City of Vancouver (finally) acknowledges importance of housing supply
The City of Vancouver recently unveiled its new 10-year housing strategy. Chief among its commitments is to see 72,000 new homes in the city by 2028, including an important boost in the rental stock, which has suffered from vacancy rates perennially below one per cent. If the city reaches this objective, the 10-year gain in housing units stands to be double what it was between 2006 and 2016—a significant achievement.
It’s good to see Vancouver City Hall (led by Mayor Gregor Robertson, pictured above) acknowledging the importance of housing supply. Indeed, Fraser Institute research over the past three years has argued for a more balanced discussion on housing, while the city tended to focus on demand-side issues such as units not occupied year-round. However, as Vancouver works through the implementation of these goals, here’s a reminder of the challenges it must overcome.
First, it takes year to obtain building permits. City governments are poorly placed to build units themselves, so developers and homebuilders obtain building permits from city hall to build new condos, townhomes and laneway units. In Vancouver, this process takes the better part of two years, on average. In neighbouring Burnaby, however, this process takes less than seven months.
Second, most projects in Vancouver require rezoning—the process whereby single-detached homes can become duplexes, townhomes or apartments. This procedure alone can add 10 months to permit approval timelines, and is often subject to opposition from community members. The city’s new housing strategy acknowledges this, and, if implemented, will allow for tens of thousands of new units in low-density residential areas.
Third, obtaining permits also means complying with regulation and paying related fees such as Community Amenity Contributions. Though these costs vary significantly from project to project, they average almost $80,000 per unit in Vancouver compared to $41,000 in Richmond and $25,000 in Coquitlam. This adds a significant burden to homebuilders in Vancouver, and ultimately the homeowners or renters occupying new units.
For years, the City of Vancouver focused almost entirely on tempering housing demand, either by lobbying the provincial government or through direct action. Having realized that this approach has not cooled rising home prices, it’s heartening to see city hall acknowledge the importance of housing supply.