For reference, here is the executive summary and link to the full report (17 pages, 450 KB) of this paper by Dr. John Rose, covered recently in media.
Download: Click here.
The Housing Supply Myth
Dr. John Rose,
Instructor, Department of Geography and the Environment
Kwantlen Polytechnic University, Surrey, BC
Working Paper, Version 1
November 24, 2017
Executive Summary: This report examines the argument that the housing affordability crisis in many Canadian cities is the product of a constrained supply of housing units. Utilizing publicly-available Statistics Canada census data, and examining the period from 2001-2016, the report evaluates the responsiveness of housing unit supply to resident demand across 33 Canadian Census Metropolitan Areas (CMAs).
The research findings indicate that there is little evidence to support claims that i) the supply of housing units is systematically more limited in expensive housing markets than in inexpensive ones, and that ii) the supply of housing units in expensive markets has been inadequate to keep up with growth in household numbers and maintain a healthy buffer stock of surplus housing units. In metropolitan Vancouver, especially, the imputed relationship among affordability, supply, and resident demand, has, in fact, been turned on its head: prices have skyrocketed at the same time as the proportion of surplus housing units, relative to the number of households, has increased over the 2001-2016 period.
The study therefore suggests that to the extent that unaffordability is attributed to a numerical lack of supply of dwelling units, stock surplus to residents’ living needs must be being absorbed by other consumers in the marketplace—be they domestic or foreign speculators, visiting students, temporary workers, or those owning a second home in Canadian cities. If that is the case, and an argument is to still be presented in favour of addresssing housing affordability by increasing the supply of dwellings to meet these other sources of demand, then it changes the conventional frame of reference though which the adequacy of housing supply has been measured, and how policies like residential densification have been explained and sold to the public.