Just the same - I did find it interesting the claim made throughout, about the number of vacant homes being used for speculation rather than shelter - hinting that this was a key part of the problem.
Mind you - most of the film appears to be pointing fingers at corporate landlords and REITs for commoditizing shelter which I have mixed opinions on - but the point about vacant homes was something I had the data to look at.
So this got me thinking, given the high rents in BC, specifically in Vancouver and Victoria - what is the degree of vacant homes - or speculative homes that exist here?
Primarily, I would be inclined to think that if BC, Vancouver, or Victoria had a high proportion of vacant homes, this would point fingers at those holding onto Real-Estate for capital gains as a key reason for the surge in housing and shelter prices.
After all, I hear the argument that the reason we shouldn't build more units or density here on the south island is that all these units will be snatched up by investors and sit vacant - thus doing nothing to help solve the problem. I hear this argument so frequently on social and print media that it almost becomes true because of how often it is repeated.
Unfortunately (or fortunately), this does not seem to be the case - looking at the percentage of vacant homes, we find the BC is actually in the bottom end of the distribution, with the percentage of vacant homes falling from 2016 to 2021 (seen below).
Thus, while about 8% of homes were vacant in 2021, we see that BC really is on the bottom end of this distribution, Newfoundland actually having the highest proportion of vacant homes (but not necessarily the highest shelter and rental costs!)
If we magnify the view from the national/provincial level to evaluate the percentage of vacant homes by Census Metropolitan Area (Essentially cities, and greater cities, IE Greater Victoria). we see much of the same. The regions with some of the highest rents and real-estate prices, Vancouver and Victoria are both significantly below the BC average at just under 6% of homes being vacant in 2021.
Again; what if we focus the view a bit more, just looking at the municipalities that make up the Capital Regional District (CRD). Here again, we see that, on average, about 1 in 20 dwellings are sitting vacant (just over 5% in 2021).
Now, I want to bring attention to Langford, as this is an area that has witnessed an explosion in the construction of new units over the last several years. What we see is that (despite fears and stories) the vast majority of these dwellings are occupied by a usual resident, such that the percent vacant is lower than the regional average.
Thus evaluating this, it appears that the boogeyman of vacant homes drastically driving up prices is just like the real boogeyman - a figment of our imagination. Keep in mind, I am not saying that vacant homes do not impact prices, having 1 in 20 or 1 in 10 dwellings vacant is not ideal socially, and having 5-10% of homes being purchased strictly for capital gains investment is a problem that needs an effective policy to address.
Instead, what I am saying is that these vacant dwellings do not seem to be a primary contributor to the cost of housing/rent -- if they were we would expect to see high percentages of vacant units in areas with high purchase prices and rent while seeing more reasonable prices in areas with low percentages of vacant units.
Thus - If we can't point our finger and vacant homes - what is to blame for the sky-rocketing prices and rents? Again, this appears to be a simple supply and demand problem - for years we have underbuilt, and engaged in restrictive zoning. these practices allowed for the rate of population growth and household formation to exceed the rate of new dwelling construction, the fact of the matter is we have years of excess demand to construct before we even begin to solve the problem.
To put this problem in the terms of a simple metaphor - suppose that we have a kitchen sink. The water flowing into the sink is the population growth, the people who need to be housed. A cup is a dwelling. In this case, the tap is left on - there is no (ethical) way to turn off the flow of water.
For years, we ignored the problem, occasionally filling up cups with water, but generally allowing the tap to fill up the sink (excess demand). Today, we are at a point where the water is about to crest the sink and begin to spill out onto the floor. The solution? we need to start filling up more cups of water to move the water from the tap and sink into cups (dwellings).
I encourage you to undertake this experiment - at the point when the water is about to crest, it will seem crazy - you will be filling up cups rapidly and it will look like A LOT is being done -- however, there is so much pent up demand in the sink, that despite all your work (and having cups everywhere) you will still be dealing with the excess demand (pool in the sink) for a long time before you can return to addressing the water coming from the tap.
In reference to the vacant homes - yes it is annoying that 1 in 20 cups are being held by someone else and they are refusing to allow you to use them to empty the sink - but this was not what caused the problem - it is only an annoyance - the problem was caused by years of letting the tap run without filling up cups.
What are your thoughts? Feel free to comment below.
