Supply myth exposed, but more of the same
By Elizabeth Murphy, Vancouver Sun, April 15, 2017
Vancouver keeps building housing units that few Vancouverites can afford. JONATHAN HAYWARD / THE CANADIAN PRESS
The City of Vancouver is finally admitting that they cannot build their way out of the housing affordability crisis. The supply myth has been driving ever-escalating amounts of market housing, but affordability is getting worse, not better. The city now says that “we have plenty of supply — what we need is the right supply.”
This is the conclusion of a recent report to council that proposes a housing reset. Although they correctly identify that a change of direction is needed, the city instead proposes more of the same.
The city has been approving market development at a record pace, yet prices continue to escalate. The new supply is not bringing affordability and never will if we continue doing the status quo.
In fact rezoning has been inflating land values while demolishing the older more affordable housing stock. People are being displaced and priced out of their city. This is what happens when the real estate market is disconnected from the local economy.
Many of the needed solutions are out of the city’s jurisdiction. However, the city’s own land-use policies of promoting unsustainable levels of market redevelopment has been largely responsible for enabling this crisis to escalate.
The problem is that they don’t seem to know what the right supply is, other than it needs to be affordable. And they do not know how to achieve that affordability. So it still falls back to the same old doctrine.
By engaging with limited interest groups and insiders, the city has set emerging directions before broader public input. This is putting the cart before the horse. The focus of the emerging directions is of course reflecting that feedback, which is — the same old response — more supply. But none of the income levels identified as needing housing options will likely be able to afford the proposed new housing options.
One positive move by the city is to link housing affordability targets to income. But new construction is often more affordable only when it is small units. When the city is trying to encourage larger units for families, these new units will be out of the reach of most of the targeted income levels unless they are subsidized. There is no way that the city can produce subsidies to address the numbers of units they are targeting.
Although the status quo is not the answer, the emerging directions are in fact more of the status quo. Examples are: more area planning around transit stations for high-density development; Cambie corridor Phase 3 development; and expanding the rental 100 program off the arterials. All of these actions are more of the same and will continue producing unaffordable market rentals and ownership while inflating land values.
In anticipation of these emerging directions, there already are proposals for large-scale tower development that are currently not allowed under existing policy. At Alma Street and Broadway there is a new proposal by Westbank for a 12-storey tower on a six-storey podium under the interim rezoning policy.
Only the six-storey podium is currently under application as per the existing policy, but the applicant is proposing to go to 12 storeys as an anticipated next phase under upcoming changes to policy. A subway may be decades off before it is extended to UBC, if ever. Yet the city is already considering substantial transit-oriented development without the transit.
Also included in the emerging directions is building new duplexes, row houses and townhouses. These housing forms are not even affordable on the east side, where they go for close to or over the million-dollar mark, far less the west side which will be substantially more expensive. More new built market strata will not address the kinds of affordability targeted.
Cambie Corridor condos are abundant, but they are not affordable. Pre-sales advertise starting at $1.55 million for a two bedroom plus den and $2.15 million for a 2 bedroom and den. And many units are vacant as recently confirmed by the 2016 census.
There are some groups emerging who claim to represent the millennials. But they are calling for more new market development that most millennials will never be able to afford. So either these groups are being duped into believing otherwise, or they are promoting the interests of the industry in the name of the millennials.
Ironically, the one action that the city could have taken to help affordability has been sidelined. The character house zoning review was underway to create more incentives to retain character houses such as more secondary suites for rentals and mortgage helpers through conditional zoning.
Now this has been given a back seat to adding more new strata market duplexes, townhouses and row houses which will be expensive. Inflated land values will lead to more incentives for increased demolitions of the character housing stock rather than more sustainable adaptive reuse.
Although new market multi-family may not be affordable, it still may make sense to have some variety of housing types in some locations. This was identified in each community through CityPlan, but rather than implementing these types through a neighbourhood-based process, the city is considering to rezone on a city-wide basis.
Realtor Bob Rennie has been head of fundraising for the B.C. Liberals and a supporter of Vision Vancouver. He has been advocating rezoning of all RS zones across the city to multi-family development. It looks like he may be getting his wish.
The industry must be pleased that the same supply myth continues to be applied even though the city admits it doesn’t work. More expensive market supply will not make things more affordable. It will, in fact, continue to intensify the affordability crisis as millennials are demo-victed from their older housing and priced out of Vancouver. How many more times will the city do the same things expecting different results?
Elizabeth Murphy is a private sector project manager and was formerly a property development officer for the City of Vancouver’s Housing and Properties Department and for B.C. Housing. email@example.com
Vancouver Sun: Saturday April 15, 2017 Page H5