by David Korzinski | June 17, 2015 10:30 pm
June 18, 2015 – With housing prices soaring higher than the peaks of the North Shore mountains and the transportation issues of a growing region on the ground, will a generation of more than 150,000 families simply leave Metro Vancouver in search of more manageable living?
A comprehensive new opinion poll studying the effects, causes and possible solutions to housing and transportation issues by the Angus Reid Institute indicates a significant segment of people living in Metro Vancouver is seriously considering moving away from the region because of high housing prices.
Even more say they would like to buy into the market, but can’t afford to, and nearly everyone is concerned the next generation won’t be able to afford a home here.
A detailed analysis of this comprehensive survey indicates that Metro Vancouver residents fall into one of four segments depending on their experience with housing and transportation: the Happy, the Comfortable, the Uncomfortable, and the Miserable. The experiences of each of these groups drive their views on these issues and what should be done about them.
Across all survey respondents the ARI survey also reveals a strong consensus on the impact of housing and what should be done to address this issue:
PART 1: The Metro Vancouver Experience: Four different realities
While this report reveals opinion trends shared by respondents across all main demographic categories, further analysis of survey responses uncovers four distinct portraits of regional residents, based on their personal housing and transportation situations. So who are they? See below:
The Miserable are thinking of moving away:
Though diverse in their demography, the Miserable are united in their inability to access the housing market, and their long commutes. Something else defines them: the distinct lack of twinkle in their eyes when it comes to living in what is widely regarded as one of the most desirable cities in the world. For the Miserable, the mild winters, mountains and ocean hold distinctly less romance when weighed against the costs of living and getting around Metro Vancouver.
The result? Fully 85 per cent of the Miserable say they are “seriously considering leaving” the region because of the cost of owning a home here. Considering this segment represents roughly one-fifth of the region’s population, Metro Vancouver stands to lose a substantial number (some 150,000 if one extrapolates against current population data for the region) of its youngest, most educated families.
The Happy are extremely content to stay in Metro Vancouver – only one-in-ten (9%) indicate any thought of leaving. The Comfortable are more divided on the issue: it’s on the minds of roughly one-third (34%).
The Uncomfortable are evenly split on this prospect: just over half (54%) are seriously thinking of leaving Metro Vancouver over housing prices.
Looking at the data from through a different lens – among all respondents, fully two-in-five (43%) say they’re “seriously thinking of leaving Metro Vancouver because of the cost of owning a home here.”
The chart below illustrates the sentiments of owners and renters on this question:
Even the Happy say current housing prices are bad for the region:
And then there are those for whom nothing – not even the cost of housing – would drag them away from a region that by average Canadian standards, enjoys near-tropical winter conditions. As noted in the chat below – these people are found predominantly among the Happy and the Comfortable:
Indeed, their buoyancy can be attributed timing. Almost nine-in-ten homeowners (87%) in the Happy group agree with the statement: “I basically ‘hit the jackpot’ by getting into the market at the right time.” That said, even the Happy are sad about the effect high housing prices are having on the region, if not on them personally.
Asked if housing prices are benefitting or hurting them individually, Happy metro residents say they’re benefitting by a three-to-one ratio over those in their segment who say they’re hurting (31% benefitting versus 10% hurting).
Asked a different question – about the impact of high housing process on their communities, rather than on themselves individually, the Happy take on a more solemn tone. A significant number (45%) believe prices are hurting their own communities, as do majorities of the Comfortable (58%), the Uncomfortable (70%), and the Miserable (83%) when asked the same thing.
Likewise, large portions of each segment agree that high housing prices are hurting Metro Vancouver as a region, as illustrated in the chart below:
PART 2: Pain Points – What’s behind the housing crisis?
Housing and Transportation are top regional pain points
Overall, more than half of Metro Vancouver residents (55%) list housing prices, affordability and real estate as collectively one of the two most important issues currently facing the region. Transportation, traffic, and transit issues rank second, with 36 per cent of the population listing them as a priority.
Housing and transportation are the top two issues for each of the segments, but they are particularly significant to the Miserable. Nearly three-quarters (74%) of those in the Miserable group choose housing as one of the two most important issues facing Metro Vancouver, and almost half (49%) choose transit.
Housing is also especially important to the Uncomfortable. More than two-thirds (68%) choose it, compared to less than half (46%) of the Comfortable and roughly a third (35%) of the Happy.
Everyone agrees prices are high – for other people, that is:
Most Metro Vancouver residents believe home prices in the region are too high, but there is less consensus on the price of one’s own home, or the price of a home in one’s own community.
The groups with more homeowners – the Happy and the Comfortable – are less likely to say that the value of their own homes is “unreasonably high.” Some 17 per cent of each group says so, compared to 25 per cent of Uncomfortable homeowners and 35 per cent of Miserable homeowners.
On the question of housing prices in their own communities:
Looking at all homeowners, regardless of the segment to which they belong, 36% say the cost of homes in their community is “unreasonably high.”
Renters and non-owners of all segments are more than twice as likely to believe this is the case. Roughly three-quarters (73%) say homes in their communities are unreasonably expensive.
There is much more agreement on the question of home prices in Metro Vancouver as a whole. Three-quarters of homeowners (75%) say home prices in the region are unreasonable. Among non-owners, 86 per cent say the same.
Causes of high housing prices
For the most part, residents of Metro Vancouver point to foreign buyers and wealthy investors for driving up the price of homes in the region. This well-documented and ongoing debate in the Lower-Mainland has had a noticeable impact on public opinion – even if empirical data to prove this hypothesis remains unavailable.
The Miserable are especially likely to choose these top two options. More than three-quarters (77%) say foreigners are to blame, and a majority (52%) say wealthy people generally are part of the problem. Not quite half (46%) also believe “condos and houses being left empty by investor-owners” are a major part of the problem.
Indeed, majorities across all four segments agree that foreign investment is part of, if not the whole problem. Two-thirds (67%) of the Uncomfortable and three-fifths (58%) each of the Comfortable and the Happy feel this way.
These groups agree less on the other causes of high housing prices in the region. Among the Happy, more than half (52%) say a main cause of high prices is that “people want to live in Metro Vancouver because it’s a desirable location.” The Happy and the Comfortable are also more inclined to choose “low interest rates” as a reason for high prices than the other two groups.
Leaving segments aside for a moment, there is an interesting disconnect between owners and renters on which additional factors – other than foreigners and the wealthy – are to blame.
Owners are more likely than renters to say high housing prices are caused by:
Renters, on the other hand, are more likely than owners to pinpoint:
Asked specifically about the role foreign ownership plays, almost half of Metro Vancouver residents (47%) say it’s “one of a few major factors.” Roughly the same proportion of each of the segments chooses this option.
The Miserable, however, are just as likely to say foreign ownership is “the biggest factor driving up housing costs here” (48% do so). Other groups are significantly less likely to say foreign ownership is the biggest factor: 37 per cent of the Uncomfortable, 31 per cent of the Comfortable, and 27 per cent of the Happy do so.
PART 3: What (if anything) should be done?
Frustration with Government
Metro Vancouverites don’t necessarily blame government for high housing prices, but they are, nonetheless, unhappy with what government has done – or perhaps not done – at both the municipal and provincial levels.
More than two-thirds of respondents express dissatisfaction with each level of government. Some 68 per cent are unhappy with municipal governments in the region and 72 per cent say the same when asked about the provincial government.
And that dissatisfaction appears to transcend party lines. Among respondents who identify as past BC Liberal Party voters, a majority (58%) say they are dissatisfied with the provincial government’s handling of housing issues.
Among those who did not vote for the BC Liberals, there is little support to be found for Christy Clark’s government: 85 per cent say they are dissatisfied with government housing policy.
But Should Government Intervene?
But does this dissatisfaction lead people living here to call for active government intervention in the housing market? Nearly all say they’re worried the next generation will not be able to own a home in their community. And indeed, a large portion also believe the solution lies with government.
When asked what governments’ priorities should be regarding housing, respondents prefer a focus on first-time buyers entering the market, rather than protecting the investments of current homeowners, by a nearly two-to-one margin (65% to 35%).
Unsurprisingly, the youngest (those aged 18-34) have the highest levels of support for helping out first time buyers (74%), but support remains at a strong majority in other age groups as well (59% of those aged 35-54 and 63% of those over 55), and among the Happy and Comfortable (57% and 59%, respectively).
Asked to choose between government intervention and the free market, seven-in-ten (70%) respondents say “government should be more involved in the housing market in order to improve affordability,” with the opposing 30 per cent saying “government should stay out of the housing market. The free market should determine prices.”
And what exactly should be done?
So there is a demonstrable appetite to see government step in, but to do what, exactly? Survey respondents were asked to indicate their support for a number of regulatory options:
When support is broken down across the various segments, a pronounced correlation exists. Simply put, the higher the level of discomfort for the respondent, the higher the level of support for government measures to help solve the problem.
The Miserable are extremely supportive of all five regulatory steps presented to improve pricing in the housing market, averaging 85 per cent support across the five options presented. This is nearly 20 per cent higher than the average for the Happy (67%).
It is important to note that even among those least supportive of such interventions (the Happy and the Comfortable), support is still at 61 per cent or higher for each individual measure.
The Desire for Better Data:
In recent weeks, Vancouver Mayor Gregor Robertson has called for a “speculation tax” aimed at reducing the practice of “flipping” – purchasing a home solely to make improvements to it and then sell it again relatively quickly for profit.
It’s an idea that has widespread support: 69 per cent of respondents say they are for such a tax. But Premier Christy Clark has indicated that her government believes implementing one would do more harm than good.
Before any of the measures respondents support could be implemented, municipal and provincial governments would need clearer data on which properties are actually vacant or foreign-owned.
Some have said Vancouver’s unit vacancy rates are much higher than those of other cities, but others contend that this controversy is overblown, and imply such discussions are discriminatory. The City of Vancouver is said to be looking to gather information on vacant homes in an effort to better understand the scale of the problem.
It’s an approach nearly four-in-five support: 79 per cent back some form of government-collected data on the profile and location of Metro Vancouver homebuyers.
Residents appear to be approaching the housing issue pragmatically, with 84 per cent saying they don’t think it’s reasonable for the younger generation to expect to own a house and a yard in Metro Vancouver. This notion pervades across all segments, from 79 per cent of the Happy, to 85 per cent of the Miserable:
Most Metro Vancouver residents anticipate a bleak future if the housing status quo in the region continues. While some groups are better situated to benefit from the current state of affairs, it appears every segment of the population believes that the younger generation is being disenfranchised, and that the majority of residents would like to be a part of the solution.
Citizens perceive a problem and are looking for their local and provincial governments to point the way to a solution. If this doesn’t happen, the region risks losing a significant portion of its younger generation to more accommodating destinations.
Click here for the full report including tables and methodology
Click here for the questionnaire used in this survey
Notes on Methodology:
The Angus Reid Institute’s Pain Index scores respondents’ answers to a series of transportation and housing questions based on the relative amount of “pain” each answer indicates. Scores for each answer are then added up to produce a total score for each respondent. A higher score indicates a great deal of housing-and-transit-related pain, and a lower score indicates minimal such pain.
The Pain Index is based on 10 questions in total, though respondents would only answer between seven and nine of them, depending on whether they own property and whether that property has a mortgage or not.
In all, the Pain Index includes three questions about transit – which are asked of every respondent – and seven questions about housing, of which each respondent is asked, at most, six.
Scores ranged from -3 to 16, with a larger concentration of respondents near the middle of the scale. Those with scores from -3 to 2 were sorted into the Happy category, those with scores from 3 to 6 became the Comfortable category, those with scores from 7 to 9 became the Uncomfortable, and those with scores of 10 or higher were sorted into the Miserable category.
Though this report has focused primarily on housing, there are also stark divides between groups on questions of transportation. For example, Happy and the Comfortable are much less likely to commute than the Miserable and the Uncomfortable, and their commutes are generally shorter:
More-detailed portraits of each segment of the Metro Vancouver population follow:
It is of note that household income does not appear to be the determining factor when it comes to these categories. About the same proportion of each group reports annual household incomes of $100,000 or more (see detailed tables at the end of this release). The same is true of those earning $50,000 to $99,000 and those earning less than $50,000 per year; they too span the segments. Therefore it’s not only lower income earners who are Miserable, and not only those earning more who are Happy.
Image Credit – Magnus Larsson
Source URL: http://angusreid.org/vancouver-real-estate/
Copyright ©2018 Angus Reid Institute unless otherwise noted.