I’m at the annual Union of British Columbia Municipalities convention in Victoria this week. Yesterday, I posted about a sessions on homelessness and tent cities. On Tuesday, I attended a panel called “Perspective on the BC Housing Market.”
Helmut Pastrick who is the Chief Economist for Central 1 Credit Union talked about the long-term uptrend in housing prices since the 1960s. Based on his research, he believes that this trend with continue into the future.
He also looked at the average number of MLS listings in BC since 2013. He found that the number of listings has been going down which leads him to believe that there is a supply shortage of housing in the province. He did acknowledge that the 15% foreign-buyers taxes has cooled the high-end market in Metro Vancouver, but he noted that whenever there is a price correction in BC, values have always bounced back.
Over the long-term he stated that growth due to the increase in population of BC, especially Metro Vancouver, will result in higher prices and worsening housing affordability. The housing price to income ratio will continue to rise.
Tom Davidoff from UBC presented on policies that governments can take to create affordable market housings.
He stated that government should lower income and sales taxes, and increase property and capital gains taxes. According to Davidoff, our current tax system benefits wealthy and not working-class people. He pointed out that older people who are house-rich, but money poor, can defer their property tax, so shifting the tax burden from income and the sales of goods, to property shouldn’t create an affordability challenge for older people.
Davidoff said that drivers for high housing cost in Metro Vancouver are because of our high amenities such as the ocean, mountains, and mild climate, and tourism which attracts people to relocate to our region.
Davidoff said that single-family housing zoning is one of the top things that is causing an affordability crisis in our region. He stated that when a municipality zones single-family, it is basically excluding households that make under $200,000 per year (95% of households) from affordable home ownership.
Davidoff stated that by increasing density, shifting the tax burden, and reforming the development process, we can attain affordable housing in the region.
You can view his presentation below.
Davidoff focused on creating affordable market housing, but there is still a role for government to play in building and funding the on-going costs of below-market price housing, and other forms of accessible housing for all people.