Vancouver c2030—Getting to Affordable

City Conversation # 37: How a local government organization nailed the issues, and a new Vancouver City Council responded

A fictional look back from 2030 at how a 2022 report assisted a new City government in its fight for affordability.

Cover of the Report that Changed the Affordability Equations

“Dad, how did things change so I could continue to live in Vancouver?” It was 2030 and my son was in one of his more contemplative moods. He and his partner had recently moved from his older, studio walk-up apartment to a two-bedroom townhouse in a co-operative development in False Creek South (FCS)—one of the several new projects that had been blended into the original FCS neighbourhood. FCS’s population had increased somewhat as new housing was created. Existing owners and tenants who chose to stay were temporarily relocated to the new housing “right next door” while the older buildings were being renovated to become as close to Net Zero as possible. The new housing also included a seniors community and complex care facilities for those needing greater community support.

His new construction townhouse was even closer to Net Zero, meaning its various technologies produced almost as much energy as they consumed and waste was virtually 100% recycled. There were other more sophisticated technologies at work—meaning I couldn’t necessarily understand them, but appreciated their contribution to reducing our environmental footprint. 

“The corner was turned with an innocuous sounding report tabled in March, 2022: Housing Completions & Population Growth 2016-2021”, I responded. “It might have had more impact, and quicker, if it had a more focused title—say Build it and They will Come…if They can Afford it! Or just It’s not Supply, Stupid! The report was authored by the Union of BC Municipalities (UBCM)—I guess they had to be more polite to senior government levels. It was apparently written in response to threats by the provincial government to force massive increases in housing supply on many municipalities. Many UBCM member municipalities were also concerned about housing affordability and UBCM had been doing their own research on the subject.” He waited patiently so I continued.

“At the time, the federal, provincial and some municipal governments, including the City of Vancouver, were insisting that housing affordability would simply be solved by indiscriminately building more housing anywhere a community’s Official Community Plan (OCP) allowed for its possibility.”

“If a community’s OCP allowed the possibility of more housing,” he answered, “what’s wrong with that?”

“A good question, and confusing for many.” He relaxed a bit, knowing he had company in his confusion. I continued: “Certainly, some communities whose OCP provided for the potential of more dense forms of housing at some future time might face opposition from existing residents when an actual rezoning consistent with the OCP was brought forward.” He looked puzzled at that. “There will always be some degree of opposition to any changes to a community, even where they are contemplated in its OCP. Some municipal Councils might bow to that community NIMBY (Not In My Back Yard) pressure. They provided the excuse for the 2022 BC provincial government to threaten to overrule opposition to any proposal complying with an OCP, simply in order to create new housing supply.”

“Isn’t that okay if a community is being pig-headed about new development?” he asked.

“Like much in life, it depends,” I responded. He smiled. “Where a municipality needs new housing for a local population that’s actually growing, yet refuses to approve it, then there might well be a case for senior government pressure. BUT, and it’s a big BUT, simply forcing a community to allow more housing does nothing for housing affordability.” He gave me that explain please look so I continued.

“The UBCM 2022 report pointed out that new housing production in BC in general, including the City of Vancouver, had kept pace with population growth—in fact, new housing in Vancouver slightly exceeded population growth in the five year period of rapid home cost inflation.”

He thought for a moment. “If population and housing were in tandem, how did affordability suffer so much?”

“Great question!” I took this as my cue to carry on. “The UBCM report noted that the BC home construction industry was producing record amounts of new housing in the four years ending in 2021. But this meant labour and material supply shortages, leading to higher costs for new homes. In the report, the Independent Contractors and Businesses Association (ICBA) called it the most significant labour shortage in decades, prompting ICBA President Chris Gardner to observe that You can draw a direct line from labour shortages and longer project completion times to the affordability crisis in B.C. Makes sense to me,” I continued, “when there’s a shortage of workers and materials, costs increase—such is our economy.”

“So what was the solution in Vancouver?” he asked, no doubt wanting to move the conversation along so he could get home and continue unpacking in their new place.

“Before I get there, I need to add a couple other factors into the mix.” He frowned but I pressed on. “The same UBCM report noted that 20% of new home purchases in Canada are by investors, and when they then rent out their purchases, that creates a less stable, less protected situation than for renters in purpose-built buildings.” He frowned again. “Remember you told me that your apartment building had been taken off the market in 2022 because the tenants were mostly long term, hence the rents were relatively lower?” He nodded. “That’s the more stable, protected situation that folks who rent from investors, what’s called the secondary rental market, don’t enjoy.” He nodded slowly.

“Investors were also flipping property with abandon.” He looked quizzical. “So you buy a home, keep it just long enough, if that, to qualify for a capital gains exemption,” which I could see he did not understand. “In Canada, if you own a home for more than a year and it’s your principal residence, which government doesn’t check, then you can sell it and pay no tax on the profit, called a capital gain. So if you sell, then buy every year, you can often make a lot of tax-free money, but at the cost of reduced affordability to those who follow. The provincial government is conflicted about the whole thing, as they collect millions from the Property Transfer Tax every year from flipping activity as well as all other real estate sales.”

“In addition to investor activity, the years leading up to 2022 saw major purchases of rental buildings by Real Estate Investment Trusts (REITs), who were looking to jack up rents however they could.” He positively glowered at that. “All this is in the UBCM report.”

“So how did we get from that awful there to today’s here?” This was the opening I’d been leading him to.

“To be clear about what the there was, we need to look at Vancouver’s political landscape when the UBCM report was tabled.” He gave me his whatever look so I continued. “The 2018-2022 City Council had approved record numbers of residential spot rezonings—that’s where someone whose zoning allows, say, three-storey townhouses, comes in to city hall and says, ‘How about an 18-storey high-rise?’ If Council agrees, and they did more than 300 times between 2018 and 2022, then more housing is created, but very little of it needs to be affordable as approved by that Council. Remember those investors I just mentioned?” He nodded slow understanding. “In addition to that, the Council was on the point of approving tens of thousands of high-end, high density homes along the Broadway corridor, further west in the Jericho Lands, and further east in Grandview Woodlands—they had already approved major new construction the length of Cambie, were shifting to Oak and Granville Streets. But less than 10% was affordable and there were zero co-operative homes like the one you’ve just moved into.” He looked startled so I pressed on.

“The UBCM report came just at the right time for opponents of the 2022 Vancouver City Council. They had been fighting an uphill battle against the ‘build it and they will come’ supply-side proponents leading the charge to pre-approve a 40-year supply of largely unaffordable housing in addition to the 20-year supply that City Council had already approved between 2018 and 2022, which was mostly not yet built.”

I continued, picking up steam. “The UBCM report marked the beginning of turning the tide. It pointed to the solutions the current, new civic government elected in late 2022 have been championing and implementing.”

“There were several parallel streams to the new Council’s activities: 

• They paused all rezonings while they re-evaluated the city’s addiction to developer fees as a revenue stream—the drop in Community Amenity Contributions (CACs) and Development Cost Levies (DCLs) that city management had come to depend upon to fund their pet projects quickly led to much service consolidation—staff were redeployed to the neighbourhoods and back to basic city services like road and parks maintenance, not to mention much needed civic building maintenance. 

• As land prices began to deflate, some developments that had depended on super high density did not proceed—this reduced pressure on overactive labour and materials markets, leading to a reduction in construction costs for the first time in over a decade.

• The new Council undertook a core services review focused on really making city hall work better for residents—out of that came major fee, time and effort reductions required to do most anything in the city.

• They re-established the Neighbourhood Planning Offices (NPOs) closed by previous administrations, sending dozens of city staff to storefronts all over the city, with a mandate to listen to citizens, reformulate priorities and develop local rental housing strategies—developers and landowners quickly recognized the new game in town, in fact many local actors who had been sidelined by the city’s focus on mega projects resurrected more neighbourly projects—neighbourhood centres began to revive with more housing and commercial construction, and more of it affordable.

• Working with other UBCM members, Vancouver Council faced down the federal government over their lack of follow through on services for new immigrants and the downloading of affordability issues with no federal investment—the feds responded perhaps simplistically by bringing back a housing co-operative program, updated to address the issues that collapsed the original program in the 1990s. More is needed, but it’s a start.

• Also working with UBCM members, they faced down the provincial government over their attempt to overrule local governments in the name of unaffordable affordability. All UBCM member municipalities extracted key concessions around adequate schools provision, homelessness and health care supports, including expensive complex care needs that had been shifted to municipalities even while the province insisted that more of the wrong kinds of housing should be imposed on BC communities

      “Is that a good enough synopsis?” I finished with.

“Where would we be now if that report hadn’t been tabled and acted on when it was?” he asked hesitantly about he and his partner.

“To be blunt,” I concluded, “your co-op would never have happened. You would have been evicted from your studio—your old building would have been replaced by a 15-20 storey building, as proposed in the Broadway Plan, that you probably couldn’t afford to live in and wouldn’t want to with a family. There would be nowhere for you in this city, except for our basement suite—not a happy place for a 40-something.”

Knowing I had fought a bit for what was a close run thing that turned out okay for him and his generation, he rose, clinked beer bottles with me and gave me a big hug, as he likes to do on most occasions. I hugged back more than usual, glad to have him close by.

Call to Action

Vancouver’s civic election is in late October of this year. Lots of damage can be done by the current Council, city management and staff before that date—and it will continue, and worsen, unless TEAM for a Livable City elects a majority (6 of 10) City Councillors—less than 6 and not much will change. If you are concerned that what you’ve just read is an example of what’s wrong with our city, and want to bring back its livability, join TEAM and work with us to restore Vancouver as a place we can all afford to call home.

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Today’s question: Do you think the province should grant itself the power to override local councils in development matters? Why or why not? 

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Brian Palmquist is a Vancouver-based architect, building envelope and building code consultant and LEED Accredited Professional (the first green building system). He is semi-retired for the moment, still teaching and writing, so not beholden to any client or city hall. These conversations mix real discussion with research and observations based on a 40+ year career including the planning, design and construction of almost every type and scale of project. He is the author of the Amazon best seller “An Architect’s Guide to Construction.” He is also a member of team for a livable Vancouver, a new political party dedicated to restoring a livable Vancouver starting with the 2022 civic election. City Conversations are generally congruent with TEAM policy, so if you like the ideas that I’m writing about, please consider joining TEAM.