% of income which amounts to the high $200K’s. Even then, it would require multiple 1% incomes in a household to afford a detached house in much of the city. With condos being built for a similar income level, it is difficult to see a solution to the affordability crisis that is hurting the next generations of residents and businesses and the current generation of retirees.
Seeing as the economy in BC is directly and indirectly driven by real estate to the tune of 40%, there is little incentive for the government to make real estate truly affordable and ample incentive to maintain the wealth effect. Furthermore, for current homeowners, it is in fact more advantageous for the province to maintain bare trusts and hide sources of capital for the benefit of high end real estate property transactions and overall valuations.
This raises a particular question about what style of housing we are building. Not specifically related to the housing type be it single family, townhouse or condo but rather luxury or that which is meant for the majority of people. Simply increasing the supply without considering what type of housing we are building makes supply a non-starter solution.