Progressive Housing Solutions to Address Workforce Challenges (2018)

Year: 
2018

The cost of housing in BC’s major centres is rising. Demand for housing is out growing housing supply in both new builds and available rentals. By 2040, Greater Vancouver’s population is expected to grow by over one million people, requiring over half a million new dwellings[1]. While the Canadian Mortgage and Housing Corporation has noted record housing starts in 2016 and 2017, supply is still not keeping pace with growing demand.[2][3]

Not only is the price of purchasing a home increasing, but rental vacancy rates across BC 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;[4] compared to a 60 per cent absorption rate for single-family detached homes, it is apparent that the supply of multi-family housing is not yet meeting the existing demand.

Impact on Business and Community-At-Large

High demand, coupled with inadequate volume and a lack of diversity of supply, has resulted in soaring housing prices, which threatens to drive away young professionals and hindering the attraction of labour to our province. The inability to attract and retain talent will impact the province’s productivity and competitiveness levels, compromising our economic competitiveness.

 

Gap Between Population Growth and Housing Supply/Demand

While there is no silver bullet when it comes to improving housing affordability, the province would benefit from initiatives that fall into two areas:

  • Increasing housing density in major centres; and
  • Streamlining and improving permitting processing procedures.

Increasing Housing Density

Greater Vancouver is one area whose unique geography provides 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 the majority 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 liveability. Despite constrained geography, inefficient land use continues to exacerbate Metro Vancouver’s housing affordability challenges. 63% of residential zoned land is occupied by detached single-family homes, housing a small minority of our total population.[5] This is unsustainable –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.

To maximize the best use of our lands, we must look at options that increase density and diversity in our housing stock. Many municipalities fall short of contributing their pro-rata share of new housing. For example, the number of new housing units built in North Vancouver are far below what they should be contributing to the overall housing stock in the Lower Mainland. If municipalities are required to issue permits for new housing in sufficient volume to ensure they are contributing their fair share of the total, it would go a long way to ease the current shortage. Furthermore, if every municipality was required to issue a certain number of permits each year, they would have to face the tough decisions around where to build new housing and in what form.

Diversity in Housing Form

In order to make more efficient use of our 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. Lack of housing options make it difficult for businesses to attract people between the ages of 25 and 34, a highly desirable and productive demographic, that is also the demographic that tends to start families. 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. Increasing the number of housing units that can support families while also contributing to density, will need to be a priority for all levels of government, not just to address issues around housing affordability, but also productivity and economic competitiveness.

Processing Time Limits

While increasing the diversity and density of housing supply is one part of the solution to the housing crunch in the province, improving and accelerating the approval process is equally as important. 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. 

I know of one application in Vancouver that has been in the process for 12 years! Three years is common place in Vancouver while two years is the norm for Richmond. There is a huge cost to sitting in the development permitting process for all this time. It creates a terrible backlog of projects and deters people for seeking approval for creative designs.

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. 

If you are going to be stuck in a long process, you do everything you can to try and speed it up. This includes “dumbing down” your project to be similar to others that have already been approved in the hope this will speed up the processing on your application.

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.[6] These processes, while generally similar, vary across jurisdictions. Currently, there is no consistent empirical way to measure, analyze and compare the development processes. This is a key barrier preventing new efficiencies in the development process.

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. If information on development timelines were collected in a consistent and empirical manner, this would provide local governments with the information needed to identify, make changes and address inefficiencies in the development process. There is a role for the BC Government to play a key role in prioritizing and mandating the collection of data and ensuring standardisation 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.[7] Understanding where duplications exist and working to streamline the permitting process can increase efficiency for both developers and local governments. The BC 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 BC 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 works with local governments to:

  1. Set density requirements for development;
  2. Pre-zone for transit-oriented development during the planning process for new rapid transit investments;
  3. To implement density bonus zoning wherever possible and appropriate to encourage diversity and density;
  4. Prioritize and mandate the collection of information, in partnership with local levels of government to:
    • Identify local market gaps in housing supply and diversity;
    • Provide a means to compare timelines for development across regions; and
  5. Meaningfully reduce development timelines through concurrent permitting for housing types that introduce affordable and diverse housing supply by speeding up the process of enabling supply in the market.
 

[1] Regional Growth Strategy - Metro Vancouver 2040: Shaping Our Future

[2] Canadian Mortage and Housing Corporation, “Rental Market Report: Vancouver CMA.” 2017

[3] Canadian Mortgage and Housing Corporation, “Housing Market Outlook: Vancouver and Abbotsford CMAs,” 2016

[4] Ibid.

[5] Greater Vancouver Home Builders’ Association and Landcor Data, “Housing Approvals Study: A review of housing approvals processes in Metro Vancouver”, April 2017

[6] Kenneth Green, Ian Herzog, anvd Josef Filipowicz, “New Homes and Red Tape: Residential Land-Use Regulation in BC’s Lower Mainland,” Fraser Institute, July 2015

[7] Meg Holden, Sophie Fung, and Daniel Sturgeon, “Getting to Groundbreaking: Residential Building Approval Processes in Metro Vancouver,” Greater Vancouver Homebuilders Association, March 2016

 

 

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