Vancouver’s housing system is facing serious challenges 

Vancouver, Washington’s local economy in 2026 is navigating a complex and high-stakes balancing act. On one hand, the city is experiencing long-term growth driven by major development projects, population increases, and regional investment. On the other, it faces immediate and intensifying pressures: rising infrastructure costs, housing shortages, labor constraints, and the fragility of small businesses. These challenges are not isolated—they’re interconnected, and they’re shaping the city’s fiscal strategy, workforce dynamics, and community resilience.

At the heart of Vancouver’s economic concerns is a structural mismatch between rising costs and limited revenue flexibility. The city’s 2026 operating budget reflects this tension. While city leaders opted not to raise property taxes this year—a politically cautious move—they are contending with escalating expenses across nearly every department. Public safety, construction materials, employee compensation, and utility infrastructure are all becoming more expensive. The city’s water and sewer systems, for example, are facing increased levies from Metro Vancouver, and solid waste fees are set to rise by over four percent. These increases are necessary to maintain service levels and replace aging infrastructure, but they also place a heavier burden on residents already grappling with inflation and stagnant wages.

Housing affordability remains one of the most urgent and visible economic flashpoints. According to the city’s 2024 Housing Report, Vancouver must build at least 2,000 new housing units annually to meet demand—half of which must be affordable to households earning 80 percent or less of the area median income. Yet housing starts are lagging dramatically, down more than 50 percent from the 10-year average. This shortfall is driven by a combination of high interest rates, labor shortages in the construction sector, and rising material costs. The result is a deepening crisis: rents continue to climb, home prices have surged more than 50 percent since 2020, and waitlists for subsidized housing are growing longer. The city has responded with zoning reforms to allow more duplexes, ADUs, and cottage clusters, and it has launched a construction sales tax deferral program to incentivize affordable development. But these measures are not enough to close the gap in the short term.

Labor shortages are another critical concern. Across sectors—especially healthcare, education, and construction—employers are struggling to find and retain qualified workers. This is partly due to demographic shifts, with an aging population and fewer young workers entering the trades. It’s also a consequence of national immigration policies that have restricted the flow of both skilled and unskilled labor. In Vancouver, where immigrant workers play a vital role in caregiving, food service, and building trades, these constraints are slowing project timelines, increasing costs, and limiting economic mobility. The city’s economic development strategy now includes workforce training and apprenticeship programs, but scaling these efforts takes time and sustained investment.

Small businesses, the backbone of Vancouver’s local economy, are facing a particularly precarious moment. While the city is investing in long-term revitalization projects like the Main Street Promise and Terminal 1 Public Market, the construction phase is disrupting foot traffic and access for many downtown businesses. To mitigate these impacts, Vancouver has launched the “Explore Main Street” app and offered Bricks & Clicks grants to help businesses adapt. Still, many entrepreneurs report declining revenue, staffing challenges, and uncertainty about how long they can hold on. The city’s economic development office is working to streamline permitting and expand technical assistance, but the broader economic climate—marked by inflation, high borrowing costs, and shifting consumer behavior—remains volatile.

Infrastructure investment is both a necessity and a challenge. Vancouver’s 2026 capital budget prioritizes road repairs, park improvements, and community center upgrades. These projects are essential for maintaining quality of life and supporting future growth, but they come with hefty price tags. The city is relying on one-time resources, state and federal grants, and creative financing strategies to avoid service cuts. However, this approach is not sustainable in the long term. Without new revenue streams or voter-approved levies, Vancouver may face difficult trade-offs in future budget cycles.

Tourism and regional development offer some hope for economic diversification. Projects like the Terminal 1 Public Market are designed to attract visitors, support local vendors, and create a vibrant waterfront district. The Heights District redevelopment is another major initiative aimed at transforming underutilized land into a mixed-use hub with housing, retail, and public space. These projects have the potential to generate jobs, increase tax revenue, and enhance Vancouver’s regional profile. But they also carry risks: delays, cost overruns, and gentrification pressures could undermine their benefits. Community advocates are calling for inclusive planning processes and safeguards to ensure that new development serves existing residents, not just future investors.

The city’s fiscal strategy reflects a cautious optimism. Leaders are trying to balance short-term stability with long-term investment, avoiding tax hikes while still funding essential services. This requires careful prioritization, transparent communication, and a willingness to adapt. Vancouver’s decision to hold the line on property taxes in 2026 was driven by concerns about affordability and public trust, especially after contentious debates over public safety levies and housing bonds. But as costs continue to rise, the city may need to revisit its revenue model—potentially exploring new levies, impact fees, or public-private partnerships.

For residents, the economic picture is mixed. Unemployment remains relatively low, and the region continues to attract new residents and businesses. But the benefits of growth are unevenly distributed. Working families face rising rents, limited childcare options, and long commutes. Seniors on fixed incomes are vulnerable to utility hikes and property tax shifts. Young adults struggle to afford college or enter the housing market. These pressures are fueling demand for stronger social safety nets, more affordable housing, and equitable economic development.

For advocacy platforms like Humans To Action, this moment presents both a challenge and an opportunity. The data is clear: Vancouver’s economy is growing, but it’s not yet inclusive or resilient enough to meet the needs of all its residents. By tracking budget decisions, spotlighting community voices, and building modular dashboards that connect policy to lived experience, local advocates can help shape a more just and sustainable economic future. Whether it’s embedding grant links in newsletters, mapping housing production by zip code, or amplifying small business stories, the tools are available. The question is how boldly and collaboratively they’ll be used.

In sum, Vancouver’s 2026 economy is a study in contrasts: growth and strain, promise and pressure, resilience and risk. The city’s leaders, businesses, and residents are navigating this terrain with creativity and care—but the path forward will require deeper investment, broader inclusion, and a shared commitment to building a local economy that works for everyone.