The benchmark price for a home in Metro Vancouver has fallen below $1-million for the first time in two years.
For this, we are supposed to be deliriously happy.
There is no question that the market is trending in the right direction – down. But absent some unexplainable, horrific crash, it will remain out of reach for many, especially young people living in the region. A new report out of University of British Columbia’s Generation Squeeze lab offers a bleak assessment of the housing affordability picture for millennials.
According to the lab’s latest report, it would take this cohort 29 years to save for a home in some of the country’s biggest cities. According to Generation Squeeze founder Paul Kershaw, the average millennial would need to save eight years longer than his 1976 counterpart to buy a home.
And that means for thousands of young people, the home they rent will be the only home they can afford.
Which brings me to the histrionics that has engulfed the debate around the construction of much-needed rental housing in the city of Vancouver – a city that includes postal codes representing Ground Zero in this country’s housing affordability crisis.
Recently, city council voted down a rezoning application for a rental townhome project that would have been located in the upscale neighbourhood of Shaughnessy. The 21 rental townhomes would have been situated next to an end-of-life hospice. Unsurprisingly, those who didn’t want to see a rental project go up in this neighbourhood used the hospice as a pretext, saying construction would have been too disruptive for those using the facility.
While I have some sympathy for the argument that the construction might have been temporarily disturbing, it wouldn’t have lasted forever. And I’m sure not all those using the hospice felt that building a rental project to help those priced out of the housing market was a non-starter. I’d be willing to bet many would say it was just fine. People who are near-death have a perspective others don’t and I’m sure many of them would not have been nearly as NIMBY-minded as those who were supposedly representing their interests in this fight.
Rental townhomes are precisely what the city needs. There are an increasing number of small, rental apartments, but not anywhere near enough units for people with families. That’s exactly the need this project would have filled, yet council killed it in a moment of fantastic short-sightedness. (One councillor thought the underground parking lot being proposed was too big. Seriously).
So now, the owners of the lot have moved on and are proceeding with plans to build a single, 12,000-square-foot mansion. It’s absolutely heartbreaking to see such stupidity in action.
And the fight over rental housing is far from over.
A trial program that the city started to get more rental built is experiencing growth pains. Under the Moderate Income Rental Housing Pilot Project, developers receive concessions such as extra density in exchange for putting up rental buildings in which 20 per cent of the units are priced below market rates. The idea is they would help those with annual family incomes between $30,000 and $80,000.
A report in The Vancouver Sun this week said six developers who initially had their rental projects selected by the city have since withdrawn their proposals. It’s likely because the profit margins are too tight and they are witnessing the neighbourhood outrage one proposed project is already facing.
That project, along a main thoroughfare that will one day have a subway line and high-rises sprouting up alongside it, is designed to be 28 storeys. That is the density trade-off the developer sought to cover the costs of the below-market rental it would be building. But people living in smaller condo buildings nearby don’t want a tower that size going up.
Well, something has to give here. There is a point at which these rental buildings make no economic sense for a developer. So it’s either accept that there will be tall buildings along a major transit route, buildings serving a vitally important service to the city or cave to those who don’t want to have their view wrecked and allow people who can’t find cheap rental accommodation to continue to suffer.
Members of Vancouver’s council will need to show a lot more spine than they have to this point, if the city is going to begin addressing one of the biggest problems it faces.