ThIs paper is in response to an article by Judith Lavoie, “Housing security elusive for Victoria renters” that appeared in the May/June 2019 Focus magazine. (Source: https://www.focusonvictoria.ca/focus-magazine-mayjune-2019/housing-security-elusive-for-victoria-renters-r14/)
The answer lies in looking at the big picture.
Samuel Stein in his recent book, “Capital City – Gentrification and the Real Estate State”, points out: “Global real estate is now worth $217 trillion…it makes up 60 per cent of the world’s assets, and the vast majority of that wealth—roughly 75 percent—is in housing.” 
For a comprehensive review of global wealth, “The Wealth Report 2019” published by Knight Frank is worth a good look. It provides an in-depth analysis of global capital investment flows in and out of various economic sectors, highlighting the fact that the most popular commercial and private capital investments are in apartments and seniors housing/care.
New World Wealth Report (April 2019) ranks Canada as the eighth largest private wealth market in the world, with a 23 percent growth in private wealth accumulation between 2008 and 2018. And, a December 2018 Statistics Canada report on non-financial assets identified that as much as 76 percent of Canada’s national wealth is held in the real estate sector. The total volume of national wealth in that quarter was $11.415 trillion, with real estate representing $8.752 trillion. This is the highest it’s been since the Great Recession of 2007.
So where does B.C. fit into this picture of wealth and real estate investment? B.C. Assessment, a crown corporation, reported early this year that the total value of all real estate investment on the 2019 property tax roll is $2.18 trillion, up 18 percent over 2018 Note: approximately 88 percent of all properties in the province are classified with some residential (Class 1) component, equivalent to more than $1.5 trillion.
The 2019 B.C. Assessment report also indicated that the average assessed value of a single-family residential property in the City of Victoria was $842,050 up eight percent over the previous year, while the average condo property assessment value was $447,800, also rise of eight percent since 2018. While the province saw almost $31.3 billion invested into new construction and rezoning last year alone, the City of Victoria – Q1 2019 Operational Highlights, Accomplishments and Metrics Report stated that the City has seen an increase in the value of construction permits from $125.2 million in 2014 to $347.9 million in 2018. And, at the end of Q1 2019, the value of construction in Victoria reached $82.8 million – a 56% increase over the same time period in 2018.
What the “big picture” reveals is a highly lucrative and booming real estate investment market on the global, national, and local level. It should not then come as a surprise to see a generally inflated housing market and unaffordable home prices the world over.
A deeper dive into the rental housing market in Victoria
Victoria’s unaffordable housing environment is also contributing to its ultra-tight rental housing market. With a vacancy rates below 1.1 percent in the capital city, tenants are now living in the sixth highest rental market in the country. The May 2019 Padmapper Canadian Rental Report indicates that the median rent for a one-bedroom unit in Victoria is now $1,390, up 12% over this time last year, while the median rent for a two-bedroom unit is now $1,730, an increase of 13% over May 2018. A recent glance at Craigslist reveals only 35 long-term apartment listings in Victoria (where 27,000 tenant households comprise 60% of all city households.)
What few housing planners, advocates, and politicians are willing to discuss is why there are more than 3,450 housing units unoccupied in the City of Victoria. That’s equivalent to 7 percent of the City’s entire housing stock, according to the 2016 Census. This inconvenient statistic appears to have been ignored, even though the proportion of unoccupied housing units is a constant feature of Victoria’s housing market from one census to the next, not unlike other housing markets. The only level of government that is cashing in on the problem is the province of B.C. Its new Speculation and Vacancy Tax promises to generate a new source of revenue to be used to support affordable housing throughout the province.
What’s underpinning the ‘growth at any cost’ story is the Capital Regional Growth Strategy which forecasts a population increase of 20,000 in the City of Victoria by 2041. In fact, the City’s Official Community Plan (2012) is based on increasing housing capacity to accommodate the population growth—necessitating an additional 13,500 apartment units, and more than 2,700 ground-oriented housing units. While the City’s plan stated it had sufficient zoned capacity in 2011 to match this demand, the development and real estate sector had its own agenda. Just lobby Council and senior planning staff to approve construction of more upscale units in higher density downtown core projects, with reduced parking requirements, and removal of minimum unit sizes. Why? To increase their profitability. Who would bear the cost? Those left out of the picture –the many young buyers and working families locked out of the unaffordable housing market, or renters being displaced by higher-value property owners. The City’s unchecked residential growth plans are all predicated on escalating land values and a strong real estate market disconnected from local incomes.
While federal and provincial governments benefit from the real estate gold rush, they both promise that billions of dollars will be invested in “affordable housing”. The real question is, housing for who, only the top ten to 15 percent of income earners? Historically, senior levels of government have consistently relied on the private housing market to provide shelter in the country. They have perpetuated a housing policy and financed a two tier housing market in Canada, two-thirds of which is comprised of private homeowners whom they heavily subsidize, while investing precious little in supporting the “secondary housing market”, comprised of private market renters, and a small proportion of publically supported social housing tenants.
There is a constant refrain about the need to increase the housing supply to solve the housing crisis. How does building more unaffordable homes used as investment vehicles and retirement nest eggs that few can buy or rent, ensure an equitable and sustainable foundation for all residents?
Victoria has built more than 4,000 housing units over the past four years. What’s the net result been to taxpayers in terms of revenue from development cost charges and community amenity contributions? Less than $15 million in the City’s coffers and, fewer than 100 affordable housing units in the City of Victoria!
Yes, the City has significantly altered its planning and land use bylaws since 2014, but have these changes been balanced, and are the costs and benefits distributed equally and equitably? The City has streamlined the development approval process, removed restrictions on garden suites and secondary suites, reduced parking requirements, eliminated housing unit sizes, and even approved short-term rental units in the downtown area and in primary residences. At the same time, Council has granted more than $40 million in ten-year property tax exemptions to more than 450 downtown condo owners for undertaking heritage conservation and development investments. All these measures have however principally advantaged property owners, developers and real estate personnel, not tenants who comprise the majority of the City’s households.
What did renters see over this period?
1.Council ignored their pleas for assistance when more than 600 tenants faced evictions and health complications related to the renovation of older multi-unit residential properties in James Bay. The corporate owners chose to upgrade their properties in order to increase the rents substantially so few existing tenants could return to these units.
Together Against Poverty Society (TAPS) legal advocates tried to assist renters in taking their complaints before the Residential Tenants Branch, while also trying to deal with an unprecedented trend in tenant displacement through renovations and demolition of older properties and replacement with upscale condos or higher-priced apartment rental units. TAPS also assisted in establishing a lobby group in May 2018, the Victoria Tenants Action Group (VTAG), which focused its efforts on carrying out its municipal election campaign—to secure a pro-tenant political slate of candidates on Victoria City Council.
2. Council approved the demand of developers and entrepreneurial property owners wanting to cash-in on the lucrative short-term rental (STR) market, by accommodating tourists as opposed to long-term tenants. Today, there are more than 1,000 short-term rental units in the City, serving principally as alternative hotel accommodation in a popular tourist destination. At last glance, there are only 35 vacant rental housing units available for long-term tenants, while the City boasts of more than a thousand Airbnb type accommodations. Although Council has provided no current STR compliance data, it would appear that by-law enforcement efforts have been unsuccessful in curbing the proliferation of unlicensed short-term rental units. The unanswered question: why has Council given priority to housing tourists over the need to provide long-term rental accommodation for those who live and work here, and pay taxes to all levels of government?
3. Council last year approved a “Market Rental Revitalization Study” (MaRRS) designed to ‘preserve’ rental housing stock in the City over the next six years. The study defined Victoria’s private rental housing market as comprised of 16,773 purpose-built rental units in 679 buildings. In particular, MaRRS identified the most affordable and aging rental units (primarily those built in the 1960’s and 1970’s) as targets for demolition, energy efficient renovation or seismic upgrading. That amounts to 11,861 rental units (or 71% of all purpose built rental units) in 241 buildings (or 40% of all multi-unit rental buildings), likely affecting more than 21,000 tenants.
There is however no assurance from the City that there will be no loss of affordable rental units, particularly when escalating land values and new ‘energy efficient’ building code changes increase pressure on owners to demolish older buildings. In spite of the fact that the 2016 Census reported only 2,900 properties (6.3 percent of the City’s total housing stock) needed major repairs, the MaRRS study, in the name of fighting ‘climate change’ and reducing greenhouse gas emissions, promises new housing development opportunities. By earmarking apartments for demolition as the next ‘ground zero’, the cost of Victoria’s affordable housing strategy will be borne by tenants. What is glaring is the fact that there are no curbs or constraints on the number of downtown, high greenhouse-gas consumption condo towers being built for upscale home-buyers.
The City has co-opted groups such as TAPS and VTAG, to serve on its new Renters Advisory Committee. Why? To secure support from majority of Victoria households who are tenants who it is said will be protected by the City’s new but limited Tenants Assistance Policy and as yet to be approved Standards of Maintenance Bylaw (to establish basic standards of repair for residential property).
The fact remains however that the City has done little to improve its transparency in decision-making or open-data sharing. It has not provided public information on the content and conditions related to current housing agreements it has signed with developers for ‘affordable’ housing units, nor has it implemented a system to monitor and ensure their compliance. Neither TAPS nor the City collects any data regarding the current status regarding displacement of all tenants in the City, whether through rezoning or development permit renovations, etc. And, since the City does not track the number of “affordable” rental or home-owner units being built in Victoria, one can conclude that if it is not measured, it cannot be managed; therefore technically, the phenomenon does not exist.
As for the proposed “Inclusionary Housing” policy (to increase the number of housing units in larger downtown condo projects, affordable to those on primarily with a middle-income between $35,000 to $85,000), it’s not a magic bullet according to Mayor Helps. The “Inclusionary housing” policy (requires 30 percent or more of units in new strata projects to be affordable to middle income earners in return for higher density and increased profitability). The fact that the Mayor states, “inclusionary housing is about 10 percent of the problem”, it’s highly unlikely it will deliver a solution beneficial to the majority of renters in the City. Even in the United States, the home of the ‘Inclusionary Housing’ policy, there is no national data to demonstrate that this policy has delivered affordable housing for those most in need.
There is also no evidence to indicate that other housing policies such as ‘gentle density’ infill-housing, or ‘missing-middle’ housing in traditional single- family neighbourhoods have sufficiently increased the supply of affordable housing units in Canada. To call for pre-zoned strata multiplex-ready properties in Fairfield or elsewhere is just a windfall gift to the City’s 6,545 single-detached home-owners. These new multiplex housing units start at $800,000 and are unlikely to attract either young professionals, millennial families or working tenants, unless their annual incomes are well over $100,000.
It seems that City of Victoria councillors, only two of whom are renters, are unwilling to establish any red lines on the housing issue. Even less are they prepared to consider something bold like–no more housing be built for the wealthiest 10 percent when 90 percent struggle to put a roof over their heads, and a growing number are being forced to leave the City.
According to the latest labour market survey, the Greater Victoria area may have the lowest unemployment rate in the country at 3.1 percent, but the region has shed more than 6,000 jobs since last year. The highest losses have come in the trades sector, finance, insurance and real estate as well as information technology, culture and recreation. Unfortunately, these higher-income job losses were not offset by other gains which came from lower income jobs in transportation and warehousing as well as accommodation and food services. In other words, when construction workers can’t afford to live in the homes they build, plus retail and food/hospital service personnel can’t find a decent, available and affordable rental unit, where are they to go? And don’t even ask, how can the City sustain its much touted high-tech industry and its stalwart tourism/hospitality sector if it can’t provide housing for these employees? It seems the Council doesn’t care. Apparently, reflecting on the consequences of their housing or economic development policies is not a requirement of prudent decision-making.
What is evident in all the rhetoric and commitments to solve the housing crisis–the imperative to deflect the conversation away from the fact that none of their “quick fixes” work. On the other hand, their “magic pills” have not yet rendered comatose the growing presence of the precariat agitated, restless youth whose dreams are being thwarted. And, those teetering on the edge of homelessness are not inspired by the thought of living in a backyard “tiny home”, while the visible blight of the unhoused and most vulnerable members of society are for the most part ignored—until the next crisis.
Bold moves are needed, but don’t count on empty promises of politicians and pundits to remedy the housing crisis. Why? They are part of the problem. Tepid steps of a Mayor, proposing new housing partnerships and tiny movable homes in backyards reveals not only arrogance but also total detachment from the concerns of struggling citizens. Frankly, it’s not surprising, since those with no skin in the game, never have to suffer the consequences of the decisions they make.
The unanswered questions however remain:
- Why is affordable, accessible, safe and secure shelter for everyone, impossible to achieve in such a wealthy, democratic country like Canada?
- Is it truly a lack of political will? Is it blind faith in a system that’s too big to fail?
- Or, is it a lack of imagination and willingness work individually and collectively to create a new reality in which everyone belongs?
- Isn’t it time to consider what bold change really looks like and, what are we prepared to do to make this happen?
- If we’re going to exit the box, color outside the lines…and limit the downside risk, why not identify the “green lines” (the things that must be part of solution), as much as know where are the “red lines” (the things that must not be part of the solution)?
 Stein, Samuel. 2019.Capital City – Gentrification and the Real Estate State. New York, N.Y. Verso. p. 2.
 The Wealth Report 2019. Knight Frank. https://content.knightfrank.com/resources/knightfrank.com/wealthreport/2019/the-wealth-report-2019.pdf
 Global Wealth Migration Review. New World Wealth. April 2019. https://e.issuu.com/embed.html?u=newworldwealth&d=gwmr_2019
 “Facts on B.C.Property Assessments and the 2019 Assessment Roll”. B.C. Assessment. https://info.bcassessment.ca/Property-information-and-trends/Annual%20Reports/Vancouver%20Island%202019%20BC%20Assessment%20News%20Release%20-%20FINAL.pdf
 City of Victoria, Q1 2019 Operational Highlights, Accomplishments and Metrics, p. 12. https://pub-victoria.escribemeetings.com/filestream.ashx?DocumentId=37864
 May 2019 Canadian Rent Report. https://blog.padmapper.com/2019/05/15/may-2019-canadian-rent-report/
 British Columbia Government – Speculation and Vacancy Tax. https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax
Additional Background Reading:
“Victoria’s Rental Housing Crisis: Is There Really Nowhere to Rent?”, Keith Norbury, Douglas magazine, October 10, 2017. https://douglasmagazine.com/victoria-housing-crisis-nowhere-to-rent/
Current cost of living in Victoria, B.C. (May 2019) – Numbeo.com https://www.numbeo.com/cost-of-living/in/Victoria