Vancity Credit Union

Vancity Credit Union

May 21, 2015 08:00 ET

Report: Housing Crisis Could Trigger Labour Crisis as Millennials Leave Region

Metro Vancouver's Core Public Services and Future Economic Development at Risk

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 21, 2015) - Rising Metro Vancouver real-estate prices are likely to trigger future labour shortages as salaries fall further behind the cost of living and drive workers to locate elsewhere, says a new report by Vancity credit union.

The report, Help Wanted: salaries, affordability and labour exodus in Metro Vancouver, found that if current trends continue, by 2025, 85 of 88 high-demand occupations will pay too little to support typical housing debt-loads. The report considers these high-demand jobs key to the region's future economic growth.

Only three occupations will still be able to afford housing in Metro Vancouver: senior business managers, senior construction managers and engineering managers. This imbalance is likely to drive highly mobile and educated Millennial workers to more affordable cities, resulting in a significant negative effect on Vancouver's long-term growth prospects due to labour shortages.

The report found:

  • Between 2001 and 2014, Metro Vancouver housing costs increased 63 per cent, while salaries only rose 36.2 per cent.
  • Vancouver housing is projected to rise by 4.87 per cent a year, but salaries will continue their low growth: wage rate growth with only rise between 0.6 per cent for some occupations to about 3.2 per cent for others.
  • By 2025, the household income required to maintain the average mortgage will be $125,692.
  • Economically vital occupations such as industrial electricians, civil engineers, construction managers, police officers, firefighters and general practitioners will not meet this threshold.

The report provides several recommendations for businesses and governments to help the next generation of workers achieve affordability:

  • Build inclusionary zoning into municipal bylaws, giving developers the right to develop only if they include non-market housing.
  • Harmonize affordable housing strategies across municipalities, setting guidelines for planning and pricing.
  • Provide rental housing tax incentives to make development of rental housing as competitive as condominiums.
  • Renew land leases for existing affordable housing developments, maximizing affordable and community-owned units in any redevelopments.
  • Incent or require employers to develop workforce housing to address increased housing demand created by their operations.
  • Employers should pay a living wage and provide flexible benefits to bring household incomes and expenses into greater alignment.

Vancity offers financial advice to assist residents in addressing the challenges of living in Metro Vancouver. The credit union also supports the Living Wage for Families campaign, and is the largest Living Wage employer in British Columbia.

Vancity invests in a continuum of stable and affordable housing including: emergency and homeless shelters, transition housing, not-for-profit or subsidized housing, cooperative housing, rental housing, and life leases.

Vancity is committed to redefining wealth and building healthy communities for its members. An important part of building a healthy community is understanding key concerns like affordability.

Quote

Andy Broderick, Vancity's vice-president of community investment

"More and more, people are wanting to live in the communities where they work - if these communities are not affordable, workers will look elsewhere. It is important to our local economy that people in the labour force have access to stable and affordable housing. Vancity is advocating for sustainable wages as well as working to support growth in the affordable housing sector."

Additional information:

• Report: Help Wanted: salaries, affordability and labour exodus in Metro Vancouver

• Backgrounders: Vancity's investment in affordable housing and Living Wage

• Data tables: Projected salaries and affordability, by occupation

About Vancity

Vancity is a values-based financial co-operative serving the needs of its more than 509,000 member-owners and their communities through 59 branches in Metro Vancouver, the Fraser Valley, Victoria and Squamish. As Canada's largest community credit union, Vancity uses its $18.6 billion in assets to help improve the financial well-being of its members while at the same time helping to develop healthy communities that are socially, economically and environmentally sustainable.

Tweet us @vancity and connect with us on facebook.com/Vancity.

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