Which candidates for Vancouver Mayor are most likely to solve housing
Updated Oct 1, 2018
Vancouver is in a terrible housing crisis and it’s tearing the city apart, pitting neighbour against neighbour, and parents against their kids.
Most candidates for mayor promise bold new measures to build more of the “right kind of housing” but each of them has different ideas about the definition of “right kind of housing”. In this article we dig into their proposals and promises and help you compare them objectively. We even keep score, but you may want to re-score them based on what you think the “right kind of housing” looks like. Generally, this analysis gave points for more of all types of housing and for removing incentives for people to misuse homes they own.
Most candidates for mayor are promising a mix of:
More market housing
More social or alternative housing
Streamlining the development process and making it more transparent
Controls on how current owners use their property
Taxes and fees to discourage behaviours that worsen the housing crisis
There is only one candidate, Wai Young of Coalition Vancouver, who disputes there is a supply problem altogether. Her platform stands in stark contrast the rest.
So here are the facts:
There is a housing shortage today.
More people are moving to Vancouver all the time.
The city needs a plan to get home building fully caught-up and to support citizens who are struggling.
Let’s examine our candidates and where they stand on the supply issue.
Is there a supply issue?
The housing supply problem is generally accepted to be real. It is evidenced by rental vacancy rates below 1%. Do our candidates agree?
Mortgage Sandbox analysis has shown that if Metro Vancouver continues building at the current pace, by 2020 there will be a housing shortfall of around 47,000 homes. It could be fewer but we used a population growth figure of 65,000 to arrive at that number. Some forecasters expect the region to grow by 43,000 people annually and others project the region will grow by 65,000.
For context, the average annual population growth between 1991 and 1996 was 45,000 (3%), yet ten years later from 2011 to 2016 the growth rate was 30,000 (2%) annually. If today Metro Vancouver’s growth rate climbed to the 3% seen in the 1990s then it would bring 74,000 newcomers to the area annually! This is to illustrate that growth fluctuates over time and is difficult to forecast.
Given the city is in a housing crisis, we believe the new mayor should plan for the worst-case scenario and that’s 65,000 people annually. If the region were to accidentally overbuild by a few thousand units in one year and reach too high a rental vacancy rate, then 6 months of population growth would easily absorb the excess housing. Excess housing supply would be a good problem to have.
So let’s keep score, shall we?
Looking to the future, let’s assess how the candidates for mayor intend to avoid a repeat housing crisis decades from now.
The only municipality in Metro Vancouver without a city-wide plan is the City of Vancouver because the city has an exemption from the province which gives it greater leeway than other municipalities to side-step making such a plan. It seem reasonable that Vancouver should be a responsible planner and custodian of our civic future, so Hector Bremner and Ken Sim come out ahead on this count. Having a city wide plan is like having a picture of your completed Ikea furniture included with the instructions, it helps you understand what all the interconnected parts are supposed to look like in the end. Shauna Sylvester is taking a bottom-up approach by focusing on neighbourhood plans and this gets point because it’s a step in the right direction. It would be better if she were to commit to developing a rough plan for what a city of 1 million people looks like. The bottom-up approach to planning creates a risk that each of those neighbourhood plans cobbled together may not make a feasible holistic city plan.
Now let’s look at how the candidates hope to help people who are struggling with the current cost of housing.
David Chen has an interesting idea but doesn’t provide concrete numbers. As well, his solution is dependent on the cooperation of developers who may prefer to build in another municipality if the ratio isn’t reasonable. Ken Sim’s proposal is simply too timid and vague considering the magnitude of the problem. Hector Bremner and Kennedy Stewart come out ahead because they committed to specific targets that they can be held accountable to.
New Market Housing
How do the candidates propose to bring enough supply to meet the population growth demands of a world class city?
Bremner and Stewart get credit for promising concrete numbers for market housing and market rentals. Bremner and Sylvester get special mention for targeting a 3 to 5% vacancy rate in order to shift power from the landlords to the tenants.
Bremner is the only candidate who wants to build more hotel rooms to reduce the need for tourists to rely on AirBnB. In the past decade the city has lost over 1,000 hotel rooms while tourism has boomed, bringing a record number of visitors annually.
David Chen again proposes a solution that is dependent on collaboration and negotiation with developers.
Sim and Sylvester’s building targets are still rather vague. They promise more secondary suites and laneway homes but the challenge with this promise is that it relies on homeowners to build these homes. As well, it puts renters in the hands of amateur landlords who are unfamiliar with tenant rights and minimum rental standards.
The incentive for home owners to build suites and laneway homes is diminished by Sylvester’s plan to charge homeowners an up front fee when they upgrade their property to capture any lift in property value. Likely, this fee will be paid by taking out a mortgage on the home.
Wai Young stands out for suggesting that building ever smaller micro-suite apartments are the solution to affordability while retaining the vast majority of residential land for multi-million dollar single family homes.
Some candidates want to take a hands off approach to the housing market while other feel that government should have a hand in guiding the market. Let’s look at their suggested market controls.
Bremer stands out for mentioning industrial land and its role in supporting job creation. Yaletown, Granville Island, and Olympic Village are all residential neighbourhoods built on top of land that used to support jobs. Politically, it is easier to redevelop industrial land to build apartments, but it’s bad for the long term economic diversity of a vibrant city.
Sim, Chen, and Bremner, want protection in place for reno-victions and demo-victions.
Sylvester wants better enforcement of AirBnB rules, Stewart and Chen propose additional restrictions on short term rentals like AirBnB. Bremner proposes to review short term rentals but his solution to short-term rentals relies more on building more hotel rooms. This was mentioned in the previous section.
So far Bremner, Sylvester, and Stewart are the front runners if you care about housing and quality of life for future generations.
After spending a year to negotiate the assembly of land, it can take over 3 years to get rezoning and a building permit in place. After approvals come through it takes easily 2 years to build a home in Vancouver. With the city in the midst of a housing crisis, some candidates hope to cut this time in half by improving the permitting application process. Let’s look at their proposed solutions.
Most are proposing faster approvals and more transparent development fees. The fee changes are to address how the current fees allow for potential favouritism and provide incentives for developers to lobby the city for special treatment.
Bremner and Sim also want to fast track social housing, while Stewart and Sylvester are focused on purpose built-rental. Sylvester also talks about fats-tracking “community-scale homes” and we will follow up with her team to find out what those are.
Stewart, and Bremner get special mention for seeking to change the development approval processes and put controls in place to reduce the potential for conflict of interest.
Now some candidates believe in the carrot and other in the stick. Let’s see what fees and taxes are proposed.
Fees and Taxes
Sim and Bremner want to lower property taxes. Although Vancouver taxes are low as a percentage of the property value, they are high because of the high property assessed values. It would appear Bremmer want to make up the difference with a speculation tax and development fees for all the home he plans to see built. It’s unclear how Sim would pay for the tax cuts.
What is the greatest evil? Leaving a home empty or profiting from flipping a property when you’ve added no value to it while you owned it. If wasting property is an issue then Stewart is your guy.
Stewart wants to increase the empty home tax from 1% to 3%. So for a $1 million property that is the difference between $10,000 and $20,000. The difficulty will be catching cheats. When the tax was 1% companies began offering workarounds. A higher tax will simply attract more tax avoidance businesses. As well, taxing empty homes raises a question about underused homes. Should the city tax a 5 bedroom home that has only one occupant?
If you dislike speculators, then Bremner wants the province to add a 50% speculation tax on the capital gains from flipping properties. More specifically, this targets the sale of unimproved (i.e., no renovation), non-owner occupied homes, and presale assignments within 24 months of purchase. He may also increase the empty home tax but has not provided specifics. Chan also wants a speculation tax but for now he is short on specifics.
The policy that seems most likely to be counter-productive is charging homeowners who want to increase the number of housing units on their property. So they will pay construction costs to build the housing and also pay the city for the increase in their property value because they invested in it. This policy, though well intentioned, may simply encourage homeowners to not bother adding rental units to their home, and that would make the housing crisis worse. Homeowners may also just wait four years for another mayor who won’t charge them to build rentals. This is a fairly big issues since, Sylvester’s platform relies heavily on this type of “gentle densification”.
This is intended as a rough guide to help you figure out which candidates are attacking the housing problem from all the angles.
If we assume every candidate is non-partisan and judge their proposals on their merits, then Hector Bremner, Kennedy Stewart and Shauna Sylvester come out ahead for housing.
One weakness we perceive in Sylvester’s housing platform is that it relies more heavily on convincing existing homeowners to build secondary suites and laneway homes while at the same time charging them large fees (in addition to construction costs) for building those same homes.
The other candidates may get more engaged with the housing challenges as the campaigns progress, but this analysis is based on the information provided to date.
There are a lot of other issues in this campaign, but this analysis is focused on housing. Almost all the candidates are fresh faces, so take some comfort in the city staff who run the city on a day-to-day basis. The new mayor is intended to provide vision and direction. The city staff provide the mayor and council with guidance and advice, and we need to trust that elected officials have the good judgment to make the right key decisions.
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