Vancouvers Housing Crisis and Solution

Introduction

The city of Vancouver has encountered a significant problem concerning the crisis in the sphere of real estate. The prices for houses and apartments inconsistently grow to produce non-realistic costs of real estate, thus causing difficulties for the residents of Vancouver to purchase or rent accommodation. Such a critical situation is determined by a series of factors that combine and cause long-lasting adverse effects on the real estate business, local economy, and the well-being of the residents of Vancouver and its suburbs.

Despite the broad influence of foreign capital on the emergence of the increased prices for housing in Vancouver, it is essential to acknowledge the leading local factors that contribute to the problem (Gordon, 2016). The thorough identification of such factors and the decision-making logic of the main stakeholders will allow for finding a reasonable solution within the realm of local forces. Therefore, the purpose of this study is to analyze the influential determinants of housing prices in Vancouver to understand the root causes of the crisis and find possible ways to improve the situation.

This proposal will include the review of the literature on the topic with acute attention paid to recent studies carried out in Canada, including the city of Vancouver and researching the causes and effects of the housing crisis. The proposal will also address the overview of research design articulating research objectives and questions. Also, the methodological framework that will be used during the data collection and analysis process will be discussed, and its choice will be justified. Ethical considerations, anticipated study limitation and expected academic value will be presented at the end of the proposal.

Literature Review

Food, shelter, and clothes are basic necessities of every human being; without them, no one can survive for long. But due to the gradual rise in price inflation, it is really hard to buy their own home. Especially; in major cities of Canada like Vancouver and Toronto. There are many internal and external factors that lead to inflation in price; for instance, immigration, mortgage, globalization, and many more. Which creates a Housing crisis? Most of the findings focus on these aspects with the goal of finding a solution. All of my sources used different methods to conclude their findings.

The first article is Immigration, Globalisation, and House Prices in Canadas Gateway Cities, written by David Lee and Judith Tutchener. This article mostly focuses on eight main cities in Canada, but after 1985 Vancouver and Toronto grab the high inflation price in the time period between 1971 to 1996. Firstly, the authors describe how the price of a particular property determines. Its dependents on the local condition like distance to downtown or distance to the local highway. Real estate has traditionally been a mostly local business (John Logan, 1993 p.200). Another tool that also used to set a price for the property is Hedonic Model or analysis. Hedonic demand theory is used to estimates the demand for a particular good or service or its value to the consumers (Maher 1994).

Most of the data in this article are retrieved from the CMHC (Canada Mortgage and Housing Corporations), which cover 27 major housing markets. Data was also used from the annual Multiple listing services (MLS) accounts of domestic properties with both real and nominal prices. This article covers eight major cities Vancouver, Toronto, Halifax, Calgary, Ottawa, and Montreal. In the first phase of analysis, we find out that the price charged by the homeowner for renting is a nominal price, not real (Ley 2001).

This behavior was shown in all cities, but in Vancouver and Toronto is way much due to high immigration in these provinces. It is a basic law of economics that if demand rise and price must rise. On the flip side, this article gives us a more deep point in the area of immigration and globalization, but there is less information about Bank rates like mortgage provincial GDP and growth rate. But the plus point is that it explains a lot about real price and nominal price about both cities Toronto and Vancouver.

The second article is Living on the edge of suburbs of Vancouver, and the author is Carlos Teixeira. This article mostly focuses on how the affordability of the house affected by the new immigrants. However, most of the material shows the immigrant perspective. Teixeira interviewed 88 participants in Surrey, Vancouver, and Richmond in 2010. Teixeira explained that over 70 percent of the immigrants choose among the two major cities in Canada that are Vancouver and Toronto (Teixeira 2010).

Furthermore, this article also depicts that how immigrants move to suburbs of Vancouver; the main reason for that is most of the immigrants live there, and they find it comfortable and it also helps them to prevent homesickness where they live other immigrants; share same house which leads to poor conditions and overcrowded and they commute to work via transit. The first article and second article have some similarities; they both proceed with the same ideas but the article by Carlos Teixeira is more bend towards to immigrants perspective but at the end, both articles conclude to houses crisis due to all these reasons.

Teixeira asked open-ended questions to the participants, which includes a first settlement experience since they arrive in Canada. Difficulties in adopting a new culture where they discriminated by their skin color (Teixeira 2010). This article also based on data retrieved from the Canadian Census. Inflation in houses prices also create another social problem like difficulty to find employment for Canadian citizens because immigrants and refugees usually paid less than minimum wage; however, Employee find it cheaper so, they prefer less Canadian citizen.

The third article Vancouvers Housing affordability crisis by Josh Gordon 2016. This article is more recent in my topic. This article is quite different from the above two articles. However, this article is more focused on the economy of Vancouver like low-interest rate, less approval rate of the mortgage, and desirability of Vancouver. All the study in this article is based on data from Statistics Canada. The method used by Gordon is quite different from other articles basically first Gordon gives a brief summary of Causes that leads to housing crisis and Consequence; afterwards he also provides us the solution. Which quite easy to understand and also relate to my topic, which is the housing crisis in Vancouver.

All the information introduced by Gordon is new, like foreign investment is the main culprit (Gordon 2010). All of the investment made by foreigners has no track because the government is not taking this issue very carefully. But in the end, Gordon suggests money laundering, which is a method of laundering illegal money into the financial system. In conclusion, all three articles explain different causes that lead to the housing crisis, and all of them showing the same major part of Canada like Vancouver. All the articles use different patterns to conduct a study but come down with the same results. The first and second articles are more focused on immigration and their effects, but here I want to explore more local factors that lead to the housing crisis for instance, low investment, the charge of nominal price by the house owners, and others.

Research Design

Within the framework of the discussed findings of the current research on the topic of Vancouver housing crisis, it is evident that the local factors are predominantly omitted by most researchers. The problem under discussion might be resolved when the root causes of it are clearly identified. Since the governmental and real estate business forces made the crisis possible, it is relevant to seek for a solution within their decision-making and policy-making actions.

Research Objective

The study aims at exploring the influential factors impacting the real estate business in Vancouver to identify the causes of the crisis and select the best solutions to the problem. The analyzed literature allows assuming particular determinants that are expected to be identified. They might include low investment, nominal price prevalence in the business, as well as the lack of government policies enabling the regulation of the prices for housing in Vancouver.

Research Questions

Following the articulated objective of the study, the research questions that will be addressed by the research incorporate the decisive elements of the decision-making process when selling housing and setting the price. Therefore, the questions will include the following:

Investment

What is the level of both public and private sector investment in Vancouver real estate? This question will help to identify whether the housing sector lacks financing at the local level. As recognized by Hsu (2017), most part of the investment depends on foreign money, especially Asian. That is why it is important to analyze the local segment of investment in this business to evaluate its opportunities in the future as one of the attempts of prices stabilization.

Nominal price

What forces impact the diffusion of prices across the Vancouver region? What enables the application of nominal prices? The answer to this question will provide more clarity on the issue of price-forming policies and their consecutive influence on the further aggravation of the crisis. As mentioned by Grigoryeva and Ley (2019), the prices in the housing market in Vancouver are significantly impacted by externally-induced price shocks (p. 1168). Therefore, it is relevant to investigate the nature of price-forming forces in the studied region to identify the possible ways of regulating their influence.

Governmental regulations

What policies regulate the housing market forces in Vancouver? What legal, regulatory bodies and documents control the real estate business? It is anticipated that these questions will allow specifying particular regulatory endeavors initiated by the Canadian government or local policies that enable or are expected to disable the crisis.

All the above-mentioned questions provide an opportunity to allocate the segments of influential factors. The researcher will be able to define each factor separately by identifying the issues of investment, prices, and political inclusion. The locally-based issues need to be defined to enhance the opportunities to influence the real estate business and regulate the housing market forces according to the interests of the residents and authorities of Vancouver.

Methodology

Units of Analysis

The research will be carried out within the framework of the exploratory study that is determined by the overall objectives and research questions. The aim of the study is to analyze and collect substantial information about the real state of affairs with acute attention paid to the local factors causing the crisis. The units of analysis are identified in accordance with the research questions elements, including investment, nominal prices, and governmental regulations. These elements will contribute to the overall understanding of the underlying issues responsible for the emergence of non-regulated price growth and the low housing affordability rate among the residents of Vancouver. Therefore, the exploratory study will use the qualitative approach to collect and analyze data.

Data Collection Tools

The data for the research will be collected using two tools, both of which will be triggering the information concerning the three research questions. It is important to define that the sampling of the participants will be made randomly by an online search for real estate agents in Vancouver and local housing organizations. From ten to fifteen representatives are expected to be contacted and interviewed. Firstly, qualitative data will be retrieved from the participants either in-person or over the phone using the interviewing method. The questions for the interviews will be designed in an open-ended manner to extract the most explicit information. The questions will concern the three areas of interest designate in the research questions. The answers will be recorded for further analysis and evaluation.

Secondly, the participants will be provided with an electronic questionnaire consisting of close-ended questions asking to state yes or no answers regarding the questions referring to the policies, decision-making processes, and influential factors causing the housing crisis. The data collected through interviews and questionnaires will be analyzed and evaluated. The answers will be sorted depending on the identified factors. Since the target population includes the professionals in the real estate field, it is anticipated that their expertise will be reflective of the real-world situation. Therefore, the relevance of the data collected during the research process is expected to be of a high rate.

Ethical Considerations

Since the issue under discussion deals with the broad spectrum of influential factors and stakeholders, private information must be preserved undisclosed under the provision of ethical considerations in research. According to Sheppard (n. d.), a researcher is obliged to care for the participants. The participants will be informed about the interviews being recorded but will be granted that the personal data, such as the personal names, organization names, or any other personal information, will not be disclosed.

On the other hand, ethical considerations require the researchers devoting to the society through a scientific obligation to uncover information that benefits society (Sheppard, n. d., p. 27). Therefore, the collected and interpreted data will be presented accurately and informatively to meet the requirements of the scientifically valuable exploratory study.

Discussions

Limitations

The proposed study might be limited to the opinions of essential stakeholders involved in the real estate business. The random sampling technique might also limit the objectivity of the study. Also, the target participants include public administrators, whose opinions are impacted by governmental policies. However, although the data might be biased to a small degree, the inside view on the core of the crisis is anticipated to illustrate the real situation.

Anticipated Impact

Overall, the proposed research is expected to contribute to the scope of literature on the social issues related to affordable housing. It will aim at seeking a solution to the problem to eliminate the hazard of limited economic growth and impeded the labor market as the outcomes of the housing crisis. The analysis and evaluation of the collected data will provide a full picture of the local factors impacting the crisis, which need to be used as the basis for solving interventions.

Conclusion

In summation, the proposed study aims at finding the core elements causing the housing crisis in Vancouver. It aims at using a qualitative exploratory approach to collect data from core stakeholders and interpret the issue from the inside. The analysis of the data will contribute to the overall understanding of the local determinants of the crisis and will build a solid basis for finding the most relevant and evidence-based solution.