EcoDensity won't cut house prices
Real-estate agent Richard Morrison, who specialized in investment properties, thinks the city's EcoDensity initiative is a great way to keep property values from skyrocketing in Vancouver. He just sold a single-family home, worth nearly a million dollars, to an investor, who then tore it down and built eight 1,000-square-foot units that will sell for between $400,000 and $500,000.
"Way more density is the only way I see a softening of the market," Morrison told the Georgia Straight on November 27. "$450,000 is very affordable. Much more than buying an average home in that neighbourhood for $800,000."
The problem is that $450,000 is still double what the average Vancouver family can afford if the home doesn't have a secondary suite. With a median household income of about $56,200, according to Statistics Canada, most families max out at a $300,000 mortgage if they pay 30 percent of their incomes over a 25-year term.
According to www.mls.ca/ , $300,000 will still buy a two-bedroom condo in some parts of East Vancouver. It will also buy a three-bedroom townhouse or a small, single-family home in Maple Ridge–a long commute and the opposite of EcoDensity's goal.
At City Hall on November 27, Vancouver's director of planning, Brent Toderian, told councillors that EcoDensity won't provide housing that meets average incomes. He said that the initiative is really about keeping the market softer than it would be with less density.
"I don't think we could affect [housing] supply to the point that prices would go down," said Toderian. "Especially at the mid level."
Toderian was presenting his department's draft charter and draft initial actions on EcoDensity. It's the mayor-driven "acknowledgement that high quality and strategically located density can make Vancouver more sustainable, livable and affordable", according to www.vancouver-ecodensity.ca.
EcoDensity has been billed as supplying more housing through densification–laneway homes, condos on top of stores, rezoning sprawling house-oriented neighbourhoods to accommodate low-rise apartments–and prices would drop into the affordable zone.
Vision Vancouver councillors Heather Deal and Tim Stevenson slammed Toderian's draft for leaving out true affordability. Deal said EcoDensity, in this report, is no different from green bonuses for developers. Stevenson wanted to know if his "ordinary kids with ordinary jobs" will be able to afford to live in the city.
"What is ordinary may change in the future," Toderian responded.
Vancouver's developers have, in fact, been densifying Vancouver swifter than the population has grown for 15 years. And, instead of prices dropping, they've soared since 1991.
Morrison told the Straight that the rush to buy condos in Coal Harbour and Yaletown is fuelled by investors, rather than folks seeking out a primary residence. He would like to know who owns the condos downtown, and who is living in them. No one seems to know.
Vancouver senior planner Rob Whitlock told the Straight his department plans to study that as part of a rental survey in 2008-09.
"Empty housing stock is very difficult to estimate," he said. "BC Stats has previously undertaken some analysis based on hydro usage, which indicated that four percent of all downtown apartments were identified as unoccupied in 2003, with eight to nine percent of condo apartments included in that number." In addition, he said, the 2001 census found that 2,600 downtown apartments were unoccupied.
Whitlock defended the idea that building more homes leads to a softer market, if not affordability. "If the number of units had not occurred, housing prices in the city generally would have escalated at an even faster rate," he said, echoing the EcoDensity draft report. "The more difficult objective for EcoDensity will be addressing housing costs for those with lower incomes, working poor, families, and others who are unable to compete in the current market."
As Deal pointed out, there's nothing in the report that requires affordability. EcoDensity has gone on to another round of public consultation, and will be back before council February 24, 2008.