It’s not just low blue-collar service workers who are being priced out of the Lower Mainland’s hot real estate market.
A new study projects a growing list of high-earning professionals won’t make enough in the years ahead to support the rapidly rising cost of owning a home in Metro Vancouver.
The VanCity Savings report warns of a coming labour crisis as more skilled workers needed in the region – particularly millennials – are increasingly forced to live further away or abandon the region altogether.
The crux of the problem is rising housing costs coupled with lagging pay.
Wages in the region rose by 36 per cent between 2001 and 2014, the report said, while Metro Vancouver home costs climbed 63 per cent over the same period, and soared 211 per cent within Vancouver proper.
VanCity assumed housing costs will continue to climb an average of 4.9 per cent a year in Metro, significantly faster than wage growth of 0.6 to 3.2 per cent.
If that proves accurate between now and 2020, the report says, only family doctors, specialists, lawyers, university professors, police officers, firefighters and certain managers and engineers will be paid enough to qualify for a typical mortgage in Metro, while more than 90 per cent of in-demand job categories will not.
And by 2025, it found, only senior managers in business, construction and engineering will still make the affordability cut – doctors and lawyers would not.
“In 10 years, most individuals may forgo a career opportunity in the region and relocate to a different labour market,” the VanCity report says. “If there is an abundance of outward migration, a labour crisis will occur.”
Millennials, many of whom want to own homes, are among those most likely to migrate away, it said.
Among the report’s recommendations are that cities use zoning to require developers to include non-market affordable housing with new projects and that the federal government provide tax incentives to encourage more rental housing.
Businesses can help, it says, by paying employees a living wage adequate to meet a family’s basic needs and perhaps investing in affordable housing for their workers.
Millennials need to look harder at renting instead of owning a home, it said, along with choosing smaller homes or possibly alternatives like intergenerational community living or multi-family living through options like housing co-ops.