As home prices across the Greater Vancouver Area continue their decline, and the total number of sales are dropping to numbers not seen in decades across all housing types, once again we find ourselves talking about the issue of housing. Although Vancouver is in the middle of a buyer’s market, that matters little for most buyers, because housing prices are still too high for most Vancouverites.
Of course, everyone needs a place to live. So those that can’t afford a home and wish to remain in the city must turn to rent. Unfortunately, even finding a place to rent is becoming increasingly tough.
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In a presentation to city council on Tuesday, (as well as a 197 page ebook accompanying it), city staff revealed that families with a household income below $80,000 are having a hard time finding a place to live. And given the high cost of development, land acquisition, and city regulations, developers simply cannot afford to build rental units that are affordable for them.
Although $80,000 may sound like a lot, it’s sobering to realize that the median household income for Metro Vancouver is $72,662.
The problem with building affordable rental units for middle income earners isn’t a lack of interest. There’s a large, and obvious demand for rental homes geared towards middle-income earners. In fact City hall has urged developers for years to build more rental housing units for that demographic. The reality is that developers have little incentive to build those units, because there’s simply more money to be made (and faster) by building condos.
In 2018, the city approved 4,511 condo units, an amount more than exceeding Vancouver’s yearly new condo construction target by 50%.
The city has instituted a number of incentive programs to convince developers to build more apartment complexes, and has seen a level of success. Between 2006 and 2010, the city only approved an average of 80 rental units a year. But after those incentive programs were implemented, the amount of new rental units increased by a factor of 10. In 2018 alone the city approved the construction of 1,031 new rental units.
That increase is definitely welcomed, especially when we consider that Vancouver has one of the lowest rental vacancy rates in the country. Yet that number remains insufficient. Tuesday’s report showed that Vancouver is about 25% below its own target for affordable rental homes for households earning between $50,000 and $80,000.
Tuesday’s presentation did show that Vancouver did meet its goals construction goals for social housing for the poorest and the most vulnerable. And as commendable as meeting that goal is, we can’t ignore that a huge part of that success was due to building those homes on land provided by the city, using funds from the province’s treasury.
The city also more than exceeded its own target on rental homes for families with household incomes exceeding $80,000. This isn’t much of a surprise, since developments built on this price range would be quite profitable for developers, and as Mayor Kennedy Stewart put it in Tuesday’s city council meeting, these homes are “what the market likes to build.”
The government, as well as developers are well aware about this housing problem. Simply put, Vancouver can’t function with only the very rich and the very poor. It needs to provide sufficient housing for everyone.
No city can survive without service industry workers, young professionals, artists, programmers, retail employees, etc. In short, it needs people of all economic backgrounds. Mayor Stewart said that “we need diversity in our economy to make it work. […] There’s the individual stress for people under housing strain, but there’s also the larger economic impact if, for example, you cannot have any minimum-wage earners living in your city.”
Stewart repeated his call to senior levels of government about the urgency of providing more housing for middle income earners, while still giving credit to the B.C. government for its success so far in meeting housing goals for low income people in the city.