The Lower Mainland is in the midst of an unsustainable “housing bubble” that is unlikely to continue, Abbotsford Mayor Henry Braun said last week during a discussion about a new affordable housing strategy for the city.
Braun also was skeptical about the suggestion that the city might increase fees charged to developers and use that money to help build more housing for low-income residents.
That suggestion had been made in a report by G.P. Rollo and Associates, a consultancy tasked by the city to research the local housing market.
Braun and members of council expressed concern that increases to developer cost charges (DCCs) would be passed on to homebuyers, thereby raising the price of a home even further out of the reach of some.
G.P. Rollo and Associates’ Gerry Mulholland said those additional costs might come out of either the profit of a building, or be factored into the purchase price of land.
But Braun wasn’t so sure.
“I don’t necessarily disagree with you about that in a stable housing market. We are not in a healthy market,” he said “We are in a bubble, and I’m surprised it hasn’t burst yet.”
The G.P. Rollo report suggested that by 2035, almost all housing will be unaffordable for the one-quarter of Abbotsford’s population making less than $40,000. Housing advocates generally define unaffordable housing costs as those that exceed 30 per cent of one’s income.
The G.P. Rollo and Associates report said an annual investment of $700,000 could help the city chip in money towards the building of 15 units of affordable housing each year.
Braun, though, said that would be a drop in the bucket. He said creating incentives for the building of more housing could do more to address the shortfall.
And he said the city has to be careful not to discourage the building of new rental housing. The city has the lowest rental vacancy rate in the country.
Referring to two long-shuttered incentive programs, Braun said the federal government should look at bringing back tax incentives to encourage investors to put money into the construction of new rental buildings.
“I think that’s one way to mobilize our country,” he said.
Council and the city consultants both agreed that an affordable housing strategy should focus on addressing the cost and availability of homes for those on the bottom end of the income spectrum.
While the draft of a new affordable housing strategy is expected to come before council this summer, reviews of development cost charges, amenity contributions and density bonuses are slated for 2019. Those items could result in more incentives for developers to build certain types of housing, or revisions to the developer fees charged by the city.