Lowering costs lowers prices - when and where? I just can't recall. Small towns have suffered price drops because everybody leaves, but a growing place building housing so fast that prices dropped? Are there examples?
I concede the logic - IF you have a truly free market. Supposedly, housing has many, many vendors and developers and a free market.
But I'm frankly suspicious. When I read about that large condo in Burnaby staying empty on purpose to drive prices up, it seemed like economic insanity, but the story looked legit.
The article raises several critical points regarding the challenges inherent in Vancouver's housing market, particularly its reliance on discretionary zoning, and how municipal policies like the #BareTrustLoophole contribute to speculative investment and affordability issues. Here's a critical analysis contextualized with relevant data and policies:
Spot Discretionary Zoning and Affordability
Vancouver’s reliance on discretionary zoning leads to unpredictable and often lengthy approval processes. Without outright zoning, developers and homeowners face speculative risks, which increase the costs of land acquisition. This creates a "Wild West" market where only high-margin projects are financially viable, exacerbating the housing shortage and increasing unaffordability.
Cost-Driven Price Floors
The article correctly highlights how costs—land, labor, materials, municipal fees, and financing—set a price floor on rents and sales prices. Municipalities like Vancouver aim to extract 70-80% of land lift, further increasing these costs. The consistent ratcheting up of costs by government policies creates a cycle where homebuilding slows during downturns, maintaining high price floors.
Speculation and the #BareTrustLoophole
The #BareTrustLoophole enables property transactions to avoid property transfer taxes, creating a speculative environment that inflates land values. This loophole undermines municipal and provincial efforts to stabilize housing markets and is a significant factor in escalating prices.
Misaligned Municipal and Senior Government Incentives
There is a direct conflict between municipalities’ reliance on development charges as revenue streams and provincial/federal goals to reduce housing costs. As the article notes, incentives for municipalities to streamline approvals or reduce fees are minimal without external pressure, as demonstrated in clashes over development cost charge increases.
Potential Solutions and Gaps
The article suggests several measures for addressing these issues, including:
Increasing Density by Right: Examples like Auckland show that allowing more density outright reduces land costs per unit.
Pre-Fabricated Construction: Increasing productivity through prefabrication could lower material and labor costs.
Reforming Tax Policies: Closing tax loopholes like the #BareTrustLoophole could curb speculation.
Aligning School and Urban Planning: The lack of integrated planning exacerbates inefficiencies and undermines community-building efforts, particularly in transit-oriented developments.
Intersections with Education Infrastructure
As Vancouver densifies, schools become critical nodes of community infrastructure. However, discretionary zoning complicates the inclusion of schools in new developments, often leading to overcrowded or poorly located educational facilities. This is seen in the Vancouver School Board’s struggles with long-range facilities planning and its reliance on outdated BC Area Standards that do not accommodate modern educational needs.
Conclusion
The article provides a cogent critique of Vancouver's housing policies but does not fully explore how discretionary zoning's effects extend into other domains, like education and transit. A more holistic policy framework, aligning urban planning, educational infrastructure, and housing affordability, is essential to resolving these issues sustainably. The City of Vancouver's recent streamlining initiatives under the Vancouver Plan offer a starting point but require robust intergovernmental coordination and public accountability.
Lowering costs lowers prices - when and where? I just can't recall. Small towns have suffered price drops because everybody leaves, but a growing place building housing so fast that prices dropped? Are there examples?
I concede the logic - IF you have a truly free market. Supposedly, housing has many, many vendors and developers and a free market.
But I'm frankly suspicious. When I read about that large condo in Burnaby staying empty on purpose to drive prices up, it seemed like economic insanity, but the story looked legit.
"Lowering costs lowers prices - when and where?"
Good question. It's probably easier to look at a comparison of costs between two different cities, like Montreal and Toronto, or Edmonton and Vancouver. https://morehousing.ca/montreal https://morehousing.ca/edmonton-cost
The article raises several critical points regarding the challenges inherent in Vancouver's housing market, particularly its reliance on discretionary zoning, and how municipal policies like the #BareTrustLoophole contribute to speculative investment and affordability issues. Here's a critical analysis contextualized with relevant data and policies:
Spot Discretionary Zoning and Affordability
Vancouver’s reliance on discretionary zoning leads to unpredictable and often lengthy approval processes. Without outright zoning, developers and homeowners face speculative risks, which increase the costs of land acquisition. This creates a "Wild West" market where only high-margin projects are financially viable, exacerbating the housing shortage and increasing unaffordability.
Cost-Driven Price Floors
The article correctly highlights how costs—land, labor, materials, municipal fees, and financing—set a price floor on rents and sales prices. Municipalities like Vancouver aim to extract 70-80% of land lift, further increasing these costs. The consistent ratcheting up of costs by government policies creates a cycle where homebuilding slows during downturns, maintaining high price floors.
Speculation and the #BareTrustLoophole
The #BareTrustLoophole enables property transactions to avoid property transfer taxes, creating a speculative environment that inflates land values. This loophole undermines municipal and provincial efforts to stabilize housing markets and is a significant factor in escalating prices.
Misaligned Municipal and Senior Government Incentives
There is a direct conflict between municipalities’ reliance on development charges as revenue streams and provincial/federal goals to reduce housing costs. As the article notes, incentives for municipalities to streamline approvals or reduce fees are minimal without external pressure, as demonstrated in clashes over development cost charge increases.
Potential Solutions and Gaps
The article suggests several measures for addressing these issues, including:
Increasing Density by Right: Examples like Auckland show that allowing more density outright reduces land costs per unit.
Pre-Fabricated Construction: Increasing productivity through prefabrication could lower material and labor costs.
Reforming Tax Policies: Closing tax loopholes like the #BareTrustLoophole could curb speculation.
Aligning School and Urban Planning: The lack of integrated planning exacerbates inefficiencies and undermines community-building efforts, particularly in transit-oriented developments.
Intersections with Education Infrastructure
As Vancouver densifies, schools become critical nodes of community infrastructure. However, discretionary zoning complicates the inclusion of schools in new developments, often leading to overcrowded or poorly located educational facilities. This is seen in the Vancouver School Board’s struggles with long-range facilities planning and its reliance on outdated BC Area Standards that do not accommodate modern educational needs.
Conclusion
The article provides a cogent critique of Vancouver's housing policies but does not fully explore how discretionary zoning's effects extend into other domains, like education and transit. A more holistic policy framework, aligning urban planning, educational infrastructure, and housing affordability, is essential to resolving these issues sustainably. The City of Vancouver's recent streamlining initiatives under the Vancouver Plan offer a starting point but require robust intergovernmental coordination and public accountability.