B.C. homebuilding not keeping up with population growth
The high cost of housing and rent is a major concern for many British Columbians. A recent poll from Leger found that 68 per cent of B.C. residents worry about paying their mortgage or rent, and 93 per cent believe the increasing cost of rent is a serious problem.
There’s a generational shortage of housing in the province, which demands action from policymakers at all three levels of government.
Deteriorating housing affordability in B.C., like other parts of Canada, originates from a widening disparity between the number of people wanting to rent or buy homes and the number of actual homes available. Housing prices and rents continue to increase as the number of homebuyers and renters increases much faster than the number of homes available to purchase or rent. Simply put, builders in the province are not building enough homes for everyone.
According to a new study published by the Fraser Institute, the province added 86,339 residents (on average) from 2018 and 2022 while completing 39,776 homes (again, on average)—equal to 2.2 new residents per new house completed, roughly in-line with the province’s annual average since 1973, which has failed to keep housing prices and rents in check. In 2022 alone, the province added 3.5 new residents per home built. Clearly, the gap between population growth and new housing is only increasing.
In fact, the rate of homebuilding in B.C. has barely increased since the 1990s, despite the growing housing crisis. For instance, between 1992 and 1996, housing completions averaged 35,791 per year. Between 2018 and 2022, the average was 39,766—an increase of just over 10 per cent. Again, that’s a tepid increase for a province with a growing housing shortage.
To restore housing affordability in B.C., the Canada Mortgage and Housing Corporation (CMHC) estimates that 570,000 homes must be built in the province by 2030. That’s roughly double our current pace.
So, how can more homes get built in B.C.?
Policymakers at all three levels of government must take more aggressive steps to unleash housing construction in the province. The longer it takes to approve new housing and the more fees and taxes developers pay, the less housing will get built and the longer it will take.
In other words, the Eby government and municipalities across B.C. must close the gap between housing supply and housing demand. Policymakers should avoid or rescind new or existing policies that stoke demand. And relax zoning laws, reduce developer fees and speed up permit processes to help boost housing supply.
And in Ottawa, the federal government should stop rolling out new programs aimed at making it easier to buy homes. Throwing money at the demand side of the housing market only serves to boost prices. It’s not only a waste of money, it’s counterproductive.
All levels of government must work together to address the growing gap between population growth and housing completions in the province. Otherwise, for British Columbians, the struggle with high housing and rent costs are likely to persist, if not worsen.
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