Canada is Ready for a Solution
Recent research has shown that 2/3 of Vancouverites are comfortable with new, mixed use, mixed-income, multi-family developments. This demonstrates a growing appetite for innovative housing solutions that address affordability while fostering inclusive communities.
A combination of community housing trusts, land trusts, non-profit housing development corporations, social housing providers and workplace housing initiatives can benefit from shared resources and a coordinated approach to ‘Building Solutions to the Housing Crisis’. This includes Affordable Rental and Affordable Homeownership.
A key principle for affordable housing development is that the primary focus be on affordable rental (CMHC defines affordable as costing less than 30% of a household’s gross, pre‐tax income), while also incorporating a mix of deep rental subsidy, near-market, and market rental units, as well as market-rate homeownership. A key concept includes affordable homeownership (AHO) achieved through a covenant on the property where if someone purchases a home at a discounted rate (i.e. 35-50% below market) they have to sell it at the same discounted rate.
Housing Continuum
Affordable Rental and Affordable Homeownership
A key principle in affordable housing development is focusing on rental housing where rent does not exceed 30% of income. Projects can include a mix of:
- Deep rental subsidies
- Near-market and market rental units
- Market-rate sales
Affordable Homeownership (AHO) is a vital concept, achieved through property covenants. For example, homes sold at 35-50% below market are resold at the same discounted rate, ensuring affordability for future buyers.
Secondary Housing Market
Non-Profit Housing Development Corporations (NPHDCs) can play a pivotal role in creating a secondary housing market by removing profit from the equation. This allows them to significantly reduce overall development costs through measures like lower fees, negotiated professional discounts, and carefully managed construction contracts.
Moreover, affordable housing projects are often eligible for substantial density bonuses, positioning NPHDCs to increase the supply of financially accessible homes for a broader range of individuals and families.
Land Trusts and Perpetual Covenants
In developments where the land can be provided at no cost, housing affordability can be significantly increased. Land trusts and perpetual covenants on deeds ensure that this affordability is maintained for future generations by keeping the difference between the market price and the discounted price with a trust or covenant holder. This approach offers a true market solution for low to moderate-income earners, allowing them to enter an otherwise overheated housing market and build equity.
Workplace Housing and Co-Development
The high cost of housing in Metro Vancouver makes it difficult for businesses to attract and retain talent. NPHDs can partner with companies to create housing solutions, including:
- Affordable rental units
- Covenanted affordable homeownership opportunities
Strip malls are another untapped opportunity. These aging properties can be transformed into vibrant community developments that include affordable housing, with tax incentives offsetting capital gains for property owners who donate portions of land.
ADUs, Laneway Homes, and Secondary Suites
BC Housing’s Secondary Suites Incentive Program offers homeowners a $40,000 forgivable loan to create a secondary suite or laneway home. In return, the homeowner agrees to rent the unit at affordable rates for five years, expanding rental housing stock.
Moving Along the Housing Continuum
Canada’s social housing system is stagnant, with hundreds of thousands on waiting lists. To address this:
- Build more purpose-built affordable rental housing
- Create pathways for low- and moderate-income families to enter the housing market and build equity
By enabling movement along the housing continuum, affordable homeownership (AHO) becomes a catalyst:
- Subsidized renters moving into AHO units free up space for others
- Open units cascade down the continuum, benefiting individuals transitioning from supportive or temporary housing