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Vancouver homebuilders were already feeling the effects of labour shortages, rising inflation and permitting delays before flooding and mudslides disrupted supply lines across southwest British Columbia.

As the region works to recover and rebuild, a domino effect of delays is expected to impact residential construction projects, putting a strain on builders in the Lower Mainland as they struggle to keep up with increasing demand.

Livabl spoke with Ron Rapp, Homebuilders Association Vancouver (HAVAN) CEO, about issues slowing Vancouver home construction, remedies for low housing inventory, and the potential impact from November’s record-setting rainfall.

Aside from the recent flooding and mudslides, what are some of the issues confronting Vancouver builders?

In Vancouver we’re seeing the same issues that have been plaguing the housing industry across the country. Trying to expedite more supply has been a challenge due to delays and red tape, both at the provincial and municipal level. We also have an extraordinary demand on limited resources, as both material and labour resources are being strained. 

We’re still dealing with the fallout from COVID in personnel considerations, on-site operations, and the supply chain. We’ve also seen significant inflation in the way of hard costs. Lumber has receded to some degree but it’s bouncing back. The peak was in March of this year and we’re down to about half from that peak, but that’s still double what it was pre-COVID.

What factors contribute to the difficulties in Vancouver?

For all intents and purposes it’s a perfect storm. It was already a challenging environment pre-COVID, then the pandemic disrupted staffing, intake procedures were impacted, and we’ve seen unprecedented demand both on the renovation side and new construction. So between those elements conspiring it really put a major obstacle in the path of being able to expeditiously issue permits and approvals.

The City of Vancouver complicates the situation by having multiple layers of policy and direction that is imposed both through a regulatory environment, in the way of the Vancouver building bylaw and codes, as well as various design guidelines and policies relating to anything from tree preservation to parkland to streetscapes. Put it this way, it’s a jungle of red tape.

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Have you seen any steps taken to make the approval process easier?

Despite the challenges, we have seen some municipalities make the process easier. Surrey made significant strides prior to COVID by moving to an electronic intake and processing platform, but that’s taken place over a number of years, so it’s not like you just turn the switch and off you go. At least the COVID crisis has spurred that initiative, to the point where the provincial government made $15 million available through the Union of B.C. Municipalities, doling out a maximum of $500,000 to municipalities who are looking to streamline their systems.

One thing that has transpired over the last little while is the universal acknowledgment and acceptance that supply is an issue and intrinsic to addressing the question of affordability, because we have such a disproportionate balance between demand and supply. But in many cases the “controls” government has looked to impose have almost exclusively focused on the demand side, including speculation taxes and changes to the mortgage stress test, to little effect.

What’s the solution to resolve Vancouver’s supply issues?

I wish there was a silver bullet, because there aren’t any easy answers no matter how you slice it. Overall, I think there has to be an adoption of a culture that’s geared toward making things happen and have everyone work toward that goal. If we could break down the “silos” between different levels of government, different departments within municipalities, the industry regulatory authorities, and even the consumer, it would make things a lot easier.

The vast majority of the so-called “old world” is built on numerous layers of civilization that have preceded it, so it’s an inevitable part of growth and time that changes have to be manifest because circumstances change.

Unfortunately, contrary to Edmonton, Calgary or Toronto, in Vancouver we don’t have the room. We have mountains to the north, an ocean to the west and a border to the south, so the only practical route for expansion and growth is either through increasing density or expansion into the valley, which chews up the agricultural base. 

How have you seen the recent flooding and mudslides impact the construction industry?

It’s almost premature to say what the actual effects are yet. While on the surface it has been quite disruptive, the Ministry of Transportation and affected municipalities have been pretty quick to restore links wherever they can.

Over the course of the past couple weeks I think the most significant disruption has been the ability of trades and contractors to reach their sites they’re working on. The labour base that is based in the Fraser Valley — Langley, Abbotsford, Chilliwack — has had a real challenge due to some of the road closures that have been put in place.

Unfortunately there are some trades and/or contractors based in the valley that have been wiped out and literally lost everything. The impact on their business has yet to be realized, and the downstream impact has yet to be realized.

I think we’re going to see more disruption moving forward. I’m starting to hear the initial rumblings of shortages with respect to furnaces and hot water heaters because some are coming from Alberta or further east. There are thousands of homes that have been adversely affected that are going to need heat and hot water, and the equipment that is currently in place in irreparable.

What are some additional challenges you foresee in the months ahead?

First and foremost, the supply chain issues will cause some delays, and there may be some cost implications attached to that. Then there’s the potential for fragmentation of labour resources. If you have people focusing on new construction being diverted to addressing reconstruction or repair that’s going to become a challenge as well, but it’s too early to say exactly which sectors are going to be most affected and how that translates.

We’ve seen damage that is so significant many infrastructure facilities need to be addressed, so does that divert servicing contractors? Does that divert heavy equipment? As of now that’s uncertain.

The recommendation to our membership right now is to be patient. Certainly this has been an extremely disruptive event, and we’re not out of it yet. The damage and the aftermath are still being assessed, and we have to take that in stride to some extent.

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