Enabling Workforce Access to Reasonably Affordable Housing

I'll be blunt, the current approach to improving housing affordability in Victoria, the Missing Middle Initiative, hasn't won me over. Rather than a reasonable approach that is likely to get us a little closer to where we need to be (a place where those who work in our city can afford a reasonable level of accommodation within a reasonable commute), the current approach is likely to move us further away from that goal and towards a place where Victoria is little more than a façade of a place - similar to Disneyland or Las Vegas, a place where people visit but do not make their lives, a playground for the excessively well to do and controlled by a relatively limited number of people who make outsized returns on their "investments". The current approach is likely to increase speculation and inflate land values within the City of Victoria making affordable housing even further out of reach for the median wage earner who works in this city. That is not to say that more supply should not be part of the solution, it should, however, we need to start going beyond Economics 101 in tackling our affordability issues if we are to make any meaningful progress.

If we don't go beyond Economics 101 - where more supply is simply viewed as a good thing and bound to result in decreases in price, a world that relies on supply curves that slope up (as price goes up, more is supplied), and where demand curves slope down (as price goes up, less is demanded). The problem is that demand for housing is pretty inelastic - this means that nearly regardless of the price asked, people will pay until there is nothing left to pay, they'll sacrifice all kinds of things because housing is such a basic need. It's not unlike the demand for other critical things: very inelastic in the short run and only a bit more elastic in the long run.  There's substitutes (renting instead of owning) and work arounds - things like living in a van or having a lot of room mates to share the space or maybe living at home until well into adulthood. Some might "drive until they qualify" and commute. At the far end of the spectrum, there's relying on shelters because a home is no longer attainable. Ultimately, when reasonable housing can't be attained by those working in the community - those workers leave to make their lives somewhere else, where it pencils to have a reasonable standard of living given their earning capacity.

Unfortunately - supply of housing, at least in the short run, is also really inelastic - with land, zoning and capacity to build putting a limit on how much and how fast supply can be provided. Add to it all kinds of things that make additional supply more expensive and unattainable - things like requirements for Net Zero building standards, energy audits, arborists, building permit delays all adding to the costs of providing new supply. Further: little has been done to address lowering the costs of providing reasonable new housing supply.  Further still: building as much as possible, as fast as possible is likely unwise and would likely lack the kind of planning needed to ensure the needs of those calling this place home are met. Lastly: the most profitable units of housing are built first, as such demand for high end housing tends to be satisfied long before attention is turned to more marginal (from a profit perspective) demand for functional housing.

When demand exceeds supply excessively: those with the resources to pay what is asked will do so, and those who can not will ultimately do what they must: move out of the region in search of somewhere that they can have a reasonable standard of living given their ability to pay for it. The problem is: in order for a city to work, it needs a full spectrum of residents to live in it and to contribute to it's success - it needs everyone from the counter person at Tim Horton's, the labourer, the teacher, the electrician to the business owner, the doctor and the lawyer. A city that is there to exclusively serve those with the deepest pockets, doesn't work - those places are like monuments, excessively beautiful dystopias that lack substance, authenticity and soul. Those who serve those cities: don't actually live there, rather they attend to perform their functions and leave to other places they call home.

As such "fixing" the problem requires acknowledging that the market is dysfunctional - it's not delivering a full spectrum of choice to meet local demand, and the playing field is not fair. Fixing the problem means refraining from adding fuel to the dysfunction. It might even be worthwhile to recognize that the housing market has much more in common with the market for education or healthcare than our government has been willing to admit to date. It might be time to admit that it requires more regulation to prevent abuse of the market by those with the resources to do so. We need to ensure that first time home owners and those seeking to make their lives in our community by working in our schools, building homes, running local businesses and providing care in our clinics and hospitals have access to fair housing that meets their needs.

At a minimum: the missing middle initiative needs reasonable constraints to ensure that it serves the local market and local community rather than undermining it. This may mean that it is supplied "with strings attached" - things like requiring that the units are either owner occupied as a principal residence or rented at regulated rates to the long term residential rental market, that they are not allowed to be sold to people who already own two or more properties, that resale of the units is limited to price plus inflation at the time of sale, and that purchasers be local to the area having resided in Victoria for a minimum of 24 months, and that purchasers be either Canadian Citizens or permanent residents. This may also mean that it faces a process similar to a variance (rather than a formal rezoning) and still would require community consultation and consideration. Lastly, it may mean that the Affordable Housing Initiative should have a first right of refusal before the property is eligible for the Missing Middle Housing Initiative.