Housing Need vs. Housing Reality in Mid-Vancouver Island Residential Markets

A Gap Between Housing & Planning Policy and Delivery Is Driving the Market

Across British Columbia, every municipality is now working under the same BC Government directive: quantify housing need using a standardized model and plan for enough housing to meet it.

The first step, prepare a ‘Housing Needs Assessment Report’ that models anticipated future housing needs in each municipality for 5-year and 20-year time horizons.

At Jackson & Associates, we’ve taken a closer look at these assessment reports from seven key central Vancouver Island municipalities:  Courtenay, Comox, Cumberland, Nanaimo, Parksville, Qualicum Beach, and Campbell River to compare:

• Current housing stock 

• Projected housing need (HNR) 

• Actual delivery through building permits 

The conclusion is straightforward:

The housing issue on Vancouver Island is not a lack of demand. It is a lack of deliverable supply.

The Scale of Required Growth

The Province’s Housing Needs Reports (HNRs) require municipalities to plan for both 5-year and 20-year housing demand.

Across the markets analyzed, the 20-year model numbers are significant:

• Courtenay: 8,350 units

• Comox: 3,358 units

• Cumberland: 1,350 units

• Nanaimo: 23,776 units

• Parksville: 3,604 units

• Qualicum Beach: 2,435 units

• Campbell River: 805 units

When compared to existing housing stock, 6 of these 7 municipalities are being mandated by the BC Government to increase housing supply by 52% to 73% over the next 20 years.

These levels are more than ‘normal’ incremental growth, they represent a goal of structural expansion and will fundamentally change the built environment and land economics paradigm within these communities.

Understanding the HNR Model

So how exactly were these ‘housing needs assessment’ reports done?  The legislated HNR methodology is designed to capture more than just population growth. It layers in:

• Existing unmet housing need

• Suppressed household formation

• Homelessness

• Vacancy rate targets

• Additional “demand buffer”

In effect, the HNR represents:

What would need to be built to normalize housing conditions and not what will realistically be delivered.  Fundamentally, based in ideology not economics.

Where the Gap Appears

When we compare HNR targets to actual building activity over the past decade, a consistent pattern emerges.

1. Growth Markets: Supply Is Increasing, but Still Falling Short

In Courtenay and Nanaimo:

• Development activity is strong

• Hundreds of units are being delivered annually

• But supply still trails modeled demand

These markets are capable of scaling, but even here, delivery lags need.

2. Constrained Markets: Demand Translates to Price, Not Supply

In Comox, Qualicum Beach, and Parksville:

• Demand is strong and persistent

• Land availability and zoning constraints limit development

• Permit activity remains well below required levels

In these markets:

The gap between need and delivery is absorbed through rising property values rather than increased housing supply.

3. Transitional Markets: Growth Is Uneven

In Cumberland:

• Required growth is high relative to existing stock

• Development occurs in cycles rather than consistently

This results in periodic bursts of supply, followed by periods of limited activity.

4. Balanced Market: Need Aligns More Closely with Delivery

In Campbell River:

• Housing need is comparatively modest

• Development capacity aligns more closely with demand

This produces a more stable and balanced market environment.

Why This Matters

The most important takeaway is not the size of the HNR numbers it is the gap between:

Required housing vs. achievable housing

This gap drives:

• Price escalation in constrained markets

• Development feasibility challenges 

• Shifts in highest and best use 

• Long-term valuation trends 

Put simply:

Where supply cannot respond, value will.

Policy vs. Reality

The Province’s housing policy is designed to unlock supply by requiring municipalities to:

• Quantify housing need

• Align Official Community Plans (OCPs)

• Ensure zoning allows sufficient density

However;

• Zoning does not guarantee construction

• Market conditions still govern delivery

• Labour, financing, and absorption all matter

As a result:

The HNR sets the ceiling, but ultimately the market will determine the outcome. Simply setting targets based on theoretical models will not solve either the supply problem or the affordability problem.

Our Perspective

From an appraisal standpoint, the HNR framework provides a valuable lens, but only when paired with real-world data and real-world data is where we are specialized.

At Jackson & Associates, we focus on:

• The gap between policy and delivery 

• The feasibility of new construction 

• The interaction between supply constraints and value 

Because in today’s market:

Understanding what can be built is more important than knowing what should be built.  It is paying to attention to what is truly happening on the ground.

Final Thoughts

Across Vancouver Island, the housing conversation is often framed around demand.

The data tells a different story.

• Demand is present and measurable

• Policy is pushing for increased supply

• But delivery remains constrained

The result is a widening gap.

And that gap is now one of the most important drivers of real estate value in the region.

Jackson & Associates Ltd.Data-driven valuation. Market insight that matters.www.comoxvalleyappraisers.com