Housing supply

British Columbia Housing Supply – Victoria Times Colonist

A commentary from a VP, Consulting, with Vancouver-based Rennie real estate organization.

February 9 marked the release of the first installment of data from the 2021 Census. This first release provided data on the total population and number of dwellings in Canada and insight into the growth of our communities.

Based on this high-level data, a narrative has begun to emerge in British Columbia and some of our regions that because the housing stock has grown at a faster rate than the population, it is irrefutable proof that our communities are not facing a housing supply crisis.

Using these simple growth measures to stave off housing supply problems illustrates at best a misunderstanding of our housing system and, at worst, alleviates the real difficulties British Columbians face in finding suitable and accessible housing. .

This misunderstanding is based on the idea that the housing market is in relative equilibrium if total housing growth keeps pace with population as communities add enough supply to meet housing needs.

History shows us why this is a false premise and misrepresentation of our housing situation; while housing must certainly expand to accommodate more people, it must also expand to meet the changing needs of those already here.

Interestingly, if we dive into the last 50 years of census data, we find that the stock of occupied dwellings has always grown faster than the total population. This difference was greatest in the late 1970s and early 1980s.

From 1971 to 1976, the province’s occupied housing stock grew by 24% while its total population grew by almost half that rate (13%). Similarly, between 1976 and 1981, housing increased by 20% against a population that only increased by 11%.

The following three decades saw the difference diminish, with the most recent census period (2016 to 2021) showing a provincial occupied housing stock that grew by 8.5% compared to a population that grew by 7.6% .

So what was the driving factor behind the rapid growth of housing relative to population in the 1970s and early 1980s? It is changes in the composition of our population (not growth) that have caused the housing stock to grow faster than the population.

Simply put, this was the period when the post-war boom generation grew old outside the parental home and began to form their own families. This means that even though these children were already part of the population (which does not affect the overall population growth), they still needed additional housing to meet their needs when they left the family home.

Specifically, while the total population of British Columbia increased by 13% between 1971 and 1976, the population aged 15 to 24 increased by 20% and that of those aged 25 to 34 by 35%. These changing demographics were the driving force behind the 24% increase in occupied housing stock in British Columbia.

This process continued until the early 1980s: between 1976 and 1981, the provincial population increased by 11% while the number of occupied dwellings increased by 20%. Why? Because the 25-34 and 35-44 age brackets grew by 24% and 22% respectively.

When the longer history of housing completions in the province enters the conversation, the decade of the 1970s saw an estimated 318,000 housing units completed in British Columbia, levels of housing development that have not been seen in the province since.

Even with the increasing levels of housing starts over the last decade (and a much larger population), the last decade (2012-2021 with 310,000 completions) remains below what was added during the 1970s .

This reinforces that the predominant driver of housing need is changes in the underlying composition of a population (demographics). Given this, it cannot simply be said that because housing is growing faster than population, there is sufficient housing supply to accommodate residents.

Now, what about the most recent census period? Unfortunately, we have to wait until later this year for more detailed census demographic and housing data to draw any solid conclusions about household formation over the past five years.

That said, Statistics Canada’s Demography Division produces annual estimates of population by age (as does our provincial statistical agency, BC Stats). In the absence of age-specific data from the 2021 census, we can turn to these other datasets for insight.

Statistics Canada estimates show that between 2016 and 2021, the overall population of British Columbia grew by 7.3%, which is similar to census figures. But over that time, BC’s population aged 35 to 39 grew by 20%, nearly three times the rate of the total population. Additionally, the 25-34 age group also grew faster than the total population, increasing by 10%.

As in the late 1970s and early 1980s, another demographic bulge is moving into the family and household formation stage of the life cycle in the province. As post-war B.C. boomers age further into the retirement and empty-nesting phases of the life cycle, their children age in and through a period of household formation, though at a slightly older age than their parents.

Add to this that over the past two years we have also seen a greater influx of migrants into the province, new residents who are also predominantly in these younger household-forming age groups.

One could argue that given the changes we are seeing in the demographics of British Columbia, the small difference between overall housing growth and population growth over our recent history is another indicator that we have important supply-side issues in our housing system. Future releases of more detailed census age and housing data will further crystallize our understanding of where the gaps are and to what extent.