In Vancouver’s hot housing market, the ‘missing middle’ remains a muddle

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After a decade of centre-left municipal governance, Vancouver’s 2018 election saw voters back a fractured city council. Seats were split among four parties, roughly divided between left and right, with the new mayor, a former NDP MP, running as an independent.

The split council, and Mayor Kennedy Stewart’s narrow victory, winning by just 957 votes, were harbingers of the grind to come.

Housing was the pressing issue in 2018. Previous municipal and provincial governments had watched housing prices explode, with little action taken until 2016. By that point, home prices in the region had doubled in the span of a decade. Foreign buyers sparked a price surge for high-end houses but the boom became widespread, spurred by immigration, a strong economy and low interest rates.

To try to moderate prices, some measures were finally put in place, from taxes on foreign investors and empty homes to a 2017 plan to get 72,000 new homes built in a decade, two-thirds of which were to be rental. But more was necessary and it was supposed to be top priority for the new city council.

Instead, the pace of progress has been slow. The first thing the new council did was to launch a ponderous citywide planning process. The idea itself was not a bad one; its extended timeline is: Council won’t vote on a final plan until mid-2022, a few months before the next election. Until then, a divided council struggles to agree on any solutions and there are extended fights over each inch forward. The latest new idea suffered that fate last week.

In July, a councillor from the right-leaning NPA put forward a motion calling for the creation of more housing in the “missing middle” – modest density that bridges the big gap between single-family homes and high-rise towers. About 60 per cent of the land in Vancouver is devoted to single-detached housing – yet only 5 per cent of households can actually afford such housing. The missing middle, which would mean more low-rise infill apartments in established neighbourhoods, and typical of how cities used to be built, has emerged as a popular idea to grapple with the need for more affordable housing. Toronto this summer took a tentative step in that direction.

The NPA motion wanted a report by year-end on possible ideas for immediate experiments. It was vague but a welcome idea. After the motion was predictably delayed, the mayor in September jumped in with a bigger plan. Mr. Stewart proposed a pilot of 100 projects that would allow up to six housing units to be built on any lot zoned for single-detached houses, as long as at least two units were affordable to a household earning $80,000 a year.

In a city where experiments are badly needed, the mayor’s idea was an intriguing one. It attracted support from the likes of Evan Siddall, head of Canada Mortgage and Housing Corp. The plan was not perfect – it focused on ownership, whereas the pressing need is rental – but it was promising. City councillors were not impressed. Through a series of amendments, they last week effectively torpedoed the mayor’s plan. Instead, city staff have been asked to produce a report that won’t land until mid-2021. Actual housing action is postponed, again.

The episode encapsulated the current Vancouver council, which has been marked by disordered meetings and an inability to enact real change. Opposition to new plans for housing is often bipartisan, as likely to come from a Green or left-wing councillor as it is from right-leaning councillors worried about single-family homeowners.

Meanwhile, Vancouver housing prices remain astronomical. According to data from zolo.ca, an average three-bedroom house is $2.1-million, a three-bedroom townhome is $1.5-million and a two-bedroom condo is almost $1-million. So it is no surprise about half the city’s residents are renters – a percentage that rises to three-quarters among new arrivals. Before the pandemic hit, the rental market was extremely tight, with CMHC reporting a vacancy rate of just 1.1 per cent, meaning that demand was outpacing supply – as it has for decades.

After the mayor’s defeat at council, he blamed the failure on the NPA and issued an election-style press release. But the next election is two years away. Housing will be the top issue again, as it was last time. Unless, that is, the current mayor and council accomplish something in the next two years. It doesn’t look promising.

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