ANALYSIS | Vancouver’s Housing Crisis, Explained
Vancouver House, located in Downtown | Photo Credit: Divit Sharma/Unsplash
Vancouver has been grappling with a long-standing housing crisis that has left many residents struggling to find affordable homes. As prices continue to rise, the issue has begun to catch global attention.
Vancouver’s picturesque landscapes make the city a desired destination to live in, but Vancouver’s geography stands as a formidable obstacle to housing development. Surrounded by mountains, the ocean, and the American border, Vancouver has limited space to expand, fostering a highly competitive real estate market.
Another significant factor that accelerated the housing crisis was the influx of wealthy foreign buyers who poured their investments into Vancouver's real estate market. Over the past decade, the influx of foreign buyers artificially inflated housing valuations, further driving costs.
Though the provincial government responded with 2016's Property Transfer Tax, which placed steep transfer taxes on foreign buyers, loopholes remain open for foreign investors. The federal government even introduced outright bans on foreign homebuyers temporarily; however, inflation and lack of housing supply still remain largely unchanged.
Even with pre-existing affordability issues, the outbreak of the COVID-19 pandemic became a massive tipping point. The economic fallout from the pandemic created job losses and financial uncertainties for many individuals and families, leaving many unable to afford the skyrocketing housing costs.
In 2023, the Urban Reform Institute named Vancouver as the third least affordable city behind Hong Kong and Sydney, with many surveys showing residents’ concerns when it came to meeting rent and mortgage payments. Many government and city officials have claimed that they recognize the magnitude of the issue. In October, Mayor Ken Sim announced a bold plan to heavily modify Vancouver’s 26 Village Areas. The new plan allows for single-family home and commercial areas to be diversified into townhomes, multiplex buildings, and mixed-use low-rise buildings. Following Sim’s plan, BC Premier David Eby revealed the provincial government’s strategy: to build up to 290,000 new housing units, which will cost $16 billion over the next decade.
In addition, there have been initiatives to review and revise regulations and guidelines, such as the Vancouver Building By-Law and the Shadow Impact Criteria and Guidelines. Streamlining these regulations could expedite the construction process for many housing developments.
However, while progress is being made, many worry if it will be enough. Urban planning professor Andy Yan, an expert at Simon Fraser University, questioned the plans set in place. “While some in the city may strive for home ownership, data tells us that this possibility has become increasingly out of reach.”
According to a 2023 report by the Canada Mortgage Housing Corporation, even with an additional 290,000 units, the province will still need an extra 320,000 units to match 2012’s level of housing affordability.
Looking toward the future, Vancouver's housing crisis remains a pressing issue that will require far more action from developers and the government in order to be corrected. With government and city officials shifting focus to fixing Vancouver’s housing market, there are still many ways to give citizens a home they can afford.