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Metro Vancouver staff currently anticipate annual housing demand at 18,000 new units


By   BIV | Sept. 13, 2016, midnight


Growth forecasts revisited

 

There have been repeated calls this year for someone to show leadership when it comes to planning for growth, particularly around housing affordability. This past January, at the Urban Development Institute’s annual forecast luncheon, Reliance Properties Ltd. president Jon Stovell called for immediate amendments to Metro Vancouver’s Metro 2040 regional growth strategy to mandate residential development targets.


“We need targets set by regional government to say, ‘You have to grow,’” Stovell said at the time. “Until that happens, municipal governments are just going to keep under-entitling land.”

 

Responding to an item in this space two weeks ago that mentioned Vancouver’s apparent ignorance of its own residential development capacity, a reader pointed out that Metro Vancouver is soliciting feedback on Metro 2040 through October 1.

 

Provincial laws require review of the document every five years, something Metro Vancouver says it does constantly (eight amendments have occurred since 2011), alongside ongoing work to review the region’s housing demand estimates. Metro Vancouver staff currently anticipate annual housing demand at 18,000 new units, significantly below the 25,400 housing starts the Canada Mortgage and Housing Corp. (CMHC) forecasts for 2016.
But even then, starts need to address affordability. RBC Economics recently declared Vancouver to be “in uncharted territory” as the benchmark home purchase requires 90.3% of household income. At the other end of the market, CMHC pointed out in a media call last week regarding Ottawa’s proposed national housing strategy that 1.6 million Canadians face “core housing need.”

 

Metro Vancouver staff report that of the 5,500 new rental units the region requires annually, 3,500 must meet the needs of households earning less than $50,000 a year.

 

“It has not been possible to achieve this level of new affordable rental supply in recent years due to lack of senior government funding,” the report said.

 

However, CMHC president and CEO Evan Siddall told media last week that expectations for the national housing strategy concerned him – in large measure because they’re legion. To meet them all would take a lot of money, or as he put it, “we would have an irresponsible budget request.”

Steady demand

With all the talk about slack supplies of affordable rental housing and the struggle tenants have to make ends meet as rents rise through the use of fixed-term leases, one might assume growing demand at the Vancouver rental bank.

Set up in 2012 through the Network of Inner City Community Services (NICCS) with $150,000 from the Streetohome Foundation as well as support from the city and the Vancouver Foundation, tenants facing tough times can access interest-free, short-term loans to tide them over.

 

While the latest numbers for the year ended August 31 show that just 130 loans were made in the past 12 months, down from 142 in 2015, they don’t tell the whole story.

 

Amanda Pollicino, director of community programs with NICCS, said there’s been an increase in the number of loan applications the bank has denied – typically because monthly rent outstrips monthly income. The most recent stats indicate that 75% of applications were denied on this basis, up from about 45% in the initial three years of the bank’s existence.

 

Put another way, just 25% of applicants are approved while nearly 400 applications draw disappointment.

The good news is that 65% of loans are repaid within the two-year period required, only slightly less than the 70% repayment rate originally anticipated.

 

The average loan amount over the past four years has been just $888, well below the maximum loans amounts of $1,300 for individuals and $1,800 for families.

 

Pollicino said approximately 660 people, including 195 children, have benefited from the loans since 2012.