What do Penticton, Kelowna, Vernon, Kamloops, Victoria, Nanaimo, and Campbell River have in common?
The average 2023 home price in those communities exceeded the average home price of Calgary ($550, 511), in some cases by several hundreds of thousands of dollars.
Bryan Yu, chief economist with Central 1, pointed to this fact during one of the opening study sessions of the 2024 Union of British Columbia Municipalities Monday (Sept. 16). The session, titled "What's Next for Housing," also featured Paul Kershaw, policy professor in the UBC School of Population and Founder of Generation Squeeze, Terri McConnachie, executive officer of Canadian Home Builders'鈥� Association of Northern BC, and Thom Armstrong, chief executive office of the Co-operative Housing Federation of B.C.
The group discussed a wide range of issues around housing, fielding questions from moderator Coquitlam Coun. Craig Hodge, as well as a packed audience with close 200 attendees with each approaching the subject from a different perspective.
Yu used his opening remarks to highlight that high housing prices have spread from Metro Vancouver into every corner of the province to the point where housing prices in mid-sized markets now exceed housing prices in Calgary. While British Columbians wanting to escape high housing prices used to move to those communities in B.C.'s Interior, they are now increasingly turning toward locations beyond B.C.'s borders, such as Calgary.
"We are building a lot, but we are not building enough."
He added B.C.'s housing problems also stem from the province's lagging productivity, warning against high expectations or immediate relief.
"(One) of the challenges we're facing is that there is no good rationale or no real momentum right now that affordability is going to improve measurably, just given prices."
Kershaw focused on housing from the perspective of inter-generational equality.
Politicians across Canada including B.C. have struck what he called a "political bargain" that protects the home values of older generations by sacrificing housing affordability. Addressing the older audience members, Kershaw urged them to reflect on their role in this bargain.
"We have skin in the game," Kershaw said. "If we don't lean in, we are not going to solve the unaffordability in our communities and we are going to tolerate not only a younger demographic being priced out on and moving away, but we are going to tolerate a level of inequality in our communities that is just frightening."
Kershaw also criticized what he called the "fatal flaw" of the new housing legislation allowing for higher density on single-residential lots. Increasing density lifts the value of the land, but the legislation fails to capture a share of this increase to pay for infrastructure, he said. Ultimately, Kershaw foresees a future of government starting to shift the tax burden away from income and toward wealth (such as wealth found in housing) to help pay for various services needed in an aging society such as health care.
McConnachie used her speaking time to highlight concerns in the construction industry. It too wants to contribute to housing affordability, she said.
"We want to build more houses, more quickly, for the least amount of cost."
She called on the provincial government to slow down the introduction of new rules, regulations and mandates because they have caused additional costs, confusion and unintended consequences. She also called on government to avoid one-size-fits-all norms in essentially recommending different construction standards for different climatic and urged government to speed up permitting.
Armstrong, meanwhile, predicted that pressure in B.C.'s rental market to drive policy changes in pointing to what he called a "growing gap between what the private sector can afford to build and what tenant incomes will support and that gap is growing bigger every day."
Armstrong said the "market is not going to deliver a solution for many, many people who live in this province," while calling for an expansion of policies creating non-market housing. He said half of households that rent in B.C. earn less than $64,000 a year.
"That means that if they are paying more than $1,600 a month rent, they can't afford it without compromising on other necessities of life," he said. "So I don't think I can imagine a set of variables that could tweak the market to deliver homes that are affordable to many, many thousands of renter households in this province."
Armstrong also took a broader perspective in urging better co-operation among levels of government.
"People who are struggling to find an affordable home in this market are going to have less and less patience with finger pointers in the room," Armstrong said.
He and Kershaw also said it is time for politicians to avoid difficult solutions. "If we are not making ourselves deeply uncomfortable with the solutions we're advancing to tackle this housing problem, we are not going far enough."
Ultimately, all four panellists agreed with Yu's assessment that fixing B.C.'s housing deficit and affordability won't come easy.
"I don't think there is a magic bullet," Yu said. "We're not going to see those prices...fall dramatically anytime soon. They will remain unaffordable. The only thing we can really kind of do is kind of bend this curve a little bit more back into something more in line over five years, six years."
