Amazon HQ2—you can grow Vancouver’s economy without making housing less affordable
The City of Vancouver is keen to land Amazon’s “HQ2”—a second North American headquarters, which the company claims will house tens of thousands of new jobs and add billions of dollars to the local economy. Indeed, HQ2 aligns with the city’s aspirations to become a world class tech hub, a goal shared by the provincial government and neighbouring municipalities.
But not all are convinced that a boost in high-paying jobs would benefit the city.
For example, Vancouver city Councillor Adriane Carr recently expressed concern that the city might not have the capacity to accommodate the resulting demand for housing, which might escalate prices in Canada’s most expensive market. Carr’s attitude reveals what many Metro Vancouverites might believe: that there is a trade-off between growing the local economy and housing affordability. Indeed, Vancouver’s geography—wedged between mountains, the ocean and the U.S. border—makes it difficult to add more homes at the urban fringe to house new tech talent.
The good news is that the city need not grow at the fringe—there’s plenty of room to grow upwards by adding more homes within the city’s existing urban footprint. Simply put, by letting the supply of new homes adequately respond to demand, new business investment and high-paying jobs don’t have to come at the expense of housing affordability.
So what can local governments in Metro Vancouver—including Vancouver City Council—do to boost the housing supply? They can start by cutting red tape on new homebuilding.
Recent work by the Fraser Institute measured the regulatory burden faced by homebuilders across 21 Lower Mainland municipalities and it takes more than 10 months, on average, to obtain building permits. This average rises to almost two years in Vancouver proper, where timelines are also less predictable.
These timelines are aggravated by the need to rezone property—the process where city hall lets factories become lofts or bungalows become condo towers. Due to everything from height restrictions to protected views, almost all new homes in Vancouver require rezoning, which can take up to 10 months.
When years of delay are combined with the tens of thousands of dollars developers must pay, per unit, to clear all regulatory hurdles, it’s very difficult—if not impossible—for the housing supply to adequately respond to strong increases in demand.
Embracing tomorrow’s economy does not have to be a zero-sum game. If local and provincial policymakers want to attract new jobs and investment without eroding housing affordability, they should free-up the housing supply. And a good place to start is by reducing red tape on new homebuilding.