A report on housing from VanCity, a member-owned financial institution, finds a continuing decline in housing affordability in the B.C. Lower Mainland.
Home ownership costs are rising across the region as buyers look beyond the City of Vancouver. In the background, the report suggests that home ownership is a lost cause for an increasing number of British Columbians.
Housing affordability matters for a bunch of reasons. When downtown workers are pushed to live in the outer suburbs, it puts increased stress on transportation systems and it reduces (trust me) both quality of life and engagement in community life. As signalled by the Vancouver Board of Trade, high housing costs create a barrier to immigration from other parts of Canada for creative and capable talent. And, obviously, a shortage of affordable housing can push families and individuals into financial distress and even into the street.
“Home Stretch,” released on June 6, charts the rise in Vancouver-area housing prices from March 1, 2016 through February 28, 2017. The affordability calculations correlate median sale prices in given municipalities with median household income on a regional district basis (Vancouver or Fraser Valley.) The cost of purchasing a detached home in West Vancouver in February 2017 was more than 200 per cent of median income, and more than 150 per cent in Vancouver, both clearly unaffordable for most consumers.
Purchasing a townhome in Maple Ridge or Abbotsford involved a commitment of about 25 per cent of median income, supportable if that’s where you want to live. However, the affordability of all housing in the outer suburbs — detached, attached, or apartment — is quickly eroding. In fact, the long-time price advantage of apartments and townhomes is eroding across the region. The official property value assessment on my own Maple Ridge townhome flatlined after the 2008 financial crash, but it jumped in 2016 by more than 25 per cent. The provincial government’s 2016 foreign buyers tax may have cooled the speculation on detached homes in the most expensive markets, but demand for other housing is building.
Suburban apartment prices were almost dormant for several years; they rose in 2016. And looking at the most recent three-month data from the Greater Vancouver Real Estate Board, apartment prices are now on an even more rampant rise than the VanCity report anticipated.
The authors of “Home Stretch,” Landcor Data Corp., state that consumers should “seriously consider” whether a new home purchase in southwest B.C. is a Good Idea. They do not discuss the benefits of renting, quite possibly because the rental housing market is also difficult. There’s an almost complete lack of modern, purpose-built rental housing, as in all of Canada; most renters must rely on amateur landlords, with reduced security of tenure and uncertain property standards.
In the end, after 15 pages of data on home purchase costs, the VanCity consultants present recommendations to government that are weighted towards building rental housing supply, rather than trying to defend home ownership. Their recommendations to local and provincial governments are provided here in full, complete with the coveted approval of Fraseropolis.com.
- Place publicly owned land into a trust to deliver purpose-built and affordable rental housing. These may provide affordable rentals, allowing renters to save for a down payment (if home ownership is a goal).
- Increase zoning for high-density multi-unit buildings and stipulate that new condos must include a set percentage of affordable rentals. Create incentives for developers to build affordable workforce and family housing.
- Design growth centres with a dense core, with secured sites for affordable rental housing in proximity to mass transit and improve transit from suburban areas to central Vancouver, as well as inter-city transit throughout the region.
- Encourage every municipality to have an affordable housing plan that is tied to providing safe, decent and affordable housing to its residents.
- Encourage communities to permanently zone land (similar to the Agricultural Land Reserve) to provide capacity for affordable housing development in conjunction with regional housing trusts.
- Dedicate a portion of the Property Transfer Tax annually to support the creation of perpetually affordable home ownership options across the province.