Report blames Agricultural Land Reserve for your expensive home

Post by Daniel Fontaine in ,

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Expensive House

A very interesting report entitled the Demographia International Housing Affordability Survey 2009 was released this week. It made some pretty remarkable statements about Metro Vancouver's housing market, including blaming initiatives like BC's Agricultural Land Reserve (ALR) for high house prices. The report revealed that Vancouver was rated the "5th least affordable city" in the world to purchase a home.

In his preface, Dr. Shlomo Angel provides a general overview of the problem as he sees it. He talks about declining densities and how we are simply running out of land to build our cities. Less land equals higher prices. Higher prices equals less affordability.

His arguments may sound reasoned, but rather than looking at stripping the ALR, why does he not focus on why cities are not properly zoning for increased density? Why are so many gutless municipalities continuing to eat away at the precious remaining farmland we have in order build swaths of single family homes?

With the exception of Vancouver, no other North American city has densification as official city policy. This is simply amazing when you consider the benefits that densification can bring for both our environment, and for creating a lively and cosmopolitan city.

Angel does acknowledge that people don't like their neighbourhoods to change, even if it results in saving the environment and keeping prices more affordable. I can't say we disagree on this point. However, we part company regarding where the solution lies to housing affordability.

Ask any economist and they'll tell you that increased supply translates into lower costs. I believe that higher supply should be coming from increased density in the urban core, rather than opening up more farmland for development. Lower land prices in the suburbs will only exacerbate an already growing problem of urban sprawl.

Angel states in his report: 

For cities to expand outward at their current pace ─ to accommodate their growing populations or the increased demand for space resulting from higher incomes ─ the supply of land must not be artificially constrained. Land supply bottlenecks lead to increases in land prices and, since land is a major housing input, to increases in house prices. The more stringent the restrictions, the less is the housing market able to respond to increased demand, and the more likely house prices are to increase. And when residential land is very difficult to come by, housing becomes unaffordable.

I must admit, when the City of Vancouver introduced their EcoDensity initiative, I thought it would be a great opportunity to bring the development community together with environmentalists. It's a natural fit. Developers inherently want to build as many units as they can on the smallest parcel of land, while environmentalists understand the eco-footprint of higher density living is much smaller than that of a single family home.

Yet as the months passed, and the EcoDensity debate raged on in Vancouver, the environmental movement, with a few minor exceptions, went into a political deep freeze. I couldn't believe that even they were too afraid to take on the wrath of angry single family neighourhoods opposed to accepting additional density. They were prepared to save Clayoquot Sound, but they couldn't muster the courage to support multi-housing developments in Vancouver's tony westside.

It can be easily argued that for every high density unit that was built in Vancouver, there was a parcel of farmland that could remain as pasture in our outlying suburbs. Where are all the environmentalists when these types of debates happen at local city councils?

To its credit, on most occasions, Vancouver Council has been unanimous in supporting the increased density option. This is despite criticisms from a number of vocal opponents. That's because the elected officials in Vancouver understand that simply stripping away the ALR in order to accommodate more housing development is a policy doomed to failure.

Angel goes on to make a couple of other key points:

"...homeowners may not care about affordable housing and may prefer housing to be unaffordable as long as they own a home that was bought before prices shot up. Unfortunately, those same homeowners are also resistant to densification, regardless of its trumpeted merits: more public transport use, less congestion, less pollution and all. They typically want their neighborhoods to remain exactly as they are, resisting any attempts to add rooms and extensions to existing dwellings let alone allowing the construction of multi-family dwellings in their midst. If there is to be densification, they claim, it should be elsewhere, 'Not in My Back Yard.' Needless to say, densification restricted to the urban fringe because of high land prices will not lead to any of the hoped for merits of a dense city. On the contrary, it is likely to increase commuting and pollution while adding nothing to making public transport more feasible."

What Angel is saying is that Vancouver does have a unique role to play in the density debate. If it simply rolls up the bridges at night and density is forced out into the suburbs, it completely eliminates the possible environmental gains. On this one, we agree.

As someone once said, there are two things that Vancouverites hate most - density and sprawl. I would encourage you to read Angel's whole report if you get a chance. And perhaps when you have time, you may want to attend the odd council meeting or two and let them know that you support a denser, and greener Vancouver.

1 Comment

You state in your opening paragraph that "...Vancouver was rated the '5th least affordable city' in the world to purchase a home."

Yet, as clearly stated on the front cover of the report, the study only included cities in 6 countries: Australia, Canada, the Republic of Ireland, New Zealand, the United Kingdom, and the United States.

Hardly the "world", except for anglo-centric thinkers.

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