Huge subsidies or sale-price discounts would be needed to help turn Greater Victoria renters into homeowners, says an analysis prepared for the Capital Regional District.
To achieve “affordability” for renter households with annual incomes of about $49,000 to $73,000, units would have to be discounted between 48 and 85 per cent of market value, and/or receive a per unit subsidy of $64,000 to $228,000, says a study by McClanaghan & Associates.
“It is pretty dire,” said CRD chairwoman Barb Desjardins about the housing affordability crisis in the region.
She noted that the study points out that “it’s a significant jump” to make the move from rental to home ownership in markets such as Greater Victoria or the Lower Mainland.
The income range in the McClanaghan study is 80 to 120 per cent of the median income in the region. About 16 per cent of rental households — 8,700 — would be eligible for a program focused on that range, the study says.
CRD staff note that the incomes of most renter households are “well below the affordability threshold.”
According to the study, there were 54,470 rental households in the capital region in 2011, with a median before-tax annual income of $38,583.
And because the subsidies are calculated at maximum lending limits, it’s likely many potential purchasers would be reluctant to take on the required level of debt.
“For many people across the capital region, saving a down payment for a home or even finding suitable rental housing is becoming increasingly difficult,” the study says.
It notes that the Victoria Real Estate Board’s benchmark price for a single-family home in the capital region in July was $700,800 — almost eight times the region’s median family income.
Given the current market, any new affordable developments would have to have strata units within multi-unit developments — something that would further reduce the total number of renter households that could be served, the study says.
And land values, market dynamics and income demographics would probably limit development opportunities to areas such as Esquimalt, Saanich, Colwood and Langford.
While there are examples of non-profits delivering affordable home ownership projects, they tend to operate in areas with different market conditions and development opportunities, the study says.
“A number of these non-profit entities have tried but have not yet been able to break into the housing markets in the Lower Mainland and capital region.”
Desjardins supports undertaking a review and update of the Regional Affordability Strategy to further identify CRD’s role and options in housing affordability.
“The question now is: Do we want staff to take this to a second level and [if so] what are some of the options?” she said.
CRD directors will consider housing-related initiatives at today’s board meeting, including a call for the CRD to enter into discussions with local governments in the hope of identifying lands that could be made available for housing.
A separate motion seeks sites for modular housing and for Desjardins to meet with provincial officials about securing modular units for housing the homeless people in the region.