In a bold move to address the housing crisis, the Heather Lands in Vancouver will soon be home to 2,600 new units, blending market-rate and affordable housing. With Vancouver’s property market among the most expensive in North America, this project promises to improve access to housing for diverse income groups, reducing income inequality and providing more opportunities to participate in the city’s economy.
Approximately half of these units will be reserved as affordable housing, aimed at lower-income families and individuals. By creating affordable homes in a city struggling with high living costs, Vancouver is addressing a significant market failure — the lack of accessible housing options for everyone. As property prices soar, many are excluded from homeownership or even decent rental options. This initiative helps correct that imbalance by ensuring that housing isn’t just available for the wealthy.
Projects like these are critical in correcting market failure. When the free market doesn’t supply enough affordable housing, the government can step in to ensure the efficient allocation of resources and a fairer outcome. This initiative demonstrates how interventions can improve market access and foster inclusivity in cities facing rapid economic growth.
For economics students, this story shows the practical implications of economic policies to reduce inequality. It highlights the real-world application of supply-side policies to address housing shortages and market failures.
THINK LIKE AN ECONOMIST!
Q1. Define the term “market failure.”
Q2. Explain one reason why governments might intervene to provide affordable housing.
Q3. Analyse how a shortage of affordable housing impacts income inequality.
Q4. Discuss whether government intervention in housing markets is always beneficial in reducing income inequality.
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