The City That Loves Its Housing Crisis
Vancouver, BC, one of North America’s priciest real estate markets, clings to exclusionary zoning. Despite skyrocketing housing costs, new apartment buildings are banned on most of the city’s land. Other cities should learn from Vancouver’s mistakes.
In Vancouver, British Columbia, the apartment ban in single-family areas is driving displacement of tenants in existing apartment areas. (Andrew Chin / Getty Images)
Vancouver is the epicenter of British Columbia’s housing crisis and shortage. So why does the city still effectively ban new apartment buildings on most of its residential land, reserving it exclusively for low-density housing?
While there have been small steps toward reforming single-family zoning in Vancouver in recent years, apartments are still not allowed on more than three quarters of the city’s residential land. Much the same is true in other big, expensive cities in British Columbia and across North America.
Under this decades-old zoning regime, sometimes referred to as the “grand bargain,” apartments are permitted only in relatively narrow segments of a city. New apartment buildings are largely confined to busy roads and areas with older apartments where working-class and poorer folks live, while the wealthiest single-family housing areas are left largely untouched to avoid provoking NIMBY backlash.
The results of this “grand bargain” are perhaps easiest to see from above, as an image from the housing advocacy group, Vancouver Area Neighbours Association, helps illustrate. While Vancouver may conjure images of downtown skyscrapers, the reality is that most of the city’s land area is taken up by single-family houses, which are the most expensive and land-intensive form of market housing.
The BC government has recently shown a willingness to push back on cities applying exclusionary zoning (more on this below), but it hasn’t been prepared to overturn the apartment ban. Persistent exclusionary zoning in cities like Vancouver is deepening the housing crisis and shortage and inflicting damage on Vancouverites and British Columbians — especially renters — in several ways.
Apartment Bans Hurt Renters
The apartment ban is suppressing the creation of badly needed new housing in huge parts of our cities. The Canada Mortgage and Housing Corporation estimates that BC needs to build 610,000 more homes by 2030 above current trends, consistent with findings of independent analysts. Housing shortages hurt the most vulnerable, while adding new housing helps reduce upward pressure on rents. We can’t address those shortages while blocking apartment creation on the vast majority of cities’ residential land.
The apartment ban in single-family areas is driving displacement of tenants in existing apartment areas. Under the status quo, with apartments blocked in the vast detached housing zones of our cities, development is steered instead toward existing apartment areas, leading to demolitions of older apartments. For example, in the satellite city Burnaby, many renters were forced out of their homes near the Metrotown area due to this trend. It doesn’t have to be this way: new apartments could be built instead in nearby single-family areas if cities would allow it.
Exclusionary zoning increases the costs of new housing and the risks of trying to build it. In limited areas where apartment housing is allowed (through a discretionary rezoning process), developers of new housing — nonmarket and market alike — have to compete for scarce parcels, driving up land purchase prices. As a result, even well before a rezoning process, exclusionary zoning artificially increases land prices for the sites where apartments are allowed by keeping them scarce.
For nonprofits trying to build affordable housing, going through the rezoning process itself can be very costly and risky. Higher costs for nonmarket housing translate directly into higher rents, hurting housing affordability. In Vancouver, nonprofit housing developers estimate that a rezoning process can easily cost them $500,000 to $1 million, including required predevelopment expenditures and fees.
By suppressing apartment creation in wealthier areas, exclusionary zoning robs people of the option to live in the areas they choose. This is a conscious effort to ensure certain neighborhoods are reserved for “the crème de la crème,” as one resident of a wealthy Vancouver area put it.
Instead, residents of most new apartments are forced to live on noisy, polluted arterial roads, where building apartments is primarily allowed, harming their health and well-being. Indeed, one “community vision” document in Vancouver praised this practice of confining new apartments to busy roads because they help “shield, to some extent, adjacent single family homes from the noise of arterial traffic” and “leave large areas of single family unchanged.” Steering development to arterial roads also puts a target on older small businesses that may be displaced from existing commercial spaces on these streets.
Also, when cities like Vancouver block apartments on so much of their land, it pushes people out of the city and spurs more car-dependent sprawl in outlying areas. This means more commuter misery, higher household transportation costs, and increased climate pollution. Indeed, a growing body of research points to these exclusionary residential land use policies as an important driver of climate pollution.
Exclusionary Zoning Drives Up Land Prices
Channeling development into suburban sprawl increases public infrastructure costs. It’s much more expensive to provide roads, sewers, schools, transit and other public goods in suburban developments than in more compact communities. As a recent Metro Vancouver report confirms, “Higher density development forms are associated with lower per capita municipal expenditures for streets and highways, sewer, water, and solid waste.” The continued imposition of the apartment ban makes addressing long-standing infrastructure deficits more difficult and expensive.
Within cities like Vancouver, denser neighborhoods also contribute proportionally more to the city tax base than areas with sprawling detached housing, even though providing public infrastructure to the latter is more expensive. Allowing more apartments in low-density areas would increase and broaden the local tax base and help fund important infrastructure investments that have been neglected for too long.
Excluding people from large high-productivity cities by blocking apartments means excluding them from job opportunities and higher wages, which hurts economic growth and increases inequality.
Advocates are increasingly pushing back and shining a light on exclusionary zoning and its harms. The group Abundant Housing Vancouver regularly organizes walking tours to help people see how exclusionary zoning affects cities on the ground, including in a recent tour of the ultra-wealthy Shaughnessy neighborhood. The Vancouver Area Neighbours Association has helped organize support for new rental and nonmarket housing in areas like the wealthy West Point Grey neighborhood, where the voices of opponents of new housing usually dominate.
With a provincial election fast approaching, where does provincial housing policy fit in this equation? BC is head and shoulders above any other Canadian province in taking action on housing policy, and the provincial government deserves credit for that. But the action still doesn’t match the scale of the housing crisis in many important dimensions, including on zoning reform.
In a step forward, BC legislation now requires cities to allow small multiplexes in areas formerly reserved for single-family houses. However, this falls far short of allowing apartment buildings, and cities like Vancouver are implementing the multiplex policy in a highly restrictive way that will limit its benefits.
The provincial government is also pushing cities to allow apartment buildings within 800 meters of transit hubs like Skytrain stations, which include areas still dominated by single-family houses. But there are too many ways for cities to wriggle out of these requirements, which apply to limited areas.
These steps forward urgently need to be expanded. Yet the main opposition, the BC Conservative Party, strongly opposed even these limited steps on reforming single-family zoning. In an interview earlier this year, leader John Rustad called the BC government’s reforms “crazy” and promised to “repeal all of that,” despite saying he would (somehow) increase housing supply. The BC Green Party voted against the legislation allowing multiplexes in single-family areas but in favor of housing near transit hubs.
Ending Exclusionary Zoning Once and for All
In a housing crisis and shortage, public policy should ensure that land where apartments are permitted is plentiful, not scarce and expensive. Yet long-standing zoning and land use policies are geared to do exactly the opposite, suppressing multifamily housing creation in the places that need it most.
To end the apartment ban, at a minimum, expensive cities like Vancouver should be required to allow at least six-story rental apartments by right — without discretionary site-by-site rezonings — anywhere that you can currently build a multimillion-dollar detached house (that is, almost anywhere). Significant additional density should be permitted for nonmarket housing specifically, ensuring public and nonprofit providers are in a strong position to acquire land when competing with private developers.
If cities like Vancouver are willing to finally end the apartment ban on their own, that would be welcome, but their records are not encouraging. There is a strong democratic case for provincial action on zoning.
To be clear, zoning reform isn’t a silver bullet to tackle the housing crisis. There are many other key pieces of the puzzle, including the need for a massive increase in public investment in nonmarket housing, taxing the wealthiest landowners, and strong tenant protections and rent control. But any serious effort to tackle the housing crisis and shortage must bring the apartment ban to an end.
Cracks in the edifice of exclusionary zoning have appeared in recent years, yet it remains in force on the vast majority of land in our cities. There is no way out of the housing crisis — or toward a large build-out of nonmarket and rental housing on the scale BC needs — without finally ending the apartment ban.