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The $77 Billion Question: Unlocking British Columbia’s Vacant Land Amid a Housing Crisis

Writer's picture: William DonnellanWilliam Donnellan

British Columbia is in the throes of a housing crisis, with skyrocketing property prices and a severe shortage of affordable housing. Yet, amidst this crisis, there exists a staggering $77 billion worth of vacant residential land—an untapped resource that could play a pivotal role in alleviating the province’s housing woes. This raises an important question: why is so much land sitting idle in one of Canada’s most expensive real estate markets? Let’s dive deeper into the issue, explore its implications, and discuss how BC can unlock the potential of this land to address its housing challenges.


Science World
Science World


What Does $77 Billion in Vacant Land in British Columbia Mean?


To put things into perspective, $77 billion is equivalent to nearly 20% of BC’s GDP (as of 2023). This figure represents the total value of vacant residential land across the province. While some of this land is located in remote areas with limited development potential, a significant portion lies within urban and suburban regions where demand for housing is at its peak.


In cities like Vancouver, where housing affordability has reached a breaking point, this vacant land could be the key to unlocking new housing supply. However, much of it remains unused due to speculative practices, regulatory barriers, and policy gaps.


Why Is This Land Still Vacant?

The reasons behind such extensive underutilization of residential land are multifaceted:


  1. Speculation and Investment

Many property owners purchase land as an investment, holding onto it while waiting for its value to increase. This speculative behavior is particularly common in high-demand areas like Metro Vancouver and Victoria. By leaving land vacant, these owners avoid the costs associated with development while benefiting from rising property values over time.


  1. Regulatory Hurdles

Developing vacant land often involves navigating complex zoning laws, lengthy permitting processes, and community opposition (commonly referred to as NIMBYism—Not In My Backyard). These obstacles can discourage property owners from building on their land or selling it to developers.


  1. High Development Costs

The cost of developing land in BC is among the highest in Canada due to expensive labor, materials, and municipal fees. For many owners, these costs outweigh the potential benefits of development, especially if they are not experienced developers.


  1. Ineffective Tax Policies

While BC has introduced measures like the Speculation and Vacancy Tax (SVT) to address underutilized properties, these policies primarily target homes rather than undeveloped land. As a result, vacant lots often fall through the cracks of existing regulations.


  1. Land Banking by Developers

Some large developers purchase land with the intention of holding it for future projects but delay construction due to market conditions or strategic decisions. While this practice can be profitable for developers, it reduces the immediate availability of housing.



Crane


The Impact on Housing Affordability

The existence of $77 billion worth of vacant residential land has far-reaching consequences for middle and low-income households in BC:


  • Artificial Scarcity

By keeping land out of circulation, property owners create an artificial scarcity that drives up prices for both buyers and renters. This scarcity is particularly acute in urban centers like Vancouver, where limited private land already constrains housing supply.


  • Focus on Luxury Housing

When vacant lots are eventually developed, they are often used for high-end projects that maximize profits for developers rather than affordable housing. This trend exacerbates inequality by catering to wealthy buyers while leaving middle-income families with fewer options.


  • Missed Opportunities for Affordable Housing

Vacant residential land represents a missed opportunity to build affordable housing units or community-oriented developments that could address the needs of BC’s growing population.


  • Economic Inefficiency

Land that sits idle contributes little to local economies or communities. It generates limited tax revenue and fails to support job creation through construction or related industries.



Family looking at their house being built


What Can Be Done?

To unlock the potential of BC’s vacant residential land and address its housing crisis, policymakers need to adopt bold and innovative strategies:


  1. Strengthen Vacancy Taxes

Expanding taxes like the Speculation and Vacancy Tax (SVT) to include undeveloped residential lots could incentivize property owners to develop or sell their land. Higher tax rates on long-term vacancies could further discourage speculative behavior.


  1. Implement a Land Value Capture Tax

A “land value capture” tax would target increases in land value resulting from public investments (e.g., new transit lines or infrastructure improvements). This tax could encourage development while generating revenue for affordable housing initiatives.


  1. Streamline Development Processes

Simplifying zoning laws and speeding up permitting processes could make it easier for developers to build on vacant lots. Municipal governments should also consider rezoning underutilized areas to allow for higher-density developments.


  1. Public Land Acquisition Programs

Governments could purchase vacant lots at market value and use them for public housing projects or partnerships with non-profit developers. This approach ensures that vacant land is used for community benefit rather than private profit.


  1. Encourage “Missing Middle” Housing

Policies that promote “missing middle” housing—such as townhomes, duplexes, and low-rise apartments—could make better use of vacant lots while providing more affordable options for middle-income families.


  1. Community Land Trusts (CLTs)

Community Land Trusts are non-profit organizations that acquire and manage land for long-term community benefit. Expanding CLTs in BC could help ensure that vacant lots are developed in ways that prioritize affordability and sustainability.



Architectural drawings



A Call to Action


The $77 billion worth of vacant residential land in British Columbia represents both a challenge and an opportunity. On one hand, its current underutilization exacerbates the province’s housing crisis by limiting supply and driving up prices. On the other hand, it holds immense potential as a resource that could be leveraged to create more affordable homes and vibrant communities.


Unlocking this potential will require collaboration between governments, developers, community organizations, and residents. By addressing speculative practices, streamlining regulations, and prioritizing affordability over profit, BC can transform its dormant assets into a cornerstone of its housing strategy and provide hope for middle and low-income families struggling to find a place to call home.


Vanway Properties remains committed to addressing BC’s housing challenges by actively developing missing middle housing options that provide affordable, diverse residential solutions for communities across the province.



Couple moving into new home



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