Douglas Todd: B.C. Cities Growing Fast, For Different Reasons
B.C. is beating population records during the pandemic, which is changing the migration patterns of both domestic Canadians and international newcomers.
Kelowna is now the fastest-growing city in Canada. Meanwhile, of smaller communities, the Victoria suburb of Langford is the second hottest in the land, according to new Statistics Canada data . Chilliwack is also growing rapidly and Metro Vancouver is surpassing Canada’s other big cities.
These cities and town are getting more populous, however, for strikingly different reasons, all related to migration trends. And the population spikes are affecting local housing supply and prices.
Kelowna and Greater Victoria are growing mainly because people are moving there from other provinces, especially Alberta and Ontario.
Chilliwack is the prime target of B.C. residents who are simply shifting residences within the province.
And Metro Vancouver is still expanding mostly because it’s popular with migrants from abroad, taking in a net 21,000 new permanent residents in 2021, despite COVID-restricted borders reducing immigration to Canada.
While most Canadian cities declined in population or were stagnant, Kelowna lead the national pack because it grew by 2.6 per cent in the year ending in June of 2021, according to data released last week.
Almost two-thirds of the newcomers to Kelowna, 3,500, came from other provinces. The proportion of international immigrants was minimal.
Meanwhile, Langford was the second fastest-growing medium-sized municipality in the country, swelling by a remarkable 6.3 per cent in 2021. It’s a suburb of Victoria, where the strong majority of recent arrivals are from colder provinces.
Langford Mayor Stewart Young, who has held the office for 32 years, says the pandemic has exaggerated a five-year trend of people pouring into his “blue-collar” municipality for jobs and affordable housing.
Saying he runs his 45,000-resident municipality like a business, Young’s council has been reducing bureaucracy during the “housing crisis” to build new supply faster. He is pushing to construct about a half-dozen new 20-storey condo towers.
“We’ve long been growing, but this is our biggest year because of COVID. You can buy a nice home here for $800,000, which would cost you $2 million in Metro Vancouver,” Young said. “We want to keep condos in the $350,000 to $400,000 range.”
Frustrated by the lack of housing programs from Ottawa, Young said Langford has forged on its own to offer a subsidy, of up to $17,500, to first-time homebuyers who live in the municipality for two years.
Meanwhile, the city of Chilliwack is growing the fastest in B.C. based on intra-provincial travel , which measures people moving within their province.
Chilliwack expanded largely because 2,300 new people showed up from elsewhere in B.C., mostly Metro Vancouver, which in the past year lost a total of 12,200 to other regions of B.C.
Brad Vis, the MP for Mission-Matsqui-Fraser Canyon , said even though he welcomes new arrivals, the region is finding it hard to keep up with demand for housing, where assessments have risen by about 40 per cent in one year.
“It’s causing a lot of anxiety, especially for young people trying to start families,” said Vis, a 37-year-old Conservative MP who specializes in economic and housing issues.
Vis understands why people are heading to suburbs and towns and leaving Vancouver and Toronto, which have become some of the world’s most unaffordable cities.
Metro Vancouver has not lost as many people to the rest of its province as Toronto, which had 64,000 residents head for other parts of Ontario during COVID. Montreal experienced 40,000 move out to the rest of Quebec.
B.C.’s megalopolis of 2.5 million, in contrast, is still significantly growing, mostly because of immigration . And the number of new arrivals from offshore is expected to swell back to the 35,000 to 40,000 range in 2022 as Canada’s Liberal party hikes immigration levels to a record 410,000.
Housing analyst Steve Saretsky, of Vancouver, is among those recently saying that, since national housing prices have jumped more than 20 per cent in the past year and the country takes in far more immigrants per capita than the U.S., “perhaps it’s worthwhile to consider a temporary reduction in immigration targets.”
Meanwhile, a flood of speculators, both domestic and foreign, who have been attracted by record low mortgage rates are exacerbating regional housing demand. That’s especially the case for Fort. St. John and Squamish.
Investors now account for 78 per cent of all buyers of recently built housing in Fort St. John, and 55 per cent in Squamish. That’s compared to an investor rate in new housing of 44 per cent in Metro Vancouver and 20 per cent across Canada.
Even though the two towns are not breaking growth records, Fort. St. John is being sold as “the next best investment opportunity” because it will be a hub for workers for giant new natural gas plants.
Similarly, real-estate promoters predict Squamish will be a fiery market because it’s set to profit from a massive new ski resort to be called Garibaldi at Squamish.
Vis says such investors are aided by the federal Liberal government’s historically low interest rates and monetary stimulus, which is producing record inflation.
“Most people don’t care too much about the government overspending until it affects their own lives,” Vis said. But that, he said, is what’s happening now, as house prices go through the roof. “So many young people are losing hope.”