AFFORDABLE HOUSING FOR OUR YOUNG GENERATION2017-12-18 00:53:30 Posted By Amir Hamzehali
Whenever we speak of affordable housing, the first thing that crosses everyone’s mind is some type of subsidized rental housing! Of course, the affordable rental housing is a great way to help financially vulnerable people to live in expensive cities like Vancouver. But, is this a real long-term solution to keep our talented young people in Vancouver, or is it a good way to bringing more talented young people to our city?
We all know that nothing is more financially beneficial to an individual or family than owning a paid off property at the time of retirement, when most people’s income tends to drop dramatically. It is also obvious that for most people; if they could make their first real estate purchase at a younger age, the chances that they own their own home mortgage free at the time of retirement is very high. We also know home ownership gives people a great sense of belonging to the city that they live in.
Saying all that might shed some light on the importance of home ownership for our young individuals and families. Whatever the reason, either political or economical, we have a lack of supply of affordable homes in Vancouver real estate market. A simple market search for properties in $400,000 range or under in Greater Vancouver reveals that in some cities this price range will only buy people a boat slip and in some other cities a small unit in an old building!
Purchase of less expensive units in older buildings involves a lot of risk for first time home buyers or the young home purchasers. The price of these type of units might be affordable, but the special levies or the special assessments that are very common in older buildings could be problematic for young buyers who usually have to use most of their cash for down payment.
In my opinion, the affordable housing for young buyers should be in form of new micro units being built in suburbs where land values are less expensive and the access to the public transit is easy. The demand for affordable micro units already exists as the fast pace of real estate price appreciation in last few years has put home ownership out of reach of many people especially young families. The government can play a great role for facilitating the process in terms of zoning change, providing developable land, and encouraging developers to invest in these type housing developments in future. Construction of buildings purely consisting of small 1 and 2 bedroom units, rather than large luxurious units and penthouses, will also increase the housing supply for the same gross building area allowable.
The only questions remain is how we could make sure these type of affordable units reaches to the hands of young buyers instead of being scooped up by wealthy investors! Hopefully, all the young people will have the opportunity to get a foot on the property ladder one day.