Mayor Gregor Robertson sipped on his green tea latte as we settled in to discuss his major commitment to affordable housing Wednesday morning. He admitted the issue, which is plaguing every major city in the country, makes his task of reducing street homelessness a relative walk in the park.
As politicians look to take on the problem, he says, we are in growing danger of having our cities "hollowed out" as those working people seeking housing flee to less expensive climes.
That is nowhere more the case than in Vancouver. The day before we met, there was more bad news. Buried in the business pages of the Globe and Mail was a report on the eighth annual Demographia International Housing Affordability Survey. It covers 325 global metropolitan markets. And it looks at housing prices in relationship to household income.
It concluded that Â鶹´«Ã½Ó³»is the second least affordable city in the world following Hong Kong. Toronto, by the way, sits in the 18th spot while Montreal is 23rd on the list.
It's simple enough to figure out why Â鶹´«Ã½Ó³»has the high rating it does: Land costs. But understanding the problem doesn't make finding a solution any simpler.
It does explain why one old formula we have used for decades no longer works in dealing with affordability. For years, developers have been encouraged to include social housing as 20 per cent of their projects in exchange for concessions on density. The remainder of the project was expected to be "market housing." But land costs dictated that market housing was soon out of reach of anyone seeking anything vaguely affordable. Also, as Robertson points out, we have failed in using that formula to keep up with our need for social housing, which is another problem.
But more to the point in seeking a solution for affordable housing is this observation by the mayor: "If the cost of the housing carries the full value of the land, it is unaffordable."
Even his council's attempt to create affordable rental housing with the STIR program has not worked that well. He now says that STIR, which offered developers incentives to keep costs down and annoyed West End residents who objected to what they saw as spot zoning, "has not produced drastically lower rents."
So land costs. As you may know the city has a considerable land bank: the Property Endowment Fund where land is recorded at book value, which is to say, its actual cost at the time it was acquired. (That includes the land that was turned over to the developers of the Athletes Village where the city greedily chose the developer believing a $20 million asset in the Property Endowment Fund would return them more than $190 million. Wrong.)
Robertson says it's worth considering what UBC has done to create affordable housing by using its land bank, the University Endowment lands. It apparently builds on that land and maintains title to the property by offering 99 year leases. There is also an affordable housing project at Simon Fraser University, where the university still holds title to the land and the revenue from leasing it was built into the selling price of the housing at 30 or 40 per cent below market.
You also need covenants on those properties to keep them out of the hands of speculators and sustain them below market value. But before we get ahead of ourselves, Robertson is still a couple of weeks away before he and his Affordable Housing task force co-chair Olga Ilich select the members of their committee.
Then there is the not-so-insignificant matter of figuring out what it will take to succeed.
Based on the philosophy that what you don't measure you can't manage, Robertson, Ilich and the rest will have to figure out just how much affordable housing will be required to curb or even reverse the "hollowing out" we are talking about.
This will be interesting, but not easy.
