Judy Keen
USA Today

SEATTLE — John Stoeck is building a one-bedroom, 437-square-foot cottage on the spot where his garage stood before a tree fell on it. Construction costs: about $50,000. When the cottage is finished this summer, he plans to rent it for at least $900 a month, which will make a nice dent in his mortgage payments.

His is just one of about 50 tiny cottages sprouting in backyards across the city as it tries to expand affordable housing options in established neighborhoods without resorting to high rises and apartment complexes. The city changed zoning rules to allow cottages in single-family neighborhoods citywide, rejected a proposed cap of 50 cottages a year and helped organize a design competition to spur creation of reasonably priced plans. The point is not just to allow the cottages, but to encourage them.

“I want to preserve rural areas around Seattle, and I don’t want the suburbs continuing to march on without any limits. One way to do that is to add more density to these inner-city neighborhoods,” says Stoeck, 47, an architect.

Backyard cottages are a promising way to address the need for affordable housing without diminishing the character of urban neighborhoods, and they’re creating more options for families who want to live near an elderly parent or adult child. “It’s harder and harder for working people to live in the city,” says former Seattle mayor Greg Nickels, now a fellow at the Harvard University Institute of Politics.

The backyard homes, he says, also help ease traffic jams and reduce pollution.

Seattle tested the backyard cottages initiative in the southeast part of the city starting in 2006, resulting in 28 cottages. It was expanded citywide in December, and 22 more building permits have been issued.

Other cities such as Denver and Faribault, Minn., are allowing for the first time or expanding programs that encourage backyard residences to accommodate growing demand for affordable housing in the wake of the recession and foreclosure crisis.

Unlike attached “granny flats” or basement apartments, backyard cottages are separate buildings, often just a few feet from owners’ homes. Once built, owners such as Stoeck either rent out the cottage or rent out their main home and move into the cottage.

Besides expanding housing options, backyard cottages have another benefit: “It’s really a way to help people hang on to their homes,” says Andrea Petzel, senior urban planner for the city of Seattle. She expects about 40 to be built each year.

The Denver City Council votes next month on a zoning code that for the first time would allow “accessory dwelling units,” including detached cottages, in some residential areas.

It would “balance our housing opportunities and at the same time add density” in areas where affordable rentals are scarce, says Peter Park, community planning and development manager.

Faribault, Minn., which has a rental housing shortage, began allowing freestanding backyard dwellings in October.

“It can be a good thing if you have the proper controls in place,” zoning administrator Greg Kruschke says.

Santa Cruz, which has some of California’s highest housing prices, encourages backyard cottages citywide, and about 40 are built each year. Santa Cruz “did not want to price people out of living here,” says Carol Berg, the city’s housing and community development manager.

The concept evolved from the carriage houses where employees or extended families lived near grand homes in the early 1900s, says Dana Cuff, professor of architecture and urban design at UCLA. That changed in the 1950s, she says, when the American dream meant owning a single-family home on a big lot.

“We need to adapt our living environment to the kinds of families we have now,” Cuff says.

“We have two people working in nearly every household now, so people don’t need as big a yard,” she says.

Other benefits: Owners’ rental income can help fend off foreclosure, and aging parents can move into cottages to maintain their independence, she says.

Backyard cottages “don’t suit everyone, but they’re really right for some people,” Cuff says.

Her view is borne of personal experience: A decade ago, she and her husband moved into one on their property in Santa Monica.

Critics cite privacy concerns

Seattle needs room to grow: Almost two-thirds of the city is zoned for single-family homes. Its population rose from 563,374 in 2000 to 602,000 last year.

Houses are pricey here. The median cost in the fourth quarter of 2009 was $305,500, compared with the national median price of $172,900, the National Association of Realtors says.

Nickels had been intrigued by the idea of backyard cottages for decades before he became Seattle’s mayor in 2002 and made it a priority. Opponents argued that it would double the city’s density, he recalls, but he felt “there was no excuse other than political cowardice not to move forward.”

After the first batch of cottages was built in southeast Seattle, a survey of people who lived near them turned up a surprise: More than half the neighbors didn’t know they were there, he says.

Some critics of the Seattle initiative still worry that backyard cottages will clutter neighborhoods, clash with existing homes, create parking shortages and attract irresponsible renters.

Seattle architect and developer Marty Liebowitz says the cottages could rob neighbors of the privacy they want to “barbecue, entertain guests and walk around naked if they’re kinky.”

Seattle arborist Michael Oxman has another concern: If the idea catches on and many cottages are built, he says, they “would decimate the urban forest of Seattle.” Inevitably, he says, trees will be removed to make room for cottages and parking spaces for owners and tenants.

Chuck Cady, who has sold Seattle real estate for 30 years, says cottages probably increase the value of lots where they’re built but might hurt the value of homes adjacent to them.

“If you’ve got a lovely backyard that’s totally private, it’s worth more than one with a two-story, butt-ugly addition looking down on your backyard,” he says.

In Seattle, “none of the worst-case scenarios happened,” Petzel says. Getting city permits for a typical single-family home can take about three months, but for cottages the turnaround time can be as short as six weeks, she says.

Seattle City Councilmember Sally Clark, a proponent of the initiative, says design standards were written to help ensure neighbors‘ privacy.

Backyard cottages can be built only on lots of 4,000 or more square feet, height is limited based on lot width, and entrances must face away from neighbors. At least one property owner must live in the main house or cottage.

“Sometimes they actually improve the neighborhood,” says Diane Sugimura, Seattle’s director of planning and development. “We don’t believe the majority of homeowners will choose to do this, but it really provides another option … and it allows you an income source.”

‘A great spot’

College student Laura Chamberlain, 20, would love to live in a backyard cottage. She’s tired of overpriced apartments near campus, and the expansion of Seattle’s light rail system makes living away from school more practical, she says.

“A cottage would be a great spot for me while I save enough money to buy a house, and unlike condo living, I might be able to grow my own vegetables,” she says.

Stoeck, who shares the main house with his wife, Jennifer, and son Colin, 9, says that because the cottage is just steps from his back door, choosing the right tenant is important. So is keeping his neighbors happy: He gave them a tour of the cottage and assured the people who live next door that his tenant won’t be able to see into their home.

“You have to be careful about the context and scale of the neighborhood, but I think the idea is great, and I’d do it again in a second,” Stoeck says.

Clark says the economy helped prove cottages’ value.

“In a recession people are definitely looking for ways to pay the bills and for lower-cost housing options,” she says. “Seattle had an overheated rental market, so folks who had backyard cottages had something that was desirable.”

Patrick Leigh, 57, took a different approach to the cottage initiative. He built a bigger new house in front of an existing tiny one on the back of his lot in West Seattle. The houses are for sale. “If people want affordable housing,” says Leigh, a land surveyor, “this is one way to help.

“There are tough choices to be made as population increases. Do we really want to keep building out where people have to commute? I think we’re better off getting more density in the city.”

Less is more for some

Yolinda Ward and Lynn Watkins bought a four-bedroom Craftsman-style house in Seattle’s Columbia City neighborhood four years ago after falling in love with its architectural details and expansive yard. Soon, the couple decided the house was too big, so they built a 600-square-foot cottage behind and over the existing garage and moved into it. They rent the “big house” to Ward’s godson, Erik Norwood, his wife Rebecca and their two children. A friend rents the basement.

Although Watkins, 60, had to forfeit part of her garden space to build the cottage, she loves living in it. “It’s easier to clean and everything’s right here,” she says. The bedroom is on the ground level; upstairs there’s a kitchen and living room.

Original designs for the cottage included big windows facing the back door and deck of the “big house,” says Ward, 61. They decided to move the windows to overlook the garden and eliminated them on the wall with a view of the big house.

Privacy is important, but being close to her godson’s family is part of the appeal, Ward says. She can open a window near her desk and chat with almost-3-year-old Jaeda when she’s playing outside. There’s a big family meal every other Wednesday.

The cottage cost about $135,000, Ward says, and added about $200 to their mortgage payment — an increase covered by the rent they receive, which also covers increased property taxes. The property, appraised at $560,000 before the cottage was added, now is worth $710,000.

The only drawback the couple can think of is that they don’t have room for overnight guests. Watkins still has room for a garden, and the “green” elements they added — including extra insulation, a water heater that kicks in only when hot water is needed and the recycling of runoff water — keep expenses low.

“It’s a very easy way to get regular income, and it will pay for itself,” Ward says. Strangers sometimes knock on their door to ask about the cottage — and how they can build one, too.

Copyright 2010 USA TODAY

Derrick Penner
Sun

The Vancouver-based developer PCI Group is proposing to build the city’s tallest tower outside the downtown core as part of an ambitious redevelopment of the southeast corner of Cambie Street and Marine Drive.

Rising more than 30 storeys to 350 feet (105 metres), the proposed tower would contain 577 residential units (390 condominiums and 187 rental apartments) and form more than one-third of a sprawling 950,000-square-foot project PCI has named Marine Gateway.

The residential tower would provide housing for 750 to 850 people. A second, 260-foot office tower plus a 288,000-square-foot retail centre at its base would support 2,000 jobs, said PCI CEO Andrew Grant.

Grant said the site’s two-hectare size, plus its location practically on top of the Canada Line’s Marine Drive Station and TransLink bus exchange, begged for a substantial, “transit-oriented-design” project.

“This site, because it was a large site with a station on it, represented an opportunity for mixed-use development with job density, and our plan meets that,” Grant added.

PCI is aiming to have its rezoning complete and development-permit process concluded in time for a 2011 construction start and possible 2014 completion date.

However, the residential component is what has given the City of Vancouver pause.

The property, formerly an ICBC claims centre, is in the city’s industrial zone south of Marine Drive, and the fear is that allowing residential development would invite speculation on surrounding industrial land and drive up property values, pushing existing businesses out.

“There are certain types of job lands that need single-use in order to keep land values low and taxes low,” Brent Toderian, Vancouver’s director of planning said in an interview.

“Protecting job growth from the greater profitability of residential [development] is an absolutely key aspect of a sustainable city.”

Toderian said he believes the Marine Gateway proposal, which places all the residential development virtually on top of Marine Drive station, and sites the retail and office portions as a buffer between the industrial lands, successfully “puts a fence around” it to mitigate the negative effects.

Nonetheless, the project is still in the early stages of city approvals. City council last year gave approval in principle to removing the Marine Gateway site from the industrial zone, paving the way for a rezoning application now in the public open-house stage.

Grant said the developer will hold a second open house meeting in coming weeks.

Toderian said the city planning department’s urban design panel will also review the project and offer a recommendation of support or no support before the project goes to a full public hearing before council. That is expected to happen over the summer.

PCI has some familiarity with transit-oriented development, having built the much smaller Crossroads development at Cambie and Broadway.

“The debate usually comes down to how big is too big,” Toderian said.

He said the buildings’ height provides another challenge to make sure the development doesn’t cast a shadow over Sir Wilfrid Laurier Annex elementary school or Ash Park.

David Dove, lead architect on the project with the firm Busby Perkins + Will, said it was the introduction of transit along the Cambie corridor that made the project’s scale possible. But he said it will be less imposing once surrounding sites are developed.

“I think you have to plan for what’s going to be there in 15 years,” Dove said. Once projects now in the early planning stages for the northeast and northwest corners go ahead, he said, “there is going to be a context that makes sense.”

Toderian said that between the city and developer, “everybody agreed we want to do something bold and strategic here.”

But future development along the Cambie corridor will be “at appropriate scales and densities,” he said.

“A clear message is that what we’re talking about in this station’s context is much more ambitious and bold than what we’re prepared to support at other stations.”

© Copyright (c) The Vancouver Sun

.C. and Alberta the most overpriced

Garry Marr
Sun

A new report from one of the country’s major banks says house prices in Canada are sitting 14 per cent over their “fair” value.

The report from Canadian Imperial Bank of Commerce says the average price of a home has risen 23 per cent since reaching its cyclical low in January 2009.

British Columbia and Alberta homes are the most overpriced, at 25 per cent above their fair value. CIBC establishes what it calls fair value from market fundamentals that include income, rent and demographic changes.

“This doesn’t mean that house prices are going to crash tomorrow,” said Benjamin Tal, senior economist with the bank. “I’m saying they probably will go down by five per cent or 10 per cent.”

The CIBC survey came out the same day as a new report from Royal Bank of Canada that shows affordability eroded in the first quarter.

“Looking ahead, further erosion in affordability is likely to take place in Canada in the coming 12 to 18 months,” said the report, written by Robert Hogue, senior economist with the bank.

The index measures the percentage of household income needed to carry a home and is based on a 25 per cent down payment, 25-year amortization at the five-year closed fixed rate.

Royal Bank said that during the first quarter, 46.8 per cent of household income was needed to carry a standard two-storey house. At the peak of this cycle in 2008, 52 per cent of household income was needed to carry a home, but that was still below the record high of 57 per cent in the early 1990s.

“Affordability will decline, but it will come just short of the most recent peak,” Hogue said. “What has driven home ownership costs in the past year has been higher prices, but going forward we expect prices are going to start moderating and going flat at some point. But higher interest rates will drive up [costs].”

Tal at CIBC said Canadians spend about 15.6 per cent of their average gross personal income on mortgage payments, about the same level as a decade ago.

But he found there was a significant difference in affordability based on income class. “The vast majority of homeowners in Canada, regardless of their age, have not experienced any worsening in affordability despite the rapid increase in prices,” Tal said. “The only sub-group of households that have seen some deterioration in their affordability position is older Canadians with average income of less than $50,000.”

In that category, the CIBC study found the group was spending an average of 60 per cent of their gross income on mortgage payments, property taxes and electricity costs.

This group makes up only 13 per cent of all mortgages in Canada, down from 19 per cent five years ago.

The good news for anyone thinking about jumping into the market is that CIBC believes a correction, albeit a slow-moving one, is already underway.

The report said the supply of new listings is on the rise with the current pace of monthly increases in new units the fastest since early 1990. Sales are also falling on a month-over-month basis.

One person not buying the decline in the housing market is Don Lawby, chief executive of Century 21 Canada.

“If people stop buying, prices will react. But you have people who can afford to make the payments on their mortgage and the default and delinquency mortgages [market] is very small, especially compared with the United States,” Lawby said.

“I just don’t see where the big fall is going to come from.”                                                                                            

© Copyright (c) The Vancouver Sun

Their partner may end up owning 50% of it

Garry Marr
Sun

It’s one thing to buy your son or daughter a condominium, it’s quite another to have their partner or spouse end up owning half of it.

A column earlier this month about a new TD Canada Trust survey that found 10% of Canadians are considering buying a condominium for their adult children, up from 5% a year ago, drew plenty of reaction from readers.

On one side were the people who justified the expense because the cost of housing has risen so dramatically over the last decade. On the other side were people who maintain children should have to build their own wealth.

The most compelling argument may be the one made by a 55-year-old retired certified general account in Vancouver who emailed me with a story about a former client who almost gave away a significant amount of money.

“I had a client in the office who had just retired and sold his home and moved into a townhouse. He said to me, ‘my kid is getting married and I’m going to give them money for a hefty down payment on their first home,’ ” recalled David Morrow about the 1995 conversation. “I said, ‘you should take back a second mortgage’ [as opposed to giving his son a gift].”

The client was worried about what his child and future daughter-in-law would think of him if he demanded they sign a second mortgage that would be placed on the property after the first mortgage from the bank. The accountant didn’t know it at the time, but the client decided to go the loan route.

“The next time I talked to him he says to me, ‘that was the best advice you ever gave me. My son and his wife split up,’ ” Mr. Morrow wrote.

Certified financial planner Ted Rechtshaffen said the divorce issue frequently comes up when talk turns to buying children property and it’s not something that should be ignored.

However, there is significant advantages to children holding property in their own name. The most obvious reason is there is no capital gains tax on the principal residence. If you own your kid’s house, you owe tax on any gains.

“There is zero tax on gift giving in Canada,” said Mr. Rechtshaffen. “If you are going to leave money anyway, you can avoid probate [fees] by giving them the money [while you are alive].”

He thinks giving your children a loan may be preferable to providing an outright gift or staying on the title of the property. He would not go so far as to register a mortgage on the property.

“It may be a loan that you end up forgiving,” said the financial planner. “It doesn’t need to be listed anywhere. It could be a note just being held in a safety deposit box. It could be forgiven with a note in your will.”

Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada, says the potential pitfalls hasn’t stopped parents from giving gifts of downpayments.

“Everybody wins. The kids get money for their starter home and the parents get the kid out of the house,” says Mr. Polzler. “If the marriage breaks down, it’s just part of the risk. If you’re the parent, it’s a lot better than having your kid in the basement.”

© Copyright (c) The Vancouver Sun

Province, city to combine with foundation on $225-million plan

Gery Bellet
Sun

Premier Gordon Campbell has announced a $225-million program to build 1,006 new supportive housing units in Vancouver to deal with the city’s chronic homelessness problem.

The province will provide $205 million for building the apartments on eight city-owned sites — worth $32 million — with the Streetohome Foundation providing $20 million.

“One of the single largest challenges we face in a modern community is homelessness,” said Campbell Tuesday.

“If we are going to meet the challenge we are going to have to do this in partnership.”

However, the premier admitted that in the past the province’s attempts to provide more low-cost housing were stalled because of delays in acquiring zoning or permits. He pointed to the conversion of the Woodward’s site “as a good example.”

“It took from 2002 to 2009-10 to actually get the housing,” he said.

Six supportive housing projects are now under construction in Vancouver. The province is contributing $108 million to build 569 units on city-owned property worth $32 million. The first of those suites should be ready for occupation next year.

Construction on the eight sites would begin later this year subject to municipal approval, said the premier.

Campbell paid tribute to the efforts of Vancouver Mayor Gregor Robertson — who stood alongside him and Housing Minister Rich Coleman during the announcement — for his commitment to tackling homelessness.

“It was important that when Mayor Robertson was elected he decided he would take a focused approach to housing and homelessness,” said Campbell.

“There are six sites under construction. That is significant but equally significant is that today we are announcing a partnership valued at about $225 million — $205 million from the province and $20 million from the private sector, the Streetohome Foundation, to create an additional eight sites and over 1,000 units of housing.”

The eight sites were originally identified by the city and the province for housing in 2007 but no money was forthcoming for development of the sites until Tuesday’s announcement.

Campbell said the housing units were “critically important if we are to break the cycle of homelessness because they will create a sense of stability for the people who live in them and give us an opportunity to connect them with services which are essential as they deal with the challenges of mental health or addiction.”

Robertson said the announcement was a “crucial step forward in ending homelessness in Vancouver.”

“This is great news for everyone,” he said.

“This is the most effective response to homelessness. It’s great news for the region as we recognize homelessness is growing in Greater Vancouver.

“Most of all, its good news for those who are homeless or at risk of homelessness. Housing is essential to making positive changes happen in life. It fosters, dignity, independence and growth.”

Robertson said the cooperation between the city providing land and the province and private sector providing construction costs will make a real difference.

“We have the ability to break the cycle of homelessness in Vancouver if we focus on housing.”

The mayor said this year’s homeless count showed the numbers up by 12 per cent over the last two years.

“It’s very disconcerting but we are seeing people shift inside. With this announcement we will see changes in the years ahead,” he said.

Robertson called on the federal government to get involved in the city’s attempts to overcome homelessness by 2015.

“Hopefully, we’ll see the federal government match the province and the private sector,” he said.

John McLernon, of the Streetohome Foundation, thanked Frank Giustra, Streetohome Campaign chair, for his $5 million donation to the campaign.

© Copyright (c) The Vancouver Sun

Miro Cernetig
Sun

If you have the sneaking suspicion the world might work a little better if our politicians just set aside partisan politics and got down to the business of governing, look no further for vindication.

The City of Vancouver and the provincial government, along with a foundation stacked with private-sector leaders, have agreed to cooperate on a $225-million plan to build eight social housing complexes for 1,000 of the city’s poorest.

It represents the biggest drive to build social housing in a generation. In the decades ahead, as people cycle through the project, it will lift thousands of homeless people off the street into better lives.

And it all came from an all-too-rare group effort.

You can thank ex-mayor Sam Sullivan, who served under the Non-Partisan Association banner, for getting the ball rolling, when he freed up 18 key pieces of city land worth $64 million for social housing. We can thank his nemesis, Mayor Gregor Robertson, whose Vision Vancouver took power away from the NPA at city hall in the last election, for keeping things going by continuing to focus on homelessness and relentlessly pushing the province for money.

There’s also the investment in dollars and time of the Streetohome Foundation — led by such business luminaries as mining magnate Frank Giustra, B.C. Business Council president Virginia Greene and Vancity’s CEO Tamara Vrooman. Giustra, who spent time around shelters to understand the scope of the challenge, pumped in the first $5 million of the $20 million the foundation has promised.

But mostly, the accolades belong to provincial Housing Minister Rich Coleman.

He kept the dream alive by fighting for the right idea, regardless of what political party held control of city hall. Coleman was able to use his position on the government’s agenda and priorities committee, which sets policy, to prevent anyone using the province’s plunge into deficit financing after the global financial crisis as an excuse to delay or scale back this social initiative.

Coleman, often pigeonholed as one of the red-meat-eating conservatives in the Liberal government, took over the provincial housing ministry more than three years ago. Many thought it an improbable role for a partisan pol and an assignment — straight from Premier Gordon Campbell — with little political upside.

At the time, the number of homeless on Vancouver’s streets was reaching its zenith. The Olympics were on the horizon and the international media were focusing in on the city’s army of homeless people. There seemed to be little time left for any dramatic, political solutions.

Coleman surprised us by finding them.

He began a $140-million splurge on rooming houses, buying up flophouses and dilapidated hotels set for redevelopment. He renovated them for the poor.

Coleman also made it clear he would be cracking down on any abuse of social housing or public funds. Case in point: The government is now suing the Downtown Eastside Residents Association, one of the city’s storied antipoverty groups, for allegedly mismanaging funds and filling some of the nearly 300 social housing units under its purview, through a subsidiary, with people who didn’t meet government eligibility requirements.

Now Coleman is offering another $205-million splurge — along with $20 million from the Streetohome Foundation — that will create eight complexes, supposedly within three years. The provincial dollars are largely coming from his innovative plan of taking over the Vancouver Little Mountain social housing site, selling it off for redevelopment and using some of the profits for more social housing.

The aim is to fast-track the creation of 1,006 housing units within three years, for people who are homeless or in danger of being cast into the streets.

Let’s put the import of this initiative in perspective. It was estimated in March that there were 400 people living on the City of Vancouver’s streets and another 1,400 in emergency shelters.

It suggests city hall, the province and our community leaders may finally be turning the corner on homelessness. Social workers and police will soon have the facilities that allow them to offer housing to the city’s poorest, the first step in stabilizing their lives, offering treatment and even a return to work.

We just might fulfil the promised Olympic legacy of building a better city for the poorest after 2010. Who says government doesn’t work?

© Copyright (c) The Vancouver Sun

Police officers, nurses, teachers apply to rent affordable housing units

Mike Howell
Sun

VANCOUVER — About 50 people working in public safety, health care or education in Vancouver have applied to rent 126 of the affordable housing units at the Olympic Village.

The city is reviewing the applications and hasn’t determined how many are from police officers, firefighters, paramedics, nurses or teachers. “We’ve had lots of people call us up,” said Dennis Carr, the city’s assistant director of social infrastructure, noting successful applicants could move in by August.

Council decided in April to rent the city-owned units at market rates and give priority to workers who are essential to the city, including police officers and nurses.

Another 126 units are available to people who require subsidized housing, including low-income families and people with mental or physical disabilities.

B.C. Housing is handling applications for those units but didn’t have a tally on how many people applied. A non-profit operator still has to be hired before applicants will be reviewed.

The affordable housing component of the Village comprises 252 units that are located in three buildings on the site at Southeast False Creek.

The nonprofit operator hired to manage the subsidized units may also manage the market rent units, although it is possible three different operators will manage each of the three buildings. The buildings were originally planned for social housing until council decided in April on a so-called 50/50 plan that split the units in half to create the current formula.

To make the plan work, and keep to the city’s goal of 20 per cent affordable housing for new neighbourhoods, the city kicked in $32 million. That’s because cost overruns on the units jumped from $60 million in 2006 to $110 million.

Carr acknowledged the city hasn’t sorted out details related to the market rent units such as a tenant’s eligibility once their household income increases.

The Courier presented a hypothetical scenario of a rookie police officer who moves in and the officer’s salary significantly increases over five years.

Does the officer then have to vacate?

“That’s a good question and we’ve asked ourselves that question and we haven’t landed on the answer yet,” said Carr, who also couldn’t answer whether a tenant whose salary doesn’t increase could rent a place indefinitely.

A city report that went before council in April estimated the rents could range from $1,601 a month for a 640-square-foot one-bedroom to $2,368 for a 1,480-square-foot four-bedroom place.

The rate for a one-bedroom is based on a formula that 30 per cent of the rent comes from an annual household income no greater than $64,040.

The rate for a four-bedroom at 30 per cent would equal an annual household income no greater than $94,720. The income threshold would climb to $142,080 if the city lowered the rent percentage to 20 per cent, which would still equal $2,368 a month.

The Southeast False Creek development also includes a community centre and a childcare facility. The city and park board have to find an operator for the facility before registering families and taking names on a waiting list.

© Copyright (c) The Vancouver Sun

Cheryl Chan
Province

More than 1,000 new homes for Vancouver’s homeless are about to become reality after the province announced dollars are finally in place to build permanent supportive housing at eight city-owned sites.

The majority of the $225-million cost for the long-awaited projects will be paid for by the provincial government, which is shelling out $205 million — financed mostly by the sale and redevelopment of Little Mountain housing. The rest will be raised by the Streetohome Foundation from the private sector, while the city donated land worth about $32 million.

“These housing units are critically important as we break the cycle of homelessness,” said Premier Gordon Campbell at the official unveiling Tuesday at the Downtown Eastside’s Smith-Yuen building.

“They create a sense of stability for the people who live in them, and they give us an opportunity to connect services that are so essential to them as they deal with their challenges.”

Permanent supportive housing is “absolutely essential” in solving Vancouver’s homelessness crisis, said Mayor Gregor Robertson, who campaigned on a promise to end homelessness by 2015. “We’re seeing a dramatic investment here,” he said. “It’s one that has been long-awaited and certainly most welcome.”

Tuesday’s funding announcement is the culmination of the 2007 memorandum of understanding between the city and province, which laid out 12 sites slated for new social-housing development. Two more sites were added later.

Construction was originally scheduled to start at the end of 2008, but it wasn’t until last year that digging started on six sites.

Construction on the eight remaining sites, which are scattered across the downtown, Fairview and Mount Pleasant, is expected to start this year and take 18 months to complete.

The first two projects to get the green light — 7th and Fir and Howe Street — are kick-started by a $5-million gift from Vancouver philanthropist Frank Giustra, who sits on the Streetohome board.

The two buildings will provide 172 new units and are expected to be completed by early 2012.

In total, the 14 sites will provide 1,575 new homes for people. But more are needed. According to Streetohome’s 10 Year Plan, 2,000 units will be needed over the next 10 years to solve Vancouver’s homelessness problem.

“We are committed to finding new resources to help bridge the housing gap in Vancouver,” said Streetohome chairman John McLernon, adding the foundation is committed to raising $26.5-million from private and corporate donors toward housing projects as well as homelessness prevention and education.

Wendy Pedersen of the Carnegie Community Action Project welcomed the announcement but said it’s nowhere near enough.

“It’s only one quarter of what we need, according to the city’s own homeless action plan,” said Pedersen on the sidewalk outside the Smith-Yuen building. “It’s good to build this housing, but people need to understand the province should be stepping up and building a lot more.”

Pedersen was also wary of funding from the Streetohome Foundation, arguing housing should not be dependent on charitable donations.

“Relying on charity is a dangerous precedent. That’s like making food dependent on food banks. It’s not a good system to live within,” she said.

But Housing Minister Rich Coleman said he was only able to get the treasury board to loosen its purse strings by leveraging partnerships with the city and the money Streetohome put on the table.

“If you don’t have the partnerships, it’s tougher to make your case when you go to finance,” said Coleman.

The funding announcement comes at a crucial time: According to the last homeless count taken in March, Vancouver’s homeless population jumped by 12 per cent to 1,762.

Mark Townsend, of the PHS Community Services Society — one of the 11 non-profits that will operate the new supportive housing sites — said he was glad to hear funding has gone through for the projects.

“It’s really exciting because [permanent housing] is nicer than an SRO [single-room occupancy] and an SRO is better than a shelter, which is better than the street.”

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Province

Home-ownership costs in Canada rose for the third-straight quarter in early 2010 and will get higher as interest rates rise this year, says a housing report released Tuesday by RBC Economics Research.

The RBC Housing Affordability measure, which identifies how much pre-tax household income is needed to own a home, rose nationally across all housing types in the first quarter of 2010.

The detached-bungalow benchmark measure rose by 0.9 of a percentage point to 41.1 per cent of average household income, the standard townhouse inched up by 0.4 of a percentage point to 33 per cent, the standard condominium climbed by 0.5 of a percentage point up to 28.2 per cent and the standard two-storey home increased by 0.6 percentage points to 46.8 per cent.

Robert Hogue, senior economist at RBC said in the report that although home ownership became more costly in the first quarter of 2010, affordability is still below peak levels reached in early 2008 and is not expected to exceed those peaks.

“We expect affordability to deteriorate throughout 2010 and 2011, but this should be limited as more balanced supply and demand conditions will take much of the steam out of the housing market,” he said.

Home prices are expected to rise with interest rates “as the Bank of Canada moves towards raising the current exceptionally low rates to more normal levels through the second half of this year and in 2011,” the report states. Bank of Canada Gov. Mark Carney is widely expected to begin slowly raising interest rates as early as June 1, leading up to an overnight rate of 1.5 per cent by the end of the year.

“We believe that the spectacular rally in housing prices over the past year will soon end, as rock-bottom mortgage rates increase,” wrote Hogue, adding that the improving economy and rising incomes should keep home affordability in check.

The affordability measure for a detached bungalow in Vancouver is 73.4 per cent (up 4.8 percentage points over the last quarter).

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