Next month, city planners will unveil a review of Richmond’s Affordable Housing Strategy to city councillors, who must then decide on whether or not the city is receiving enough bang for its buck.
The review of the 2007 strategy will come on the heels of some debate at council as to whether the city is asking enough of developers to service affordable housing, an important component to the city’s local economy.
According to the BC Non-Profit Housing Association (BCNPHA), after the North Shore, Richmond is the most expensive place to rent in Metro Vancouver.
Of the city’s 15,420 rental households, 48 per cent of tenants are paying more than 30 per cent (the standard threshold of affordability) of their income on housing.
The city has a housing crunch as well, according to the BCNPHA: 2,675 rental households are too small for their occupants and the city needs an additional 3,560 more rental bedrooms.
In Richmond, housing demand (at least in terms of homebuyers) has outpaced housing growth, according to the Greater Vancouver Homebuilders Association. And, only 10 per cent of new Metro Vancouver homes built from 2011 to 2013 were “purpose-built rental.”
The city currently has a three-pronged approach to affordable housing, according to John Foster, the city’s manager of community and social development.
The first priority of the strategy is to create subsidized rental units through city-sanctioned housing agreements, based on a tenant’s (low) income.
Second, the city tries to establish low-end market rental units.
Third, the city attempts to create entry-level home ownership opportunities, although Foster admits with the latter “less attention” has been placed.
Foster summarizes the problem as such:
“We have a finite ability to provide housing with a very high demand,” he said, noting Richmond is locked in by the river and protected farmland.
Furthermore, Foster says the city is “filling a vacuum” left behind by provincial and federal governments; Canada has no national housing strategy and funding for co-op housing projects is starting to expire.
Foster says the city will be reviewing ideas such as modest finishes, smaller units, and less parking (even no parking) in apartment complexes, while seeking more coach houses in townhouse developments and secondary suites in new single-family homes.
The city currently allows developers to pay cash in lieu of building affordable suites in any development under 80 units (apartments over 80 units must include five per cent affordable units).
That strategy came under fire at a city council meeting on Nov. 24, when councillors Bill McNulty and Harold Steves voted against a single-family home development on Moncton Street whereby developer Oris Consulting will tear down one home and build three while paying the city $1 per square foot of building space to the affordable home reserve (in this case $5,980).
“The amount that the developer is paying for this is really next to nothing compared to what that suite could be worth,” McNulty argued.
However, the bylaw was written as such that the developer could choose cash in lieu of a suite.
Then councillor, Evelina Halsey-Brandt, noted in the meeting the city doesn’t have affordable housing agreements on single-family home suites — an issue that could be part of the review of single-family home developments.
In cases of townhouses, developers must contribute $2 per square foot.
In the same meeting, council unanimously approved a permit for a 15-unit townhouse project partly owned by councillors Ken Johnston and Derek Dang, who also chose to pay the city cash ($43,921) for affordable housing.
In apartments of less than 80 units, the city charges $4 per square foot.
According to Oris’ president Dana Westermark “there is an argument for looking at those fees and determining if they are right.”
Westermark said the costs of mandating five per cent of affordable units on 80-plus unit developments has kept pace with market forces (inflation) because the units are built-in, however, the cash contributions have not changed in a decade.
Westermark said building homes requires a certain profit margin to gain financing.
Right now, he said the market isn’t as “hot” as to pass on additional affordable housing costs to the homebuyer. As such, he said developers would likely offer less money to the seller for its land.
He noted Richmond has the second highest total package of development charges in the region, after Surrey, and any policy change should factor in development costs.
“If you start increasing fees more, you dampen down development in Richmond.
“I don’t know if that’s something the city is inclined to do. The city derives a great deal of income from development. …I would expect them to want to continue seeing development in Richmond,” he said.
But he noted a housing strategy is “important for the community and for the whole economy” as entry-level jobs must be met with adequate rental costs.
The money the city has collected to date has mostly gone to major, affordable housing projects such as the nearly completed Kiwanis Towers for seniors and the soon-to-be-constructed Storeys development, near Granville Avenue and No. 3 Road, for low-income renters.
Steves wants to see a policy shift away from aggregating affordable housing into large projects.
“We have to go with a strategy that the developers should put in the suites or laneway housing or whatever and not give us donations to cluster all the poor people in one building,” he told council.
Westermark noted the 80-unit threshold could be scaled. “No one’s going to build 81 units,” he said, suggesting mandatory affordable suites in smaller developments.
The review will also be introduced just after council passed the first of four phases of a housing agreement on a massive, planned 1,128-unit complex by developer Pinnacle International at Capstan Village, last week. Capstan Village will have 17 unique, affordable units that will house artists, in addition to 63 affordable units.
There, 485 square-foot suites are being listed starting at $270,000.
According to city staff, the review is expected to be unveiled in stages, with the single-family home development portion being the first to be presented to council.
According to senior planning manager Wayne Craig there are 50-60 single-family home development applications in progress.
