It’s not exactly surprising to learn that Vancouver currently ranks as one of the least affordable places to live in the world. It’s a challenging time for all of us, but especially for low to middle income families who have to spend 50% or more of their income on housing. Outside factors like climate change, a for-profit housing market, and a lack of affordable housing developments only make the problem worse.
Many mission-driven organizations and community groups are championing affordable housing developments in Vancouver, but they often face financing and support difficulties that prevent them from being as effective as they could be.
Vancity is working to help change that by addressing these barriers and aiming to help more affordable housing solutions reach the market. Enter our Affordable Housing Accelerator Program & Fund: designed in consultation with affordable housing developers to help finance and support the development of affordable housing projects.
This program is part of our commitment to addressing Vancouver’s affordable housing crisis and making our city more livable for everyone. By working together, we can help make a difference in the lives of those who need it most.
What is the Affordable Housing Accelerator Program & Fund?
The Vancity Affordable Housing Accelerator Program & Fund was developed in 2011 to provide low-cost and flexible loans to support expenses in the early phases of affordable housing development. This allows affordable housing developments to move forward at a much faster pace, and with less risk.
In addition to financing, the program also provides technical support and advice to organizations considering affordable housing development and grants to support organizations that engage consultants or development partners for concept, feasibility, and business planning.
As of May 2022, the fund has made 76 loans totaling $28.M to help build 59 different housing projects. That support has helped create almost 4,500 sustainable and affordable rental homes, and empowered projects like Soroptimist Apartment House, Rivermark, and Mount Douglas Manor to reach the finish line. These projects now provide permanent, sustainable, and affordable housing for local communities.
Barriers to affordable housing development in Vancouver.
Here are just some of the issues affordable housing projects face today in Vancouver.
The affordability gap
Affordable housing is often defined as spending up to 30% of your household income on housing. For example, if you make $50,000 per year, you should be spending roughly $15,000 per year on housing or around $1,250 per month.
In Vancouver, average rental prices rose 75% between 2001 and 2017, while the median income has risen only 18%. This discrepancy between income and rent is often referred to as the affordability gap.
Here’s where we currently stand:
- The average price of a one-bedroom apartment in Vancouver is $2000 per month.
- This means in today’s market, you would need to make $80,000 per year to make rent affordable.
- Unfortunately, the average income in Vancouver for a single-person household is only $38,500 per year.
- If you want to be a homeowner, data from the National Bank shows you would need an average income of $267,641 for a house, and $136,469 for a condo. Use Vancity’s mortgage affordability calculator to learn more.
Because Vancouver is the third-highest source of greenhouse gas emissions in BC and Canada, upfront building costs are required to build environmentally-sustainable housing. This can mean electrical heating, carbon-sequestering concrete, or heat-regulating exteriors.
We know that building climate-ready housing is a win for the environment, but it can also be expensive and out of reach for many not-for-profit and community developers. Right now, the high cost of construction is a key barrier to building affordable housing in Vancouver.
For-profit housing markets
The high cost of land and development in Vancouver doesn’t make it any easier to build new affordable housing units. On top of this, many central neighbourhoods are only zoned for single-family homes, which further restricts the types of affordable housing that can be built. So, what does that mean?
Simply put, increasing the amount of affordable housing in Vancouver would require changing the way we think about development and land use in Vancouver. That means allowing a mix of housing types in all neighbourhoods, including apartment buildings and cooperative housing, and creating incentives for developers to build more affordable housing units.
Many non-profit housing companies, cooperatives, and Indigenous groups are trying to help the affordable housing crisis by acquiring, developing, or redeveloping their old buildings or unused land. But many of these developments lose momentum before they get off the ground because of the high cost of the pre-construction process, which can be incredibly difficult to finance and maintain.
Access to capital
Even once affordable housing projects are ready for construction, they often do not have the same access to capital as market developers. Why? Because affordable housing developments are often deemed high risk, particularly when located in low-income or rural communities.
This lack of access forces many organizations that want to help their communities by creating affordable housing to sell their land to market developers, slow their progress, or scrap the redevelopment project altogether.
How can you help?
The Vancity Affordable Housing Accelerator Program & Fund has made huge strides in recent years to help address the problem of affordable housing in Vancouver and the province overall. And we couldn’t make this progress without the help of our members.
Putting your money where your values are is a great way to support the continued development of affordable housing projects. When you bank with Vancity, a portion of your day-to-day deposits are lent out to impactful projects like affordable housing. On top of that, 30% of our annual net profits are invested back into BC communities every year.
We believe government institutions and the market on their own can’t solve the complex housing problems we face. That’s why we’re committed to being a part of the solution—and you can be too. Join Vancity today.