Government inattention, increased building costs and workforce pressures have contributed to an equation that added up to a housing crisis, according to a panel of experts at this year's Vancouver Island Economic Alliance summit.
“There is the old saying: ‘to every complex problem, there is a fantastic simple solution' — and it’s wrong,” said Mark Holland, president of Westplan Consulting Group and Vancouver Island University professor.
He moderated a discussion titled 'The Housing Equation: The blunt truth about what caused the housing crisis and how we can find our way forward' on Oct. 23 at Nanaimo's Vancouver Island Conference Centre.
“The first things we have to do as a collective piece of the economy here on the Island is figure out what’s actually standing in our way and what is it going to begin to take to start working our way back metric by metric, item by item to begin to bring down housing costs over a period of time without crashing everybody’s personal wealth,” Holland said.
One factor he and other panellists pointed out was federal government pulling out of subsidized housing in the 1980s and '90s.
“Today we have half a century that we are behind that we have to catch up and that’s one of the core problems …" Holland said. "Whether you are left or right of centre, whether you are pro-market or pro-government intervention, both failed, so this is the problem. We are way behind on supply.”
He said the Island currently has three to four months of supply in the housing market – an improvement from just over a year ago when it was around 45 days of supply. Despite being closer to a balanced market, the average price to buy a home is still well over half a million dollars, he pointed out.
Russell Tibbles, principal with Island Places Property Corp. was among the five panellists. He said though there have been efforts to make housing project approvals easier, specifically with provincial densification and secondary suite legislation, it is still a slow and cumbersome process.
He said municipal staff often have to sift through proposed projects and find how they fit with community plans and policy.
“That helps to fuel what becomes a very antagonistic relationship because you are dealing with someone, oftentimes … that is trying to administer a policy that’s really not set up for success and quite often it’s coming from a local government where the culture is one where you are set up to get to ‘no.’ You have to work hard to get to ‘yes.’”
Tibbles said municipal councillors need to balance the need for more housing against the desires of the community and often more weight is put on concerns about development than housing.
Scott Dutchak, CEO of Habitat for Humanity Victoria, sat on the panel and said his organization faces cost escalation as it helps people get into affordable home ownership.
“We are helping firefighters, we are helping nurses, we are helping all those people in your community that you want in your community to keep it a vibrant, healthy and active community. It’s no longer we are focusing on the most challenged people in our society. We are helping what, when I grew up, were well-paying jobs,” Dutchak said.
When the discussion made its way to provincial legislation for secondary suites in single-family dwellings, Dutchak said he believes there are still challenges because municipalities could find themselves unable to add density to neighbourhoods because of inadequate infrastructure.
“The problem with a lot of real estate development and a lot of activity today is these great ideas come out but implementing them is dependent on a local execution that remains, in my opinion, the biggest impediment to actually getting housing growing – the decision-making is too local,” he said, pointing to Greater Victoria, where there are 13 municipalities representing a population under half a million. “The decision-making is so close to the neighbourhood … These decisions need to happen at a higher level, at a regional level or even at a provincial level in my opinion if we are going to make a dent in providing any more housing.”
Coun. Troy Therrien from the Village of Cumberland took the floor during a question-and-answer period at the end of the discussion. He said municipal councils were “thrown under the bus” in the discussion about increased costs and cumbersome approval processes.
“I fully agree that when the federal government stepped out of building houses, that was a big part of it, but nobody touched on the commodification of housing as one of the reasons that the price of housing is where it is at right now,” he said. “If you go to buy a house and are competing with a bunch of boomers that are looking for rental properties, of course the price is high.”
He challenged panellists who said increased costs get passed down to home-buyers.
“Costs aren’t passed on – the market determines the cost of housing, so you either build the house or you don’t based on market conditions, but you are not passing on costs. You are either saying yes or no,” he said.
Therrien added that communities live with developments long after they are finished and he believes it is OK for municipalities to take extra time to ensure the projects are right for the community.
Panellist Rory Kulmala, CEO of the Vancouver Island Construction Association, pointed to labour and materials as a driving factor in high housing prices. He said the cost of living makes it hard to attract tradespeople to Vancouver Island and immigration is costly and challenging.
“We are busy right across the country and the smallest communities are having the same conversation about housing so people can stay in their own community. Their dollar will go farther, their lifestyle will go farther, they can have a nice home and they can raise their families there, so they are not coming out here,” he said.
Kulmala said even if there is funding for projects, tradespeople are working at capacity and can only build so much.
“We are seeing a demand for housing outpace our ability to keep up with it,” he said.
Kulmala responded to the Cumberland councillor's concerns by stressing the urgency of the crisis.
“Taking the time to do it right has been great but we don’t have the time. We know how to build," he said.
The panel discussed the impact of the crisis on renters, agreeing that many people who are renting now could be renters for their whole lives if significant change does not come.
“We can’t just bottleneck ourselves through government programs into only funding rental and because what happens is people get into rentals, they can’t afford a down payment. They will never afford a down payment,” Dutchak said.
The economic summit was held Oct. 23-24.
