Bob Ransford
Sun
Many British Columbia communities are facing a housing affordability crisis. The causes are multiple and cumulative. Many are cyclical and there is a good chance we will be worrying about falling home prices a few years from now. Nonetheless, we have a problem today.
First, there is no magic bullet.
No government can intervene in the marketplace to the extent that the problem will be solved for all renters and homeowners. Taxpayers simply couldn’t afford to support such intervention and regardless of how much governments spent, someone would still suffer.
Solutions will be found with multiple responses — most of them aimed at encouraging more housing supply. Many of these solutions are government policy initiatives and a few require new public attitudes and expectations.
There are two components to the housing crisis and they are interlinked. One has always existed to a greater or lesser extent and it has only worsened because of the impact of the other.
Some in society will always find it difficult to provide for a roof over their head, regardless of what is happening in the housing marketplace. They have special needs because of one disability or another, or they are simply unemployable. In short, their income levels will simply never allow them to pay the costs of adequate shelter. These are the people for which social housing programs of one type or another have always existed.
The social safety net needs to be there to assist these people. Governments must enter the free economy where supply and demand dictate housing prices and artificially modify the economics by providing different ways for these people to access housing.
Governments and other social housing providers have learned over time better ways to provide this assistance. For example, they learned that non-market housing needs to be integrated into the community with all other forms of housing. Gone should be the days of social housing “projects” that were little more than ghettos.
Low income earners and the marginalized suffer today more than others for a couple of reasons. First, the general condition of housing demand outpacing supply puts pressure on this non-market segment. Moreover, there simply isn’t enough government assistance to supply adequate the non-market housing. A decade or so ago, the federal government started to pull out of many subsidy programs it once sponsored. The money to build new non-market housing for those with the deepest needs simply doesn’t exist, or what exists isn’t enough to build new units. But in many communities, like Vancouver, government-owned or developer-donated land does exist.
The simple medium-term solution to the problem is to provide more government dollars to subsidize construction of new non-market units. While waiting for these new units to be built, government can provide other subsidies, like rent supplements that can be used as vouchers to rent homes.
Both initiatives will require political will — most often stirred by public concern.
The wider housing crisis is one felt by renters and homeowners across the marketplace, especially those we call the “middle class.” Housing prices have simply risen faster than incomes. Most families are spending a bigger and ever-growing portion of their household income on housing than they did a few years ago.
The causes are many, some of them cyclical. Labour shortages due to the demands of numerous megaprojects underway simultaneously. Increasing international commodity prices due to demand for basic materials in emerging world markets. International and national in-migration trends. A finite land supply. Increasing NIMBYism in response to development proposals. All contribute to the housing affordability crisis for the masses.
Now for some solutions. These ideas are not new. Many of them have been suggested by experts who truly understand all of the forces at play.
The provincial government could immediately legislate against restrictive strata bylaws in apartment condominium and townhouse projects that prevent rental of strata-titled homes. This would free up new supply for all parts of the market.
At the same time, they could change the Local Government Act to put in place maximum processing times for rezoning and development permit applications at the municipal level. Once the public has had its say at an official hearing, the clock should start ticking and the bureaucracy should be limited in the amount of time they have to say yes or no to a proposal.
The federal government could immediately change tax laws to permit capital gains realized on the sale of real estate investments to be exempt if they are rolled into a new rental housing investment.
Municipal governments could eliminate minimum parking requirements and legislate maximums to allow the market to decide how much to spend on construction of space that simply occupies automobiles. They could also eliminate on-site parking requirements for all new developments within a quarter mile of a SkyTrain station or B-Line Bus stops.
These are just a few policy and legislative initiatives that, if implemented quickly, could provide some relief for our crisis.
Meanwhile, we could all begin to live and let live. We need to accept that one way of providing more affordable housing is to increase housing supply by using our land more efficiently. That means changing attitudes towards higher density, in-fill housing in our neighbourhoods.
© The Vancouver Sun 2006