There is little doubt that Canada has a housing affordability crisis. And there is little doubt this will be a major topic of concern during upcoming elections.
It is hard to know who or what to believe on the subject. Who is at fault? What should be done?
I would respectfully suggest the present housing crisis is not the fault of any government – municipal, provincial, or federal. Perhaps more to the point, it is not associated with any particular political party.
Right now, in B.C., the NDP is in power and therefore, if the opposition is to be believed, it is their fault we have a housing crisis. But the B.C. Liberals – now B.C. United – were in office from 2001 to 2017 and during that time, the average price of a house in Vancouver increased from $441,499 in 2001 to $1,704,820 in 2017 – an increase of $1.26 million.
That is almost a 300 per cent increase in the cost of a house. During the past seven years, house prices in Vancouver have increased a further $800,000, essentially at the same rate. Whether the government is NDP or B.C. Liberal, the housing market has behaved roughly the same.
Similar arguments can be made at the federal level where we have seen Conservative and Liberal governments have very little influence on the price of housing in this country.
At the municipal level, there is nothing much they can do except allow developers to build more houses. In Prince George, a quick drive along Tyner Boulevard will show you just how many new houses have been added to the city over the past decade or so and there are more to come.
No, government and politicians are not at fault when it comes to the housing crisis. They do not have the levers necessary to control the market.
But somebody must be at fault, you might say. Not really. Certainly not the developers who are trying to make a living. Nor the homeowners who are selling their properties at whatever the market will bear knowing that they need to find housing elsewhere. Nor the immigrants moving to Canada for a better life.
These are all easy outs to blame for a complex problem. There are so many factors which come into play in the price of housing.
For example, baby boomers are retiring and want to get as much equity out of their house as possible to provide financial security. They sell their houses for what they can get on the market, which helps to drive up prices.
Or we could look at limited space within most cities – not Prince George – for the building of new houses. Or we could look at the North American dream of owning your own single-family detached house with a yard, driveway, garage, and patio. Maybe we should have more row houses.
But I would suggest the real reason we have a major housing crisis lies in the failure of wages to keep up with costs. Consider that using constant 2001 dollars – that is, adjusting for inflation – the average wage in Canada in 1990 was $21.40 while it was only $30.03 in 2023. Increases in housing prices have outstripped increases in wages.
A house used to cost three to four times an average annual salary. Now, it is more like 20 times.
Houses are now unaffordable to an increasingly large portion of Canadians. And no one really knows how to fix the problem despite what we will hear during election campaigns.
Todd Whitcombe is a professor of chemistry at UNBC.
