British Columbia's housing market is at a critical juncture as it faces an ongoing and increasingly severe housing supply crisis. With growing demand outpacing available homes, affordability continues to decline across the province. This article explores the key gaps in BC’s housing supply and assesses the provincial proposals for 2024-2025 aimed at addressing this complex issue.

‍

The Scope of the Housing Supply Crisis

The housing market in British Columbia, particularly in major metropolitan areas like Vancouver and regions such as the Okanagan, has seen unprecedented price growth over the past decade. Despite various government interventions, including taxes aimed at curbing speculation and foreign ownership, the core issue remains — there are simply not enough homes being built to meet demand.

‍

According to the BCREA’s "How Soon is Now?" report, BC needs to deliver more than 450,000 new homes by 2030 to achieve affordability similar to what was seen in 2004. This includes homes across a wide spectrum of affordability, from market-rate housing to social and rental units.

‍

In 2023, the province’s new housing supply, driven largely by market forces, fell short of what is necessary to accommodate the rising population and economic growth. Even though 2022 saw a record number of housing starts, the rising cost of construction, labor shortages, and regulatory bottlenecks have constrained the speed at which these projects can be completed.

‍

Current Housing Gaps: Where Are the Shortfalls?

• Mismatch Between Housing Supply and Demand: BC's population is growing rapidly, fueled by immigration, inter-provincial migration, and an expanding economy. Between 2021 and 2023, BC added nearly 120,000 people, yet housing completions were far below what was needed to accommodate this growth. The number of homes built per capita has decreased in many areas, exacerbating the supply-demand imbalance.
• Labor Shortages in the Construction Industry: One of the most pressing challenges identified by BCREA is the skilled labor shortage. Skilled Trades BC estimates that 55,000 construction workers will retire over the next decade, and a further 130,000 new workers are required by 2035 to meet the province’s housing construction targets. Without an expansion in trades training programs and more incentives for workers to stay in BC, these shortages will slow construction even further.
• Affordable and Rental Housing Shortages: While market-rate housing receives much attention, BC also faces a severe shortage of affordable and non-market housing. The demand for rental units is higher than ever, with vacancy rates in many cities at historic lows. The federal Rapid Housing Initiative (RHI) has added some units, but the number of truly affordable homes remains inadequate. The BCREA projects that, without intervention, BC will see a deficit of 100,000 affordable homes by 2030.
• Municipal Regulations and Permitting Delays: Permitting processes across various municipalities are a bottleneck for new housing developments. The process can take 18 months to two years in some regions, delaying much-needed housing projects. Local opposition, known as NIMBYism (Not In My Backyard), often slows or stops higher-density projects that could provide more housing in urban centers.

‍

Provincial Proposals for 2024-2025: Bridging the Gap

In response to the housing crisis, the BC government has outlined several proposals and initiatives in its "Homes for People" plan, aiming to address these issues in 2024 and beyond. Here are the key components:

• Increasing Housing Starts: The provincial government is targeting the creation of more than 216,000 new housing units over the next decade, focusing on multi-unit housing near transit hubs (Transit-Oriented Development). This is part of a larger plan to build between 216,000 and 293,000 net-new homes by 2035. The government has committed to cutting red tape and streamlining approval processes to help fast-track housing projects.
• Zoning Reforms: The government is implementing zoning reforms to make it easier for developers to build multi-unit homes in areas currently zoned for single-family homes. This includes up-zoning certain residential areas and creating incentives for densification in major urban centers like Vancouver, Kelowna, and Victoria.
• Labor Force Expansion and Investment in Trades: Recognizing the urgent need for more construction workers, the provincial government has proposed increasing funding for Skilled Trades BC to expand training programs and attract new talent. In 2024, the government will also expand youth programming and increase capital grants for training institutions to ensure that BC’s labor market can meet future housing demands.
• Affordable Housing Initiatives: To address the shortage of rental and affordable housing, the government will invest in partnerships with non-profit organizations and the private sector to build more social and affordable rental units. Part of this initiative includes the $500 million Rental Housing Fund, which aims to support the construction of 20,000 rental homes over the next decade.
• Addressing Regulatory Bottlenecks: A key part of the 2024-2025 housing proposal is the creation of a provincial Housing Delivery Team, which will work with municipalities to cut down on permitting times. The government is also pushing for a permanent housing roundtable to bring together stakeholders from across the housing sector to create more cohesive and effective policy decisions.

‍

Conclusion

BC's housing supply crisis is a complex issue, influenced by labor shortages, regulatory challenges, and a mismatch between supply and demand. While the government’s ambitious "Homes for People" plan has laid out several key strategies to address these challenges, success will depend on the speed and efficiency with which these policies are implemented.

Without significant intervention and an expanded labor force, BC risks falling short of its housing goals. This is just one part of the broader challenge of ensuring housing affordability and access for all British Columbians. As we move into 2024-2025, the focus on closing the supply-demand gap will be critical for stabilizing the real estate market and improving the quality of life for residents across the province.

‍

Sources:

• BCREA "How Soon is Now?" Report
• Government of BC Housing Plan
• Skilled Trades BC Forecast Data

‍