Vancouver Council voted on 27 May 2020 to take a new look at the population growth assumptions behind a plan to over-build Stats Canada projections by 250%. Watch my video presentation to Council.
The image above provides a snap shot of the narrative thrust of the presentation.
⅓ OF SALARIES TO MORTGAGE SERVICE, NOT RENTS
The allocation of ⅓ of household incomes should be to servicing a mortgage. Rents will vary achieving different levels in different markets. In markets that are not ‘overheated’ rents are typically below monthly mortgage service amounts. When rent levels are at par with mortgage service, it can be considered a ‘buy’ signal: For the same price I am paying in rent, I can own a property and build home equity.
However, the issue appears to be that ‘only rents’ can achieve the ⅓ threshold of sustainability. That is just one more ‘signal’ that we have a Housing Crisis.
A REGIONAL CITY
In the presentation I reference ‘a different supply response,’ yet stop short of elaborating, since that would take the narrative off-topic to the motion under consideration. In the same vein, the image above notes whether the ‘Housing Vancouver Strategy [is] missing a key supply response?’
In both instances what I am referencing is the fact that Vancouver is at near full build-out for cottages on a garden lot, and has been that way for over 30 years. Thus, a complex set of causes may be presenting:
- The Housing Crisis has house values rising exponentially higher than condos (the presentation notes first the split of the real estate market into ‘house’ and ‘market’ products; then the ‘growing gap’ between the two)
- A made in Vancouver solution of adding more condo supply (like the HVS) likely will not bring house prices back on par with median incomes. In the presentation, I point to this as perhaps going ‘in the ‘wrong’ direction.
- If so, then the ‘right’ direction would be ‘adding house supply.’
- However, Vancouver can no longer do that—as mentioned above, we are out of ‘green field.’ Not in quantities large enough to make a dent on the Housing Crisis, in any case.
For this set of related reasons—shown in the bullets above—I see the need to reach for a larger canvas.
In order to End the Housing Crisis, the new Vancouver Plan will have to reach out to the regions. Vancouver must look regionally for a house-supply response, then act locally to hard-wire that supply with the regional job base.
One way to achieve both purposes, a rapid supply of houses hard-wired to the regional job base, would be building a Regional Transportation System.