Metro Vancouver Faces Housing Crisis as Approvals Stall

Metro Vancouver is grappling with a significant housing crisis, as municipal governments struggle to approve essential developments while pointing fingers at external factors. This situation comes to light amidst ongoing discussions about the urgency of increasing housing supply in the region, particularly with the British Columbia government contemplating new measures to expedite housing development.

At a recent meeting of the Metro Vancouver Regional District Mayors’ Committee, representatives from the Canada Mortgage and Housing Corporation (CMHC) presented a troubling overview of the home building landscape. They reported that presales have come to a halt, financing options have diminished, and construction costs continue to soar. This scenario has created a bottleneck, causing approved housing projects to stall, further exacerbating the already critical housing shortage.

The City of Vancouver’s latest Housing Targets progress report highlights the challenges faced by rental housing developers. It notes that many are encountering viability issues, especially those projects that have not yet secured construction financing or remain in the early planning stages. As a result, housing starts—often viewed as a lagging indicator—are expected to decline significantly in the near future.

Despite these alarming trends, local politicians seem to be downplaying the urgency of the situation. Following the CMHC’s presentation, Burnaby Mayor and regional district board chair Mike Hurley expressed indifference, stating, “I don’t see that there’s anything more that we can do.” This sentiment reflects a broader complacency among some municipal leaders, who often cite the need for market forces to drive construction once approvals are granted.

In March 2025, at a forum sponsored by Goodman Commercial, Mayor Hurley highlighted Burnaby’s considerable number of approved homes—approximately 25,000—as though the mere act of approval suffices. He stated, “It’s not the municipality. Once approvals are made, how homes actually get built is up to the market.” Yet, this perspective overlooks the role that municipal policies play in facilitating or hindering real estate development.

Indeed, local governments have the power to reform outdated regulations that hinder development. Instead of addressing these issues, the Burnaby City Council recently allowed in-stream rate protection on new Development Cost Charges (DCCs) to lapse. This decision resulted in a staggering increase of over 900 percent in DCCs, adding approximately $23,000 to the cost of each housing unit, a significant burden for developers already facing financial pressures.

The situation in New Westminster mirrors that of Burnaby, where city staff revealed that new development charges and proposed inclusionary housing requirements would limit condominium projects to a maximum return of only 12 percent. For rental housing, that figure drops to a mere six percent. This reality raises serious questions about the feasibility of new developments in an already uncertain investment climate. Instead of easing these constraints, the city council directed staff to increase the proposed inclusionary housing percentage, further complicating the scenario for developers.

In the coming months, the regional district’s controversial DCCs are set to increase even more. Between 2022 and 2027, DCCs will have risen by 952 percent, adding another $19,000 per unit in costs. In Burnaby alone, this translates to a tenfold increase, compounding the financial challenges facing new projects. Yet, municipal leaders maintain that there is little they can do to address these mounting issues.

As the British Columbia government weighs new legislative measures to accelerate housing development, it is clear that local municipalities must take a more proactive role in addressing the housing crisis. Whether through reevaluating community infrastructure funding or reconsidering the approach to inclusionary housing, there is a pressing need for all levels of government to collaborate on solutions that ensure that approved homes are actually built.

With vacancy rates poised to plummet and rents set to escalate, the time for decisive action is now. It remains to be seen whether municipal politicians will rise to the challenge or continue to sidestep their responsibilities in the face of a growing housing shortage.