Blogger and Grandview activist Jak King analyzed the city’s breakneck construction pace in a recent post.
He notes the projections in the 2013 Regional Context Statement which show the Vancouver population increasing from about 650,000 now to 765,000 by 2041 – a need for 97,500 housing units. However,
Vancouver City Council has approved a net increase from 2006-February 2016 totaling 32,849 housing units.
Now, a little math (can’t be avoided, I’m afraid). For the period 2006-2041, the official projection was for an increase of 97,500 units. With 32,849 already approved, that leaves 64,651 to approve in the period 2016-2041 – a requirement of 2,586 per year for the next 25 years.
However, we are approving far more than 2,586 a year. The average over the last five years is 5,068 per year, and that rate is increasing so fast that the average for the last two full years (2014, 2015) is 5,984 building units per year – just about double what we actually need according to the City’s own estimates.
Are the population projections so wrong, or is this another example of capital seeking the relatively safe haven of Vancouver real-estate?
Clearly we need to slow down the approval process. However, the graph of housing approvals from 2006 to 2016 indicates that the rate of approvals is actually accelerating rapidly, with 2016 already rushing towards another 6,000+ total.
In theory, this supply ought to exceed the demand and drive prices down, cropping the profits of developers to a razor-thin slice. Condo prices have been more or less flat until very recently. I’ve always believed that developers are the smartest guys in the room; are they setting themselves up for a price crash?