City of Vancouver needs treatment for its overbuilding addiction

The City of Vancouver has finally admitted that it has an addiction problem. The addiction is increasing density through rezoning that has been inflating land values. Along with large speculative inflows of capital that treat housing as a commodity rather than a home for people who live and work here, this has created an affordability crisis.

However, the city’s solution to this problem is to increase density and housing supply citywide – but this time it will be the right kind of supply – to improve affordability. This is unlikely to work for a number of reasons.

The city’s addiction is less like a drug or alcohol dependency and more like an eating disorder that one cannot stop altogether but must address by learning how to eat healthy and in smaller quantities. In many ways this is much harder to achieve.

So the city might have taken the first step to recovery, but the plan is flawed. What Vancouver needs is the civic equivalent of Overeaters Anonymous, such as Overbuilders Anonymous.

The problem for overbuilders is that they are stuck in the supply-side dogma that has proven to be a complete failure. The supply-side dogma has been recently countered as myth by Kwantlen Polytechnic University’s John Rose.

He went back to the 2001 Statistics Canada census, covering a 15-year span where he found that for every 100 households that were added, Metro Vancouver added 119 net units of housing. According to census data, there are 66,719 unoccupied dwellings in Metro Vancouver. Yet despite this huge overbuilding of housing supply, affordability has significantly worsened.

This is a trend that I and others have been writing about since 2007, and it is finally getting mainstream attention as affordability has become the main election issue at all levels of government.

Most of the demand-side issues are under provincial and federal jurisdictions. The city has few tools to address this, and, as proposed, the city’s plans will be of minor influence.

The area where the city does have influence is on the supply-side speculation created through increased density and rezoning. Although the city is attempting to incorporate some measures of affordability, it is unlikely that these will be effective.

We have evidence of this already in the Cambie corridor, where the city has attempted to take 75% of land value increases from rezoning as development charges, yet speculative land inflation has flourished.

Negotiating affordability into market projects will result in very large projects that will be out of scale with the surrounding communities. This precedent of larger scale, with or without affordability, will further inflate surrounding land values as speculators’ expectations rise.

The proposal to increase multi-family development in areas zoned for single detached homes will inflate land values because redevelopment and assemblies are encouraged. This will undermine the incentives for character-house retention and ensure more unsustainable demolition.

Character-house incentives and multiple conversion suites can provide more affordability over the vast 60,000 RS-zoned properties, with much less inflationary impact, while providing more rentals, some ownership and mortgage helpers. New construction townhouse and multiplex units are often just as expensive as a bungalow with a secondary-suite mortgage-helper.

These proposed up-zonings are likely to undermine affordability rather than solve it. Yet allowing more secondary-suite conversions rather than shutting down unauthorized ones is not a priority action of the proposed housing strategy.

Generally, many of the city’s proposals are for things that are out of its jurisdiction or supply-side increases of overbuilding that will not increase affordability because they increase land inflation. We know that Vancouver already has more zoned capacity than is required for decades of future growth.

So the time has come for Vancouver to address its overbuilding addiction by moving away from supply-side dogma. We need a new way to plan for a truly sustainable future that benefits the people who live and work in the city. 

Elizabeth Murphy (info@elizabethmurphy.ca) is a private-sector project manager and was formerly a property development officer for the City of Vancouver’s housing and properties department and for BC Housing.

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