The market is already too hot for even tens of thousands of new affordable housing units to make any difference
Vancouver mayor-elect Kennedy Stewart has promised to build 85,000 new rental homes over the next decade, but Urban Development Institute chairperson Jon Stovell argued that this plan won’t do much to improve affordability in the red-hot market.
“Without any land cost at all, the cost of a 600 square foot studio would be $1,800 to $2,000 a month,” according to Stovell, who is also president and CEO of Reliance Properties.
“That just barely clicks in at 30% of somebody making $80,000 a year but that’s at the very top end of this affordability range that they’re looking for,” he told CBC News.
Stovell noted that Stewart’s vow only takes into account the land area needed, while seemingly ignoring that the other costs associated with construction and development are “very, very high right now.”
“Processing is slow and costly. You’re paying property taxes while you’re waiting. A lot of these things are working against even creating that affordability.”
Data analyst Jennifer Bradshaw of Abundant Housing Vancouver added that the city does not even have enough land remaining to make Stewart’s promised number of additional housing an achievable goal.
“The city does have quite a bit of land that they could certainly, with non-profits, build on,” Bradshaw said. “But I do think they would perhaps have to go buy more, especially on the West Side.”
Stewart stated that 60,000 of the units would be rentals. Bradshaw stressed that increasingly dense areas such as the downtown core and Chinatown will not be good locations for the new construction.
“We’re going to have a Burnaby model where you are going to have to demolish those buildings and then build new developments on top of that, which is really not ideal,” Bradshaw said. “We want to keep those affordable rentals and we want to build elsewhere.”
Moreover, even an additional 25,000 units for affordable rental purposes won’t contribute much to driving down rents in the extremely tight market.
“It will have some downward pressure but really, most people in Vancouver, are living in market rentals.”