Higher-paying jobs, leasing options among ways to make Vancouver housing affordable

Buildex conference to include discussion on affordability options for pricey Vancouver

 By Tracy Sherlock, Vancouver Sun February 11, 2013 4:05 PM

The Verdant project at SFU development, pictured in 2007, included a variety of measures to make the homes available at below market cost.Higher-paying jobs, leasing options among ways to make Vancouver housing affordable

Photograph by: ian lindsay , Vancouver Sun

Strategies such as long-term land leases and the deliberate preservation of industrial land to encourage high-paying jobs could be used to make paying for housing in pricey Vancouver a little less painful.

These ideas and others will be on the table at a keynote panel discussion on housing affordability at the Buildex conference for building professionals this week. Heather Tremain, principal at the Urban Fabric Group, and Brent Toderian, urbanism consultant at Toderian UrbanWorks and former director of city planning for Vancouver, will be joined by two architects for the discussion.

Tremain was involved with the Verdant housing project at Simon Fraser University, a reduced-cost housing model that she says could be applied in other developments.

Toderian’s focus is expanding the idea of affordability beyond home ownership, to look at factors such as purpose-built, affordable rental housing and land use that encourages higher wages.

The Verdant project’s 60 units sold for 20 per cent below market value because of a partnership between Simon Fraser Community Trust, Vancity Enterprises and Tremain’s former company reSource Rethinking Building Inc. SFU leased the land for the project at below market value, while Vancity Enterprises built the property for a lower-than-usual development charge.

The Verdant model created “workforce housing — that’s the thing that we’re really missing here in Vancouver,” Tremain said. “Many of the people who live and work here, even though they have decent incomes, cannot afford to purchase here anymore.”

When the homes are sold in the future, they must be sold at 20 per cent below market value, ensuring the affordability benefits reach a broader population beyond the initial purchasers.

Toderian said building on leased land is an intriguing way to reduce housing prices, but can be complicated. He cited the South False Creek lands, which are more than 30 years into a 60-year lease from the city of Vancouver, as an example of the uncertainty that building owners face as a lease nears the end of its life. That can cause problems with selling or refinancing the home.

Another idea for increasing affordability is a model used by Options for Homes, a non-profit corporation in Toronto that builds homes for less than market value and then includes a loan to reduce the price another 13 per cent, Tremain said. There are no payments due on the loan until the purchaser sells or rents out their suite. At that time, the loan appreciates by the same percentage as the resale value of the home and must be paid back in full. The repaid loans are then used create new cost-effective homes for other home buyers.

This model eliminates the need for mortgage insurance in many cases and lowers the amount of the mortgage buyers will need (and thus the monthly payments), Tremain said.

“I’ve always been intrigued by these models, as long as they are seen as part of a continuum and as long as we get past this North American assumption that ownership, as soon as you can, is always, the right answer,” Toderian said. “Although affordable ownership can be part of the puzzle, it’s not the puzzle. You have to think about affordability beyond ownership.”

Toderian would like to see more purpose-built rentals built in the city of Vancouver. He says rented condos are not as stable as purpose-built rentals, because the owner can decide to sell or move in at any time, and second owners are much more likely to be owner-occupiers, Toderian said.

“The city will probably have to consider mechanisms like rental control in the future, which up until now have been relatively taboo,” Toderian said. “In other expensive world cities like New York, there are much more stable rents to the point where people who have been living in buildings for many years can stay there.

“It’s not an easy solution, because rent controls could also be a disincentive to building purpose built rentals.”

He said home ownership is a North American “mythology” — home ownership is uncommon in European cities.

“In many expensive cities, people don’t bat an eye at many people renting. It’s not assumed that ownership is always the right answer,” Toderian said. “More and more — especially with the younger generations like the millennials — there isn’t the automatic assumption that ownership is the right choice. There needs to be options for living, even if it’s expensive to own.”

Housing is just one factor that affects a city’s affordability, Toderian said. Transportation, cost of goods and services and energy costs must also be factored in. Income levels also affect affordability.

“The other side of the equation is income — we’re an expensive city for two reasons, because the cost of housing is high and the incomes are below average compared to the rest of Canada, so that creates a double whammy.”

He says the city needs to protect, maintain and support things that supports high paying jobs. “For example, preventing our jobs-space land from being overrun with condos (is important),” Toderian said, adding that the types of land needed for high-paying jobs could contain offices, industrial or mixed employment.

“Only 10 per cent of the land area of Vancouver doesn’t allow housing on it, but half of the jobs in Vancouver are in that 10 per cent,” Toderian said. “So it is incredibly strategic important land for our economy and constantly under pressure from condos.”

He says restaurants and retail stores generally provide lower-paying jobs while jobs in the creative industry and in manufacturing tend to be higher paid.

“You can’t guarantee the high-paying jobs, but you can make high-paying jobs impossible by getting rid of the lands that are usually associated with high-paying jobs.”

Buildex brings together interior designers, architects, property managers, construction and renovation tradesmen and real estate professionals. It will include a trade show, more than 60 seminars and a new and green products showcase. More than 13,000 people are expected to attend.


Read more: http://www.vancouversun.com/business/Higher+paying+jobs+leasing+options+among+ways+make+Vancouver+housing+affordable/7948859/story.html#ixzz2KeSIKxBg

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