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Comment by pkaler | Hacker News Reader

This seems like reasonable regulation.

And all of this demand-side management is going to do nothing for affordability. Housing affordability is a supply-side zoning issue and can be fixed very quickly:

- Unify/standardize zoning. The entire country of Japan only has about a dozen different zoning types. I see more than a dozen zoning types from my home office window.

- Stop going to council for spot upzoning. This should not be a council function. This should be handled by city operations.

- Upzone Grandview-Woodland and Hastings-Sunrise from RS-1 to RM-4. RM-4 is how Kitsilano is zoned. TADA! You’ve just created 50,000 housing units and solved the whole problem.

Zoning visualization: http://maps.nicholsonroad.com/zones/

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Supply is part of the problem, but the real culprit is that housing has been financialized and opened up as an investment vehicle for global capital. It doesn’t really matter if you change zoning laws if everything that gets built is to serve this kind of investment. Major cities in the US, such as LA and NYC, simultaneously have huge lots of vacant luxury housing stock and homelessness crises for precisely this reason.Vancouver has obviously taken steps to curb the worst excesses of this, but it’s still vulnerable to this form of “market failure.”

This is not empiracly true for Vancouver. Global capital is flooding into RS-1 and CD-1. There is very little speculation into RM-4.

I think this contributes, but it's not the principal problem. The core problem is supply shortage, which given the current astronomical prices has everything to do with zoning. Relax that enough and the market will solve the problem in a matter of years.

This would be a satisfying solution were it not for the fact that Vancouver's housing starts and completions graph is a giant up and to the right. Vancouver has been building supply. At this point if you're a politician in Vancouver that is promising to solve the problem in a few years you're going to get dumped. People wanted this problem solved yesterday.

It takes years. Whether people like it or not. It's never too late to start doing something about it.

Absolute growth in housing supply doesn’t matter. It’s growth in housing supply relative to growth in population.

I work in Vancouver and have lots of coworkers who have recently bought homes. The more I look into it, the more I think the majority of this problem is related to extremely low interest rates. As rates went down, real estate all over Canada shot up a huge amount. Now that rates are rising, it immediately cooled.

The solution to housing being used as an investment is to build so much housing supply that this investment becomes worthless.

Why SHOULDN'T we just let the Chinese build a bunch of empty buildings? It's their money and if they want to waste it building us cheap housing on an investment that will eventually go bust, I say we let them.

The solution is scorched earth, "LOL, you thought your investment was going to go up, but instead we built such a ridiculous amount of housing that houses are now free for everyone".

Nihilism is never a solution.

That's not nihilism, but a correct free market response to over-investment in a particular asset type.

The fact that this didn't happen is due to regulation and other market distortions.

I'm not sure why I should give the "correct free market response" any airtime at all, given that 1) it would appear to require making one of the top 5 Canadian cities into "scorched earth", meaning a wasteland of empty housing in order to drive out investment money so that... why? and 2) any one of a hundred or more demonstrable failures of free markets that have fueled the drive for regulation more than anything else over the same period.

Because having a bunch of free, empty apartments that investors paid for is wonderful! It means that they can be used and are available for all the productive things that building are, on the cheap.

If you could wave a magic wand and do the same thing for food and water wouldn't you do so?

If they fill up because they're cheap, that indicates market demand that will bring the investors back. You're not going to keep them out unless Vancouver becomes, in significant part, a ghost town.

Which has another cost: everyone here who owns their own property would see their most significant asset disappear as the value of their home plummeted along with all the investment properties.

If I could do the same for food, we'd soon live in a hellscape of rotten food.

This is a reply to the sibling comment rather than the parent (which I largely agree with). Politically incorrect rhetoric aside, it's clear than Vancouver's housing shortage can be easily addressed by free market mechanics.

Increased supply, even if not available on the market means that the owner or occupant will not outbid a local on a different housing unit. Multiple additional housing units will over time enter the market and reduce competition and rent increases. A more friendly zoning situation will also spur developers to bring in more housing capacity. This will stabilize or reduce rents, as has been empirically demonstrated in the past year by Seattle.

For the last 20 years Vancouver has had a building boom in which housing starts and completions have been at record highs. We're adding housing stock as fast as we can and faster than almost any municipality in North America. After 20 years, we're at record high prices, available rental properties are at record lows, and rents are at record highs. How is it that glutting supply has failed to drive prices down, correcting over-investment in our housing market?

Faster than Seattle on a population-adjusted basis?

Why not? Because we've seen places where that basic series of events took place.

That takes a long time to play out, and other factors come in to play during that time.

Places where the building was via foreign investment, in cash, absorbing all risk?

Sure I mean if we're playing with lines on a graph in a theoretical space then building enough supply can exceed the demand and result in more affordable housing. That's not real life however.

In reality supply creation is constrained by real world factors such as time and labour supply and "just add more supply" is not so easy. It takes time.

On top of this Airbnb has acted as a sort of friction against supply creation, as when you create a new building, some percentage of the new units were being bought purely to be rented out 100% of the time as a hotel business and were thus never contributing to increasing the vacancy rate. This is why this new policy from the City of Vancouver is explicitly aimed at this sort of Airbnb use. When the City of Vancouver approves a new condo building, which takes years to build, they ideally want 100% of the units in that apartment building available for local renters.

This is not theoretical. This is the exact same process that took place in Victoria, Australia.

https://www.planning.vic.gov.au/policy-and-strategy/planning...

>In reality supply creation is constrained by real world factors such as time and labour supply and "just add more supply" is not so easy. It takes time.

Ultimately, supply is constrained by cost. And in Vancouver, that's not an issue - if the regulation allows it, converting a single family home to a multi-unit dwelling is so ridiculously profitable that the solution to the housing crisis is to simply change zoning to allow it, and then wait. "just add more supply" really is that easy if you let the market forces work. yes, it's going to take time, but this problem has been ongoing in Vancouver for much longer now than the amount of time needed to fix it.

Vancouver has some special geographic considerations that you need to consider and within the downtown core the conversion away from single family units is AFAIK completely done[1]. Density increases in the downtown core are now being down by removing lower density apartment/condo buildings and replacing them with higher density buildings.

I am aware that the nearest city (New Westminster) is developing pretty actively, but there is a deadzone in between the two (Burnaby) that seems to have draconian NIMBY zoning laws. Generally speaking, Vancouver's housing crisis is pretty amazingly interesting and probably is more a result of the incredibly poor transit here[2] than anything else.

[1] There may be some single family units remaining in the Denman neighborhood and there are some remaining in Strathcona (near east van.) as well as lots in Kitsilano and the south shore in general, but both of these areas are generally considered outside of the downtown core.

[2] Oh yea, we have driverless trains, woo... but there are only three transit lines none of which connect to either of our major universities and poor management of the system has left the lines overcapacity.

What makes you say that Burnaby is a deadzone? Metrotown, Brentwood, Lougheed all seem to be growing like crazy. I moved to Toronto a few years ago and I'm find myself surprised by new buildings every time I go back.

Not to mention Gilmore, Patterson, Edmonds...

Burnaby heights has a real nice resident/commerce mix (but very poor transit and developers are forcing a lot of the commerce out). Metrotown is a good area, around the station the commerce is developed and there is plenty of density but going in any direction from it brings you through strip malls. Brentwood is weird... It is a new artificial neighborhood with plenty of Cactus Clubs and Starbucks but it doesn't have much natural commerce and there is very little in the area in terms of employment, I am afraid that neighborhood might suddenly collapse if the developers stop pouring money into it.

Lougheed is fair, I would generally consider that part of the Burquitlam span. It's awkwardly spread out with the mall itself sitting in a sea of parking lots, that doesn't tend to help build a good neighborhood but it is thriving, possibly due to being within short reach of the box stores out United/Woolridge.

Sorry, I was incorrect about Metrotown, it is a pretty nice city center but the rest of Burnaby suffers from west-coast suburb development, areas are either residential, res+light commerce or res+employers, it's hard to find a neighborhood where you can live, work and shop unless you're working in retail, and IMO a neighborhood that can't supply all three is going to fade away to pure residential in time due to NIMBYism.

What makes you think transit is poor?

Compare to a city with great transit, then you know. I used to think that Vancouver transit was great. Then I started working in Shenzhen. Shenzhen and Hong Kong are awesome at public transit, Vancouver sucks. Part of the problem is that it's difficult for public transit in Vancouver to be profitable because the population density is so low.

I agree, and part of your message is one of my strong objections. Public transit shouldn't be measured in terms of income-cost for profitability, most commercial ventures come with externalities of some sort and public transit provides a strongly net positive externality effect, it helps to subsidize business costs (cheaper transit can be seen as a subsidy to wages), retail prices (again, paying less gas/time/whatever to purchase a good makes it cheaper and reduces amazon's advantage) and psychology (IMO wanderlust is a real human need, being stuck in pattern for too long lowers productivity)

It's a public service and one that society should be happy to invest in. Governments that balance the books on public transit with accountants alone are acting against the societal good.

Fair enough. When I said profitable, I used the wrong word for what I meant. What I meant to say was sustainable. Profitable public transit is easily sustainable. Unprofitable public transit, harder to make sustainable, requires a really serious government commitment, and there are so many other things that also seriously require government equipment. For example, if I had to choose between Vancouver having good public transit and good public health care, I'd choose good public health care. Of course in an ideal world, they'd find funding for two (and more) unprofitable public programs.

You're not incorrect, and I think it's always important to look higher and strive for that. However, it's also such an unhealthy and distasteful attitude to embrace. Now, I actually do say the same about the transit in the city I'm currently living in (Winnipeg, MB), but you have to consider the test case for what makes transit "suck". Let's use basic reliability as a measure for this. Can I expect a bus to be on time and get me to work? In Vancouver yes, in Winnipeg no. Can I expect constant time travel to the downtown core from a suburb? In Vancouver yes, in Winnipeg the bus might not show up. Is there better? Yes. In Zurich for example everything was impossibly on time every time, but the country's reputation is literally watches and money.

Population density does play a huge part, which forces inadequate access to skytrains and so on, but you can still catch a bus, then use the same fare to get on the seabus, then the skytrain, then more buses, and maybe bring your bike so you can get that last mile in.

Come to Europe. Then go back to pretty much any North American city.

Yup, or just go to an east coast city (though apparently NYC is sort of terrible right now). I'm originally from Boston and while the city isn't perfect it has a solid offering in terms of moving through the metropolitan area efficiently, whether you reside directly on a T line or not.

Cities built before cars were as widespread as they are now had to put a lot more effort into making themselves livable and providing sane ways to move about the city locally (for daily needs) and regionally (for occasional needs)

I have, and would like to move there if I can manage it. Valid criticism to be sure, but I think it's a bit misguided to levy a statement like "Vancouver transit sucks". Because it doesn't. At the very least it's pretty good. No it's not Zurich or Schenzen, but it's also not Winnipeg, Manitoba.

Whenever I visit the greater Vancouver area, I’m struck by how much undeveloped land there is for a place with such insane house prices. Truly a head scratcher.

You're absolutely correct. Vancouver is unlike SF in that it has no issues building new residential buildings.

At the moment housing starts in Vancouver are at all time highs, unprecedented for decades, and yet vacancy remains sub zero and housing is very unaffordable. This suggests that even these unprecedented levels of supply creation are unable to meet demand, and there are more issues at play than a lack of supply.

This is even more clear when you contrast housing supply to population growth. Population growth in Vancouver, Canada has been stable; almost linear, and relatively low. Meanwhile, housing supply has exploded across the region. Yet, housing remains unobtainable to the vast majority of residents. What is going on? It clearly is not a supply problem, and perhaps even worse, there could be a massive supply glut that for reasons I can only speculate has not become available for occupancy.

This is not necessarily indicative of anything; I don't if this applies to Vancouver, but a big portion of why DC and Manhattan have bustling residential demand despite having less population than their historical peaks is that there has been a general reduction in household size due to various factors. So you could have the same amount of people but a much higher amount of households.

Normally the news articles say its Chinese investors parking their money in Vancouver housing since it is likely to be stable compared to the yuan, etc.

Ah yes, the Chinese investor bogeyman. Apparently there are enough millionaires to cause problems in so many cities around the globe. Yet latest figures put foreign ownership at around 10% max. Let's ignore low interest rates and Canadians bidding against themselves in a hot market.

I also think the foreign investor thing is overblown, but it’s always the marginal demand that causes prices to go up. Take 10% of the property owners out of a market and prices will go down.

You can say that about any non-zero share of the market; take it out and it becomes cheaper! I believe the reason we even talk about foreign investors is that the collective mind would like to attribute the mess to "them" versus "us".

Exactly! I would guess that another driver of high prices is speculation by Canadians. Low interest rates and the "real estate always goes up" mentality has created a ton of panicked buyers who are willing to extend themselves financially in order to prevent being priced out of the market forever.

Let's also ignore that before the foreign investor tax over 20% of purchases were being made by foreign investors in places like Langley and Richmond. That is insane when you think that these people aren't selling at the same time, and is just pure demand.

10% foreign ownership of a major city housing market is an extraordinarily high number that will certainly change the market dramatically.

Those figures are estimates. Blind trusts and proxy buyers are two ways to hide ownership.

Protest all you want, but with current available data, all the public can do is speculate, only the government has access to the data necessary to have a deeper understanding.

Population growth is higher than housing growth and has been for a long time, it's not that complicated. http://udi.bc.ca/wp-content/uploads/2017/09/Q2-2017-State-of...

As long as residential units/person and square footage/person are both on the decline, you should expect housing prices to go up. AFAIK both of these metrics are still falling in all of the major West Coast cities.

We also have unprecedented immigration with no end in sight in fact, we are rapidly increasing it. As well, we are allowing more and more temporary foreign residents (students, TFWs, illegals, etc). We need drastically more supply.

The level of supply being made in Vancouver is also unprecedented. I can seriously not overstate this enough. Vancouver is not SF. It builds.

https://twitter.com/YVRHousing/status/984243329494745088

It suggests that the rate of new supply is less than the rate of new demand.

> takes years to build

It only takes about a year in the US: http://eyeonhousing.org/2015/08/how-long-does-it-take-to-bui...

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