Why is housing in Vancouver so expensive?
A diagnosis
Mario Polese, The Wealth and Poverty of Regions (2009):
As in medicine, the essential first step to a cure is an accurate diagnosis. And as in medicine, a proper diagnosis requires combining an understanding of general laws with an understanding of the patient’s particular circumstances.
In the case of Vancouver, I would describe what's happening as population growth and per-capita demand growth colliding with extremely restrictive zoning and a slow, discretionary, revenue-maximizing approval process.
Vancouver's an attractive place to live. Even if the federal government were to cut immigration, we'd still have people moving here from the rest of Canada for jobs, post-secondary education, weather, or retirement.
Besides population growth, we also have demand growth: with Covid we suddenly had a lot of people working from home and wanting more space, and demographically we have a lot of young adults wanting to move out on their own. (Which is why comparing housing growth to population growth isn't sufficient: you need to look at per-capita demand, not just population.)
My argument is basically that we have people who want to live here, and other people who want to build housing for them. The problem is that we make it really difficult to get permission.
Some suggestions:
Make it legal to build smaller projects "by right" (in other words, without having to seek special permission from city council): multiplexes, townhouses, and even small three-storey apartment buildings in residential neighbourhoods, mid-rise apartment buildings near local shopping areas and within walking distance of SkyTrain stations. Auckland did this in 2016. Six years later, their housing supply had expanded by 4% and rents were already starting to be more affordable.
Don't micromanage smaller projects. If you look at the staff report for a typical five- or six-storey rental building, there's a ton of preconditions which have to be satisfied before the city will issue the development permit. Maybe only do that for large projects.
Add public services, like schools, and upgrade infrastructure, like sewers, as the population grows in a neighbourhood.
My take on why people oppose change in their neighbourhood that it’s basically fear of the unknown. But I suppose it could be worse: check out this video of homeowners at a Brooklyn public meeting shouting, "We don't need affordable housing!"