There was a time when B.C. politicians, a conservative Vancouver mayor and an NDP BC premier had the right stuff. In the 1970’s, Vancouver Mayor Art Phillips, a successful investment banker, and BC NDP Premier Dave Barrett had the political determination and moxie to work together and create innovative policies that tackled the housing affordability crisis head on.
Bold politicians like Phillips and Barrett created South False Creek on newly acquired public lands, with an affordable, progressive housing mix of one-third for low income, one-third for middle income and one-third for higher income, in cooperation with the province and the feds. That housing model has withstood the test of time to become a successful solution to affordable housing. It contained market housing, co-op housing and social housing all in one project.
Fifty years later, here we are today, “deja vu all over again,” with a Conservative Mayor Ken Sim, a successful businessman, and an NDP BC Premier David Eby, both newly in power, both facing the same challenge of affordable housing.
Today, the absurd and unbalanced housing market in Vancouver and other cities threatens to destabilize the economy, and it again demands more inventive policies from government.
Housing prices in Vancouver (both purchase and rental) are completely unaffordable, even for millennials in mid-career earning $100,000, and are out of balance with employment incomes.
And that’s not because there is insufficient supply. According to the 2016-21 Census, Vancouver built 6.1 per cent more housing supply, 20 per cent more than its 4.9 per cent population growth, leaving 23,000 empty homes. From 2018 to 2022, City Council also approved 254 of 254 spot zonings for high-density housing, accommodating almost any future population growth projections for Vancouver.
But housing prices soared higher and higher in Vancouver, despite increased supply, driven by investor demand (both foreign and domestic) for Vancouver real estate. Astonishingly, investors buy 60% of the new condos built in Vancouver.
So, did David Eby’s housing announcement this week show bold, decisive or innovative political action to tackle the affordable housing crisis?
The short answer is NO.
- Did Eby provide more funding for the co-operative affordable housing sector? NO
- Did Eby provide more funding for the non-profit affordable housing sector? NO
- Did Eby provide more funding for seniors housing? NO
- Did Eby set accountability & quantifiable outcomes for any of the existing funding programs? NO
- Did Eby make certain that the existing funding gets out the door and into the ground? NO
- Did Eby provide an effective stop to investor demand for Vancouver real estate? NO
- Did Eby provide incentives for the private sector to build 50% more affordable housing? NO
- Did Eby require cities to use their “public land for the public good” for affordable housing? NO
- Did Eby introduce vacancy controls to stop rental units from being commodified and converted into more unaffordable rentals? NO
- Did Eby announce any partnerships with municipalities like Vancouver to fund the building of more affordable housing? NO
- Will Eby’s policies make housing more affordable? NO
The NDP premier is following the same old, failed policy as his fellow traveller, defeated NDP Mayor Kennedy Stewart – a disastrous supply-side housing policy which focused on increasing the housing supply in the hope that it would magically become affordable. That policy has failed over the past five years.
His naïve proposal to free up condos for rentals to increase the supply of rentals does nothing but juice up the value of condos and increase their price. Investors are salivating at the thought of a higher return on their condo investments at higher rents.
Douglas Porter, BMO’s chief economist, recently wrote, ”Please stop with this supply myth,” a housing myth that is routinely and falsely touted by the real estate industry for its own benefit.
Conclusion: More housing supply alone doesn’t create affordable housing, unless that increase in housing supply is mandated to be “affordable” through other government policies.
Unaffordable housing prices are ruinous for a city and are completely out of balance with Vancouver’s employment incomes, particularly for young people with well-earning jobs such as nurses, teachers, police and firefighters who can’t afford to live in the city they serve.
Eby’s new housing announcement was not bold, not decisive and not innovative.
In terms of tackling our housing affordability crisis, Eby has already failed his first test, only one week into the job.
So, does businessman Mayor Ken Sim have an affordable housing plan yet?
We must wait and see if it will be bold, or innovative, or nothing at all.
If Mayor Sim’s new super majority on City Council is truly serious about affordable housing, decisive political action is required now.
Arny Wise is an urban planner, economist and retired developer.