Understanding BC’s Housing Crunch
Hey there, fellow B.C. residents and housing enthusiasts! Let’s dive into something that’s been dominating conversations lately—our housing situation. It’s no secret that British Columbia has been facing a major housing crunch. Home prices have surged dramatically in recent years, and the pandemic only made things more complicated. Supply chain disruptions, looser monetary policies, and a surge in migration have combined to push housing demand and prices through the roof.
In the wake of COVID-19, housing affordability became an even bigger challenge. Home prices in B.C. jumped significantly due to high demand, inflation, and supply shortages. To fix this issue, we need a bold and ambitious plan—a massive expansion of housing supply over the next decade. It's a tall order, but hey, we’re British Columbians, and we’ve faced bigger challenges before!
Let’s break down the numbers. Right now, we’re building between 45,000 and 48,000 new homes each year, which might sound impressive, but it’s not nearly enough. To hit our affordability targets by 2035, experts say we’ll need to increase that to 80,000 units per year. That’s nearly double the current rate!
There’s another challenge looming—our construction workforce is aging. Over 20% of builders are over 55, and many will retire within the next decade. This labor shortage is a major barrier to meeting our housing targets.
Then there’s the impact of the pandemic. COVID-19 spurred a huge increase in housing demand, which, combined with limited supply, sent prices soaring. We also experienced one of the largest immigration booms in Canadian history, further adding pressure to the housing market.
Despite these challenges, it’s not all doom and gloom. Both the federal and provincial governments have stepped up to address the crisis. At the federal level, the Housing Accelerator Fund is aimed at helping municipalities speed up housing approvals. They’ve also scrapped the Goods and Services Tax (GST) on new rental housing, which will encourage more rental projects.
On the provincial level, the Small-Scale Multi-Unit Housing Initiative allows up to fourplexes on residential lots in urban areas and sixplexes near transit hubs. This could significantly increase housing density in key areas, which is great news for affordability.
The government is also implementing the Transit-Oriented Area Initiative, which allows buildings up to 20 stories within 800 meters of rapid transit stations. And with secondary suites now being legalized, the rental market is set to get a much-needed boost.
Beyond that, they’re working on cutting down rezoning hearings, speeding up permitting times, and making the whole process more efficient. These measures will help alleviate some of the bottlenecks that have slowed housing production in recent years.
While the government’s efforts are a step in the right direction, there are still significant challenges to overcome. A major hurdle is the labor shortage. Newcomers to Canada are less likely to enter the construction industry than those born here, and immigration hasn’t filled the gap as expected. This, combined with an aging workforce, means we’re facing a potential shortfall of skilled workers.
Then there’s the issue of funding. While construction materials like steel and concrete are relatively easy to source globally, the financial investment required is massive. To meet our housing and infrastructure goals, we’ll need around $10 billion in net capital investment for the construction sector, and up to $100 billion overall to meet the necessary infrastructure and housing development needs.
So, what’s the game plan? The province has set ambitious targets, aiming to double or even triple current housing production. Those 45,000 to 48,000 homes we’re building annually? We need to raise that to 80,000 if we want to make housing affordable again.
Government initiatives like the Small-Scale Multi-Unit Housing and Transit-Oriented Area programs are projected to add tens of thousands of new homes over the next decade. By 2025, the government hopes to kick off a housing boom that could see over 500,000 new homes built between 2025 and 2035.
Let’s consider a few scenarios. In the baseline scenario, we stick with our current construction pace of 45,000 to 48,000 homes per year. While this might stabilize housing affordability somewhat, it won’t be enough to make homes cheaper in the long term.
In a more optimistic scenario, we see significant growth in the construction workforce. By expanding employment in the construction sector by 130,000 workers by 2035, we could increase yearly housing completions to 60,000 units. This would bring much-needed relief to the housing market as price increases slow and incomes begin to catch up.
The best-case scenario involves not only expanding the workforce but also increasing capital and productivity. By adopting innovations like modular construction and automation, we could hit the magic number of 80,000 homes per year by 2035. This would cut the time to build a home from 19 months to just 12, significantly increasing the supply of affordable housing.
Boosting productivity in construction is key to meeting these ambitious targets. New technologies like modular construction, mass timber projects, and automation could drastically reduce building times. In fact, New Zealand saw a 57% increase in their construction sector’s capital stock after implementing similar reforms. If B.C. can follow suit, we could achieve similar results.
Innovations aren’t limited to construction techniques, though. The City of Kelowna is currently testing an AI-powered permitting system, which could help streamline the approval process and reduce delays, making housing projects move faster from conception to completion.
Of course, it won’t be smooth sailing. We need to replace 20% of the construction workforce due to retirements, and rising construction costs pose another challenge. Costs have increased by 70% since 2017, including a 40% jump in labor expenses. Securing that $100 billion investment for infrastructure and housing is no small feat, either.
On top of that, developers must navigate regulatory hurdles like permitting delays, municipal fees, and stringent building codes. Overcoming these obstacles will be crucial to hitting our housing production targets.
There is hope on the horizon. We can look to New Zealand as an example of what’s possible. In 2016, they introduced housing reforms that allowed for increased density in urban areas. The result? A construction boom, especially in multi-family housing. Between 2016 and 2023, Auckland’s construction sector grew from 5.5% to 8.5% of total employment, and housing production skyrocketed.
New Zealand’s success shows that we can increase our construction workforce by 130,000 workers by 2035, raising the share of construction employment from 8.4% to 11%. With the right policies, we could add more than 530,000 homes to B.C.’s housing stock by 2035.
So, there you have it, folks. B.C.’s housing crisis is complex, but it’s not insurmountable. By adopting innovative policies, expanding our workforce, and making smart investments, we can tackle the housing affordability issue head-on. New Zealand’s success proves that with the right approach, we can build a brighter future for British Columbians.
What do you think? How can we come together as a community to solve B.C.’s housing crisis? Share your thoughts in the comments below—let’s work together to create a more affordable and vibrant B.C.!