House prices are in stunning ascent around B.C. with no clear end in sight.
Home purchase deals regularly feature no-subject offers, virtually always above asking price. This super-heated real estate market is heavily impacting the local rental situation.
As home prices soar, more and more landlords are pulling their increased equity out of their rental properties. Meanwhile, rental costs have rocketed, while vacancy rates remain in the basement. Many renting families are now in extremely stressful situations, if not desperate. Some say “government” needs to step in. But which level, and to do what? Government manipulation of free market forces can have unintended, and negative, consequences.
Municipalities can do little to address the current situation. City councils can change community planning and zoning to encourage multi-family developments, but cannot order developers to build affordable housing. And even if there is investment interest, it takes years for project completion. Should the provincial government implement more rent controls? That could encourage more landlords to sell their properties. Should Victoria be restricting foreign ownership, which is pouring billions into the economy? What’s the fallout of that? Impose property flipping taxes? That may be among the more effective measures, but it would only potentially stems the tide of sales. It wouldn’t put more rental housing on the market.
The federal government figures large in the latter respect, particularly considering federal housing subsidies have plummeted in the past several years. Perhaps the new Liberal government could have prioritized housing strategies rather than expensive infrastructure programs.
Or, is it better in the long run to let markets find their own balance, without political interference? Unfortunately, for those hunting for accommodation for their families, it’s an extremely complex question, with no easy answers, or quick fixes.