(VANCOUVER) To fully address Metro Vancouver’s housing crisis, an ambitious program of building 10,000 new units of non-market rental housing annually is needed, including public housing and co-ops that are truly affordable for ordinary households, says a new report released today by the Canadian Centre for Policy Alternatives, BC Office.
Recent investments from the BC and federal governments point to a modest revival of public, non-market housing, but further substantial investments are needed, says senior economist Marc Lee, author of Planning for a build-out of affordable rental housing in Metro Vancouver: How many units and how much would it cost?
Lee’s research shows that the greatest need is rental housing for low- to moderate-income households, precisely the type of housing that is unprofitable for private-sector developers who would rather build luxury units for sale to the highest bidders worldwide.
And, for low-income households, the situation is dire.
In Metro Vancouver’s 70 neighbourhoods there isn’t a single area where a full-time minimum-wage worker could afford the average one-bedroom apartment. For BC’s poorest, welfare rates are clearly insufficient with the shelter amount for income/disability assistance $375 per month, which has not increased for well over a decade.
A major reason that more affordable housing is not built is a mindset that only private-sector property developers should build housing and that home ownership is the preferred type of housing.
“The assumption that private-sector developers should take the lead in the development of housing needs to change,” says Lee.
“In order to build the affordable housing we need, there’s a strong case to be made for a public planning model, including public land assembly, project financing and rental housing development to cut out the intermediary and achieve some economies of scale for the large build-out we need.”
Examples of large-scale investments in public housing can be found in cities like Vienna and Singapore, Lee says. In Vienna, almost half of the total housing stock is public, which is a legacy of aggressive municipal-led development in the 20th century. There were also partnerships in Canada from the 1960s to 1980s among federal and provincial governments and the non-profit sector to build dedicated public housing, including social housing and co-ops.
“There is a lot of catching up to do, region wide,” says Lee. “A major challenge is acquiring land for new housing and the current push to ‘upzone’ or increase density across the board in single-family neighbourhoods could make our problems worse if it simply leads to higher land values and more windfall gains for existing landowners.”
A high-ambition plan of building 10,000 new units of public housing annually would cost about $2.5 billion. Lee notes that an investment of this magnitude would represent less than one penny per dollar of income, or GDP, that we generate as a province.
“This upfront capital cost would be recouped through rental income over the lifespan of the buildings. Revenues from property tax reforms, which we urgently need, could be a funding source to cover these upfront costs. Examples of reforms include progressive tiers on property and property transfer taxes and speculation and vacancy taxes,” Lee explains.
“While local governments in Metro Vancouver are starting to take a more planned approach toward approving new housing, the emphasis of municipal policy to date has been on financial incentives for developers to build rentals instead of condos. Ultimately, the local, provincial and federal governments must step in because developers are not going to build new housing stock that is truly affordable for low- to middle-income households, at least not anywhere near the scale needed.”
For more information and to arrange interviews, please contact Jean Kavanagh at 604-802-5729 [email protected]