VANCOUVER – Prime Minister Justin Trudeau says his government is concerned about the ballooning cost of housing in Vancouver and Toronto but it wants to be certain any action it takes doesn’t make the problem worse.
Speaking before a housing affordability roundtable of local MPs and academics on Friday, Trudeau said the federal government has to be “very, very thoughtful” about how it approaches this challenge in a way that continues to allow Vancouver to flourish while protecting affordability.
“There’s no question that concerted, thoughtful effort is going to be needed to address the situation, but we have to be very wary of unintended consequences,” he said.
He said he has been engaging with both British Columbia Premier Christy Clark and local mayors to talk about solutions and was eager to hear concerns of the participants at the roundtable.
WATCH: Real estate prices in Vancouver continue to climb
Speaking earlier Friday on CBC Radio in Vancouver, Trudeau said any solutions will require collaboration between all levels of government, as well as academics and stakeholders.
He said overseas money is playing a role in fuelling superheated markets such as Vancouver, where the average price of a single-family detached home is $1.5 million.
But Trudeau cautioned that any federal measures to cap soaring house prices could backfire elsewhere in the country.
He said officials are examining Australia’s decision to tax homes owned by foreigners, but warns federal levers to curb offshore ownership in Vancouver or Toronto have the potential to harm other regions of the country where overseas investment can be beneficial.
“How do we make sure we are helping people (in Vancouver) in exactly the right and targeted way,” Trudeau said. “That is where the kind of collaboration we haven’t had for 10 years between the federal government and different orders of government is so important to work on together.”
Most Vancouver homeowners know the inflated housing market must be stabilized, because the current trajectory “doesn’t have any good outcomes,” he added.
But any action must not completely devalue those people whose retirements and equity are tied to their homes, the prime minister said.
“We just have to make sure we are keeping people protected in how we stabilize it.”
Trudeau also toured a new Microsoft development centre in downtown Vancouver with Clark and Vancouver Mayor Gregor Robertson on Friday.
After the event, Robertson said the province must take the lead on addressing real estate issues. But he said the federal government can take actions, including creating incentives to build more rental housing, social housing and co-ops.
“The federal government in recent decades bailed on most of their housing commitments and it’s good to see the Trudeau government picking up that mantle and rolling out a national housing strategy,” he said.
Robertson acknowledged that it takes time to change the housing market but he said Vancouver needs decisions soon to deal with the lack of affordable housing.
“The prime minister is certainly very aware of the challenges with affordability. He sees it when we’re here at Microsoft and tech companies that are booming in Vancouver, but workers having a challenge finding an affordable place to live,” he said.
“We’re seeing, certainly, a response from the federal government to the urgency,” he added. “I’m hopeful, given the attention they’re paying to us now, that we’re going to see some movement.”