Can Metro Vancouver’s new mayors turn the tide on housing? Experts say not so fast

The winners of British Columbia’s municipal elections last week — particularly those in the Metro Vancouver region — will have to hit the ground running when it comes to addressing the increased unaffordability of housing and lack of supply, experts warn.

Housing was a key tenet of most campaigns, with many candidates making lofty promises for the number of new homes they would help get built and to focus on bringing down housing costs and rents, which have soared in Vancouver and the surrounding area since 2018.

Now those mayors and councillors will have to deliver, and try to bring about real change. The challenge will be especially crucial in Vancouver, where mayor-elect Ken Sim will soon take charge of a city that is struggling to balance its economic footprint with livability for its residents.

“The city of Vancouver, just in the downtown core and the Broadway corridor, has one in four jobs in the region, one in six jobs in British Columbia and one in 12 jobs west of Ontario,” Kit Sauder, a Vancouver-based political strategist, told Global News.

“What happens in Vancouver matters to the entire province and the entire country, and has a net impact on our GDP, our quality of life and our cost of living.”

The benchmark price for a home in Metro Vancouver sits at $1.15 million as of September, according to the Real Estate Board of Greater Vancouver. Detached home prices continue to sit just under $2 million on average.

While the benchmark price has gone down 8.5 per cent over the past six months — thanks in large part to rising interest rates — it remains nearly four-per cent higher than last year.

A new report from global financial firm UBS ranked Vancouver sixth among nine major cities around the world that are experiencing a major housing bubble risk, predicting prices will continue to rise in the short term.

Rents have also gone up in the region. A one-bedroom apartment in Vancouver is renting for $2,590 per month on average, according to an October report by Rentals.ca, which is more than $500 above the national average and up 20 per cent from 2021. The report also found rents have gone up across the rest of Metro Vancouver, as well as the provincial capital of Victoria.

Finding the solution to drive those prices down has been an ongoing struggle that predates the current housing boom, says Hamish Telford, a political science professor at the University of the Fraser Valley who remembers debates about rising housing costs when he first moved to B.C. 30 years ago.

“We’re still talking about it now because it’s not easy to solve,” he said. “And it’s not easy to solve because … we haven’t reached a consensus on what we’re trying to do.

“There are ultimately two ways to resolve this: we can actually make housing cheaper or we can help people buy more expensive houses.”

For now, politicians appear focused on supply as the solution.

Both Sim and Brenda Locke, the mayor-elect of the fast-growing Metro Vancouver city of Surrey, have promised to boost housing supply, but have not set goals on how many units they want built or timelines for when to have those homes ready.

Instead, they have said they are focused on cutting red tape and reducing permit backlogs in order to speed up the building process.

Vancouver’s latest housing needs report found there will be a need for 50,000 new homes over the next decade, but also identified 77,000 existing households in the city are living in unsuitable or unaffordable housing.

A similar report for Surrey estimated an additional 41,200 units will need to be built between now and 2031, including 22,600 rental units.

Zoning and permitting are among the few responsibilities municipal governments actually control, while securing the funding to actually build those homes requires partnerships with senior levels of government. A good relationship is especially crucial with the province — and B.C. happens to be going through its own period of transition.

David Eby, the former attorney general and most recent housing minister, was named the new leader of the B.C. NDP on Friday after a chaotic leadership race and will replace outgoing Premier John Horgan, who is stepping down for health reasons.

Eby has put forward a bold housing platform that includes a flipping tax, secondary suite legalization and municipal reforms to further accelerate permit approvals. The plan would give the province the power to override municipalities, who are being asked instead to partner with Eby’s government in clearing red tape.

Upon being named party leader on Friday, Eby included his housing plan among his list of top priorities for his first 100 days as premier.

But no date has been set for when his term will officially begin, and Telford says other obstacles will further slow down his agenda.

“A substantial part of (this year’s) budget has already been done,” he said. “So all these new mayors will be working from that template. And we’ll have to see if the next finance minister will accommodate any of these policies Eby wants to pursue … which will also require legislation to be tabled, debated and passed.

“It’s going to take some time to see a lot of these changes through the system.”

Telford adds while Metro Vancouver and the rest of the province largely voted for change last week — more than three dozen incumbent mayors were ousted, including in Vancouver and Surrey — progress on housing will likely be just as slow as previous years.

Paul Kershaw, a policy professor at the University of British Columbia and founder of housing advocacy group Generation Squeeze, says that’s because politicians are approaching the problem in the wrong way.

Instead of building more of the same out-of-reach housing, he says governments of all levels must address the tax policies and economic drivers that have led housing costs to reach such unsustainable levels.

“But that would require getting homeowners to acknowledge they are part of the problem — that their accumulation of wealth through their home has left the next generation behind,” he said.

Real estate, rentals and property leasing has been the biggest economic driver for B.C., accounting for 20 per cent of the provincial GDP as of 2021, according to Statistics Canada.

That, Kershaw says, has made it difficult for the province to truly advocate for home prices and real estate activity to fall to levels necessary for home ownership to get back within reach for first-time buyers.

“If more people accept that their neighbourhoods need to change to allow different types of housing, that their property values should come down slightly just to help lower the average, then we could begin to see some real change,” he said.

“The question needs to be, who are we planning for: those who are already comfortable, or those who would like to have more opportunity to be comfortable?”

Telford says those conversations, while necessary, are unlikely to happen anytime soon as established homeowners continue to make up a majority of the voting public.

“Two-thirds of voters own homes and have a lot invested in them,” he explained. “Of the remainder, maybe half are desperately trying to get into the housing market. So how do you help that 15 per cent without hurting that larger group?”

That challenge, while difficult, should be faced head-on by B.C.’s new councils as soon as possible upon taking office, Kershaw argues.

“If they’re not saying, ‘We’re going to do everything in our power to work with other levels of government to break our addiction to high and rising home prices,’ we’re going to be in the same problem four years from now,” he said.

“There’s no silver bullet here than can fix the problem. There’s only silver buckshot. And the reality is, at the municipal level, there’s not enough buckshot to work with.”

— with files from Global’s Emad Agahi, Aaron McArthur and Richard Zussman

by Global News