Apparently ~30% of new build cost in Vancouver and Toronto is for municipal development fees. Hard to say those fees are not hurting affordability
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When I read that, my take away is: cities are having a hard time financially.
How is that going change?
Increase taxes on existing homeowners instead of on people trying to buy condos 
In my city, midrises are springing up all over the place. In some cases, existing infrastructure is not equipped to handle an influx of thousands of new residents (sewer, storm runoff, traffic signals, transit,…) If the fees were designed to upgrade infrastructure for the new demands on the system, that would make sense. The linked article seems like a pure money grab.
I don’t get Canada’s problem. Don’t they have a bunch of land or something?
There are a lot of reasons for Canada’s housing problems. The link below is a good explanation of the problem.
The Canadian housing crisis is going to get worse as our total population is increasing rapidly and the construction industry is unable to ramp up production to meet the increased demand for the reasons stated in the article.
It is a myth that Canada has a lot of land available for housing as the population growth will be primarily clustered in and around the large cities where the jobs are. For example, Vancouver is hemmed in by mountains and the ocean: increased housing supply needs to come from densification which is now finally being addressed through zoning changes.
The fees charged by various levels of government in housing construction are ridiculous. Government says it wants to help the situation but is loath to give up its gravy train of revenue.
Lots of land sure.
Most people want to live in buildings though.
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can you like make more of them or something
That does seem to be the whole crux of the housing problem eh?
Amazing that 3 countries with lots of land - USA, Canada and Australia all have a housing shortage
Yeah I don’t get why people want their house value to go up. We just saw that happen to cars over the last 2 years and that was complete chaos.
Well, for many people it is their largest asset, and levered as well. I’m sure I’d like the assessed value to drop while the market value rockets the week before I sell and move to the nursing home.
Yep. If you want moderately priced housing, go to Cedar Rapids Iowa.
But, “That’s boring. No ocean. No mountains. And, -20 degree winters alternating with 100 degree heat index summers.” (boring is better for weather)
People want to live in places with good climates and interesting geography. Not a lot of buildable land there.
This struck me as somehow off, so I had to learn more. Turns out, Vancouver is broke. They are hemorrhaging cash. If I recall, they recently hosted a Winter Olympics. That can be nasty on the financials. I doubt the city council members are on that gravy train.
“When a person is addicted to a substance…they are not able to control the use of that substance. They continue taking it, even though it may cause harm.” That’s a key sign of addiction, according to a popular medical website.
In the City of Vancouver’s case, the substance is government debt and the city has been addicted for more than a decade. Despite clear signs of an addiction problem, city hall recently proposed an ambitious infrastructure plan that would further increase debt over the next four years.
It’s ultimately up to voters to approve the new infrastructure plan in November’s election but they should consider the city’s finances before making up their minds.
Some background: The City of Vancouver is the only municipality in B.C. that can directly take on debt without permission from the provincial and regional governments. Perhaps not surprisingly, it is also the only municipality in the Metro region with liabilities (debt, employee pension obligations, etc) consistently greater than financial assets (cash, investments, etc).
Vancouver would fit right in to the United States… sounds like every American city.
Not really. This is a great example of relying on an outdated report that only shows part of the picture. The article from the Fraser Institute that you quote is 10 years old, is misleading and does not reflect the current strong financial status of Vancouver.
I have attached a link to Vancouver’s 2022 audited financial statements that has the full picture. By charter, Vancouver has to fund new infrastructure projects through the issuance of corresponding debt. This is required even when the city has other investments exceeding its liabilities which it currently has. So Vancouver currently has debt but assets far exceeding its liabilities. It has positive operating surpluses and its debt is currently rated AAA.
I would mention that, like some other conservative think tanks, the Fraser Institute has a biased agenda so I always scrutinize their reports. The article you have circulated is typical of their selective use of facts.
I would encourage you to peruse the City of Vancouver 2022 financial statements which provides a full picture. As an aside, the assets of the pension plan covering their employees currently exceed the liabilities by over $3 billion: they do not have that as a funding issue either.
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Thankfully Vancouver is currently fiscally sound.
The think tank (the Fraser Institute) that wrote the 2013 report on Vancouver’s financial condition is a Canadian version of the American Enterprise institute. As such it is important to look for the biases and omitted facts in their reports. Vancouver is a liberal city and conservative think tanks take issue with much of the city’s spending initiatives.
Like most Canadian cities, Vancouver spends heavily on infrastructure which its charter requires to be funded by borrowing. All significant infrastructure spending must be approved by the voters through the municipal election process. It is probably a good financial discipline to see the details of the major projects and their costs on the ballots.
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The financial results look ok to me.
One nitpick though. The “surplus” of the pension plan is due to the very fast uptick of rates (liabilities way down, with assets only partly affected).
That will be largely going away over the next few years as assets start getting marked down (due to the coming economic recession).
That means you would hit older NIMBYs with higher property taxes.
Very little chance of that being voted in locally.
The main reason that Vancouver’s fiscal situation strengthened in the last 10 years was rapidly escalating property taxes. I had no problem paying them as much of it went into needed infrastructure as well as improved transit and bicycling infrastructure.
I might be unusual for an old guy as I also support the city’s liberalization of residential zoning liberalization and their spending on subsidized housing.