One thing was unanimous at a recent city council planning committee meeting: The provincial and federal governments need to enter the game to house people affordably.
But exactly what municipal politicians should be advocating for differed among councillors.
“The smart thing to do is to deal with [housing affordability] at the provincial and federal level by dealing with foreign investment” in real estate, councillor Carol Day told the Richmond News, following the meeting in which planners presented an overview of Richmond’s Affordable Housing Strategy.
But manipulating the free market may harm many recent purchasers of homes, noted councillor Derek Dang.
“It’s troubling for young people — who I’m concerned about — who have managed to buy properties, probably with mortgages they can’t afford. Once we start to do something artificially to hurt the economy, you’re going to hurt young people,” said Dang.
“Be careful what you wish for. Affordable becomes real unaffordable for a lot of people,” if restrictions are put in place, added Dang.
Day had asked staff if the City of Richmond has advocated for foreign home ownership restrictions. The reply from senior management was no. Rather, the city has taken the approach of advocating for renewed involvement in subsidized co-op housing.
Councillor Harold Steves chimed in, stating: “We know they are not going to legislate lower prices because that would outrage everyone who owns a house. We know they aren’t going to deal with immigration, and there may be bans to what you can own from offshore, but those are pretty minor.”
Steves told the News that politicians, to date, have feared speaking to restrictions on foreign ownership out of fears of charges of racism (many of which have originated from the development community).
He said he supports tightening controls on foreign ownership.
Meanwhile, councillor Chak Au told the News he supports government-imposed restrictions to “cool down” the influx of foreign money, along with a suite of other supply mechanisms, to curb rising property values.
Economics academics from the University of BC and Simon Fraser University are largely unified in calling for not only housing supply initiatives, but also restrictions on demand, namely foreign investment, to reduce housing costs, which have reached about $1,500 for a one-bedroom rental in Richmond, according to councillor Bill McNulty.
At the meeting, McNulty called housing costs in Metro Vancouver “diabolical.”
In the time it took to produce the staff report, from March to May 31, benchmark prices for detached homes rose 19.9 per cent, to $1.64 million (more than any other city in Metro Vancouver). Townhouses rose 11.6 per cent, to $685,400.
Dang’s fears of mortgage foreclosures are being publicly debated amongst investors, regardless of restrictions, with some shorting the housing market while others insisting there is no bubble.
McNulty and Steves harkened back to the 1970s when federally-funded co-ops were being built in Richmond.
“The province and federal government are agonizing over what to do and one thing would be to bring back co-op housing,” said Steves.
Richmond has 2,513 non-market housing units that were built several decades ago. By 2020, 1,543 of those mortgages will expire, leaving the units without government funding. The city stated in its report that while the federal government recently invested $573 million to provide maintenance on co-ops, no funding for new units has been announced. In Richmond, 641 households are waiting on the BC Housing registry for subsidized housing. That wait could be as long as seven years.
Over the next 10 years, Metro Vancouver has identified Richmond as needing 3,200 new rental units (1,300 for “very” low-income households) and 10,800 market units. Last year, Richmond set a record for development permits but added zero purpose-built rental units.
Over the past nine years, Richmond has seen 1,371 affordable housing units and 477 subsidized rental units built through redevelopment.*
It was able to do so, in part, by charging fees during rezoning. Last year, the city upped its rezoning fees, for affordable housing, by as much as 100 per cent, something councillor Alexa Loo has questioned as counterintuitive to affordable home ownership.
For example, a new townhouse development now pays $4 per square foot to the affordable housing fund, which then pays for future subsidized housing developments.
Those development charges have largely been expended, however, with recent developments for seniors (Kiwanis towers) and vulnerable citizens (Storeys complex).
Presently, the city requires developers to include five per cent of residential floor area in an 80-plus unit development to be under a permanent housing agreement for low-income families. McNulty has said in the past that figure should be 15 per cent. The staff review is expected to see a recommendation on that percentage, as well as the unit threshold, by the end of the year.
Another aspect being looked at is a micro suites (under 400 square feet) policy near the Canada Line.
Staff have already put forth suggestions for council to consider, such as repurposing city-owned lands for mixed-income housing developments.
While 2011 statistics show about one in five Richmondites is living at or below the poverty line, planners are cautious about under-reported incomes determining subsidies.
“This may not reflect an accurate number of those who are truly considered low-income residents, due to Canadian and foreign income tax laws,” noted the report.