City sings two tunes on CACs and housing affordability
By Peter Mitham, Business In Vancouver
Improvement without impact
One of the hazards of being a writer is a tendency to parse other people’s communications too closely; for instance, the latest reports from Vancouver regarding community amenity contributions (CACs).
“Community benefits from development: improving neighbourhoods and enabling affordable housing in Vancouver,” crows the information bulletin announcing the reports.
But just a few lines below, the bulletin says, “[CACs] do not impact housing affordability.”
Digging into the numbers reveals how the city can see things both ways.
On the one hand, the city claims it secured $111 million in CACs in 2014 that will support construction of 290 city-owned social housing units as part of the Oakridge Centre redevelopment that Westbank Projects Corp. is undertaking with Ivanhoé Cambridge.
CAC negotiations also secured agreements for 1,362 units of privately owned rental housing, bringing to 5,395 the total number of public and private rental units extracted from developers between 2010 and 2014.
That’s a lot of real estate, but a separate report for the city by Coriolis Consulting Corp. concludes that CACs – totalling about $642 million over the past five years, of which $234.1 million has funded city-owned housing to date – aren’t making market housing in the city any less affordable.
“The empirical evidence indicates that CACs are not the cause and may in fact be part of the solution,” Coriolis said of Vancouver’s high housing costs.
Anne McMullin, president and CEO of the Urban Development Institute in Vancouver, laughed at the idea, pointing out that CACs and development levies represent about 15% of the cost of a $500,000 condo in Vancouver and undoubtedly have an effect.
“Any time you add costs, taxes, it has an impact on price,” she countered. “Of course it does!”
Unless, of course, market forces require developers to take the hit, which Vancouver senior planner Randy Pecarski suggests is happening.
“[With] the market setting the prices, the CAC isn’t being passed forward,” he said. “We’re not saying the unit price is affordable.”
Legendary perspective
But has housing in Vancouver ever been affordable?
University of British Columbia professor Tsur Somerville told Urban Land Institute members in 2010 that Vancouver housing has never been affordable by conventional measures, a point Polygon Homes Ltd. chair Michael Audain made as part of a panel of “legends” the Urban Development Institute convened on June 11.
“Right from when I first got involved in Vancouver in the 1960s, we’ve always had these high housing prices compared to the rest of the country,” he said. “There’s a housing crisis, a housing shortage and all the rest of it. It’s not new, and it’s not going to go away.”
Audain urged municipalities to work together rather than independently defending their own turf.
“The regional need is for a lot more land being made available for housing development,” he said. “Until that happens there’s going to be increasing prices, increasing rents, and we’ll be complaining about exactly what we’re complaining about today in another 30 years.”
Ob-La-Di, Ob-La-Da
Life goes on: regardless of housing costs, downtown Vancouver is home to growing families.
Statistics Canadadata indicates that 7,730 families with children called downtown home in 2011, up from 5,660 families on census day in 2001.
While the proportion of downtown families held steady at 11.6% over the period, families of all sizes – one, two and three kids – increased in number.
That translates into an additional 5,100 residents under the age of 15 downtown, multiple times more than in either Seattle or Portland.
With three-bedroom units being among the rarest of rental properties in Metro Vancouver, according to the latest Canada Mortgage and Housing Corp.rental market survey, small wonder that Vancouver and other cities are requiring new condo towers – a key supplier of rental properties – to offer family-sized units.
Vancouver requires that at least a quarter of new condo units be larger than one bedroom, while Jim Pattison GroupandReliance Properties Ltd.plan double that proportion in the first residential tower at Burrard Place.
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