Dambusting

It is a pretty drive into downtown from the Vancouver airport. Crossing the Arthur Laing bridge over the Fraser River, you catch a glimpse of dozens of tanker ships gathering in the shelter of Burrard Inlet. Then you dip back onto city streets through the cherrytree- lined streets of Shaughnessy and Granville. The sweet fragrance at this time of year is otherworldly. Past several kilometres of stylish boutiques and outdoor gear shops— each corner seemingly punctuated with a coffee shop where a request for a simple coffee is likely to elicit a bemused look from the Australian barista. Then suddenly, the urban pattern is interrupted. Just before False Creek. Just before you are transported into one of the most densely populated places in North America.

On the right, the former industrial docklands on Granville Island have been transformed into a lively mix of funky residential and commercial— where life is organized around the principle of walking around. On your left…well, there isn’t much of anything of note. Remnants of some industrial buldings, a brewery, a former armoury. An assortment of fine automobile stores and repair shops. A string of low-rise residential condos and apartments straining to cling to the marketing cachet of Granville Island stretches westward along the waterfront. But beyond these is a significant swath of land that seems underutilized. So near this mass of humanity. It looks out of place.

It is not surprising, therefore, that later this year, the ground will be broken for the first of twelve 59-storey towers that will comprise as many as 6,000 new residential apartments. The project is known as Senakw.

This patch of land is bounded on two sides by Kitsilano, a leafy neighbourhood of mostly single-detached and semi-detached homeowners, most of whom are accustomed to getting what they want from their local government. They are fiercely opposed to this development. It won’t make a difference, however. Not in this instance.

This is because this land is part of the Squamish First Nation territory. As such, Senakw is not subject to the rules that apply to other urban development. It is not required to provide details to the public or hold public meetings.

Housing is desperately needed in Vancouver. It is the second most expensive place to live in the world. According to analysis produced by the Canadian Centre for Policy Alternatives, Vancouver workers must earn $35.43 per hour to rent an average two-bedroom apartment. Half don’t. Many earn well below this wage.

Where there is intense demand, it seems inevitable that some supply will find a way to slip around the dams erected by not-in-my-backyard warriors. Otherwise, housing prices have no countervailing pressure. Valuations rise unchecked. Working families are forced to move further away or commit more of their income to keep a roof over their heads.

Across this country, a carpet of demand engineering ideas is sprouting—schemes designed to artificially discourage homebuying. Some want to compel banks to raise mortgage eligibility. Others want the banks to shoulder more risk—perforating the insurance backstop provided by the Canadian Mortgage Housing Corporation. Creating more downside exposure, they reason, banks will be more disciplined about who they lend to and under what circumstances.

Maybe.

Other fashionable notions will pop up. Some may be adopted. None is likely to alter the housing market’s trajectory. This is because the problem is structural. People want to live in Canada.

Among the millions of folks who live in Hong Kong, Macau, Taiwan or scattered throughout the South China Sea, many are likely increasingly anxious about the intentions of Xi Jinping. With the US intently focused on its domestic concerns and the rest of the world grappling with a pandemic, it is unclear who will stand up to the expansion of Beijing’s reach.

Whether you assess the threat as overstated or imminent, the prospect of Canada—particularly Toronto or Vancouver—for a great many in southeast Asia is increasingly attractive. Safe. Good education and health care. The rule of law. Vast neighbourhoods where Mandarin and Cantonese serve as the primary language of daily life—for commerce, social services and employment.

This demand pressure is likely to persist. More precisely, it is largely immune to the standard ebbs and flows that buffet the Canadian housing market. It is unwise, in this context, to bet on a deep and sustained pullback in housing prices in this country. Waiting for the bubble to burst may be a long wait.

So what to do? Tinkering with mortgage or other rules is unlikely to do more than make it harder for those who most need a place to live. At best, it is a marginal exercise with uncertain and unpredictable outcomes.

The only remedy for surging demand is more supply. It means building more homes and apartments. Faster. It means streamlining planning. It means disarming NIMBYs. It means diluting their political power to delay, stall and strangle residential development that offends their view or alters their mind’s eye of what their neighbourhood is. It is self-interested myopia that makes new homebuilding much more expensive. It ultimately pushes folks out on the street.

Several European publications have revelled in the story of Senakw and the Squamish First Nation’s initiative. But it is easy to lose sight of an important lesson in this story—specifically that planning authorities and NIMBYs are a part of the housing crisis in Canada. Perhaps the most stubborn obstacle to affordability in a nation in desperate need.

rick@wellingtontimes.ca