| It’s official. Vancouver is now ranked along with Sydney, Australia and Hong Kong as one of the three most expensive cities in the world in which to live. And it’s mainly due to the cost of housing.The average house price in Vancouver topped $1 million dollars for the first time in 2010 and, despite the weak economic recovery since the 2008 financial crisis, housing prices have continued to rise throughout 2011. The last decade has seen the steepest and steadiest increases, graphically illustrated by the Real Estate Board in the chart on this pageWhat does this mean in terms of affordability?According to a recent Canadian study of 325 international cities, an “affordable” house price-to-income ratio is three, while a “severely unaffordable” label can be pinned on any city with a multiplier of more than five. Average house prices in Vancouver now represent 11.2 times Vancouver’s median family income of $ 89,280, more than double what the price-to-income ratio was just ten years ago. Compare this with Toronto’s current price-to-income ratio of 6.7 or Calgary’s at 4.2 or Fredricton’s at 2.4 and you begin to appreciate just how expensive Vancouver’s housing market has become.What is the affordability situation on the Sunshine Coast?According to the Greater Vancouver Real Estate Board, at $432,224 the Sunshine Coast has the lowest benchmark housing prices of any municipality in the Metro Vancouver area. That’s way below $1M but does that mean housing here is “affordable” ?The 2006 census pegged the median income on the Coast at $63,629. By applying the method defined by the comparative study to the average house price of $432,224, the price-to-income ratio here is 6.8 – higher than Toronto’s and well into the “severely unaffordable” category. Since the 2006 census set the average household income on the Coast at $38,939, well below the median income level of $63,629, it is apparent that there’s already a serious affordability problem here. And it could get worse.Comparing Vancouver’s median income with the Sunshine Coast’s average house price nets a 4.8 ratio. With its proximity to Vancouver and the surrounding municipalities, there is a real potential that the unaffordable situation there may attract house hunters to the Coast, increasing the upward pressure on local housing prices. Renters are also negatively effected by high house prices, which lead to a tightening of the rental market and, inevitably, rent increases.What can be done about it?We all need to let our politicians and policy makers know that housing affordability is a top community priority. At the same time, since sustainability of housing affordability depends on income increases keeping pace with increases in mortgage or rent payments, we can support community efforts to strengthen and attract economic development throughout the region in order to stimulate job creation and provide the secure employment opportunities people need to afford adequate housing.
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The consumer can re-evaluate their tastes and expectations. Must every bedroom come with an ensuite, two sinks and radiant in-floor heat? Expectations of “luxury” drive costs of production up and are tacked onto the new house prices charged by builders. Homeowners establish the re-sale prices. They may need to adjust their thinking about housing as just another commodity to be traded to generate short term high-yield returns.A key Coast Community Builders Association policy is to advocate housing affordability. We need to do more to help our members learn about and apply cost-saving measures to land development and building practices. We need to continue reminding local governments to adopt regulations and measures that result in making housing more affordable. And we need to continue preaching collaboration to help unite efforts in reducing house prices. This is the motivation behind the CCBA’s calls for more reasonable development cost charges and simplification of the hundreds of pages of building regulations and guidelines. We have aligned with local government and community groups to support the development of a strategic Housing committee, and will continue to promote incentives, secondary suites and secondary dwellings for the provision of affordable housing.The District of Sechelt, Town of Gibsons, and the SCRD have all introduced Affordable Housing and Amenities bylaws and guidelines. These require developers and builders to contribute to community amenities and create a minimum number of price-controlled units in their developments or contribute funds to municipal housing reserve accounts. This mechanism to create affordable units is often referred to as “inclusionary zoning” and has been widely adopted by municipalities here and abroad as a way to foster a mixed, diverse, and integrated community. It also allows for concentrated, mixed use, as well as pedestrian and transit-oriented development.But there is a down side. In effect, the jurisdictions are levying a narrowly targeted “tax” to address a broader social and economic issue and are contributing to the higher cost for market units. Other local development regulations, such as urban containment boundaries, actually drive higher housing costs by artificially limiting the supply of available land and buildable lots. Local governments need to take a closer look at the consequences of their policies on affordability.In fact, local government’s role is large. Some estimate that the impact of zoning, building regulations and permit delays are responsible for anywhere from 15% to 90% of housing price increases. Our job is to help them make the right choices for housing affordability so our children can have the choice of staying on the Sunshine Coast to raise their families, pursue their dreams and enrich our community life.Join the CCBA and help us help local jurisdictions adjust their thinking about sustainable ways to provide housing affordability and implement affordable housing policies more effectively.by Jane Hopkins, CCBA Projects Coordinator
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