“On Sept. 30, after months of research, the Mayor’s Task Force on Housing Affordability released its final report, outlining the challenges facing renters and owners in Metro Vancouver’s housing market.
“We know that many people across a wide range of incomes face affordability challenges in our city,” it states, “from those with little income and no housing to those with a higher income but who struggle to find affordable, suitable and adequate housing… How Vancouverites decide to address these challenges is fundamental to the future of our city. Should we simply let the market decide what kind of city we want and who gets to live here? Or should we take the actions needed to increase the diversity of affordable housing options, and maintain the vibrancy, diversity and economic competitiveness of our city?
“We believe that this report provides a blueprint for both short and long-term policy directions to significantly increase affordable housing options in Vancouver, and encourage City Council to embrace the recommendations and take action on the most pressing policy issue in Vancouver today — the lack of affordable housing.”
The report goes on to cite high costs and substandard facilities as particular problems — echoing media rumblings about a city-wide “housing crisis” — and concludes that housing affordability is perhaps the most significant issue affecting Vancouverites at the dawn of this century. As it turns out, a look through the city archives reveals that it was also the most significant issue affecting Vancouverites at the dawn of the LAST century. And quite often ever since then. Hm.”
– from ‘Vancouver’s 128 Years of Affordability Fears’, Jesse Donaldson, TheTyee.ca, 24 Nov 2012 [hat-tip to YVRHousingAnalyst]. Be sure to read the whole article for many wonderful quotes from prior speculative manias in Vancouver housing and land.
Here follows the comment that we posted below the article at The Tyee:
“Century Long Crisis or Boom ‘n Bust Cycles?
Many thanks for this article, Jesse. Anybody following the Vancouver housing predicament will find it very interesting. We’ll definitely reference it at VREAA.
By the way: In your reading related to this, did you happen to see any early mention of the “running out of land” idea? It’d be fascinating to know when that was first expressed.
Also: Did you come across quotes from down-cycles, when housing/land ownership was valued far less? In the thirties, houses in Vancouver could be purchased for the equivalent of three years rent. (That figure gets distorted in the other direction during manias.. currently rent:price ratios on some properties make the purchase price the equivalent of 50 years’ rent!)
Our own thesis is that Vancouver is very clearly currently locked in the jaws of a speculative mania in housing, and that, when the mania collapses (it likely peaked in 2011), prices will fall by very substantial amounts.
This will shake things up, and ownership will become more affordable, again. Rents will, perhaps paradoxically, also come under downward pressure, for various reasons.
Vancouver housing will never be cheap, there will always be a mild-weather, beautiful-vista premium, but the current mania has taken prices to more than twice those supported by economic fundamentals, even when that premium is accounted for.
Until prices reconcile with underlying fundamentals like rents and local incomes, affordability talk and action will be the equivalent of rearranging the proverbial deck-chairs on the Titanic.
A number of local bloggers have been bearish the Vanc RE market for years, for good reason.
At VREAA (the Vancouver RE Anecdote Archive) we collect personal stories regarding the impact of the Boom (and the unfortunate, inevitable, coming Bust).”
Also, here’s an excerpt from another comment at The Tyee:
“There was no housing crisis in Vancouver when we moved there in 1955. My first job paid me $1.35/hr and lasted 5 months. The I went into an apprenticeship for .75 cents/hr.my wife was making about the same in various jobs.
Our rent for 2 nice rooms and shared bathroom was $35./mo. Our grocery bill under $20.wk.
There were ads in the Sun for small bungalows in Burnaby for $1,200. A $5,000. house was really something.
We bought our first in 1966 for $500. down and $45./mo. Nobody complained about housing shortages or unaffordability.”
– Ed Deak (‘Fiat Lux’) at the Tyee, 24 Nov 2012
Extreme example of a down-cycle: