The province’s housing-density legislation unlocks zoning to create tens of thousands of new homes across Metro Vancouver, but that alone might not spur developers to build houses, at least not quickly. Bill 44, which allows for multi-unit construction on previously single-family lots, and Bill 47, which sets minimum standards for increased zoning around transit hubs, have been heralded in many circles as revolutionary changes in the face of B.C.’s housing crisis.
Zoning, however, is still just one element that developers need to consider before building new homes in an environment of high interest rates and soaring costs. “I think the central assumption in all this legislation is that municipalities and zoning are the (main) reasons for inaction” on building more housing, according to Andy Yan, urban planner and director of the City Program at Simon Fraser University. “And I think it’s problematic. It’s the housing system we’re talking about, not just one part of it.”
Yan said the objectives raise questions about whether B.C. will have the construction workforce needed to build the number of units desired and whether the goals are financially sustainable, considering prevailing inflation-fighting interest rates. A modelling exercise commissioned by the province to support its legislation assumes still extremely high prices would be required to entice the levels of development it wants, particularly in high-priced centres such as Vancouver, Burnaby and Richmond.
Those prices wouldn’t be sustainable and $1,500-sq.-ft units wouldn’t be realistic, according to Anne McMullin, CEO of the Urban Development Institute. “That’s just not happening now,” McMullin said. “Right now, the sweet spot for prices is $750,000 to $800,000, and right now it’s very difficult to build units of a certain size for that amount.”
Besides being too expensive to build, McMullin said buyers typically aren’t interested in three-bedroom, family-oriented apartments. Their preferences lean to townhouses or row homes, which are more likely to be built in suburbs such as Surrey or Langley where land is more available. “Costs have to come down,” McMullin said. “It’s very difficult right now to even build what people can afford and meet the (federally mandated mortgage) stress test.”