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The task-force also suggested creating new housing other than the towers and single-family homes that dominate in Vancouver.JASON LEE/Reuters

Vancouver is hoping to make a dent in the demand for housing from less-wealthy residents by creating a housing-development agency, the way the city's two universities and the ski resort of Whistler have.

A task force on affordable housing recommended that the city set up a separate agency that could negotiate with private developers on deals to build units on discounted city land. The rents would have to be guaranteed at lower rates than usual for new units.

As well, the agency would then manage the hoped-for thousands of units created to ensure they go to people with lower incomes.

But Vancouver is willing to take on that more aggressive role because the city is "in an affordability crisis," said Mayor Gregor Robertson, the political leader of a city where the average sale price for a house is around $800,000, more than 10 times median income.

"The city hasn't had a big focus on stimulating the development of affordable housing historically," the mayor said, as he announced the task-force recommendations.

He didn't have any numbers on the cost of setting up a housing authority or on the value of city land that Vancouver might commit to future housing projects.

The recommendations also included creating new "transition zones" that would be geared to different forms of housing than the towers and single-family homes that dominate in Vancouver. There was also a requirement for developers to include more affordable options in major projects.

A housing authority would create a specialized team operating at arm's length from the city and able to move more quickly to take advantage of real-estate trends and opportunities.

Both the University of B.C. and Simon Fraser University have, through their property-development divisions, focused on creating new models of affordable housing.

Vancouver deputy city manager David McLellan said the city agency would be most like the UBC Properties Trust, which set a goal of building 20-per-cent rental among the new housing developed on its extensive holdings.

"We put the land in and that makes it possible for our rental units to operate on a cost-recovery basis," said Paul Young, the trust's development director. The university has created 380 apartments that rent for less than the usual market rates, which go to faculty and students only, and another 375 that are rented at standard rates to anyone.

Whistler started its housing authority in 1977 as, like many high-end ski towns, it discovered that its local residents, essential for the resort's service businesses, were being priced out of the market. It now manages almost 2,000 rental and home-ownership units.

Oliver Clegg, a 31-year-old who has worked as a hotel and golf course employee and in property management, just bought a three-bedroom townhouse in the resort as a result of the program.

"It's the best thing I've ever done," said Mr. Clegg, who had to agree to Whistler's rules that homebuyers can only get a limited amount of profit out of their homes, pegged to the rate of inflation.

The creation of a city agency to develop lower-cost housing is also similar to what Toronto has done – once in the late 90s and again more recently – after federal and provincial funding evaporated, said Mark Guslits, a former chief development officer with the Toronto Community Housing Corporation. Mr. Guslits was a member of Vancouver's housing task force. (TCHC's recent woes over managing its older social-housing properties isn't connected to any of the agency's housing development work.)

Mr. Guslits said having a separate agency, staffed by people who understand the real-estate market and can negotiate with developers, gives any city its best chance at finding ways of using the private market plus city assets and non-profit agencies to create lower-cost housing.

"When cities have tried to be a developer [without that separate agency], they have either failed or spent far too much money," said Mr. Guslits.

Many other cities have created housing authorities or corporations to find ways of developing lower-cost housing where the private markets don't seem to be serving their residents well.