“So, who are these townhouses aimed at? Foreign speculators could afford them, of course; and so could people who already have houses to sell. But the average Vancouver family looking to get a foothold into the housing market are frozen out.” (Jak King)
“My simple position: building for need is good density, building for greed is nothing but greed. Building for need, in case some people don’t know, is building in a way that local families with local incomes can afford what is being built.” (@jakking49)
Historian and prolific blogger Jak King has made an interesting blog post with specific example that sheds light on Vancouver’s “Housing Crisis in A Nutshell.” The Grandview Woodland community plan is in its implementation phase. It strongly promotes townhouse development, supposedly to make housing more affordable. How are the City’s policies working out in the real world?
Brand new townhouses the City and housing supply-siders are advocating are now on sale, on land formerly occupied by old houses that had provided inexpensive rentals. Jak does the math to show that even with a family’s parents helping out with the down payment, the annual mortgage payments of $56,652 are “more than the entirety of their take home pay after tax and deductions.”
Here is an excerpt, with permission.
Housing Crisis In A Nutshell
I live on Adanac hill in the same block as the WISE Hall. The north side of the street running up to Victoria used to have several crumbling old Edwardian houses that were full of very cheap rental units. They have all been demolished over the last few years and replaced with townhouses.
You may recall that townhouses are supposed to be one of the cheap alternative to single family houses, and the Planning department are pushing them more and more into Grandview (see the recent Open House) as a solution to the housing affordability problem.
The townhouse development right next door to my building has just been completed and I happened to see one of the townhouses advertised in a real estate office this morning:
The top of the picture is a little blurry (having been taken through a glass window) but the important figures below are clear and readable.
Let’s step back a moment and remember that the median family income in Vancouver is roughly $75,000 a year. Therefore, a normal family in Vancouver can never possibly afford this townhouse which, with a 30% down payment, requires an income double what most earn.
The minimum down payment is $265,600. No family can possibly save that much in 20 years on a median income in Vancouver. But let’s assume — as the build-at-any-cost crowd do — that the purchasers have boomer parents able and willing to assist with the down payment. It still doesn’t work.
The annual mortgage payment is $56,652 which is more than the entirety of their take home pay after tax and deductions.
So, who are these townhouses aimed at? Foreign speculators could afford them, of course; and so could people who already have houses to sell. But the average Vancouver family looking to get a foothold into the housing market are frozen out.
Tell me again how this helps the affordability crisis?