Monthly $3,722 rent for three-bedroom east side home meets City of Vancouver’s definition of “affordable”
CARLITO PABLO (GEORGIA STRAIGHT) - A proposed development highlights the City of Vancouver’s measure of what it calls “for-profit affordable rental housing”.
Yearly, the city updates a bulletin setting the initial maximum rents that can be charged on these projects.
In exchange, developers get a number of incentives, including a waiver on paying development cost levies or DCLs.
For 2021, the starting rents for new east side rentals are as follows: $1,653, studio; $2,022, one bedroom; $2,647, two bedrooms; and $3,722, three bedrooms.
On the more expensive west side of the city, the initial maximum rents are: $1,818, studio; $2,224, one bedroom; $2,912, two bedrooms; and $4,094, three bedrooms.
Based on the 2016 federal census, the City of Vancouver has drawn an official profile of social indicators for 2020.
The city profile notes that the median personal income in the city is $39,000.
The standard measure of affordability is 30 percent of income for housing costs.
Using this 30 percent standard, someone earning an income of $39,000 should pay only $975 for a one-bedroom unit or studio in Vancouver.
The said bulletin containing initial maximum rents was cited in a city staff report about a proposed rezoning to allow a six-storey development on the east side of the city.
A rezoning application for 4426-4464 Knight Street and 1406 East 28th Avenue was filed by GBL Architects on behalf of Alliance Wingsail (Knight Street) Holdings Ltd.
If approved, the six-storey rental building will contain 72 market rental housing units, including 10 live-work units.
Yardley McNeill, assistant director of rezoning, wrote in the staff report that the project “meets the intent” of the city’s Affordable Housing Choices Interim Rezoning Policy or ACH.
Moreover, the project meets the city’s definition of “for-profit affordable rental housing”.
This means that the operators of the rental project can charge the following 2021 maximum rents at first occupany: $1,653, studio; $2,022, one bedroom; $2,647, two bedrooms; and $3,722, three bedrooms.
“Staff note that the term ‘for-profit affordable rental housing’ as defined by the Vancouver Charter, and used in relation to the DCL By-law, does not necessarily create rental units which are affordable to all Vancouver residents,” McNeill wrote.
McNeill also noted that although the application was eligible for a waiver, the applicant has chosen not to take it.
“As the project is subject to a Community Amenity Contribution (CAC), should the applicant choose to pursue a DCL waiver at a later stage, the application will be subject to further review to determine if an additional land lift is generated,” the city planner stated.
The proposed rezoning for 4426-4464 Knight Street and 1406 East 28th Avenue is included in the public hearing agenda of city council on September 21.
DANIEL WONG (BETTER DWELLING) - Lumber prices continue to spiral lower, and that might be a good thing for home prices. The commodity surged throughout the pandemic, hitting an absurd high in May. Since then, prices have plummeted back to reality at a rapid pace, wiping out all of this year’s gains. This can result in a huge discount for lumber, which has contributed to soaring home prices.
Lumber Prices Have Wiped Out All Of 2021’S Gains
The price of lumber has cratered recently, losing all of this year’s gains. Spruce-pine-fir (SPF) lumber closed at $506.10/mbf today, down 20.2% from a month ago. The price has fallen 37.5% from a year ago, more than reversing the gains made this year. As big as that decline is, it’s nothing compared to the drop seen from the peak just a few months ago.
Lumber Prices Are Down 69% From Peak, Cheaper Than 2018
Just a few months ago people thought lumber prices would soar forever. They weren’t just a little wrong about that. Lumber prices peaked at $1,668/mbf on May 7, 2021, and have since dropped 69.7% since then. Niiice.
SPF Lumber Price
The closing price for SPF random length lumber.
Not quite to the price it was immediately before the pandemic, but it was more expensive just a few years ago. Back in 2018, lumber prices reached a high of $624/mbf, and prices are now 18.9% lower. This decline can turn into a huge benefit for homebuyers in the future.
Lumber Costs For The Average New Home Over $11,000 Cheaper Than Last Year
Building a home involves a lot of lumber, and the drop in prices is good news for home buyers. At the $1,600 peak, the rise in prices added ~US$47,800 to the cost of building a home. These costs are largely just passed onto consumers, pushing new home prices higher. It’s not just new buyers either. Pre-construction buyers from years ago have had to pay more to have their homes completed.
At today’s price, the contribution to home prices should be negative compared to last year. The average home should see a discount of US$11,700 in lumber costs compared to a year ago. Though surging inflation might consume a lot of that discount if it doesn’t prove to be transitory.
Does the drop bring in more buyers for support at this level? Or will commercial buyers listen to lumber execs, and wait for potentially cheaper lumber next year.
Vancouver real estate: West Side detached homes post biggest price increase amid decline in outlying markets
CARLITO PABLO (GEORGIA STRAIGHT) - The West Side of Vancouver has always been known not just as the wealthier section of the city.
It’s also the jewel of Metro Vancouver’s prime real-estate market.
Realtor Kevin Skipworth goes a step further. The partner, managing broker, and economist of Dexter Realty describes the West Side as the “epicenter of B.C. urbanity”.
Skipworth does so in a new report noting that the benchmark price of a detached home on the West Side increased 2.2 percent in June compared to May.
The realtor observed that it’s the highest increase for detached homes in markets served by the Real Estate Board of Greater Vancouver (REBGV).
In June 2021, the price of a detached home on the West Side of Vancouver rose to $3,458,300.
That’s also the highest price for a typical single-family home across all markets under the REBGV, which does not include Surrey.
West Vancouver comes second only at $3,152,50, posting a month-over-month increase of 0.4 percent.
The 2.2 percent increase in the price of a typical detached home on Vancouver’s West Side comes as prices of detached homes in other REBGV markets fell in June 2021.
In a report Tuesday (July 6), Skipworth described the decline as an “anomaly”.
“Outlying markets that had been posting the highest year-over-year price increases reported the biggest month-over-month decline in detached house prices in June,” Skipworth noted.
Across the REBGV region, the typical price of a detached home stayed flat or posted zero increase in June compared to May.
In East Vancouver, the benchmark price dipped -0.8 percent; Bowen Island, -0.9 percent; Burnaby East, -2 percent, Burnaby South, -0.6 percent; Ladner, -0.6 percent; New Westminster, -1.6 percent; Port Coquitlam, -1.6 percent; Richmond, -1.1 percent; Squamish, -2.8 percent; and Sunshine Coast, -0.5 percent.
In the report, Skipworth wrote that the increase in the benchmark price of a Vancouver West Side detached home is neither suprising nor a short-term trend.
“September is expected to welcome in the fourth and final phase of B.C.’s post-pandemic reopening. This means international borders will open, all businesses will be back in action and thousands of workers will return to the office.
“The big city will look increasingly tempting as hockey games open to crowds, major concerts tune up and Vancouver’s restaurants, pubs and theatres are open for business,” Skipworth stated.
“Expect to see home sales and prices, not just in Vancouver but across the entire region, continue to increase. The reason is quite simply the undeniable law of supply of demand,” Skipworth added.
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