Code Red: Lessons Toronto can learn from housing hell
Vancouver’s mayor Gregor Robertson explains the city's efforts to cool the market.
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Gregor Robertson knows his city is at a turning point.
Vancouver is a thriving municipality of more than 600,000 people that consistently places near the top of international quality-of-life rankings.
But the problem is hardly anyone — not even doctors and lawyers, according to a recent report from real-estate website Point2Homes.com — can afford to buy a home there anymore.
“We’re in an affordability crisis that is extremely difficult and we are by necessity looking at every option,” three-term mayor Robertson told Metro.
With Toronto facing many of the same challenges — housing prices are up 27.7 per cent from last year, according to the Toronto Real Estate Board — the city could learn from Vancouver, as well as other urban centres all over the world that are struggling with the same pressures, Robertson said.
More from Metro's Code Red series on the housing crisis:
He blames high property values on a “lack of regulation” from the federal and B.C. governments that led to “lots of speculation, driving up property values in Vancouver as people held properties and flipped them to make money on a booming market.”
The B.C. government has since introduced a 15 per cent foreign buyer’s tax in an attempt to crack down on investors outside the country, but Robertson said it’s come too late for many people.
He’s calling for a housing “reset” focusing on affordability and incorporating a concept called “homes first, investment second.”
Cherise Burda, executive director of Ryerson University’s City Building Institute (CBI), believes the approach makes sense.
“The speculation and expectation are driving up prices like it’s a stock rather than a shelter where people live,” said Burda.
“We cannot build our way out of a housing bubble,” she added. “It’s like adding another road onto a highway to solve congestion; you’re just going to get more buyers.”
It’s too early to tell if the foreign buyer’s tax has had an impact, Robertson said, but realtor Royal LePage predicts prices in the Greater Vancouver Area will drop by 8.5 per cent in 2017.
Jason Mercer, director of market analysis for the Toronto Real Estate Board, said according to a survey his organization commissioned from research firm Ipsos, foreign buyers make up a very small number (about five per cent) of buyers in the GTA.
Mercer said he’s seen a “sustained decline” of listings and believes policies that address the lack of supply by speeding up the development process are needed.
Back on the West Coast, Vancouver is focusing on housing that’s still accessible to people who aren’t millionaires.
“And that’s only going to be rental housing now, so we’ve put our attention on putting out more rental housing supply and introducing the empty homes tax,” said Robertson.
The city is also trying to encourage “gentle density” by looking at ways to get more row houses, duplexes and townhouses into single-family home neighbourhoods.
Vancouver has already legalized laneway and secondary suites, and each single-family home is now seen as three units per lot.
“We’re seeing some neighbourhoods emptying out because of real-estate prices,” said Robertson. “We need to turn that around.”