Vancouver housing 'crisis' prompts call for big changes
Published Monday, June 25, 2012 4:00PM PDT
The building at 600 Drake St. in Vancouver was built during the 1990s as a privately-owned building on city-owned land. June 25, 2012. (CTV)
A local housing authority, new city land trust and dirt-cheap land leases for developers are all on the table as Vancouver tries to tackle what the mayor calls an “affordability crisis.”
Mayor Gregor Robertson’s housing affordability task force presented its interim report on housing affordability Monday, stressing the need for more transitional housing types like row houses and incentives for developers to build more rental units. Robertson told reporters that housing prices have reached such high levels that businesses are having trouble attracting new workers from outside the city.
“Vancouver is in an affordability crisis. We are routinely considered to be one of the most expensive cities to live in in North America, if not the world. It has been a real challenge for many Vancouverites, young and old, to find affordable housing,” he said.
The real estate experts, developers and city officials on the task force focused on housing options for households earning between $21,500 and a combined $86,500 per year. According to city statistics, close to 40 per cent of households in Vancouver spend more than 30 per cent of their income on housing -- and that proportion rises to nearly half of all homes headed by someone under the age of 34.
Meanwhile, vacancy rates have hovered at around 0.9 per cent of rental units over the past three decades.
One major proposal to increase the rental stock is to offer city-owned land to developers for “nominal” leasing fees in exchange for building new social housing and affordable rental units. Robertson said the hope is that increasing the housing supply will allow market forces to cool down high rental prices.
But deputy city manager David McLellan acknowledged that won’t necessarily mean cheaper housing.
“I don’t think rents would necessarily go down,” he told CTV News. “The market’s going to determine what sort of rent is charged there.”
Developer Michael Geller said the proposal is an attractive one.
“Developers are likely to take advantage of these opportunities. It’s oftentimes a myth that developers make more money building expensive condos than they do building cheap inexpensive condos or sometimes social housing,” he said.
“There’s no doubt that rental housing is hard to make money on, but if the city is prepared to make land available at no cost, then you can oftentimes make money on rental housing, too.”
He said that while the average rent won’t likely go down, it could cause rents to increase less dramatically.
But University of B.C. economist Tsur Somerville said the proposal is nothing more than a subsidy that cuts off a potential revenue source for taxpayers.
“You could have taken that land, sold it for $300,000 a unit, put it in the bank, earned three per cent and we would have $10,000 a year in interest off each of those units that goes right into general revenues,” he said.
The task force’s interim report also suggests focusing on transition zones between high-density areas and single-family neighbourhoods, where buildings like stacked townhouses and row houses should be encouraged. It goes on to recommend the formation of a land trust, supported by donations from private and non-profit sources, as well as a community-based financing agency and a city-owned housing authority to oversee development of more affordable housing.
The task force is recommending that developers’ applications for affordable housing projects should be fast-tracked, and even suggests a “NEXUS Pass-type system” for developers with proven track records.
The final report from the task force is set to go before city council in September.
With files from CTV British Columbia’s Shannon Paterson