Vancouver, BC, had the least affordable housing in North America in 2021, according to Wendell Cox’s latest International Housing Affordability report. The median home price in Vancouver was 13.3 times the median household income, which means almost no one can really afford to buy a home. According to Zillow, condos typically sell for around a million dollars while single-family homes sell for $3 million to $6 million. Yes, those are Canadian dollars, but still unaffordable.
Click image to download a 3.2-MB PDF of this report.
Vancouver was followed by San Jose, whose median home prices were 12.6 times median incomes, and San Francisco, at 11.8. Vancouver was exceeded by Sydney, Australia, at 15.3, and Hong Kong, at a stunning 23.2. As Cox takes pains to point out, all of the most-expensive housing markets are in areas with urban-growth boundaries, greenbelts, or other containment policies.
As I discussed in detail in my 2007 report on Vancouver, that region began limiting urban growth in the 1960s. In 1973, the Greater Vancouver Regional District asked a German city planner named Hans Blumenfeld to look at its plans, and I suspect the agency thought he would endorse them. Instead, he vehemently argued that the plans were going to unnecessarily make housing expensive. They ignored him. After all, British Columbia is only 40 percent larger than the state of Texas; they had to restrict growth or Vancouver would soon sprawl over the entire province.
Also in 2007, I reviewed San Jose’s growth-management plans in detail, showing that they were driven from a little-known 1963 state law that created something called Local Agency Formation Commissions, which governed annexations and the creation of new cities and special service districts. San Jose used the Santa Clara County LAFCO to draw an urban-growth boundary that has never been expanded, thus making land inside the boundary at least ten times more expensive than land in urban areas that don’t have such boundaries. All of the counties around San Francisco–Alameda, Contra Costa, Marin, and San Mateo–did the same, effectively limiting new development in the entire Bay Area. Fifteen years later, nothing has been done.
It is worth noting that places with unaffordable housing have some of the greatest income inequality levels in the world. Urban containment policies limit new construction, so housing prices are pushed up by wealthy people, leaving ordinary people in their dust, sometimes literally. It is ironic that the left, which claims to be so worried about income inequality, is responsible for the urban planning policies that are a major cause of that inequality.
Unfortunately, many supposedly free-marketeers don’t understand how housing markets work or the role of urban containment policies. Emily Hamilton, of the Mercatus Center, blames high housing prices on single-family zoning. This is completely wrong; single-family zoning is used in some of the most affordable cities in the country and has never made housing less affordable.
Michael Munger, writing for the conservative American Institute for Economic Research, claims that any new housing, including expensive apartments, will make housing more affordable. What Munger doesn’t understand is that there are really two housing markets: one for single-family homes and one for multifamily homes.
Just as no one would confuse a Toyota Corolla for a Ford F-250 pickup, people in search of housing don’t confuse 950-square-foot apartments for 2,200-square-foot single-family homes. In each case, the market for the former is quite different from the market for the latter. Yes, you can carry firewood in the trunk of your Corolla, but it will take you several trips to carry as much as can be carried in the pickup. In the same way, people searching for a single-family home don’t want to be crammed into a tiny apartment. That means that building more multifamily housing won’t make the market for single-family housing more affordable, especially if single-family homes are torn down to build the apartments or condos. Munger doesn’t understand that distinction; I wonder what kind of a home he lives in.
An additional message of Cox’s report is that the pandemic has reduced housing affordability almost everywhere. Even places with no urban containment policies have seen affordability decline, probably due to labor problems and the reluctance of putting people to work building homes at the peak of the pandemic. But those places will soon see new homes built and their affordability will return. Places like Vancouver, San Jose, and San Francisco will not.
There’s space on california….in the desert. I said this before you wanna live out west be my guest. But this notion you can take with you the trees the grass the colonial style house….you’re out of your mind. The American dream is catching up with reality of climate and laws of physics. Its not gonna be a pretty picture.
You wanna live there, that’s fine, but this delusion you can take with you the East Coast vegetation and style of housing. Get used to water restrictions, driving 200 miles to go somewhere interesting, spending a lot of your time indoors with the AC on cause it’s Hot.
–“reality of climate”
What do you mean? The reality is that there is NO CLIMATE PROBLEM:
5000 years ago, there was the Egyptian 1st Unified Kingdom warn period
4400 years ago, there was the Egyptian old kingdom warm period.
3000 years ago, there was the Minoan Warm period. It was warmer than now WITHOUT fossil fuels.
Then 1000 years later, there was the Roman warm period. It was warmer than now WITHOUT fossil fuels.
Then 1000 years later, there was the Medieval warm period. It was warmer than now WITHOUT fossil fuels.
Then 1000 years later, came our current warm period. You are claiming that whatever caused those earlier warm periods suddenly quit causing warm periods, only to be replaced by man’s CO2 emission, perfectly in time for the cycle of warmth every 1000 years stay on schedule. Not very believable.
The entire climate scam crumbles on this one observation because it shows that there is nothing unusual about today’s temperature and ALL claims of unusual climate are based on claims of excess warmth caused by man’s CO2.
http://www.debunkingclimate.com/warm_periods.html
http://www.debunkingclimate.com/climatehistory.html
http://www.debunkingclimate.com/warm_periods.html
http://www.debunkingclimate.com
I live in San Ramon, an expensive San Francisco Bay Area suburb. There are tons of undeveloped ranchland within a few miles of my house.
Of course, water is an issue in California. However, making housing tremendously expensive is a stupid way to deal with this problem.
LazyReader,
There’s lots of land in California that’s not desert. Most of California is not desert, and almost 95 percent of it is undeveloped.
Builder,
Water is only an issue in California due to archaic water laws that require farmers to use as much water as their ancestors did a hundred or more years ago. Farmers that install water-efficient irrigation systems risk losing the value of their property. California has plenty of water — cities actually use less water per acre than many farms, so making farms more water efficient would free up plenty of water for cities.
The Antiplanner,
Yes, I agree with you 100%. I just wanted to make the point that housing and water in California are to separate issues that shouldn’t be tied together.
This silly idea that it’s all about supply isn’t the only issue.
They’ve also grabbed onto crazy ideas like this:
”
We’re losing out on innovations because people can’t live in the places where they could bring their ideas to fruition,
“
California is a Mediterranean climate on Koppen identification system…..
California’s water usage has also exacerbated the fire problem. For the last 120 years, the big cities and agriculture business have pulled water from the Colorado river, Sierra Nevada mountains and sub surface wells and springs which have been tapped to accommodate domestic water consumption so LA County residents and suburbanites can have jungle plants in a xeric climate. Combine a drastic reduction in the natural ground water, the replacement of native vegetation with weedy, invasives (and sometimes oil rich plants like Eucalyptus) is a recipe for disaster. So the subsurface water has been depleted; California’s forests have lost significant ground water; soil moisture has heavily declined.
Las Vegas has also resorted to paying people to augment their property landscapes for water conservation. Las Vegas has resorted to paying residents to trade their fescue for cacti. California also knew for decades the consequences of water crisis and did little to replenish their supplies, desalination plants, they’ve only built one this decade while they’ve had 50 on the drawing boards….drawing boards is where they’ll stay. Israel manages to run facilities thy produce fresh water at 40 cents per cubic meter or over 6 gallons of water for a penny. Nuclear power uses ocean water as it’s coolant……they can desalinate millions of gallons of water per day using only the waste heat. While desalination is more expensive than improving conservation the fact is WE Cant conserve your way out of a drought
Or they could just the the, Russian financed, Sierra club and their ilk to pound sand and build more water infrastructure
Just build artificial islands like Dubai….unlike Dubai, not making them out of sand…….
Every year Construction industry throws away or tosses 10 BILLION tons of concrete….. why not dump it at sea as Island foundation rip rap and fill it with dredge spoil….You can build 3000 acres with this crap……10 neighborhoods worth of real estate. Enough for 100,000 people every year…. Manhattan has built up 1000 acres since 1600s…..
Denver’s been doing something similar for 30 years. Denver Water gave me a Kentucky Coffee Tree in 1992 and now it’s a beautiful, 50′ tall tree. And they really encourage replacing Kentucky bluegrass with turf-type tall fescue. The fescue looks good even with half the water.