As Vancouver creeps onto CNN’s list of “The top 10 most expensive housing markets” in third place, just under Hong Kong and Sydney, the municipal government and policymakers will need to effectively and promptly address affordability-related concerns. On top of the brewing policy challenges in areas such as transportation, urban poverty, and economic development, the City of Vancouver has been unsuccessful to address the housing unaffordability issue in Vancouver.

The Vancouver byelection yesterday is revealing the growing frustration of Vancouverites. Following the byelection results, Mayor Gregor Robertson issued the following statement:

“Tonight’s results are not what our team hoped for. We knew this by-election would be difficult. Our city faces real challenges. Vancouverites are frustrated—particularly around housing affordability—and they expect more from us. We’re working hard to deliver solutions, but tonight’s results show us there’s much more work to do. I heard that message loud and clear, and our party heard that message loud and clear.”

Vancouver seems to have a specific problem where much of its real estate is being bought by foreign buyers. Although most of these investors are mostly buying luxury housing, it has the effect of raising housing prices across the market and geographically across the city. An important consequence to consider around Vancouver’s housing challenge is its impact on migration, in particular, millennials who are driven out of the city by the unaffordable housing market. The high cost of living exacerbated by the high cost of rent or house ownership adds to the existing challenge of millennials or recent graduates facing the unwelcoming job market and paying off student debts.

If Vancouver desires to become a “home for global business” or Silicon Valley North tech and innovation hub, then it will need to be able to keep and attract both local and foreign talents (especially given it is the home to a world-class university and two of Canada’s best MBA schools), and not just a place for the wealthy and the retired.

What can Vancouver do to address one of the most intractable policy challenges it is facing to attract and retain local talents? 

Targeted subsidies is an approach to housing affordability the city could consider to address the problem of housing unaffordability that is causing millennials to leave Vancouver. For example, the government of Hong Kong has rolled out a Starter Homes scheme to give higher discounts to first-time homebuyers. Another way to provide subsidy is through social or public housing. In Singapore for example,  80% of the population live in flats built by the Housing and Development Board. Although social housing is offered by the Province of BC, there is a shortage of supply in government-assisted public housing. The program focuses on addressing homelessness, providing support for women in need, seniors and indigenous people, but does not provide focused support for young adults or recent graduates transitioning into adult roles (and who are also facing financial stress from paying back their student loans). The City of Vancouver does not have a housing board or authority, and BC Housing faces a supply shortage for affordable housing (in 2016/2017, the Province announced its commitment to creating only 2000 more new affordable housing units, which will not be sufficient to meet the demands of Vancouver alone, let alone the entire province). For public housing to be more effective, the supply of affordable housing needs to increase.