IN my last column I discussed the present state of our real estate market and how economic indicators suggest we're not in the midst of a housing bubble at all.
I made the argument that limited buildable space and our desirable location make for an environment that will maintain high housing prices. What I didn't address was the repercussions of this lack of affordability.
The Royal Bank of Canada's report on housing affordability in Canada issued in August indicated that most housing markets across the country are affordable or slightly "unaffordable" with one major exception: Vancouver.
"By and large, the share of household budgets, taken up by the costs of owning a home at current market values, remains close to historical norms," said Craig Wright, senior vice-president and chief economist with RBC.
"However, extremely poor and rapidly eroding affordability in the Vancouver-area market is somewhat skewing the national picture."
RBC's report lists the affordability of owning a detached bungalow as a measure of the percentage of pre-tax household income required to service the costs of owning a home. Vancouver's index came in at a whopping 92.5 per cent. What this means is that the homeownership cost of owning a typical detached bungalow in Vancouver, including mortgage payments, utilities and property taxes, takes up 92.5 per cent of a typical household's monthly pre-tax income.
What this outrageous number unequivocally states is that if you're a typical household in Vancouver not already in the housing market, you might as well forget about owning a typical detached home in the city.
I believe a solution to this conundrum can be found in the so-called small house movement that has gained considerable momentum in recent years. Architect Sarah Suzanka has been credited with starting this movement with the publication of The Not So Big House in 1997.
Her thesis is a simple one: build smaller but build better. She believes that the quality of a living space is not related to its size but rather to the efficacy of its design.
Buildable land on the North Shore is all but gone and we're left with few options. We can go up, of course, and this is a reasonable solution in some cases but densification by building towers is very different than the densification created by low-rise structures knitted more tightly together.
The sense of community and neighbourhood created by these low-rise models are far more intimate, and in my mind far more successful, than the general anonymity of tower living.
A small home could be a stand-alone residence on a smaller lot or be an additional structure on a lot with a home already on it (the coach house concept). Either way, the small home increases density and affordability without deteriorating the quality of a community.
For any of this to happen municipalities will need to amend their existing zoning requirements to permit smaller scale construction. The City of North Vancouver has bravely moved forward in this direction, recently permitting the addition of coach houses on residential properties.
Smaller houses are a logical, economic and environmentally sound solution for a city that is feeling growing pains. There's no question that the singlefamily suburban model is being transformed. We live in a new era where new models for living need to be entertained for the betterment of our communities.
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