Housing Affordability: can we really do anything? Should we?

UBC Centre for Urban Economics and Real Estate and Urban Land Institute invite you to the forum

An event organized for next week by the ULI and UBC caught our attention and we thought we'd share the information with our readers. City Caucus will be there!

A long history of high house prices has made housing affordability a constant topic of the local political discourse. Yet, years of rhetoric and hand-wringing has not changed the relationship between incomes and housing costs for the better. Join a panel of housing and design experts to ask whether we can fundamentally affect the affordability equation for the better. And more provocatively to ask whether public funds spent on making housing affordable is an appropriate and efficient use of tax dollars. Our speakers will offer three very different perspectives on this issue.

Panelists

Dr. Raphael Bostic
Assistant Secretary for Policy Development and Research
US Department of Housing and Urban Development
Professor, Sol Price School of Public Policy, University of Southern California

Dr. Thomas Davidoff
Assistant Professor, Strategy & Business Economics and Finance Divisions
Sauder School of Business, University of British Columbia

Mr. Mark Guslits
Architect
Principle, Mark Guslits & Associates Inc.

Dr. Tsur Somerville
Real Estate Foundation of BC Professor in Real Estate Finance & Director,
UBC Centre for Urban Economics and Real Estate
Sauder School of Business, University of British Columbia

Click for panelist profiles (pdf).

Event Details

Wednesday, June 20, 2012

5:30 p.m. – 6:30 p.m.    Reception
6:30 p.m. – 8:00 p.m.    Presentation and Q&A
8:00 p.m.                       Closing

Spanish Ballroom
Rosewood Hotel Georgia
801 West Georgia Street
Vancouver, BC V6C 1P7

Admission

$20 pre-register online
$30 onsite registration

Register online: https://secure3.sauder.ubc.ca/events/cuere_roundtable/cuerereg1.cfm

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About The Author

  • Ron

    Well you could always implement what I like to call the “kill two birds with one stone” tax.

    Part of the reason housing is so expensive here is that (fueled by low interest rates) speculators have bid up the costs. Take a look at many of the new towers being put up in the core, many many of them are empty.

    As a result of this, many people have fled to the suburbs where they can afford housing. Of course, with no transit to be had, they just ending up spending on gas and time and soon enough tolls.

    Therefore, since one help cause the other, I propose that to help fund this suburban transit that the property tax for places that are not the primary residence of the owner be charged at triple the rate.

    So who pays?

    If your a homeowner and live in your home, no change.

    If you own a residence that you rent out, you pay the higher rate. But that would be counted as an expense that would reduce your taxes.

    If your an offshore speculator with enough money to just keep the housing empty, well, you pay triple.

    This would apply a stick to speculation which would lower prices as well as provide a much needed source for transit income.

  • teririch

    On housing affordability:

    I was sent an advert for a development out in Pitt Meadows – townhouses and condos.

    New units that are loaded with features. (And I mean loaded)

    A 4 bedroom, 3.5 bath, $1865 sq feet (with parking) is $399,900.

    A one bedroom, 642 sq feet (with parking) starts at $199,900.

    Strata fees are $192/month which includes Digital TV and high speed internet (Shaw).

    It states the development is close to the West Coast Express Station.

    This is what ‘affordability’ looks like.

    If anyone wants to see the list of features they can visit: CedarDowns dot ca.

    • Working Mom

      @teririch – Took a look at the link – wow – 8 x 10 bedroom – what the heck can you fit in there? The average size of a prison cell is 6 x8 not much difference to these bedrooms and yet we are expected to pay $420,000 plus tax. The monthly maintenance fee sounds low – but after the first AGM this would go up significantly. Many town homes in Vancouver that are part of a condo complex are paying $500 – 700 per month. On top of their mortgage fees.

      No this is not affordability – it is all smoke and mirror’s but it is still a heck more cheaper than the shoe box town homes in Vancouver.

      • Von Pursey

        @WorkingMom – You seem to really take issue with the size of homes in the Vancouver area, as noted in more than one post. I’m just interested to know which other major cities around the world you’ve seen or lived in? London, which is a much larger city but not as dense as Vancouver, typically has much smaller homes. Berlin, where I live now, has slightly larger spaces and is somewhat more affordable, but this is highly unique for Western Europe (and also because the city was destroyed 67 years ago). The issues in Portland and Seattle are the same as Vancouver, while similar homes in San Francisco are much, much more expensive. And if you dislike small spaces you can forget about all of Asia. So really your expectations of a “good sized” home at an “affordable” cost are completely abstract and outside today’s reality. Maybe you should follow the example of inhabitants in countless other cities – make do with less.

  • teririch

    @Working Mom:

    I may head out on the weekend to take a look – just curious.

    There was another development that I toured in Pitt Meadows going back to last summer – Osprey Village. It was lovely, very ‘Whistler’ like, on the river, quiet.

    My one bedroom apartment in Vancouver is 650 sq feet and in an older building (30 yrs?) on a busy and progressively noisey street) My strata fees are about the same as what this dev. is offering and we have no amenities and nothing is included. Sometimes I wonder about selling up and getting out…..:)

    (At least these are better than the 250 sq/ft micro-suites Vision is pushing as ‘affordable and liveable’…Yikes!)

    If I head out there, I will take pictures and post them.

    Cheers,
    T.

  • Ron

    Affordability isn’t even close to “good” in the suburbs. Sure, my engineer/nurse parternship might be pulling in enough money to buy a (starter) house in Pitt Meadows or Surrey but it makes you wonder where the heck the blue collar types are buying their homes or what the heck the people buying the 1.5million dollar places in Vancouver do for a living!

    • Terry M

      Right on Ron!
      I feel your pain…:-)

      • Ron

        I would be more worried about the people that have highly leveraged themselves in a period of record low interest rates that can not take any sort of shock to employment, interest rates, etc. without defaulting and the taxpayers (you and I included) that will inevitably be bailing them out via the feds CMHC liabilities.

        Other than the nasty commute and a recent smattering of special assesments our debt to income and debt to total equity are in very very healthy positions. When the ponzi scheme blows I will be ready to pounce don’t worry.

    • boohoo

      There are plenty of properties available in Vancouver for under 1.5, hell there are plenty available for 700k. Vancouver is expensive, no need to exaggerate for no reason…

    • Van Man

      I guess I am one of these recent million dollar homeowners.

      We are 2 middle-income, white collar, working parents with decent income from a rental suite. We were able to afford it as we moved up the property ladder from a condo.

      I don’t think we are that unusual for the east side.

  • boohoo

    Same Van Man,

    The problem is expectations. Everyone expects to be able to get into the market with a nice new, 2 story house with a yard and picket fence. It’s just not reality any more.

    • Ron

      And everyone else expects the conditions they entered into (a market raising in value far in excess of inflation) will be repeated indefinately.

      I just hope the people doing all this upsizing have a considerable equity position – there’s enough people that are going to be needing bailing out when the ponzi scheme blows up.

  • Steven Forth

    We are finding good options for a y family of four plus dog in the $600-800k range in Vancouver. But this is not really affordable for most people. Not that renting is a whole lot better, where you arounge looking at $1,600 to $2,000 per month.

    • Ron

      This is why Vancouver continues it’s trend of being a smaller and smaller percentage of the total population (and with it job and commerce base).

      Nothing wrong with a 750k place so long as your take home income is 250k and you have a 150k down payment.

  • becauseimintheknow

    constrained land supply
    low unemployment
    stable economy
    positive migration
    health care
    fresh air
    political stability
    excellent education system
    need I go on…

    We are experiencing extraordinary demand for housing for these very reasons, although perhaps in fact its not so extraordinary after all. Vancouver is expensive for a reason. get over it.

    • Steven Forth

      All good points. But there is still an afforability issue if you look at the average income vs. housing costs in Vancouver. You may think that this is just the market work and it will self correct. Maybe that is true, but two thoughts.

      “The market can remain irrational longer than you can remain liquid.” JMK

      Markets are designed, they are not natural phenomena, and they exist in a larger social context. We can (and regularly do) change the design of markets and markets are not the sollution for all problems.Market failures do occur. There are social goods.

      • Ron

        Half a decade of lax lending standards and record low interest rates don’t help either.

        People’s short memories and lack of history will be refreshed sooner or later.

        This person has a point though – local policies did contribute to inflating the bubble to heights poor fiscal policy could only dream of acheiving.

    • Higgins

      I think this comment should also migrate to the latest one on Sullivanism: http://citycaucus.com/2012/06/vancouver-and-the-rise-of-sullivanism/#comment-4130
      IMO.