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Is Affordable Housing Unaffordable?

A new “Guideline Document” on housing affordability in York Region will be published “before June” according to Valerie Shuttleworth, the Region's Director of Long Range Planning.

She told Regional Councillors at the Committee of the Whole on 6 March 2014 that staff is working “to come up with a more practical definition of affordability”. She says the definition has to be meaningful.

At the moment, “affordable” means affordable to households in the lowest 60th percentile of the income distribution.

Translated, this means a property costing a hefty $417,300 (in 2012) is deemed by York Region to be affordable.  Yet to service the mortgage while leaving enough cash to get by day-to-day requires an annual household income of more than $110,000.

$417,300 is "affordable"

The Regional number crunchers make various assumptions in coming to this eye-watering figure for ownership. They assume, for example, a 5% down payment and amortisation over 25 years.

Still, the idea that a property at $417,300 is affordable to many people is risible. The average household income in York Region is well under $110,000.

According to the National Household Survey 2011 the median household income of all households in Ontario (half way between the highest and lowest incomes) is $66,358. The average total household income in Ontario is $85,772. The median income for all Canadians is $47,868.

The price of certain types of housing has sky-rocked. The average resale price of a single detached dwelling in York Region in 2011 was a cool $643,088.

Some people cannot afford to buy or choose not to. For them, the rental affordability threshold is set at $1,067 per month.

No improvement

The Region has been grappling with housing affordability issues for decades. A 2004 study reported that there was no overall improvement in housing affordability in York Region over the decade from 1991-2001. Back then one in every four households in York Region was paying over 30% of total household income on housing. A staggering one in ten was paying over 50% of total income on housing.

We shall soon see how these figures have changed when the Region’s 10 year Housing Plan and Affordable Housing Guidelines is finalised mid-year and submitted to the Province.

The Region currently sets targets for affordable housing:

25% of all new housing should be affordable Region wide

35% in Centres and Corridors should be affordable

Against this background, Shuttleworth muses aloud at what really constitutes “affordability”.

Affordability by Municipality

Interestingly, she says they are looking at a definition of affordability by municipality.

This really would throw a spanner in the works for the development industry. What if each of the nine municipalities came up with their own definition?

Imagine the outcry if developers are told they have to deliver 35% affordable housing in, for example, a new development in Newmarket centre and that the affordability benchmark is not to be the current, rarified $417,300 but something much more achievable and down-to-earth.

Regional staff tell councillors, “implementing policy is the hardest part”.

Indeed.

What if the developers go on strike? They will say they can’t afford to build accommodation and sell it at the price the Region stipulates.

What if the targets are not met?

And what if “affordable housing” remains unaffordable for far too many people?

Those running for election in October will have to supply convincing answers.


 

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