Thank you so much, Mr. Chair.
Good morning. Thank you for the opportunity to address the honourable members of the Standing Committee on Finance.
I would like to acknowledge that I am speaking to you from the traditional, ancestral and unceded territories of the Squamish, Tsleil-Waututh and Musqueam nations.
My name is Andy Yan. I'm the director of the city program at Simon Fraser University as well as an adjunct professor in urban studies and a registered professional planner.
Inflation in the current Canadian economy is an increasingly serious matter for Canadians. Wages for many have stagnated as the costs of living have continued to increase. This can be most vividly seen in housing. Income has become decoupled from housing prices and rents, not only in Vancouver but increasingly across the country. I will concentrate my comments on my research in housing policy and urban planning in British Columbia, but I think the sobering lessons for the rest of the country are pertinent to this conversation.
For a growing number of young and new Canadians, the dream of home ownership has been going out of reach. For renters, their housing tenure is increasingly precarious, if affordable and livable rent is available at all. Since March 2020, the pandemic has been a disruption in the lives of all Canadians, accelerating economic and urban trends and amplifying pre-existing economic vulnerabilities and inequalities between Canadians.
It's from this overall state that I'm focusing on three observations that I think frame my conversation today. The housing challenges faced by Canadians follow a specific timeline, with specific actions and inactions, and intended and unintended consequences, within the local, national and global actors and practices.
In 1990, relatively speaking, Canadian city regions were remarkably clustered together in terms of housing-to-income measures, largely ranging from between three to five times price-to-household income. Of course, today it's been widely extended. You'll find that a place like Vancouver, based upon the last census, was 11 times that multiple, and most likely with the next census it will be far higher. Underlying this is fundamentally beyond not only inflation but also how fundamentally housing values and rents have really outsped the role of income.
Canada's housing challenges are about not just the delivery of supply but also a combination of changes in behaviours and actors in supply, demand and finance. Outdated and inflexible zoning and land use practices are only part of the problem. The problem of housing and its solutions need to be grounded to the question and the answers around whom we are trying to house. It's clear that there are acute housing shortages for particular populations in Canada. In Vancouver, two-thirds of what gets approved to be built in the city is affordable to only 40% of incomes.
The additional demand types that we've seen emerge in the last 10 years have similarly added additional pressures towards the costs of housing in terms of rent and mortgages. We find that such activities as speculation, flipping and short-term rental—a.k.a. Airbnb—have eroded rental stocks and have made housing in urban, suburban and rural communities across the country go from a difficult situation to one that is worse.
Finance has itself been a major challenge, in terms of our really understanding that housing has increasingly become commodified and financialized. Really, the realm of homes now is having second, third or more homes, and we have Canadians who have no homes at all. Again, within this conversation, one has to note the role of global capital blending in with local lending practices. Within this environment, renters face the prospect of becoming a financial underclass in terms of credit and underfunded retirement.
Third, public policies have an effect. There are no panaceas, but tool boxes can offer instruments that need to be able to adapt to local conditions. While building will take years to achieve at the best of times, there are fundamental changes through which public policy can make a sizable difference.
British Columbia has been able to break a 40-year pattern of ever-increasing vacant and underoccupied units through a mix of provincial and municipal policies on vacant home taxes, speculation and school taxes. In terms of vacant and underoccupied homes, we find that those policies have led to a decline in that population by 8%, while in jurisdictions that don't have these policies—an example would be found in the city of Toronto—numbers have increased by 40%.
Fundamentally, this discussion about housing supply and dealing with the issue of affordability comes at the same time that British Columbia has been able to see starts and completions over the last three years higher than any previous 30 years in the province. Indeed, that is in the most recent set of data.