HOUSING

HOUSING Housing affordability worse than in past 31 years

by Carlito Pablo

People may wonder how bad the housing-affordability situation is in Canada.

A new RBC Economics report could drive them to tears: it’s the “worst level in 31 years”. That’s from a paper prepared by economist Robert Hogue that was released Monday (December 20).

RBC’s affordability measure is the proportion of median pre-tax household income to costs required to maintain a home. Costs include mortgage payments, property taxes, and utilities.

Simply put, the higher the measure, the less affordable it is to own a home. For the third quarter of 2021, the measure increased by two percent to 47.5 percent.

“It came on the heels of a huge 2.7 percentage increase in the second quarter that completely reversed improvements at the start of the pandemic,” Hogue wrote.

The 47.5 percent figure represents the cost of ownership of an aggregate of all types of homes. The long-term average has been around 40 to 41 percent in Canada since 1985.

Talk about housing unaffordability inevitably leads to Vancouver. “The area still reigns supreme as Canada’s least affordable market,” Hogue noted about the western Canadian metropolis.

As of the third quarter of 2021, RBC’s affordability measure shows Vancouver at 64.3 percent. Toronto follows as the second least affordable with 61.9 percent.

In Montreal, it’s 40.7 percent. Ottawa is 40 percent; Calgary, 32.8 percent; and Edmonton, 28.5 percent.

This East Vancouver bungalow at 342 East 57th Avenue came on the market with an asking price of $1,399,000, and it sold after nine days on December 15 for a much higher $1,805,000. And it’s only going to get worse. “We expect ownership costs to continue to rise quickly in the period ahead,” Hogue stated. The economist noted that home prices have increased “amid strong demand and scarce inventories this fall”. Housing loans will also get more expensive. Hogue said that fixed mortgage rates

[Vancouver] still reigns supreme as Canada’s least affordable market.

– RBC economist Robert Hogue

have gone up since summer.

In addition, the Bank of Canada is expected to hike its overnight rate next spring, which means variable mortgage rates will go up.

In short, the “knock on affordability will be felt across the country”.

For buyers, the outlook is “grim”.

“We estimate rising interest rates alone could drive up our national affordability measure another 2.0 to 3.5 percentage points over the coming year,” Hogue wrote.

In addition, a further five percent increase in home prices would add an extra two percent to RBC’s affordability measure. g

Pattison project honours Mount Pleasant history

by Carlito Pablo

Interpretive displays will celebrate the culture and history of Mount Pleasant in a new Vancouver development.

The displays are to be mounted on a brick wall that will frame a heritage alley at the southern side of the residential and commercial project by Jim Pattison Developments.

The alley is expected to animate the public realm around the six-storey development.

Formosis Architecture filed an application with the City of Vancouver for a development permit at 2202–2218 Main Street and 206 East 6th Avenue.

The architecture firm said in a design rationale document that the heritage alley is “not required by city zoning or community plans”. Rather, it is “part of the owner’s (JP Development Group) gesture to the community to connect the project with Mt. Pleasant’s history and culture”.

“As such, the alley will contain an interpretive display of the history of the area, while offering a physical connection from Main Street to the laneway mid-block,” Formosis Architecture explained.

The alley will reduce the massing and density of the project as well as provide a buffer to the neighbouring building to the south.

Formosis Architecture was operating as Studio B when it filed a rezoning application for the site in 2017. At the time, the firm’s developer client was Main Street Arts Investments Inc., a company identified with PortLiving.

A city staff report to council noted that an “existing heritage brick wall will be retained in situ” as an “urban relic” in a proposed pedestrian alley.

“This space is being referred to as ‘Heritage Alley’ as the space is anticipated to include an interpretive display of the history of the area in conjunction with the heritage brick wall,” the report explained.

Council approved the rezoning application in 2019.

The application for a development permit for the Jim Pattison Developments project lists 76 apartment and townhouse units as its residential component. There will be commercial spaces fronting Main Street that will wrap around the building to the southern side, where the heritage alley is found.

The city will accept public comments on the application from December 20, 2021, to February 17, 2022.

Jim Pattison Developments is one of many B.C. companies associated with Vancouver businessman Jim Pattison. He’s the founder of the Jim Pattison Group, which is a diversified holding company that generates $12.7 billion in annual sales, according to its website. The president and chief operating officer is former B.C. premier Glen Clark. g

Formosis Architecture filed the application for the corner of Main Street and East 6th Avenue on behalf of Jim Pattison Developments.