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As followers of the Burnaby-South byelection no doubt noticed, two of the hottest issues in the race were immigration and the housing crisis. Some would have also noticed, however, that each of the candidates utterly failed in actually tying the two together; as if there was no connection between home-price inflation and the housing demand from newcomers. Local environmentalists, economists, and academics have been making the link for years; why couldn’t the candidates?
Over the last 30 years, the population of Metro Vancouver (which includes Burnaby) has doubled, with the lion’s share of newcomers coming from outside the country. According to study, just in a five-year period between 2006 and 2011, these newcomers bought over 100,000 homes in the area. As former Simon Fraser University economics professor and former MP Herbert Grubel has noted, today the region’s receiving over 250 immigrant families every week. And, as he says, with these kinds of numbers, supply-side solutions simply do not have a chance in helping the crisis. The real problem is demand.
Of the 350,000 immigrants coming into Canada each year, around 90 percent go to just our three major cities, including Vancouver (where nearly half of all residents are now foreign-born). As Grubel says, a modest, measured reduction could therefore go far in taking pressure off the major housing markets in the country, including the hard-hit Lower Mainland.
Considering the severity of the problem, the demand-side of the equation has to be addressed. In Vancouver, housing prices have risen to levels nearly 40 times that of a typical local wage-earner. RBC has reported that typical residents who want to own a normal home will have to pay 84 percent of his or her income to cover the necessary utilities, property taxes, and mortgage expenditures (a far higher percentage compared to Toronto and Montreal). The situation requires working- and even middle-class residents in the region to tighten their belts, even on essential items, all while the house-rich get richer.
Meanwhile, the stress experienced by the house-poor can have highly destructive knock-on effects in their communities. Take family formation. Studies show that young people generally delay the decision to marry and start families until they can build up enough savings to afford a down-payment on a home. Prolonged housing unaffordability, therefore, comes at the expense of the most fundamental social institution we have. It’s little wonder then that a recent Angus Reid survey found 80 percent of struggling people in the region are simply considering leaving (another disastrous effect on communities), citing house inflation as the prime reason.
Perhaps most heartbreaking for area residents (and exiles), this situation was all completely needless. B.C. politicians have long tried to keep up the lofty housing market through more and more immigration. Struggling residents watched the disastrous effects for decades with local politicians refusing to lift a finger. They even tried to tell us there was nothing to worry about. As late as 2015, former Liberal Housing Minister Rich Coleman had the gall to tell frustrated residents that home prices were actually “pretty reasonable.”
Unlike election-winner Jagmeet Singh’s plan to build half-a-million housing units over the next decade, a reduction in migration numbers (which, to be fair, the People’s Party of Canada has called for) would have certain results and without putting an enormous strain on taxes, traffic figures, public infrastructure, and the natural environment. In Australia, where the immigration-housing dynamic is just as strong, politicians have proposed numerous ways to curb migration in order to make housing there more affordable; a strategy which Bloomberg News called a “important vote-winner” in the country’s upcoming elections. With half of Canadians already wanting a reduction in immigration, it could’ve been a vote-winner here too, and, for those who lost to Singh, a great way to counter his costly supply plan. All the more perplexing and disappointing then, that the other candidates just couldn’t make the connection.