Record new home construction needed to meet surge of new immigrants in B.C.

Construction urgently needed The BC Real Estate Association says the province is bracing for an unprecedented need for new construction to house a growing population.

To tackle a country-wide skilled worker shortage, the federal government is increasing immigration targets. That means more permanent residents will be settling in B.C. in the coming years, and there’s concern the province’s housing supply isn’t keeping up.

A new BC Real Estate Association report found a record 43,000 new homes need to be built in each of the next five years to meet demand from hundreds of thousands of newcomers. That’s a 25 per cent increase over historical norms.

“We are at around 40,000 currently, so we would have to go up even from levels we are seeing right now, which are pretty close to a record, and then sustain it through a period where the economy might be in a downturn,” said BCREA chief economist Brendon Ogmundson.

While he thinks the immigration increase is good policy, he doesn’t believe the issue of where to house the new arrivals has been addressed.

“We need to plan for it, and that’s the one thing we never do properly. We make policy that affects housing demand without ever really thinking about the supply side,” said Ogmundson.

The provincial government is also concerned the federal immigration strategy doesn’t include a plan for where new permanent residents are going to live.

“I have spoken to the federal minister multiple times urging them to consider tying their immigration numbers to both housing starts and also affordable housing. We know it’s going to be critically important to build that stock for the amount of people that are coming,” said Housing Minister Ravi Kahlon.

Jamie Howard, the CEO of Woodbridge Homes, says developers want to help meet the demand from new immigrants and existing residents, but they need municipalities to get on board with greater density and shorter construction times.

“You’ve got the federal government controlling immigration targets and then you have municipal governments who are adjudicating land rights and saying how much density can go where and how quickly it can be approved,” said Howard. ”What we really need is the three levels of government to be cooperating and coordinating and trying to find ways to reduce bureaucratic processes.”

He’d also like to see less pushback from the public on new multi-family developments in what have traditionally been single-family home neighborhoods.

“If we can have the broader community coming into the construction process more constructively and cooperatively, then that would be massively helpful,” said Howard, adding, “NIMBYism is a real thing, and it’s a big problem in development.”

Ogmundson says if the target of 43,000 new homes per year isn’t met, the price of existing real estate will continue go up.

“Keep in mind we need to build a record amount of housing in the next five years just to get affordability back to where it was like right now,” he said. “To improve affordability, we would need to build a lot more.”