British Columbians are a frustrated bunch—and who could blame them?
British Columbians are a frustrated bunch—and who could blame them?
An Ipsos poll conducted on behalf of the Urban Development Institute found a strong majority of the 1,001 respondents don’t believe their governments, whether municipal, provincial or federal, are doing enough to improve the province’s housing situation. In Vancouver, Canada’s most expensive real estate market, the problem is especially pronounced.
One problem is housing isn’t brought to market quickly enough, says UDI President and CEO Anne McMullin.
“People are frustrated with long housing delays, increased taxes and a shortage of affordable housing options,” she said. “The government brought in measures over the last couple of years that have not improved affordability or availability of housing options and what they brought in hasn’t been what people are looking for. It hasn’t had the intended effect. Rents remain high, home prices at lower end of the market remain high, and British Columbians are saying the governments are not doing enough to encourage new rental home construction and availability of different housing options.”
Another gripe respondents have is that there’s little housing diversity in most neighbourhoods. McMullin noted that 75% of neighbourhoods are exclusively replete with single-family homes and also that 75% of respondents believe there should instead be an array of housing types.
Another rankling issue is that the approvals process takes much longer than it should.
“More than 70% of people believe that the long list of policies and regulations in place has made the approvals process far too long, and they also believe that all the regulatory red tape has made housing less affordable,” said McMullin. “At the very high end, prices have come down a bit, yes: A $10 million home is now $8m, and an $8m home is now $6m. But condo prices aren’t going down much. There’s a softening in the market right now but they’re still higher than they were three or four years ago.”
McMullin also contends that there are about 10,000 housing units stuck in purgatory at the moment because people cannot afford to buy them. However, given the slew of taxes, fees and delays their developments are subjected to, developers can’t bring down the prices.
“So it will make fewer and fewer homes available and prices in the next 18 months will go back up again as there’s pent up demand.”
If housing prices begin falling, buyers will be spooked by the very real possibility that their home equity will decline below what they paid for the homes, added McMullin.
The rental housing shortage appears to be the most resonant issue with British Columbians, if the Ipsos poll is any indication. But as it turns out, developers are shying away from building rentals because of the economics.
“You can’t just go in and pay full market value and only develop rentals, so you need incentives,” said Vancouver-based Jason Turcotte, VP of development at Cressey Development Group. “Government incentives are critical because the highest value for that land will always be condominiums. It’s an easier route for developers, so it generates higher land value.”
