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A 'housing bottleneck': Immigration targets exacerbate B.C.'s housing crisis

The province will have to find housing for the 20 per cent of newcomers it absorbs, on top of current needs.
Construction industry leaders say more housing supply is needed to support the tens of thousands of newcomers arriving and expected to arrive in B.C.

As Canada aims to welcome 465,000 new permanent residents in 2023, B.C. is grappling with the question of not only where they will live, but how to factor record national immigration levels into an existing housing crisis. 

“We simply do not have the housing supply that can accommodate the demand for people within Metro Vancouver. And let’s face it, the demand to live in Metro Vancouver is extremely high, not only from current residents, but also new Canadians,” said Cameron McNeill, executive director and partner with MLA Canada. 

British Columbia absorbs, on average, roughly 20 per cent of new full-time residents to Canada each year, according to David Lee, director of employment, language and social enterprise with MOSAIC, a non-profit settlement services organization. Last year, B.C. welcomed roughly 83,000 new immigrants, he said. 

Lee says that it is important to consider not only the high levels of immigration to B.C., but the existing housing needs of current residents. 

The biggest problem at the intersection of housing and immigration is a current lack of available built supply, and an already constrained pipeline to get more housing to market, according to McNeill. The result is a housing “bottleneck,” he said. 

Earlier this month, B.C. Housing Minister Ravi Kahlon called on Ottawa to tie federal funding to the number of new permanent residents that come to each province. B.C. currently accepts the second-highest number of immigrants, according to Lee, who agrees with this approach. 

In 2021, the B.C.’s net migration reached 100,797 people, with two-thirds of that increase coming from abroad. It was the highest annual total since 1961, according to the B.C. government, but it could become the norm over the next several years.

Ottawa has said it hopes to welcome 485,000 newcomers in 2024 and 500,000 in 2025. If B.C. continues to absorb around 20 per cent of immigrants to the country, the province could be looking at 97,000 newcomers next year, and around 100,000 in 2025.

Vancouver has the second-largest proportion of immigrants of large urban centres in Canada, according to 2021 census data from Statistics Canada. Immigrants also account for three-fifths (60.3 per cent) of the population of Richmond and half (50.4 per cent) of Burnaby’s population, according to census data. 

McNeill told Glacier Media in December that the province will have to build housing and amenities “roughly the size of Burnaby” in the next three years to accommodate the new targets. 

Residential supply should be focused on density and close proximity to urban amenities, he said, adding that, above all else, urban sprawl should be avoided. 

“We can’t afford to sprawl – that requires great energy consumption and puts incredible strain not only on transit but on all municipal services,” McNeill said. “The most effective way to provide housing is to concentrate the housing in logical locations that have excellent access to transit, as well as urban amenities.” 

Further exacerbating the issue, is that high-density housing – which is needed to help address housing supply – holds a high level of uncertainty as a construction project, said to Chris Atchison, president of the British Columbia Construction Association. 

This is due to the current economic environment and continuing constraints from cost of materials, a skilled-labour shortage and municipal red tape, said Atchison. Another factor, he said, is reservations from investors in private-sector construction.

“They’re less willing to invest in projects if they know that the returns are not there, if they know that interest rates or supply chains might drive up the costs,” he said. “We’re just in a delicate time right now with interest rates being what they are.” 

McNeill also cited high municipal costs, such as Vancouver’s community amenity contributions and development cost charges, as contributors to the housing bottleneck. These can amount to “multiple millions of dollars,” he said. 

But because there is no standard format to negotiations between a developer and a municipality like Vancouver, according to McNeill, the cost of these charges is difficult to assess early on in the project, something that in turns contributes to cost uncertainty. 

“There’s so many variables of uncertainty that if we can start to eliminate some of that variability, [supply] will really start to open up supply,” he said. 

In a stated effort to reduce some uncertainty, the province announced Jan. 16 that it would implement a new permitting process with the goal of speeding up approvals and building more homes. Atchison said that he sees this as a progressive step. 

“Now, we need to continue to make sure that the government is aware of other areas where they can make some improvements, so that more confidence is there for the building community who will need to build all of these projects across every municipality,” he said.

This article was first published in BIV's print edition. For first access to print content, become a BIV subscriber.