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?

10 Responses to Housing Crisis In A Nutshell

  1. larry says:

    Answer: It doesn’t.

  2. Tavish McGillicutty says:

    They are aimed at the rich.
    Was that a rhetorical question, or are you legitimately clueless?

    • jakking says:

      Which part of this post (if you actually read it) was so unclear to you that you have to make a ridiculous comment like that?

  3. […] 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 […]

  4. Keith says:

    It was said by Gordon Price that Vancouver “densified in place for a few decades.” Old homes became effectively rooming houses, not zoned for that but affordable housing was created out of necessity. Of course the increased density of duplexes and townhouses does not house more people, in fact it houses less. Now that the price of the housing coming on stream is approaching and exceeding $1000 per square foot, the gentrification is in full swing.

    Even if the new housing is offered for rent, the price does not reflect the reality of the median or even average income of a neighborhood like Grandview. Slowly, but inexorably the affordability factor takes hit after hit as older housing stock is replaced by effectively lower density housing solutions.

    Canada has always been a sellout nation. We used to get good jobs with union pay in exchange for selling raw or primary process resources. Today those jobs are mostly gone, and we are a low wage service sector economy with a diminishing middle class. Grandview will be gentrified gradually, and the slow boiling of the working class frog will continue until there is a tipping point. Goodbye to neighborhood, goodbye to local business priced out of by an unaffordable business tax rate. We will be the poorer for losing this wonderful quirky unique neighborhood. This townhouse advertisement is a bell, tolling for all of us.

  5. jakking says:

    Thanks Keith. I believe Grandview has been gentrifying since the late 1980s as can be seen on the Drive. In those days there were about 25-30 restaurants; today there are 100. We have lost 75 businesses that used to serve the residential Grandview (furniture, appliances, electricians and heating engineers, clothing stores, shoe repairs, etc). Now, the Drive is a destination retail centre.and the residential area is catching up.

    • Generation Screwed says:

      So, rent your house to someone in need for an affordable amount. Set an example or STFU.

      You’re either part of the problem or part of the solution. From where I sit, you’re a privileged boomer who’s hell bent on virtue signaling.

      You don’t speak for us.

  6. Thomas Beyer says:

    $1.25M to $1.3M for a new 3 BR TH is more affordable than a $1.8M to $3M older single family house with not much more floor space.

    It also provides more housing, for 3-4 families as opposed to 1. So it is the right strategy for Vancouver.

    Unless heavily subsidized by other tax payers, the affordable housing train in Vancouver has left the station at least a decade ago, despite all the hollow words spoken by far too many well meaning but ill-informed politicians, It does exist further out, in smaller sub 1000 sq ft 2 BR condos. Many sub $500,000 in Burnaby, New West, Surrey or Coquitlam.

    With the new 25% rule of forced rentals, implemented about 2-3 decades too late, we will see more rentals in time in Vancouver, but even more expensive condos for the remaining 75% that now subsidize the rentals. But that is the right strategy, after three decades of inaction on this file in Vancouver.

    • jakking says:

      The fact that the townhouse is less expensive than a SFH does NOT mean it is any more affordable. If I can raise, say, $400,000 based on median Vancouver income, then it doesn’t matter if a townhouse is $1.3m and a SFH is $3m, they are both equally unaffordable. And cramming three families into a single narrow townhouse sounds a lot like the slums I grew up in in postwar London. Is that really a solution we want here?

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