The City of Burnaby recently passed an amendment to its inclusionary rental requirements. It has now been removed from the southeast portion of the city, which, according to Burnaby Now, has one of the lowest median incomes in the city.
Here's an excerpt from the staff recommendation report that was approved in early October:
The analysis explored the impacts of increasing the density of developments in the Edmonds Town Centre area to try and improve revenues. However, the results showed that at current values, additional density is not able to offset the costs of providing the non-market housing, and that the equity needed to pursue large developments became prohibitive. As such, it is recommended that inclusionary rental requirements apply city-wide, with a delayed effective date for the Southeast Burnaby CMHC rental zone (the “SE Burnaby CMHC Zone”), until such time that inclusionary rental requirements become financially viable.
What's noteworthy about this amendment is that it acknowledges the real costs associated with non-market housing and shows how important high market rents are to subsidizing them. There's no such thing as no-cost affordable housing. In the end, somebody always has to pay.
Metro Vancouver, which includes the City of Vancouver and 20 other municipalities, is proposing to increase its development cost charges (DCC):
Metro Vancouver is proposing to increase DCCs by roughly $23,000 per new single-family home; $21,000 per new townhome; and $14,000 per new apartment. For example, fees for a townhouse in Vancouver will rise from $10,027 today to $30,861 by 2027.
In response to this, federal housing minister, Sean Fraser, has just pulled $138 million in funding that was intended to accelerate housing permits and new affordable housing projects in Surrey and Burnaby.
This makes some sense. Because it is pretty weird to say, "Hey, we need more affordable housing. Give us some money for this and, while you do that, we're also going increase the cost of building new housing."
Of course, this is the whole growth-should-pay-for-growth mantra. And supposedly, there's growth-related infrastructure that needs to be built.
To be fair, Metro Vancouver is also proposing to increase its property taxes: 12% in the first year, 11% for the next two years, and then 5% for the next three years. So this is not all going onto new supply.
I don't know enough about the finances of Metro Vancouver to comment on these numbers specifically, but I do think it's important that policy makers understand what the current market environment means for new housing.
It is difficult, and in many cases impossible, to underwrite new housing projects today. Which means that even if all fees and charges were to remain unchanged, we are going to see a decrease in new housing supply.
A few days ago I tweeted this chart out (from Statistics Canada):
It is a list of the densest downtowns in Canada (people per square kilometer). But to be more precise, it is a list of the densest primary downtowns for each census metropolitan area.
In the case of Toronto, for instance, it considers downtown Toronto, but it does not consider downtown Mississauga, downtown Brampton, or any other "downtowns" across the CMA. And in the case of Vancouver, it ignores important centers such as Burnaby.
Many were quick to point this out on Twitter and it is a fair comment. Our cities are often more polycentric than a chart like this might make it seem.
The other thing to consider is that these density numbers are dependent on what you assume as the boundary for each downtown. For downtown Vancouver it's a fair bit easier because it is a peninsula surrounded by water.
But for downtown Toronto, it's more nebulous. Where do you draw the line? In this case, Statistics Canada is using the same downtown boundary as what's in our Official Plan, but that happens to include the lower-density University of Toronto lands. So are we comparing apples to apples?
I don't know. But go Hamilton!