BC’s Minister of Housing Ravi Kahlon shared some candid thoughts on affordability as British Columbians come to the end of a year marked by high prices and a tough job market.
Getting more affordable housing built is high on Kahlon’s priority list when it comes to bringing rents down, and he wants more buy-in from local governments to approve projects.
“The system around housing right now is rigged against young people,” Kahlon told Daily Hive in a phone interview. “The opportunity for people to leave their parents’ home, rent, and then get into home ownership is not working. Because we’ve been stifling the system.”
He pointed to a failure to build enough housing as one reason BC is where it is today. Also to blame are short-term rentals like Airbnb taking up housing stock and aggressive interest rate raises from the federal government to curb inflation.
“The Bank of Canada, their objective was to slow the economy down,” Kahlon said. “And they certainly did.”
He said the high rates have had ripple effects on BC’s housing industry, with new housing starts slowing down as projects that were viable in a low-rate environment fail to be feasible as the cost of borrowing money rises.
At the same time, British Columbians are facing a tougher job market. Statistics Canada notes unemployment in Canada has been trending upward since April 2023, and last month hit its highest point in eight years (excluding 2020 and 2021 during the COVID-19 pandemic).
Statistics Canada suggests that 6.8% of Canadians are looking for work after losing their previous job.
Even British Columbians who have jobs are having trouble paying their bills. The Canadian Centre for Policy Alternatives now pegs the living wage in Vancouver at $27.05 per hour, rising 5% from last year.
A key driver of BC’s affordability crisis, says Kahlon, is a lack of affordable housing.
“If you don’t have access to affordable housing for people, you’re not going to have a strong economy,” Kahlon said. “You’re not going to be able to provide the supports and services that people need… Solving the housing crisis, I think, is central to addressing challenges in the economy.”
Softening rents in Vancouver a “light at the end of the tunnel”
As people across Canada deal with a slowing economy, Kahlon said a softening rental market in BC’s biggest city gives him hope.
New data from rentals.ca released this week suggests rents at empty apartments in the city have hit a 30-month low. We’re seeing rents similar to 2022, with the average one-bedroom in Vancouver going for just over $2,500 a month.
“We are seeing a light at the end of the tunnel,” Kahlon said. “But there’s still a lot of work to do.”
Of course, $2,500 per month is still far from affordable. The BC government defines affordable housing as not costing more than 30% of someone’s pay before taxes.
Under that definition, a one-bedroom apartment in Vancouver would only be affordable for a single person making $100,000 per year or more.
Kahlon hopes to continue making progress on getting rental prices under control by controlling short-term rental platforms like Airbnb and green-lighting more affordable housing projects. Last week, Kahlon spoke at the Jenga-like 3338 Sawmill Crescent project that’s heading for completion. The two buildings contain 337 homes built on City of Vancouver-owned land.
He acknowledged that a few hundred homes here or there won’t solve the housing crisis since BC needs tens of thousands more homes. But he’s confident the crisis will only be brought under control one step at a time, saying these almost-completed homes mean more than 300 people will have somewhere affordable to live where they didn’t before.
“Every time a local government says no to housing, it helps those who have housing and hurts people who are struggling to get into the housing market,” Kahlon said, adding BC “needs to” support housing getting built.
“It’s a major change, and that’s what we’re working on.”