You may have heard through the media about this housing report that identified Vancouver and Victoria the 4th and 7th least-affordable cities in the world. The measure they used was ratio of median house price to median income.* The historic global value is 3. Vancouver was 8.4 in the third quarter of 2008.
The paper makes a compelling argument that a dramatic rise in the affordability of mortgages led to a increase in demand for housing that markets were unable to meet due to artificially constrained supply. This market failure caused a housing price bubble, which led to the mortgage meltdown, which triggered the financial crisis. The housing supply was constrained by two things:
- urban containment boundaries
- neighborhoods that, through planning or reactionary NIMBYism, prevent densification
Municipal voters and neighborhood association members are disproportionately homeowners (eg: your mom). Homeowners have a huge incentive to increase the price of their home. Therefore, they will seek policies that constrain supply both out and up.
Being a “neo-con” think-tank, the Frontier Centre for Public Policy says getting rid of urban containment boundaries is the only path to affordable housing. I’m going to talk about how we can increase densification in future posts.
* I think this is a good measure. Imagine homeowners being matched one-to-one to houses: the nth richest homeowner will probably buy close to the nth most expensive house.
A few disparate thoughts…
Check out the documentation and maps for Ontario’s Places to Grow plan, particularly the PDFs about their growth plan for the “Greater” Golden Horseshoe, if you haven’t already. I don’t know if you’ll learn anything insightful, but you’ll likely find it interesting. I actually received free hardcopies of three of these publications today, which I ordered after my newspaper questioned a statement of fact about the Places to Grow plan in a letter to the editor I submitted. I’m posting this from my Bold, so I’m not including any helpful links.
I suppose that you should actually vote if you want more influence in government. I think it is a feature and not a bug that groups that vote more have more influence.
I think you said a while ago that BC municipalities should elect councillors from wards and not at-large, so that populous but non-voting areas like the downtown Eastside would not be under-represented. Empiricist that I am, I wonder how intensification policies compare between cities with a ward system and those with an at-large system.
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