Housing Migration and Affordability
Published in the August 28, 2019 edition of the Times Colonist
With a vacancy rate hovering close to 1%, Victoria needs more homes. The biggest debate today is what will those homes look like?
We’ve become polarized; affordable housing has become a buzz word and everything else is labeled as luxury housing. However, we will not be able to meet the housing demand with subsidized affordable housing alone, and new research suggests that we don’t need to.
Economist Evan Mast of the Upjohn Institute for Employment Research followed 52,000 residents in 12 major cities to determine the effect of new market rate units on the area’s overall housing availability. He found that for every 100 new market rate units that open up, 70 became open in neighbourhoods earning below the area’s median income, and 40 opened in the lowest income neighbourhoods.
As families move up the housing spectrum to slightly nicer homes, the homes they leave are then filled by families doing the same thing. This domino effect of vacancies – called “the migration chain” – results in lower priced units becoming available over time.
The vacancies do not always reach the lowest income neighbourhoods, however. For example, when a child moves out from home, or someone moves from outside of the area, no new vacancies open up. Therefore, cities with high immigration levels, such as Victoria, will experience a smaller impact from the migration chain.
We cannot stop newcomers from wanting to move to our beautiful city, and this only increases the need for new housing of all types to be built.
Our housing ecosystem is dynamic, complex, and highly interconnected. There is no one solution, and a wide variety of initiatives will be needed to balance it. New market rate housing is one important piece of the puzzle.
Read the full research paper at: https://research.upjohn.org/up_workingpapers/307/