Quote:
Originally Posted by blankall
Vancouver has never allowed mass scale building of higher density housing. AKA the missing middle. They've heavily restricted building and only allowed high end condos to slowly leak out, and always at a rate far below demand.
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They have not heavily restricted building. The Crane Index is a good judge of building activity (basically the number of active cranes a city has). Vancouver currently has 197; compare that to Los Angeles (50), Seattle (38), Boston (14), Portland (9), San Francisco (8), New York (5), and Chicago (3). There is an insane amount of building relative to the population growth.
What is inherently different about Greater Vancouver's housing supply compared to where it was 20 years ago when it was much more affordable? In the last 20 years the population has increased by about 930K people. In that same time period, they have added 640K new housing units. Given Vancouver's average household size of 2.1 people, that represents a surplus of about 200K units over what would have been needed to maintain the housing-to-population ratio they had back then. So if it was purely population-driven demand, you would have expected only modest price increases over that period.
So why the discrepancy? The answer is clearly non-population growth based demand. So lower interest rates, increased demand by investors, increased demand by people buying secondary homes, increased costs of construction, etc. That CMHC report is based on none of the latter things changing. They're saying if investors keep snapping up units, government keeps juicing the market, etc., then we need to build x number of houses to bring prices down to early '00s levels (which really isn't a realistic target given historical prices). But building that many units is basically impossible, so the more sensible (and far more cost effective) solution is to tackle those other things while continue to build new units at a realistic pace.