Vancouver plan to boost housing supply ignores city hall red tape
The City of Vancouver recently announced a plan to enable the construction of 72,000 new housing units in over the next 10 years. It’s encouraging to hear city hall pivot away from measures targeting housing demand—such as its tax on vacant homes—and target supply. However, upon reading the details of the plan, it quickly becomes clear that the city ignores the most expedient way to boost supply: less red tape on new homebuilding.
First among the city’s proposed measures is increasing the share of “affordable” units required in any new build, as was recently announced for the Cambie Corridor. By “affordable,” the city means that individuals and families earning between $30,000 and $80,000 do not spend more than 30 per cent of their income on housing. The hope at city hall is that this will result in thousands of new homes at below-market rents.
Unfortunately, city hall misses the fact that hundreds of thousands of new units are already waiting for approval in Vancouver and its neighbouring municipalities. Long and uncertain approval timelines, high costs and fees to comply with regulations, and opposition from local council and community groups all contribute to this backlog. Here lies the root issue in Vancouver’s housing market.
So what can Vancouver do to meaningfully boost supply today, rather than over the next 10 years?
It can start by reducing onerous barriers holding back the supply of new homes. The plan mentions updating zoning regulations in certain neighbourhoods to allow for more duplexes and laneway homes—this is a good start, but does not go far enough if the city is serious about boosting supply. According to the Fraser Institute’s survey of homebuilders operating in the Lower Mainland, it takes 21 months, on average, to navigate the building permit approvals process at Vancouver City Hall. It also costs an estimated $78,000 per unit to comply with regulations.
In neighbouring Burnaby, timelines are 14 months shorter and regulatory costs average $16,000 per unit. Clearly, Vancouver has much room for improvement.
By freeing up the housing supply today, Vancouver can become more affordable to average families tomorrow. This has borne out in markets from Houston to Tokyo, where housing remains affordable to residents earning typical incomes. By forcing homebuilders to include evermore “affordable” units, Vancouver City Hall is exacerbating the very supply constraints it seeks to address.
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