Winnipeg must balance supply and demand
IN Winnipeg, we tend to take choice of housing for granted. We have a good mix of multi-family choices. We can also choose among various types of single family detached homes. We also have the choice of new neighbourhoods being developed in the city. Not so in Toronto and Vancouver. In the Greater Toronto Area, the cost of building a new single family detached home is closing in on $1 million unless one is willing to commute from Kitchener, Hamilton or Barrie. Condos are the majority of starts within the GTA and townhomes are the closest one can hope to find that resembles a single family home. Land costs and land use policies have reduced single family starts in the GTA to around three times what we expect in Winnipeg; this, from a metropolitan area 10 times our size in population. The resultant lack of choice leads to a significant increase in prices. It’s simple supply and demand. Vancouver seems to have a different scapegoat for rising house prices: foreign investors. A recent project, Vancouver House, was marketed around the world and, to date, 35 per cent of the units have been purchased by foreign investors. Some Vancouverites blame foreign speculation for the 35 per cent increase in property value since 2009. Burnaby NDP MP Kennedy Stewart has tabled a motion calling for a government investigation into the impact of investor speculation. Vancouver Mayor Gregor Robertson has suggested implementing a speculation tax on housing speculators to stem the rise in prices. If we implement detrimental land cost and land use policies such as has happened in the GTA, development changes to less-desirable options or stops completely. When this happens, demand goes up for what currently exists. When supply goes down and demand goes up, prices soar. Winnipeg needs to continue to grow while maintaining affordability and choice for all current and future residents.
Mike Moore is president of the Manitoba Home Builders’ Association