‘STUCK-FLATION’ PARALYZING THE HOUSING MARKET IN B.C.
CEO of Non-Profit Housing Association is happy to see how debate has evolved
Kishone Roy says there is a pervasive feeling of “stuck-flation” in the local housing market.
Roy is chief executive of the B.C. Non-Profit Housing Association, which supports hundreds of churches, charities and other community groups that build and operate affordable housing.
For Roy, 2017 saw some major milestones: a damning increase in Vancouver’s homeless count, but also some high-profile spending and commitments made by the province, and the unveiling of a national housing strategy.
The next year could be a significant turning point as rising real estate values continue to affect owners, renters and the homeless across Metro Vancouver and elsewhere in B.C., says Roy, who spoke to Postmedia News in a wide-ranging interview that has been condensed and edited.
Q: What do you mean by stuckflation?
A: Everyone has gotten stuck in their current housing type. If you owned a condo and wanted to buy a townhome, the cost has increased between (the two) more than you have been able to afford, so you feel stuck in a condo. If you are a renter and you wanted to buy, well, that gap has risen faster. If you are in social housing and you want to move into private market housing, the cost difference, particularly in what is coming up in the private market, is very wide. If you are homeless, that gap to become a renter is also more than it used to be because prices have gone up and there is no supply (of units that are somewhat tied to income). The top end keeps getting richer, but not in cash, only in equity, which it can’t access unless it sells. The whole chain feels stuck.
Q: How did we get to where we are at when it comes to the rental market?
A: I think when the (federal) government got out of incentivizing rental housing and building social housing in the mid-’80s and early ’90s, what we said as a society was: “The private market will take care of it.” And we thought that rents would come down as buildings got older. But the opposite happened. Rents went up. In cities like Vancouver, we got down to building less than five per cent of our (new) starts as rental. Municipalities were left to deal with allowing for rentals on their own, and they did so with laneway housing and suites, but there hasn’t been enough and now more of these are being used for home offices, listed (for short-term rentals on sites such as) Airbnb or left empty. It’s all been a real strain, and yet you have over 50 per cent of people in Vancouver living in rental. Eventually, that is going to cause a crush. It caused a crush for everyone and left a lot of people homeless.
Q: How are conversations about housing taking centre stage?
A: I worked in politics for basically 20 years and never saw housing as a top-five issue. To see it be, by far, the top one means the public is keenly aware there is an issue. It may have started for some people around rental or homelessness or the cost of purchasing a home, but I think as people got talking about it more, they realized that this is something that plays out differently for my child or my parent or grandparent or my sister. Everybody understands there is a problem, but it’s affecting everybody a little differently. They also see this is the No. 1 contributor to our economy. Real estate in B.C. is bigger than oil in Alberta. Our obsession about housing is actually completely normal. Public policy for the first time in decades is now becoming more linked to the same issues that people’s pocketbook issues are.
Q: What are you expecting in 2018?
A: This is where we go from planning and funding to one of building, although really there’s still a lot more to happen with planning. The question that governments haven’t answered yet is how many units are they going to be building in each community, where and when are they going to be built and who are they going to house. We have those answers, but the big missing piece that I am waiting and hoping for next year is some sort of table for the provincial and federal governments, and the municipalities and the community housing sector to get together and actually work on the same plan to execute and fund the same projects.
The municipalities have been left on the front lines of the housing disaster for decades. Now they are going to be on the front lines of solving it. The money is available and we have people on the ground who can build it. We are going to have to deal with the political pressure of going in and densifying communities, tearing down old buildings, building new stuff, renovating — it’s going to be a building boom.