Vancity | Rent Race: The growing unaffordability rent in Metro Vancouver

1

Rent Race: The growing unaffordability of rent in Metro Vancouver

Highlights• InMetroVancouver,rentingisincreasinglyviewedastheanswertoskyrocketingrealestateprices,butrenting

isprovingtobeincreasinglyunaffordable.Thishasthepotentialtoadverselyimpactthequalityoflifeforrenters,reducethelabourpoolforbusinessesandimpactservicesthatBritishColumbiansrelyon.

• Rentersaccountformorethanone-thirdofhouseholdsinMetroVancouverandamajorityofresidentsintheCityofVancouver(51%).Millennials(bornbetweenabout1980to2000)areoverrepresentedamongrenterhouseholds,constituting33%ofthetotal.

• Rentershaveahigherlabourparticipationrate(69.1%)thanhomeowners(64.9%),andaredispersedthroughouttheentireeconomy,despitecommonperceptionsofrentersbeingprimarilyemployedinlow-wageservicejobs.

• Rentersplayacriticalroleinmaintainingadynamiceconomybybeingmorelikelytomoveintimesofeconomicchange(representingtwo-thirdsofallmovesbyallhouseholds)thantheirhomeownercounterparts,inturnsupportinglabourfluidityacrosstheregion.

• Whileweeklymedianwagesgrewby6.6%inB.C.between2011and2015,rentsincreased11.4%onaverageinMetroVancouver.

• Highaveragerents($1,144permonth)andlowvacancyrates(0.8%)areincreasinglylimitingtheoptionsofwhereyoungerandlower-incomehouseholdscanliveandwork.

• Theaveragemillennialrenterhousehold(includesallfamilytypes)earnedanestimatedmedianincomeof$40,300in2015.Consideringtoday’saveragerentalrates,thesehouseholdsarepricedoutofmuchoftheCityofVancouver,NorthVancouver(cityanddistrictmunicipality),WestVancouver,RichmondandBurnaby.

• Renterworkersmakingamedianincomeinfieldsasdiverseasconstruction,educationalservices,healthcareandsocialassistancefacetheveryrealpossibilityofbeingpricedoutofthecommunitiestheycallhome.ThistrendhaspotentialtoleaveMetroVancouverwithalimitedpooloflabourtodrawfrom.

• Byprotectingexistingrentalstockandstimulatingcreationofnewsupply,governmentcanhelpexpandandstrengthenthiscriticalformofworkforcehousing.Rentersthemselvescanbemindfuloftransportationcostswhenassessingaffordabilityforrentals,andbusinessescansupportworkersthroughadvocacy,locationefficiencyanddirectinvestmentinaffordablehousing.

Make Good Money (TM) is a trademark of Vancouver City Savings Credit Union.

2

AshighlightedinpreviousVancityreportsonhousingaffordability,home-ownershipprospectsformillennialandworkinghouseholdsareincreasinglyoutofreach.iAsthemostrecentexampleofskyrocketingrealestatepricesinMetroVancouver,betweenMay2015andMay2016,theaverageresidentialpriceintheregionincreasedmorethan30%to$786,500,faroutpacingtheaveragehousehold’scapacitytoaffordownership.iiInlightofdecliningaffordabilityintheownershipmarket,recentmediacommentaryhassuggestedthatrentalhousingisaviablealternativetobuyingformillennialhouseholds.

Unfortunately,thisreportshowsthattherehasalsobeengrowingunaffordabilityandproblematicallylowvacancyratesinrentalmarketsacrossMetroVancouver,makingthisoptionunreliableforyoungerandpoorerhouseholds.Whilethesehouseholdsusedtolooktowardthesuburbstofindaffordableandavailablerentals,transportationcostshavethepotentialtoerodethisaffordability,furtherexacerbatingtheissueacrosstheregion.

Theaffordabilityandavailabilitycrunchintherentalhousingmarkethasimplicationsthatnotonlyimpactthequalityoflifeforrenters,butmayalsoimpactthefutureprosperityandgrowthoftheregion.Whilerentersfrequentlygounnoticedinpolicydiscussionsandpopularcommentaryabouttheeconomy,theyareakeycontributortotheeconomicfabricofMetroVancouver.Rentersaccountformorethanone-thirdofhouseholdsacrosstheregionandconstituteamajorityofresidentsintheCityofVancouver.InMetro,rentersalsodisplayhigherparticipationrates,beingmorelikelytobeengagedinthelabourforcethantheirhome-owningcounterparts.Despitethecommonperceptionthatrentersareinvolvedinonlyafewformsoflaboursuchasretailandrestaurantwork,theyareemployedinallsectorsoftheeconomyandarecrucialtothesharedprosperityofourcitiesandregions.BusinessesdependonthemandBritishColumbiansdependontheservicestheyprovide.

Whilerentersaretiedtoadynamic,productiveandprosperouseconomy,thisreporthighlightshowincreasinglyunaffordablerentalhousingisrestrictingwheretheseindividualsandfamiliescanliveandwork.Inturn,thelackofaffordablerentalhousingoptionsposesadangertooureconomiccompetitiveness,asrentersareincreasinglyforcedintotheoutersuburbs,furtherandfurtherawayfromcentresofemployment.Ifcurrenttrendscontinue,workingrenterhouseholdswillbepricedoutofthecommunitiesthatrelyonthemforeconomicgrowthandprosperity.

Millennials in the rental marketThefutureofMetroVancouverrestsonyoung,mobile,andhighlyeducatedmillennialhouseholds.Thisreportbeginsbyexaminingtheabilityoftheaveragemillennialhouseholdtofindaffordablerentalhousing.Usingadataseriesbasedonthe2011NationalHouseholdSurveythatexaminesrenterhouseholdincomeformillennialsinMetroVancouver,thereportestimatestheir2015incomeusingthemedianweeklywageincreaseforallindustriesinBritishColumbiabetween2011and2015.iii

ThereportcomparestheseincomestotheaveragerentsandvacancyratesofvariousgeographicalzonescontainedintheCMHC2015Fall Rental Market Survey.ivThisanalysisprovidesageographicallookatwhatareasareaffordableandavailabletotypicalmillennialrenterhouseholdsacrossMetroVancouver.vThepurpose-built,condo,andsecondaryrentalmarket(e.g.,basementssuites)arealsofactoredintotheanalysiswheredataisavailable(showninthetablesasVancouverCensusMetropolitanArea(CMA)condo/secondary).Thevacancyratewasincludedintheanalysisgiventhatahouseholdcanrentaunitonlyifthereisavailablesupply,aswellastohighlighthowmanyrentalmarketsacrosstheregionfallbelowa“healthy”vacancyrateof3%.

Thereportalsoestimatesanaveragehousehold’stransportationcostsusingMetroVancouver’sHousing and Transportation Cost Burden study.viOtherreportshavesuggestedthatahousehold’saffordablehousingandtransitcostshouldequalnomorethan45%ofhousehold’sgrossannualincome.vii

Asawhole,millennialrenterhouseholdshadanestimatedadjustedmedianincomeof$40,300in2015.viiiThisfigureincludesallhouseholdtypessuchassingles,couples,andcouplewithchildren,andisreflectiveofhouseholdsaged15to34yearsold.Usingthestandard30%ofgrosshouseholdincomeasanaffordabilitybenchmark,thesehouseholdscanafford$1,005inrentpermonth.

Whencomparedtoaveragerents,millennialshaveadifficulttimeaffordinganaveragerentalaccommodationacrosstheregion(Table1).MillennialsarepricedoutofmostneighbourhoodsinVancouver,aswellasNorthVancouver(districtmunicipalityandcity),WestVancouverandRichmond.Theyarealsopricedoutofthecondoandsecondarymarket.ThegeneraltrendisthathousingaffordabilityappearsinsuburbancommunitiesacrosstheregioninareaslikeSurrey,DeltaandtheTri-Cities.

3

Average rent Vacancy rate

(%)

Is this neighbourhood/municipality affordable

and available?

UniversityEndowmentLands $1,712 0.1 No

WestVancouver $1,673 0.5 No

VancouverCMA(Condo) $1,421 0.9 No

Westside/Kerrisdale $1,390 1.6 No

Downtown $1,361 0.6 No

WestEnd/Downtown(Zones1-3) $1,350 0.5 No

EnglishBay $1,341 0.3 No

WestEnd/StanleyPark $1,336 0.5 No

VancuverCMA(Secondary) $1,300 Nodata No

Kitsilano/PointGrey $1,285 0.6 No

SouthGranville/Oak $1,264 0.6 No

NorthVancouverDistrictMunicipality(DM) $1,257 0.5 No

CityofVancouver(Zones1-10) $1,233 0.6 No

NorthVancouverCity $1,158 0.4 No

Richmond $1,152 0.9 No

VancouverCMA $1,144 0.8 No

SoutheastVancouver $1,118 1 No

NorthBurnaby $1,082 1 No

MountPleasant/RenfrewHeights $1,076 0.4 No

CentralPark/Metrotown $1,045 1.3 No

Burnaby(Zones12-14) $1,031 1.2 No

EastHastings $1,002 0.6 Yes

Tri-Cities $951 1.2 Yes

NewWestminster $933 0.9 Yes

Marpole $928 1 Yes

Delta $920 0.6 Yes

WhiteRock $918 0.8 Yes

SoutheastBurnaby $905 1.2 Yes

LangleyCityandLangleyDM $895 1.5 Yes

Surrey $874 1.9 Yes

MapleRidge/PittMeadows $827 1.6 Yes

Table 1 – Housing affordability and availability for millennial households

Source:CMHC2015,VancouverandAbbotsford-MissionCMAs,FallMarketSurvey

4

Iftransportationcostsarefactoredin,thesehouseholdscanafford$1,510permonth(basedon45%ofthemedianmillennialincome).Whilesomeaffordabilityexistsinthesesuburbancommunities,transportationcostsarealsotypicallyhigherintheseareas.Ifrentalhousingisnotlocatedneartransit,thesehouseholdswillhavetodependoncars,whichareexpensivetomaintain.Assuch,whenaveragetransportationcostsarefactoredin(includingcaruse),thesemunicipalitieslosetheiraffordability(Table2,above).

Affordablerentalhousingforyoungerhouseholdsiscrucialforthefuturegrowthandprosperityoftheregion.Figure1belowdemonstrateshowyoungerhouseholdsconstituteahigherproportionofrenterhouseholdsthantheirolderpeers.Thisisdueinlargeparttotheseyoungerhouseholdsleavingthefamilyhometocreatenewtenanthouseholds.Withoutaffordablerentalhousingtobuildalife,youngerhouseholdsmaydelayfamilyformation,liveinparents’homesforlongerormoveawaytomoreaffordabledestinations.

Average rent

Average transportation cost

(estimate)

Sum of housing and transportation cost

Vacancy rate (%)


and available?

WestVancouver $1,673 $1,086 $2,759 0.5 No

NorthVancouverDM $1,257 $1,086 $2,343 0.5 No

LangleyCityandLangleyDM

$895 $1,362 $2,257 1.5 No

NorthVancouverCity $1,158 $1,086 $2,244 0.4 No

Delta $920 $1,314 $2,234 0.6 No

Richmond $1,152 $1,069 $2,221 0.9 No

VancouverCMA $1,144 $1,025 $2,169 0.8 No

MapleRidge/PittMeadows

$827 $1,331 $2,158 1.6 No

WhiteRock $918 $1,224 $2,142 0.8 No

Tri-Cities $951 $1,152 $2,103 1.2 No

Surrey $874 $1,224 $2,098 1.9 No

CityofVancouver(Zones1-10)

$1,233 $749 $1,982 0.6 No

Burnaby(Zones12-14) $1,031 $928 $1,959 1.2 No

NewWestminster $933 $928 $1,861 0.9 No

Table 2 – Estimated housing and transportation cost for millennial households

Source:CMHC2015FallMarketSurveyandMetroVancouver“HousingandTransportationcostburdenstudy”

Figure 1 – Age groupings of renter households, 2015

Millennials (aged 15-34)

Gen X (aged 35-49)

Boomers (Aged 50 - 70)

Silent Generation (Aged 70 +)

Source:BCNPHARentalHousingDemandprojections

33%

11%

30%

26%

5

Who are renters and where do they work?Thispressureintherentalmarketextendsbeyondmillennialhouseholds,impactingallagegroupsacrosstheregion(Figure1,p.4).Rentaldemandprojectionsshowthatifcurrenttenurepatternshold,rentaldemandinMetroVancouverwillgrowby41%by2036.Thismeansanadditional135,000unitsofrentalhousingwillneedtobedevelopedoverthenext20years.ix

Notonlyarerenterhouseholdsrepresentedinallagecategories,buttheyarealsoemployedinallsectorsoftheeconomy.Comparingthetop10jobsectorsforrentersandownersdemonstratesthatbothareemployedinsimilarsectors,withonlyslightvariationintheorderofthecategories(Table3).Whileownersearnhigherincomesthanrentersinthesamejobcategories(datanotshown),localeconomiesrelyonthepresenceofbothrentersandowners.

Renters and the economyTheaffordabilitycrunchintherentalhousingmarketmayalsohaveaneffectontheregionaleconomy,throughreshapingthelabourforce’sabilitytomoveandsettleforwork.

Researchhasdemonstratedhowrentalhousingreinforcesandsupportsdynamiclabourmarkets.xRentershavebeenshowntobemoremobilethantheirhomeownercounterparts,whichprovidethemwithmoreflexibilitytomoveaslabourmarketdemandsshift.OneresearchhighlightfromCanadaMortgageandHousingCorporation(CMHC)foundthatmore

thantwo-thirdsofhouseholdsthatmovedduringasix-yearperiodwererenters,eventhoughtheyrepresentedonlyone-thirdofallhouseholds.xiMobilerentersareabletofillcriticallabourmarketgapsastheyarise,movingtodifferentlocationsasjobscomeup.Forinstance,ifayoungfamilyinHalifaxfindsanemploymentopportunityinVancouver’stechindustry,theabilitytofindaffordablerentalhousingwillplayacriticalroleintheirdecisiontomovehere.Thedecisiontopurchasewilllikelyoccuraftersettlement,whenthefamilyhashadtimetodeterminetheneighbourhoodormunicipalitybestsuitedtotheirneeds.

Relatedtothis,skilledworkerscomingtoCanadaindependentlyarerarelyabletopurchasehomes,andthereforemostarefoundintherentalmarket.xiiMostofB.C.’seconomicgrowthmovingforwardwillstemfromimmigrationandinter-provincialmigration,andwillrequireanaffordableandaccessiblerentalmarket.Whileaffordablerentalhousingisneededtoattractworkers,italsosupportsresiliencyintheeconomybyallowingpeopletomoveintimesofunemployment.xiiiRegionsandcitieswitharobustrentalsectorarebetterabletoadapttochangingeconomiccircumstancessuchasjoblossorgrowthinparticularsectors.

Beyonditsimportancetolabourmarkets,buildingrentalhousingisgoodfortheeconomy.Previousstudiesonrentalhousingandtheeconomyhaveshownhowcrucialthesectoristogrossdomesticproduct(GDP).OnerecentstudyconductedbyKPMGestimatedthatB.C.’srentalhousingindustrycontributed$12.25billiontoCanada’sGDP,generated82,851full-timepositionsandcreated$2.99billioningovernmentrevenuesin2013.xiv

Top 10 job sectors of renters in Metro Vancouver Top 10 job sectors of owners in Metro Vancouver

Industry Industry

1 Restaurantsandhospitality 1 Healthcareandsocialassistance

2 Healthcareandsocialassistance 2 Professional,scientificandtechnicalservices

3 Professional,scientificandtechnicalservices 3 Restaurantsandhospitality

4 Retailtrade 4 Retailtrade

5 Construction 5 Educationalservices

6 Educationalservices 6 Construction

7 Administrativeandsupport,wastemanagementandremediationservices

7 Manufacturing

8 Manufacturing 8 Transportationandwarehousing

9 Otherservices(exceptpublicadministration) 9 Financeandinsurance

10 Transportationandwarehousing 10 Publicadministration

Table 3 – Comparison of top 10 job sectors for owners and renters, Metro Vancouver

Source:BCNPHA2011NHSCustomDataRequest

6

Renters are more engaged in the workforceAcrucialfactthatfurtherunderscorestheneedformorerentalhousingisthatthelabourparticipationrateforrentersinMetroVancouveris69.1%,comparedto64.9%forhomeowners.xvHigherparticipationratesamongrentersdemonstratesthattheyaremorelikelythanhomeownerstobeengagedinthelabourmarketandalsoprovidesacompellingreasontofocusonmaintaininganaffordablerentalsupplytoensurethesecurityofthelabourforce.

Where can typical renter households afford to live?WhilerentersaredispersedthroughoutMetroVancouver’seconomy,theyareincreasinglyunabletofindaffordablerentalaccommodation,inturndecreasingtheirlabourmobility.Akeyreasonforunaffordableaccommodationisthatrentshaverisenmuchfasterthanincomesinrecentyears.Whileweeklymedianwagesgrewby6.6%between2011and2015inB.C.,rentsincreased11.4%onaverageinMetro(Figure2).Wagegrowthisnotkeepingupwithrisinghousingcostsintherentalmarket.

ToexaminetheeffectofthistrendonrentersinMetroVancouver,thisreporthasdevelopedfourscenariosoftypicalrenterhouseholdssearchingforaccommodationusingtheincomedatainTable4below.Table4updates2011NationalHouseholdSurveyincomedatato2015usingtheLabourForceSurvey(LFS)estimates.LFSestimatesmeasurethechangeinmedianweeklywagebyNorthAmericanIndustrialClassificationSystem(NAICS)sectorsinBritishColumbiaforbothmenandwomenbetween2011and2015.xviWhilethereareissueswithdirectcomparisonthatarediscussedfurtherinthemethodology,theLFSprovidesausefulproxytomeasurewagegrowthacrosslabourcategories.Medianincomeswereselectedtogiveamorerealisticsenseofrenterwagesacrosssectors,giventherearemanyjobtypeswithineachcategory.xviiInaddition,thetableisreflectiveof“totalincome”forindividualsover15yearsofage,whichincludesincomefromsourcessuchasgovernmenttransfers,socialassistance,childbenefitsandemploymentinsurance.

Theincomes(Table4)arecomparedtoCHMC’s2015Fall Market Surveywhichprovidesup-to-datedataonrentsandvacancyrates(a“healthy”vacancyrateisconsideredtobe3%).Inaddition,theCMHC’sNationalOccupancyStandardswereusedasaguidefordetermininghousingsuitability,whichisbasedonfamilycompositionandsize.xviii

Figure 2 – Cumulative change, median weekly wage (B.C.) and average rent (Metro)

Change in median weekly wage (all NAICS industries), B.C.

Change in average rent Vancouver CMA

Period

%

Endof2012

12.0

10.0

8.0

6.0

4.0

2.0

0.0Endof2013 Endof2014 Endof2015

1.9%

1.3%

3.9%

6.9%

5.2%

11.0%

6.6%

7

Median total income, individual renters, 2015 (estimate) – Males

Median total income, individual renters, 2015 (estimate) – Females

Allindustries(customdefined)-NorthAmericanIndustryClassificationSystem(NAICS)2007

$37,980 $31,458

Agriculture $20,420 $20,562

Forestry $46,296 $37,783

Fishing,hunting,trappingandsupportactivitiesforagricultureandforestry

$26,512 $16,967

Mining,quarrying,andoilandgasextraction $56,314 $62,546

Utilities $73,873 $56,390

Construction $36,483 $30,706

Manufacturing $41,418 $32,569

Wholesaletrade $41,248 $40,215

Retailtrade $28,367 $24,223

Restaurantsandhospitality $21,164 $20,369

Transportationandwarehousing $44,619 $43,773

Informationandculturalindustries $44,657 $40,602

Financeandinsurance $53,025 $45,456

Realestateandrentalandleasing $40,908 $38,064

Professional,scientificandtechnicalservices $47,526 $40,056

Managementofcompaniesandenterprises $52,615 $34,266

Administrativeandsupport,wastemanagementandremediationservices

$27,634 $24,147

Educationalservices $38,653 $40,007

Healthcareandsocialassistance $44,818 $38,760

Arts,entertainmentandrecreation $24,863 $21,694

Otherservices(exceptpublicadministration) $37,553 $23,610

Publicadministration $61,691 $48,615

Table 4 – Median total incomes, individuals, male and female

Source:BCNPHA2011NHSCustomDataRequest,CANSIMTable282-0072

8

2-bedroomVacancy rate for 2-bedroom

apartments (%)


and available?


UniversityEndowmentLands $1,986 0 No


Downtown $1,968 0 No

WestEnd/Downtown(Zones1-3) $1,951 0 No

EnglishBay $1,908 0 No

Westside/Kerrisdale $1,824 1 No

Kitsilano/PointGrey $1,732 1 No

SouthGranville/Oak $1,698 1 No



NorthVancouverDM $1,451 0.6 No


MountPleasant/RenfrewHeights $1,367 0 No


SoutheastVancouver $1,327 0.5 No



EastHastings $1,268 0.3 No



NewWestminster $1,159 0.8 No

Marpole $1,157 1 No

VancouverCMA(Secondary) $1,131 Nodata No

WhiteRock $1,087 0.3 No

Tri-Cities $1,086 1.3 No

Delta $1,051 0.5 No

SoutheastBurnaby $1,037 1.6 No


Surrey $954 2 Yes


Table 6 – Housing affordability and availability (Scenario 1)


Scenario 1 ThefirstscenarioexaminesJoanna,asinglemotherwhoworksintheeducationalservicesfield,hasafive-year-oldchildandhasanadjustedincomeof$40,000in2015.Shecanafford$1,000permonthinrentandneedstofinda

two-bedroomapartmenttohouseherselfandherchildsuitably.Table6belowshowswhereJoannacanaffordtolivewithouttransportationcostsfactoredin.

9

Ascanbeseenfromtheanalysis,thereisvirtuallynoaffordabletwo-bedroomaccommodationsforJoannaandherchildacrossMetroVancouver.WhileSurreycomesclose,theonlytrulyaffordablecommunitiesareSurrey,theCityofLangley,LangleyDistrictMunicipality,andMapleRidgeandPittMeadows.

Iftransportationcostsarefactoredin,Joannacanafford$1,500permonth(basedon45%ofherincome).

Average rent

Average transportation cost (estimate)


Vacancy rate (%)


and available?




VancouverCMA $1,368 $1,025 $2,393 0.9 No


$1,643 $749 $2,392 0.7 No

Richmond $1,296 $1,069 $2,365 0.5 No

Delta $1,051 $1,314 $2,365 0.5 No


$997 $1,362 $2,359 1.1 No

WhiteRock $1,087 $1,224 $2,311 0.3 No


$940 $1,331 $2,271 1.6 No

Tri-Cities $1,086 $1,152 $2,238 1.3 No

Surrey $954 $1,224 $2,178 2 No

Burnaby(Zones12-14) $1,222 $928 $2,150 1.3 No

NewWestminster $1,159 $928 $2,087 0.8 No

Table 7 – Housing and transit costs (Scenario 1)

Source:CMHC2015,VancouverandAbbotsford-MissionCMAs,FallMarketSurveyandMetroVancouver“HousingandTransportationcostburdenstudy”

Factoringintransportationcostsmeansallofthesecommunitieslosetheiraffordabilitybyasignificantmargin(Table7),giventhatJoannawouldlikelyhavetooperateacartogetby.ThechoiceforJoannaistofindworkinthemunicipalitywhichisaffordabletoher(ifajobisavailable),orspendadisproportionateshareofherincomeonhousingandtransportation.

City of Vancouver and Burnaby (Zones 1-14)

11

6

5

10

7

84

9

1

2 3

14

12 13

10

3+ bedroomVacancy rate for 3+ bedroom

apartments (%)

Is this neighbourhood/ municipality affordable and

available?

VancouverCMA(Condo) NoData 0.9 N/A

WestVancouver $3,485 Nodata No

WestEnd/StanleyPark $3,156 0 No

Kitsilano/PointGrey $2,978 0 No

WestEnd/Downtown(Zones1-3) $2,904 1 No


Downtown $2,656 0 No

UniversityEndowmentLands $2,510 1.5 No

Westside/Kerrisdale $2,470 0 No

SouthGranville/Oak $2,166 0 No


VancuverCMA(Secondary) $1,661 Nodata Yes

CentralPark/Metrotown $1,638 1.6 Yes

MountPleasant/RenfrewHeights $1,619 0 No

VancouverCMA $1,615 1.4 Yes

Richmond $1,596 0.7 Yes

WhiteRock $1,592 0 No

NorthVancouverCity $1,567 0 No

NorthVancouverDM $1,542 0 No

NewWestminster $1,478 0 No

Burnaby(Zones12-14) $1,431 2.3 Yes

NorthBurnaby $1,427 3.1 Yes

EastHastings $1,319 0 No

SoutheastBurnaby $1,270 1.4 Yes

Marpole $1,269 0 No

SoutheastVancouver $1,235 1.8 Yes

Tri-Cities $1,212 5.6 Yes

Delta $1,194 0 No

LangleyCityandLangleyDM $1,137 0 No

Surrey $1,098 1.9 Yes

MapleRidge/PittMeadows $1,070 2 Yes



Scenario 2 ThenextscenarioexaminesBethandJames,acouplewithoneboyandonegirlagedsevenandnine.Jamesworksinconstructionandhasanadjustedannualincomeof$36,500(basedonmedianincomesforrentersinthesectorasawhole),whileBethworksinhealthcareearning$39,400.Theircombinedincomeis$75,900in2015andtheycan

affordamonthlyrentof$1,900.Theiraffordablehousingandtransitcostis$2,845,basedon45%oftheirhouseholdincome.Theyneedtofindathree-bedroomapartmenttohousethemselvesandtheirchildrensuitably.Table8showsrentalavailabilityandaffordabilitywithouttransportationcostsfactoredin.

11

3+ bedroomAverage

transportation cost (estimate)

Sum of housing and transportation

cost

Vacancy rate for 3+ bedroom apartments (%)


and available?

WestVancouver $3,485 $1,086 $4,571 Nodata No


$2,070 $749 $2,819 0.4 Yes

WhiteRock $1,592 $1,224 $2,816 0 No

Richmond $1,596 $1,069 $2,665 0.7 Yes

NorthVancouverCity $1,567 $1,086 $2,653 0 No

VancouverCMA $1,615 $1,025 $2,640 1.4 Yes

NorthVancouverDM $1,542 $1,086 $2,628 0 No

Delta $1,194 $1,314 $2,508 0 No


$1,137 $1,362 $2,499 0 No

NewWestminster $1,478 $928 $2,406 0 No


$1,070 $1,331 $2,401 2 Yes

Tri-Cities $1,212 $1,152 $2,364 5.6 Yes

Burnaby(Zones12-14) $1,431 $928 $2,359 2.3 Yes

Surrey $1,098 $1,224 $2,322 1.9 Yes

Table 9 – Housing and transportation costs (Scenario 2)

Source:CMHC2015,VancouverandAbbotsford-MissionCMAs,FallMarketSurveyandMetroVancouver“HousingandTransportationcostburdenstudy”

Whilethereisstillsomeaffordabilitythroughouttheregionforthree-bedroomsuites,alackofsupplymakesitdifficultfortheirfamilytofindaccommodationintheCityofVancouver,NewWestminster,NorthVancouver

(districtmunicipalityandcity),DeltaandWhiteRock.BethandJames’familywilllikelyresideinBurnaby,SurreyortheTri-citiesinordertofindacombinationofavailabilityandaffordability(Table9).

12

2-bedroomVacancy rate for 2-bedroom

apartments (%)

Is this neighbourhood/municipality affordable and

available?


UniversityEndowmentLands $1,986 0 No





Westside/Kerrisdale $1,824 1.1 No

Kitsilano/PointGrey $1,732 0.8 No

SouthGranville/Oak $1,698 1.1 No



NorthVancouverDM $1,451 0.6 No


MountPleasant/RenfrewHeights $1,367 0.3 No


SoutheastVancouver $1,327 0.5 No



EastHastings $1,268 0.3 No



NewWestminster $1,159 0.8 No

Marpole $1,157 1.1 No

VancuverCMA(Secondary) $1,131 Nodata No

WhiteRock $1,087 0.3 Yes

Tri-Cities $1,086 1.3 Yes

Delta $1,051 0.5 Yes

SoutheastBurnaby $1,037 1.6 Yes


Surrey $954 2 Yes



Source:CMHC2015FallMarketSurvey

Scenario 3ThethirdscenarioinvolvesRitaandPenny,twofemaleroommateslivingtogether.Ritaworksinretailtradeandheradjustedannualincomefor2015is$23,500.Pennyworksintherestaurantandhospitalityindustryandheradjustedincomewas$20,050in2015.Theircombinedincomeis

$43,550andtheiraffordablerentis$1,090permonth.Theiraffordablehousingandtransportationcostis$1,630,basedon45%oftheirhouseholdincome.Theyneedtofindatwo-bedroomapartmenttobehousedsuitably.

13



Overall,RitaandPennywillhaveadifficulttimefindingrentalhousinginMetroVancouver,beingpricedoutoftheCityofVancouver,mostareasofBurnaby,NewWestminsterandRichmond(Table10).Theycouldlook

foraccommodationinthesuburbsofDelta,WhiteRock,theTri-CitiesorSurrey,butwhentransportationcostsarefactoredin,thesesuburbshavethepotentialtolosetheiraffordability(Table11).

2-bedroomAverage

transportation cost (estimate)


Vacancy rate for 2-bedroom apartments (%)


and available?




VancouverCMA $1,368 $1,025 $2,393 0.9 No


$1,643 $749 $2,392 0.7 No

Richmond $1,296 $1,069 $2,365 0.5 No

Delta $1,051 $1,314 $2,365 0.5 No


$997 $1,362 $2,359 1.1 No

WhiteRock $1,087 $1,224 $2,311 0.3 No


$940 $1,331 $2,271 1.6 No

Tri-Cities $1,086 $1,152 $2,238 1.3 No

Surrey $954 $1,224 $2,178 2 No

Burnaby(Zones12-14) $1,222 $928 $2,150 1.3 No

NewWestminster $1,159 $928 $2,087 0.8 No

14

Bachelor Vacancy rate (%)Is this neighbourhood/municipality

affordable and available?

VancouverCMA(Condo) Nodata Nodata Nodata

UniversityEndowmentLands $1,307 Nodata No





EnglishBay $1,021 0 No

Kitsilano/PointGrey $988 0.7 No

CityofVancouver(Zones1-10) $982 0.5 No

SouthGranville/Oak $977 0.4 No

NorthVancouverDM $959 0 No

SoutheastVancouver $943 2 No

VancouverCMA $937 0.6 No

Westside/Kerrisdale $936 0.6 No

NorthVancouverCity $921 0 No

MountPleasant/RenfrewHeights $902 0.3 No

CentralPark/Metrotown $858 0.9 No

EastHastings $846 0.6 No

Richmond $843 0.4 No

Burnaby(Zones12-14) $806 0.7 No

NorthBurnaby $780 0 No

Marpole $776 0.8 No

WhiteRock $760 3 No

SoutheastBurnaby $733 1.9 No

VancuverCMA(Secondary) $726 Nodata No

NewWestminster $716 1.4 No

Tri-Cities $712 0.6 No


Delta $679 1.6 Yes

Surrey $671 3.9 Yes

MapleRidge/PittMeadows $620 Nodata Yes


Source:CMHC2015FallMarketSurvey

Scenario 4ThenextscenarioexaminesAziz,asinglemaleworkinginadministration.Basedonmedianwagesforrentersinadministrationandtakingintoaccountwageinflation,hemade$27,850in2015.Heistryingtofindabachelorsuite

wherehedoesnotspendmorethan30%ofhisincome.Hisaffordablerentis$696amonth.Table12demonstratesthedifficultyAzizwillhaveinfindingaffordableaccommodationinneighbourhoodsandmunicipalitiesacrosstheregion.

15

AzizwillnotbeabletofindaffordableaccommodationinmostareasofMetroVancouver,suchasVancouver,Burnaby,NewWestandRichmond.WhilesomeaffordabilitystillexistsinSurrey,Delta,Langley,MapleRidgeandPittMeadows,whentransportationcostsareaddedintheseareasbecomeunaffordable(Table13),givenhisaffordablehousingandtransportationcostis$1,045permonth.Inordertogetby,Azizwillhavetospendalargeportionofhisincomeonhousingand/ortransportationorlookforworkinthemunicipalitiesthatareaffordabletohim.

DiscussionTheanalysiscontainedinthisreportdemonstratesthedifficultytypicalyoungerandworkingrenterhouseholdshaveinfindingaffordableaccommodationacrossMetroVancouver.Thislackofaffordablehousingcandelayfamilyformationforyoungerhouseholds,aswellasimpacttheabilityofolderhouseholdstomoveontorentalaccommodation.xixWhilethereismoreaffordabilityandvacancyinthepurpose-builtstockinsuburbancommunities,thisaffordabilityhasthepotentialtobeerodedifthedwellingislocatedfarawayfrompublictransit.



Alackofaffordablehousinglimitsthelabourmobilityoftheserenterhouseholds.Withoutaffordableaccommodation,workingrenterhouseholdswilllikelyfeelcompelledtofindworkinmunicipalitiesthatareaffordabletothem,therebylimitingthepooloflabouravailableinmunicipalitieslikeVancouver,WestVancouver,Burnaby,andNewWest.Alternatively,theywillcontinuetospendanunsustainableshareoftheirincomeonhousingandtransitand/orovercrowdintorentalsuites,reducingtheirqualityoflifeinordertoliveinthecommunitiestheycallhome.Anaffordablesupplyofrentalhousingprovideschoiceforrenterhouseholds,therebysupportinglivabilityandadynamiclabourmarkettosupportlocalbusinessesandprovidetheservicesBritishColumbiansrelyon.

Theanalysiscontainedinthisreportalsoreinforcesfindingsinthewiderliteratureaboutpovertyincreasinglybeingpushedtowardsuburbanareasofmetropolitanregions,xxasaffordablehousingisincreasinglyfoundthere.xxi

BachelorAverage

Transportation cost (estimate)

Sum of housing and transporation Cost

Vacancy rate (%)


and available?


$982 $749 $1,731 0.5 No

Burnaby(Zones12-14) $806 $928 $1,734 0.7 No

NewWestminster $716 $928 $1,644 1.4 No

NorthVancouverCity $921 $1,086 $2,007 0 No

NorthVancouverDM $959 $1,086 $2,045 0 No


Richmond $843 $1,069 $1,912 0.4 No

Delta $679 $1,314 $1,993 1.6 No

Surrey $671 $1,224 $1,895 3.9 No

WhiteRock $760 $1,224 $1,984 3 No


$685 $1,362 $2,047 1.2 No

Tri-Cities $712 $1,152 $1,864 0.6 No


$620 $1,331 $1,951 Nodata No

VancouverCMA $937 $1,025 $1,962 0.6 No

16

Recommendations IfunaffordabilityacrossMetroVancouvercontinuestoremainunchecked,workersrelyingontherentalmarketwillcontinuetobepushedfurtheroutofcentresofemployment.Evidenceinthisreportshowsthatturningtorentingasthe“affordable”optionissimplynotviableforallhouseholdswiththemarketinitscurrentstate.Tomaintainadynamicregionaleconomy,alllevelsofgovernment,stakeholdersandresidentswillneedtoworktogethertoaddresstheunaffordabilitythatrentersarefacing.

Municipal Government

• Increaseincentivesthatencouragedeveloperstobuildaffordablerentalhousing.

• Protectandencouragerentalhousingingrowthcentresandalongtransitcorridors.Researchgrowthintransitridershipwhenaffordablehousingistiedtotransit-orienteddevelopment.

• Transferownershipofmunicipal/regionallandsintocommunity-basedlandownershipmodelsandsupporttheirredevelopmentintomixed-incomerentalhousingprojects(buildingfromthelandtrustexample).

• Createamorestreamlinedapprovalsprocesstode-riskcommunity-ownedrentaldevelopmentprojects.

Provincial Government

• Targetnewhousinginfrastructurefundingbyneed,ratherthanpopulation.ThismeansthatcommunitiesinB.C.experiencingcriticallevelsofoverspendingonhousingshouldbeprioritizedfornewdevelopments.

• Negotiatewiththefederalgovernmenttomatchcontributionsforallnewhousinginfrastructurefundingwithcash,landorin-kindsupportinordertomaximizeimpact.

• Supportthecreationofa$250millionsocialFinanceInfrastructureFundthatwillleveragearegionalnetworkofimpactinvestmentfundstoprovidefinancingforhousingdevelopmentandotherdurablesocialinfrastructure.

• Providetaxincentives(creditsordeferrals)forprivatelyownedrentalhousingdevelopment.

• Supportthenewdirectiontakenbycommunitylivingorganizationsaroundintegratedhousingoptionsandcommunitybuildingthroughdesign,tenure,supports(i.e.integraterentalhousingintodevelopmentsowned/operatedbysocietiesprovidingsupportsforpeoplewithdevelopmentaldisabilities).

• RepairdeterioratingrentalhousingunitsinB.C.topreventfurtherlossofexistingstock.

• Alignhousingpolicy:Economicdevelopment,transportation,healthcare,immigration,refugeeservices,aboriginalaffairsandotherareasofsocialpolicyareallintimatelylinkedtohousing.Theprovinceshouldworkcollaborativelyacrosstheseportfolios.

• Establishaprovincialhousingregistry(notjustforBCHousingclients,butforallrentalhousing).

• Providegrantstohelpstimulateprivatepurpose-builtrentalproduction.

• Alongtransitcorridors,allowcautiousre-developmentofrentalbuildingstoprotectandincreasethesupplyofaffordablerentalhousing.

• Useaportionofthepropertytransfertaxtofundprovincialaffordablehousinginitiatives.

• Providecapitalgrantstosupportnewsocialhousingconstructionandoperatingdollarstorunitlong-term.

Federal Government

• IncreasefundingfortheInvestmentinAffordableHousing(IAH).

• Providetaxincentivestoownersofpurpose-builtrentalhousingthatmakerentalpropertiesascompetitiveonthemarketascondominiums.

• Allowroll-overofCapitalGainsuponthesaleofrentalhousingwhenproceedsarere-investedinnewrentalhousingproperties.

• DeliverlowinterestloansthroughtheCMHC’sDirectLendingFacilitytosupportnewrentalhousingconstruction.

• Prioritizesurplusfederallandforaffordablehousing.

• Increasefundingforlong-termaffordablesocialhousing.

• ProvideGSTrebatesonnewrentaldevelopmentandinvestigateothertaxincentivestostimulatethedevelopmentofprivaterentalhousing.

• Considermatchingcontributionsforallnewhousinginfrastructurefundingwithcash,landorin-kindsupportinordertomaximizeimpact.

• Supportthecreationofa$250millionsocialFinanceInfrastructureFundthatwillleveragearegionalnetworkofimpactinvestmentfundstoprovidefinancingforhousingdevelopmentandotherdurablesocialinfrastructure.

• WorkwiththeprovincetorepairdeterioratingrentalhousingunitsinB.C.topreventfurtherlossofexistingstock.

17

Businesses

• Inthemediumterm,considermovingofficestohigherdensitybusinesscoreswellservicedbypublictransit.

• Advocateforaffordablehousing.Theabilityofworkerstofindandsecureaffordablerentalunitswillaffectthepooloflabourtodrawfrom.

• Businesses,eitheraloneortogether,couldexploreoptionsforinvestinginaffordablehousingfortheirworkforce.Thiscouldgenerateaninvestmentorrevenuestreamatthesametimeasprovidingreducedcostsforworkers.

• Ifeconomicallyfeasibleforyourbusiness,payalivingwage.

• Realestatedevelopersshouldbringtheirdevelopmentexpertisetocommunity-ownedlandassetstodeliverrentalprojects(inreturnfordevelopmentfeesandconstructioncontracts).

• Financialinstitutionsshouldallocateparttheirlendingportfoliotothedeliveryofaffordablerentalhousing,withfavourabletermsthathelptode-risktheproject.

Individuals

• Determineyouraffordablerentandtakethecostoftransportationintoconsiderationwhenlookingforaffordableandavailablerentals.

• Consideradvocatingtolocalandseniorgovernmentsabouttheneedforaffordablehousing.

MethodologyThedataforthisreportwascompiledfromavarietyofsources.TheprimarysourceisacustomdatarequestownedbytheBCNon-ProfitHousingAssociation(BCNPHA)basedonthe2011NationalHouseholdSurveywhichprovidesincomedataforindividualsovertheageof15bytenurefortheNorthAmericanIndustrialClassificationSystem(NAICS)employmentcategories,bysex.NAICSprovidescommondefinitionsandstatisticalframeworkforindustrystructureinCanada,theUnitedStatesandMexico.IncomeanalysisformillennialhouseholdswasobtainedfromStatisticsCanadatabulation99-014-X2011028,usingdataonprimaryhouseholdmaintainerforbothcensusfamilyandnon-censusfamilytypes.

Toupdatetheanalysisto2015,medianwagegrowth(usingmedianweeklywages)fortheparticularNAICScategorieswascalculatedandappliedtotheparticularjobsectorinthecustomdatasetusingCANSIMTable282-0072.WhileTable282-0072doesnotprovideabreakdownofwagesbytenuretype(rentersversusowners)orbytheVancouverCensusMetropolitanArea,itprovidesbreakdownbysexfortheprovinceofBritishColumbia.Althoughitisnotaperfectcomparison,thetableprovidesausefulproxytomeasuremedianwagegrowthacrossdifferentsectors.Themedianweeklywagegrowthbetween2011and2015ofeachrespectivesectorwasappliedtothelabourcategoriesinBCNPHA’scustomdatarequest,providingadjustedincomefigures.WhereadirectfitbetweenBCNPHA’scustomNAICScategoriesandthecategoriesinTable282-0072werenotpossible,theclosestcategorywasselected.

Itshouldalsobenotedthatmedianwageswereusedtoprovideamorerealisticpictureofincomesofrentersacrossjobcategories,giventhathigherearningindividualscanpushtheaverageincomeup.Thereportuses“totalincome”,whichincludesfactorslikegovernmenttransfers,socialassistance,andchildbenefits,butexcludesfactorslikecapitalgains.

Once2015medianwageestimateswerecalculated,thescenariosweredevelopedbycreatinghypotheticalhouseholds.Thesewerebasedonvariousfamilyandlife-cyclescenariosthatarecommonforrenterhouseholds.The“affordablerents”forthesehouseholdswerecalculatedbasedonhouseholdincomeusingthe30%gross-incomebenchmarkandthencomparedtotherentalzonesinCMHC’s2015FallMarketSurvey.TheFallMarketSurveyprovidesup-to-datefiguresonrentsandvacancyratesbybedroomsizeforvariousgeographiesinMetroVancouver.Assuch,itprovidesanuancedpictureofaffordabilityintherentalmarketforrenterhouseholds.

Tocalculatetransitcosts,MetroVancouver’sHousingandTransportationCostBurdenStudywasused.Monthlycostswerecalculatedfromtheannualfiguresprovidedinthereportandthenappliedtothevariousscenarios.WhilethestudyprovidesaveragetransportationcostsforownersandrenterscombinedandhasslightlydifferentgeographicalboundariesfromtheCMHCFallMarketReport,itstillprovidesausefulproxyformeasuringaveragetransportationcostsforworkinghouseholds.

18

Referencesi. DownsizingtheCanadianDream:HomeownershipRealitiesforMillennialsandBeyond.

www.vancity.com/SharedContent/documents/News/Downsizing_Canadian_Dream_March2015.pdf . Help wanted: salaries, affordability and the exodus of labour from Metro Vancouver. https://www.vancity.com/SharedContent/documents/News/Help_Wanted_May_2015.pdf

ii. RealEstateBoardofGreaterVancouver.StatisticsPackageMay2015.

iii. CANSIMTable282-0072.Medianincomeswereusedintheanalysisbecauseaveragescanbeskewedbyhigh-incomeearnerswithintheparticularsector.Themethodologysectionprovidesmoredetailontheanalysis.

iv. TheFallMarketSurveyprovidesup-to-datenumbersonrentsandvacancyratesforthepurpose-builtrentalstockforvarioushousingmarketsacrossCanada.

v. Affordabilityistakentobe30%ofthehousehold’sgrossmonthlyincome.

vi. MetroVancouver,TheMetroVancouverHousingandTransportationCostBurdenStudy:aNewWayofLookingatAffordability,(2015)www.metrovancouver.org/services/regional-planning/PlanningPublications/HousingAndTransportCostBurdenReport2015.pdf

Thesecostsareestimatesonly.

vii. Otherstudiessuggest45%ofgrosshouseholdincomeasanaffordabilitymetric:www.smartgrowthamerica.org/smartgrowthusa/wp-content/uploads/2010/12/pennywise.pdf

viii. CalculatedusingStatisticsCanadadatatable99-014-X2011028andCANSIMTable282-0072.Basedonmedianincomefortheprimaryhouseholdmaintaineraged15to34.

ix. BCNon-ProfitHousingAssociation,OurHome,OurFuture:ProjectionsofRentalHousingDemandandCoreHousingNeed,GreaterVancouverRegionalDistrictto2036,(2012)http://bcnpha.ca/wp_bcnpha/wp-content/uploads/2012/09/15_Greater_Vancouver_1209211.pdf

x. AndrewOswald,“TheHousingMarketandEurope’sUnemployment:ANon-technicalPaper,”inHomeownershipandtheLabourMarketinEurope,ed.CaspervanEwijk,&MichielvanLeuvensteijn(Oxford:OUPOxford,2009).

xi. CanadaMortgageandHousingCorporation,ResearchHighlight:2001CensusHousingSeries:Issue10–Aging,ResidentialMobilityandHousingChoices,(February2006)www.cmhc-schl.gc.ca/odpub/pdf/64992.pdf?fr=1465928305778

xii. MarkusMoosandAndrejsSkaburskis,“TheGlobalizationofUrbanHousingMarkets:ImmigrationandChangingHousingDemandinVancouver,”UrbanGeography31,no.6(2010).

xiii. OECD.HousingandtheEconomy:PoliciesforRenovation,(2011)www.oecd.org/newsroom/46917384.pdf

xiv. KPMG,EconomicImpactAssessmentStudy–BritishColumbia’sRentalHousingSector,(2014)http://udi.bc.ca/sites/default/files/news/files/KPMG%20Rental%20Housing%20Impact%20Final%20Report%202014.pdf

xv. Theparticipationratemeasuresthetotallabourforce(employedandunemployed)expressedasapercentageofthetotalpopulation.

xvi. CANSIMTable282-0072.Medianincomeswereusedintheanalysisbecauseaveragescanbeskewedbyhigh-incomeearnerswithintheparticularsector.Themethodologysectionprovidesmoredetailontheanalysis.

xvii. FormoreinformationonjobcategoriescontainedintheNorthAmericanIndustrialClassificationSystem,seehere:www23.statcan.gc.ca/imdb/p3VD.pl?Function=getVD&TVD=118464

xviii.MoreinformationontheNationalOccupancyStandardcanbefoundhere:http://cmhc.beyond2020.com/HiCODefinitions_EN.html#_Suitable_dwellings

xix. PaulKershawandAnitaMinh,CodeRed:RethinkingCanadianHousingPolicy,(Spring2016)https://d3n8a8pro7vhmx.cloudfront.net/gensqueeze/pages/107/attachments/original/1464150906/Code_Red_Rethinking_Canadian_Housing_Policy_Final_2016-05-24.pdf?1464150906

xx. J.DavidHulchanski,TheThreeCitieswithinToronto:IncomePolarizationamongToronto’sNeighbourhoods,1970-2005,(2007)www.urbancentre.utoronto.ca/pdfs/curp/tnrn/Three-Cities-Within-Toronto-2010-Final.pdf

xxi. DavidLeyandNicholasLynch,DivisionsandDisparitiesinLotus-LandSocio-SpatialIncomePolarizationinGreaterVancouver,1970-2005,(October2012)http://neighbourhoodchange.ca/documents/2012/10/divisions-and-disparities-in-lotus-land-socio-spatial-income-polarization-in-greater-vancouver-1970-2005-by-david-ley-nicholas-lynch.pdf

Real Estate

Vancity | Rent Race: The growing unaffordability rent in Metro Vancouver