Tag Archives: affordable

The Little Mountain that Couldn’t

Apparently Vancouver has an affordable housing problem.

For buyers housing affordability is at a new low despite our problems with construction quality.

And lately we’re seeing more news stories about more families leaving BC due to the high cost of living.

So are we building more affordable housing?  Well, we’re trying I guess, but if you live in Vancouver you may have noticed a big vacant spot for homes just up Main street near Queen Elizabeth Park.

Several years ago the housing units at Little Mountain were torn down to make way for a new higher density housing development.

So why has nothing happened over those years?

According to Michael Geller it’s developer inexperience.

“The developer … doesn’t fully understand how to do business here,” Geller said in a phone interview.

Four years ago, BC Housing started moving the 224 residents of a social housing project into other subsidized homes. Now, only four residents remain in one building on the 6.2-hectare site by Queen Elizabeth Park and bounded by 37th and 33rd avenues and Main Street.

In June, a city report said there was a blueprint for Holborn Properties to redevelop the site with as many as 1,800 units in stepped towers up to 12 storeys, most buildings being four to 10 storeys in height. The province has committed to replacing all 224 social housing units plus another 10 for aboriginal residents. Most of the buildings at Little Mountain were demolished in 2009.

Geller also referred to the years of delays Holborn has faced in building a proposed 64-storey hotel and residential tower at West Georgia and Thurlow.

“If one wonders why this one is taking so long, one might also wonder why the same developer’s project on West Georgia took so long — although I see construction is finally underway,” he said.

“All of these things are symptoms of the lack of experience with high-profile, highly complex undertakings.”

So apparently we sold that land to a developer that doesn’t know how to get things done and to make matters worse, they bought it for an undisclosed sum right before the mini market crash of 2008.  If prices keep falling as they are now is anything going to get built there?

And if it does get built how much responsibility will the city end up taking for falling profit margins or ‘developer inexperience’? Are we looking at the potential for another Olympic Village scenario?

Housing Affordability deteriorates to new low

Thank goodness we don’t have a housing bubble in Vancouver!

Otherwise one might start to worry about these latest numbers on housing affordability.

The housing affordability index takes local family income and then looks at what percent of it would would be required to service the debt on an average benchmark bungalow.

The entire province of BC is at 69.7% and blows away the rest of Canada for overpriced houses. Only Ontario starts to come close with an affordability index of 43.9%. Even Toronto can’t compete in the overvalued housing arena, coming in at 54.5%.


According to RBC Vancouver is the champion of overpriced houses. To buy the benchmark bungalow here it would take 91% of a local families pre-tax income to service the debt.

From Macleans magazine:

Nothing, of course, could persuade condo king Bob Rennie that the Vancouver housing market is in a bubble (or, worse yet, a bubble that’s starting to let the air out).

For everyone else, take a look at this chart RBC put out today with its latest survey of housing affordability in Canada (which is deteriorating in most provinces, by the way)

No problem, just arbitrarily knock 20% off those Vancouver numbers and we’re not much worse than Toronto.

If you look around the world, you may be able to find a few markets that have an even worse affordability index than Vancouver, with lower incomes or higher house prices. But for some reason, most of those places seem to be able to pull in higher rents than Vancouver.

New mortgage rules make buying hard

How’s this for an opener:

While the country’s new mortgage rules are meant to cool the market, eventually making housing more affordable, they’ve put home ownership out of reach for many prospective buyers.

Uh-huh. And what if the problem was that we put home ownership in reach of too many prospective buyers?

Those who don’t have a down payment of 20 per cent or more will be limited to a maximum amortization period of 25 years. Since 40 per cent of new mortgages last year were for 26 to 30 years, according to a survey from the Canadian Association of Accredited Mortgage Professionals, real-estate neophytes might feel the change most dramatically.

WHoa! Did they just say 40 percent of new mortgages were over 25 year amorts?

Another new rule announced by Mr. Flaherty sets the maximum gross debt-service ratio – the percentage of household income being used to pay for housing – at 39 per cent so buyers will be less likely to take on mortgages that are too big and could leave them floundering if rates increase.

That’s the one that Andrea Benton, a 37-year-old entrepreneur in North Vancouver, B.C., said hits her family of four hardest.

“It means my total family income would have to be an exorbitant amount to afford an $800,000 house,” she said.

You mean you’re expected to have a high income to afford an $800,000 house?!?

Read all the comedy in the full article here.