The provincial election will be held May 9, and, to help set the stage, we will publish weekly editorials on issues that are likely to dominate the campaign. It is not our intent to critique party platforms, but to lay out the challenges that exist in each area. Today’s editorial is about housing.
The nature of the problem is well-known. Average house prices in Vancouver are the highest in Canada. Victoria ranks third. It used to take young Canadians an average of five years to save enough for a 20 per cent down payment on a mortgage. Today, it takes 16 years across the province, and 23 years in Metro Vancouver.
Apartment rental prices are also sky high, and vacancy rates in Victoria — near zero — are among the lowest in the country.
Not surprisingly, the shortage and high cost of housing has given rise to serious social problems.
B.C. has one of the highest levels of homelessness, nationwide. We are also near the top in child poverty, a principal cause of which is unaffordable housing.
It is a striking fact that successive governments have tried for two decades to conquer this problem, and failed. This is not just a defeat for public policy. It is a testament to the power of the forces driving our real-estate market.
Last August, the province tried to mitigate one of those forces by imposing a tax on foreign home-buyers in Vancouver. It appears this had some effect. Home prices in the city trended slightly downward after the tax was introduced, while they continued to climb elsewhere.
In January, Victoria’s city council considered asking the province to extend the tax to the capital region, but a decision was postponed for three months to permit more fact-finding.
Yet even if this measure does help cool real estate markets somewhat, it is unlikely to be sufficient on its own. Short of draconian measures, foreign buyers will continue to invest in safe shelters such as Canada.
It might seem a more effective step would be to ratchet up new housing construction. But here, too, formidable obstacles stand in the way.
Growing population density is already a major issue in Greater Victoria and Metro Vancouver. Build more highrise apartments in our urban cores and you exacerbate that problem.
On the other hand, build outward and you intrude on our shrinking supply of farmland and green belts.
There is also the reality that new housing projects are often the target of intense opposition in the surrounding neighbourhoods. No one wants a 10-storey building springing up next door.
Stated in these terms, a basic reality emerges. The need to create affordable housing cannot be met with existing solutions. At best, the trend toward higher prices will only be slowed. It will not be halted.
It appears some new thinking is needed. And political skill, too, in selling ideas that might be unpalatable at the outset.
It has been suggested, for instance, that a wealth tax on high-cost homes could be introduced to fund low-income housing. And property developers maintain they can bring down house prices by as much as 20 per cent if municipalities slashed the fees and regulations that govern the industry.
Are we ready to contemplate such steps? Possibly not.
Yet this much is clear. Once the election campaign begins, it will not be sufficient for our political parties to offer half measures. Voters are demanding real progress.
The failure to create affordable housing is a major concern across B.C. It could become the issue that determines the election.
