In this election, the issue of “affordable” housing is a topic of debate. Whether North Saanich can provide housing that young families, young singles, single parent families, people with disabilities and seniors on fixed incomes can afford to buy and sustain is a good question.
Providing social housing in a North Saanich real estate market is a huge challenge that requires more than just developers, politicians and real estate agents telling us that it should and can be done.
The red-hot real estate market, which is cooling down as we speak, was accelerated by three major factors:
- the Federal government, through CMHC, relaxed mortgage regulations by introducing zero per cent down;
- the Bank of Canada and central banks kept interest rates low; and
- major lenders increased maximum amortization periods from 25 years up to 40 years.
Buyers could borrow more, pay less and for much longer. These changes opened the market to new homebuyers who would otherwise have little access to an inflated housing market.
So what do we really mean by the term “affordable” in North Saanich? This is a fair question when you see that earlier this year; the average market price of a single-family dwelling in North Saanich was about $723,000, second highest in the CRD behind Oak Bay. In fact, the history of new housing built in North Saanich since 2002, tells the real story -- all units (single-family dwellings and condominiums in particular, including new lots) were priced according to market supply and demand, a market that had been one of the highest in more than 12 years and geared to maximum profitability, including higher income, off shore or non-resident buyers.
For the sake of argument, delete the word “affordable” and instead use the term “below market” housing. In a higher end real estate market such as North Saanich, what would “below market” housing look like? We need to examine the facts about income levels, employment markets and the disparity between land value and new housing costs in North Saanich with the second highest property assessments in the capital region.
In my view, developers define “affordable” housing in North Saanich as what they can afford to build and what you can afford to pay. If a purchaser can afford to get a mortgage for a new housing unit, single-family dwelling or multi-family unit, either low or high density, then that may be considered affordable in the North Saanich market.
According according to the recommendations of the North Saanich Housing Strategy report, anything affordable appears to be aimed at combined family incomes of between $70,000 and $100,000. Frankly, in North Saanich, that excludes young workers in service jobs, seniors on fixed incomes, people with disabilities on disability pensions and the majority of single parent families that otherwise qualify for affordable housing elsewhere in the CRD.
The Langford model, which some people have suggested we bring to North Saanich, is directly tied to the market value of land in the Western Communities. Langford works like this. The municipality requires developers to donate 1 affordable housing unit in every 10 before any re-zoning takes place. On a market price of approximately $350,000 per single-family unit for 10 units, the developer must dedicate 1 unit at a price of approximately $150,000 -$160,000. Qualified purchasers must also meet criteria that include a combined family income of no more than $60,000, family assets of no more than $50,000 and some kind of link with the community of Langford. Real estate agents marketing the affordable unit must waive their commissions. I understand that last year, there were about 1,700 applicants for one affordable unit. While this is a successful model for Langford and I commend them, it is obvious that there are not enough available units to meet the needs in Langford.
If we as municipal leaders are truly honest about our ability to build affordable or below market housing in North Saanich, then we must develop a plan that involves all key stakeholders and partners at the table. We need to involve the BC Government through BC Housing, the Federal Government through CMHC, the real estate industry, banks, non-profit organizations and social service agencies and, of course, generous developers willing to reduce profits, donate land and dedicate housing units for sale at well below current market prices.
I support any initiative for below market housing in North Saanich if it is well planned, well managed and guarantees quality of life. We can do it, but let’s be honest about what it will take and who will benefit.
