PROGRESSIVE HOUSING SOLUTIONS TO ADDRESS WORKFORCE CHALLENGES (2022)
The lack of diverse and affordable housing across British Columbia is having a significant impact on employers and employees. To ensure future economic sustainability, governments must work together to increase the supply and diversity of the housing stock without delay.
Background
The cost of housing continues to rise across British Columbia, with increases ranging from 8.3% in Powell River to 30% in the East Fraser Valley.[1] Demand for housing is out pacing housing supply in both new builds and available rentals. By 2040, B.C.’s population is expected to grow by over one million people, requiring at least half a million new dwellings.[2][3] A substantial portion of this population growth will be in urban areas, but all communities across B.C. will also face significant growth with even less housing capacity.
Over the past decade, around 40,000 new Canadians have immigrated to B.C. each year. This has increased demand for housing and supply has not kept pace. As demand for housing has outpaced supply, the average price of purchasing a home in B.C. has increased dramatically. As of September 2021, the benchmark sales price for a new home in Metro Vancouver was over 1.2 million dollars, more than triple the benchmark price from twenty years prior, and a 28% increase from just two years prior.[4]
Not only is the price of purchasing a home increasing, but rental vacancy rates across B.C. are alarmingly low compared to other Canadian regional centres. The overall vacancy rate in the rental market remains below one per cent and the absorption rate for multi-family homes in the Greater Vancouver region is almost 100 per cent.[5] Current data shows 43% of B.C. Renters pay more than 30% of income on shelter costs and 21% pay more than 50% of income on shelter costs.[6] The inadequate volume of housing threatens to drive away young professionals and hinders businesses’ ability to attract labour. Diminished capacity to attract labour will negatively impact our province’s productivity and competitiveness.
As demonstrated by recent budget commitments, the provincial and federal governments are rightly devoting more resources to addressing the affordable housing crisis. The 2022 federal budget outlines more than 8 billion dollars in investment in new housing. The 2022 BC Budget outlines $166 million in investment as part of the province’s affordable housing strategy. While these are important commitments, government has yet to implement any systematic reforms to zoning and land use policies that drive the undersupply of housing.
Gap Between Population Growth and Housing Supply/Demand
While there is no silver bullet when it comes to improving housing affordability, B.C. would benefit from initiatives that increase housing form and density, incentivize more efficient land use, and streamline and improve permit processing procedures.
Increasing Housing Density
B.C.’s Regional Districts and incorporated municipalities all have unique geography and challenges when it comes to addressing housing supply. Physical barriers and legislated land restrictions (Agricultural Land Reserve, Urban Containment Boundary etc.) significantly limit land available for new developments, meaning most of the needed increase in our housing supply will need to be in areas where housing already exists. This requires creative housing solutions that balance density with livability.
Despite constrained geography, inefficient land use continues to exacerbate B.C.’s housing affordability challenges. On average, 69% of residential zoned land in municipalities across B.C. is occupied by detached single-family homes, housing a small minority of our total population.[7] The number is much higher for the City of Vancouver – around 80% of residential zoned land is occupied by single-family detached homes.[8] This is unsustainable, and building in this manner results in unaffordable city centres. Families and working professionals would be pushed out of the city and further away from their jobs, thereby increasing commute times and emissions. Diversity in Housing Form
To make more efficient use of available land, we must construct higher density housing known as the “Missing Middle,” which includes, but is not limited to laneway housing and secondary suites in single-family home zones, townhouses, and apartment multiplexes. The availability of housing units that can support families is also of great concern. While some local governments have recently introduced family-unit requirements for new developments, zoning and regulations have created disincentives to build denser family housing styles like townhouses and other higher density housing options.
Processing Time Limits
Long permitting times, re-zoning processes and unpredictable outcomes generate uncertainty for development proponents, often stall housing developments and act as barriers to increasing supply of housing. Developers incur significant costs due to the uncertainty, inefficiency and delays. These costs are often passed down to the home buyer, further escalating the already high housing costs and worsening housing affordability. There is an incentive for developers to mitigate these costs and lengthy delays, which may result in undesirable consequences.
Data Collection on Timelines
Regulatory processes at the local government level can take more than a year for new developments, even if rezoning is not required.[9] These processes, while generally similar, vary across jurisdictions. While some municipalities have made progress on data collection by creating tracking systems, a more systematic approach will enable the public to hold policymakers more accountable for creating more efficient approval timelines.
To properly address lengthy development timelines across, there must be a consistent, empirical system to measure, monitor, and compare timelines and processes across municipal boundaries. There is a role for the B.C. Government to play in prioritizing and mandating the collection of data and ensuring standardization for what data is collected and how it is made publicly available.
Concurrent Processes
When the development process is simplified and streamlined according to a set of clearly defined desirable outcomes, development timelines become much shorter. When the timelines are shorter, and the expectations are clearly laid out, homebuilders can invest quickly and with certainty. This allows greater diversity and supply to be added to the market at a rate which keeps better pace with rapidly growing demand.
Concurrency is the practice of processing permits simultaneously rather than sequentially, which can significantly reduce development timelines and improve the time it takes for new housing supply to enter the market.[10] Understanding where duplications exist and working to streamline the permitting process can increase efficiency for both developers and local governments. The B.C. government should require local governments to achieve concurrency in permit processing.
Conclusion
Housing affordability impacts everyone from young families, seniors, employers and employees. There is an urgent need for the B.C. government to take immediate action to address the lack of density being built, and the length of time it takes for new housing supply to be built.
THE CHAMBER RECOMMENDS
That the Provincial Government:
- Assist municipalities, in developing a planning framework that actively encourages new housing options , including the following:
- Incentivize municipalities to deliver density near new and existing transportation hubs and adjacent to transportation corridors like highways;
- Require municipalities to pre-zone for dense, transportation-oriented development during the transportation planning process; and
- Consider imposing statutory time limits to stages of the property development process
- As part of the housing needs assessment process, require municipalities to report the level of density they are delivering under current land use and zoning designations, and to enact changes where necessary to ensure the appropriate level of density is achieved according to the community’s specific needs;
- Ensure that Official Community Plans are updated regularly, respond to population changes, address the gaps identified in cities’ own Housing Needs Assessment.
- Work with local governments to meaningfully reduce development timelines through concurrent permitting for all housing types to enable more affordable and diverse housing supply;
- Amend Section 941(1) of the Local Government Act to read “An owner of land being subdivided must (a) provide, without compensation, park land or land to be set aside for attainable housing of an amount and in a location acceptable to the local government, or (b) pay to the municipality or regional district an amount that equals the market value of the land that may be required for park land purposes or attainable housing under this section determined under subsection (6)”
[1] B.C. Real Estate Association, November 2021
[2] Regional Growth Strategy – Metro Vancouver 2040: Shaping Our Future;
[3] B.C. Stats, Population and Household Projections for British Columbia
[4] Greater Vancouver & Fraser Valley Real Estate Boards, via Rennie
[5] Canadian Mortgage and Housing Corporation, “Housing Market Outlook: Vancouver and Abbotsford CMAs,” 2016
[6] Canadian Rental Housing Index, 2022
[7] Greater Vancouver Home Builders’ Association & Landcor Data, 2017, “Housing Approvals Study: A Review of Housing Approvals Processes in Metro Vancouver.”
[8] Ibid
[9] Kenneth Green, Ian Herzog, and Josef Filipowicz, “New Homes and Red Tape: Residential Land-Use Regulation in BC’s Lower Mainland,” Fraser Institute, July 2015
[10] Meg Holden, Sophie Fung, and Daniel Sturgeon, “Getting to Groundbre