Part Two of a two-part series put together by our Housing Development Coordinator, Don Elliott. The series examines mixed used housing developments and the opportunities they present in our goal to end homelessness. Also see Mixed Use Housing – Part 1.
To say housing affordability is an important issue in Greater Victoria would be an understatement. Victoria, with rents averaging $918/month, consistently ranks among the least affordable communities in British Columbia behind only Vancouver ($1,099/month), Fort St. John ($980/month), and Dawson Creek ($954/month).[i]
Often when we discuss affordability, it is related solely to housing costs and is framed as household expenditures on housing not exceeding 30% gross income. This 30% would act as the threshold for defining whether housing is affordable or not affordable. However, it is becoming increasingly apparent that this measurement gives a false impression of affordability. An easy example would be how this traditional threshold suggests it is more affordable to reside in suburban areas where the housing costs are often lower when compared to urban cores. Unfortunately, the high costs of transportation, which in more suburban areas tends to be focused largely on single occupancy vehicles is often overlooked in traditional affordability assessments. It is important to discuss issues of affordability using a more comprehensive framework.
The Centre for Neighbourhood Technology has addressed this issue of affordability by looking at both housing and transportation costs through the Housing and Transportation (H+T) Affordability Index.[ii] This tool defines affordability as a household spending less than 45% gross income on both housing and transportation. This relationship between housing affordability and transportation costs is critical to recognize as much of our existing planning rhetoric emphasizes mixed-use, compact development as a means to reduce the costs of transportation thus increasing the experienced level of household affordability.
When this enhanced affordability model was applied to the City of Vancouver it emerged that due to the relatively high costs of transportation, the region is even less affordable than previously thought.[iii] Though it is true that Victoria is not Vancouver, there are many similarities between the two cities with the relatively high cost of rent, low vacancy rates and the preferred modes of transportation coming to mind first. It is possible that once transportation costs are factored in, the picture of affordability is even bleaker for those middle and low-income earners in Victoria.
What is really interesting with this research is the role transportation plays in both the actual and experienced levels of affordability for residents. It would follow the levels of affordability could be increased with a reduction in transportation costs such as through increasing neighbourhood walkability for example.
This is where mixed-use development and affordability come into play. If we can limit or reduce auto dependency and foster a more walkable community, should that not serve the interests of the region through increasing affordability?
Unfortunately the answer is no, not in all cases. Mixed-use development on its own is not the panacea to our collective urban ills we had once hoped. A study out of the University of Waterloo illustrates this through two key findings:[iv]
- Housing in mixed-use areas was more expensive than the rest of the city; and,
- Socioeconomic polarization between different classes is in some ways more pronounced in mixed-use areas than in the rest of the city.
Mixed-use areas, on one hand offer the type of liveable communities urban planners, elected officials, residents, etc. want for their communities but on the other they often command a price premium as residents and developers are willing to pay more the additional access to amenities offered through this form of development.
The many benefits of mixed-use development tend to not be distributed evenly across the community. Instead, they often accrue to the people who can afford to live in mixed-use areas. This is not to undermine or position mixed-use development as necessarily a bad thing. It is just to emphasize that communities include overt regulatory controls to ensure that those households often finding themselves priced out of mixed-use areas are able to share equally in the many amenities and benefits that these developments offer.
Further, it is important to acknowledge that we are seeing affordability pressures spreading up the income chain as more and more households are increasingly finding themselves unable to enter the housing market or are in precarious living situations.
When we consider regulatory controls, it is critical that we continue our efforts to ensure there are housing options available to those experiencing extreme poverty while at the same time enhancing the levels of affordability for everyone.
[i] CMHC. 2014. Rental Market Report: British Columbia Highlights.
[iv] Seasons, M. 2014. Does Mixed-Use Development Benefit Everyone?: Housing Affordability in a Changing Labour Market. University of Waterloo. Waterloo, Ontairo, Canada.