We have talked in the past about affordability problems in Vancouver. We argued then, as we argue now, that single-detached homes are likely to remain out of reach for most families within the city and that we need to re-evaluate how we think about the issue.
Vancouver is land-locked and the only way to accommodate a growing population is to change the distribution of the existing housing stock – we have to re-zone.
This article focuses on the effects of re-zoning on house prices and resale activity.
The effect of re-zoning on housing supply and prices is readily apparent.
These 24,000 homes represent almost two-fifths of the number of single-detaches homes in the city of Vancouver in 2001. Furthermore, we are missing data since 2011, meaning that this is likely underestimating the current percentage.
So what has happened with those properties?
These are single-detached homes that were torn down and replaced with something else.
Re-zoning has the effect of increasing the stock of higher-density, lower-priced homes, making living within the city itself more feasible and improving affordability. However, it also has the effect of raising the price of single-detached homes. This happens through two avenues:
The sum total of this is to mathematically erode affordability by increasing the prices of single-detached houses. We want to stress though, that this is not the appropriate way of thinking about the issue. Re-zoning to higher uses, especially along higher-order transit (such as the Cambie corridor) is the appropriate course of action for long-term growth.