It’s a sad case. In Vancouver a 50-foot lot on the west side with a single family home was only $1.2 million a year ago. Today it is $1.65 million. For the somewhat less pricey average two story Vancouver home, it would take 94% of the average families household income.
As for apartments, a small, 2-bedroom downtown went from $542,000 to $610,000, less than half the average house but still completely unaffordable for an average income family. Since the 1970s, real household incomes increased by 9% while the price of a condo has gone up 280%.
And the debate roars about what to do about it. Reduce red tape at city hall! Get rid of excessive charges on developers! Get government out of the way and let the market do its magic; there is not enough supply and too much demand.
The discussion is dominated by tinkering, much of it shaped by the interests of developers in maximizing profits and minimizing risks. For instance, one developer recently warned the city of Vancouver not to make any public land available on a low cost basis because it would be unfair to private developers.
I am not “expert” in housing but I know enough to know that fundamental issues are missing from the discussion. That is because I have been exposed to solutions that are creating significant stocks of permanently affordable housing.
Key to both is what I call an “ownership” solution. In many, if not most settings, the private property system is failing to deliver affordable housing. And I am not just talking about developers here. Many of us are implicated. Owning a house is a good investment, a way to make money well beyond recovering the price and a modest return on capital. There is some juicy potential for pocketing a bundle. The problem is that all that unearned profit pocketed on every sale puts the price of housing increasingly out of reach for us modest wage earners.