“Housing crisis in a nutshell”: Jak King asks who can afford the new townhouses in Grandview

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

https://jaksview3.wordpress.com/2018/02/02/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:

Realty advert Grandview Woodland, Jak King Feb 2018

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?

3 thoughts on ““Housing crisis in a nutshell”: Jak King asks who can afford the new townhouses in Grandview

  1. > So, who are these townhouses aimed at?

    People making above median incomes, obviously. Surely you do understand that half of all people have incomes higher than the median, which means some people will have incomes much higher than the median. The graphic you posted shows the required income for people to afford a townhouse in east van. That’s who it’s aimed at. Anyone who has owned a condo in the past 3 years likely has the required down payment. 2 working professionals who are 28 – 35 should pretty easily have incomes of $140 – 160k (I know it’s way more than median, but not out of reach for two professionals).

    Maybe you should look at re-sale townhouses in Port Coquitlam – a product that’s perhaps more “median” in the context of desirability for housing in Metro Vancouver – to have a better measure of affordability.

    Alternatively, since I’m sure you won’t care for this answer, what is your proposal to make real estate cheaper? Other than a ban on foreign money, what else would you suggest? Should we demand land owners sell their land to developers cheaper and in turn make developers sell those units for less? Should we just not build anything else? What do you suppose that would do to affordability?

    • Point being is that the average family/person in Vancouver is simply priced out of the market. I’d be interested to know Mark’s own proposal to make real estate cheaper. I’m guessing he’s probably in the age/economic bracket that simply refuses to acknowledge how much of a problem this has become, and simply prefers to sit back and casually dismiss it as an entitled millennial issue.

  2. Mark, the point is that most people are not “two professionals.” We should d be building housing that works for most people not just the few who are lucky enough to have high paying jobs. As Isaac asks, what is YOUR proposal for affordable housing in Vancouver or, like Vision Vancouver, are you suggesting most of us should move away?

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