An efficient and equitable community provides diverse housing and transportation options to meet diverse needs, including affordable housing and transportation options. Many current development policies and planning practices favour more expensive housing and transport modes over more affordable options. For example, restrictions on townhouses and low-rise apartments in residential neighborhoods favour more expensive housing, minimum parking requirements subsidize automobile travel, and current transport planning practices favour automobile improvements over improvements to walking, cycling and public transit. An affordability agenda corrects these distortions: it ensures that basic, inexpensive housing and affordable mobility options are available to people who want them.
There are many possible ways to increase affordability. Some provide large benefits to small number of households that qualify for special services (often those with the greatest needs, such as people with disabilities or very low incomes), while others provide smaller benefits to a larger number of low- and moderate-income households. Some policies depend on subsidies, others reduce the costs of developing moderate-priced housing. Even if the additional housing units are initially too expensive for lower-income households, but by increasing overall housing supply this tends to drive down market prices, and such housing becomes more affordable over time as it ages.
Transportation affordability is also important. An inexpensive house is not really affordable if located in a sprawled, automobile-dependent area with high transportation costs. Walking, cycling, ridesharing and public transit are affordable modes – improving them allows households to reduce their vehicle costs and save money.
The following policy reforms can increase housing and transportation affordability.
- Establish 1.5% Neighborhood Affordability Solution targets. Victoria’s population currently grows about 1.5% annually. To become more affordable and diverse we must increase our housing supply faster than that rate. A reasonable target is for residential neighborhoods to increase housing supply at least 1.5% annually. Most of these new houses should be moderately priced ($300,000-600,000), so they are initially affordable to middle-income households and becomes affordable to the lower-income households as they depreciate.
- Remove barriers to the development of low- and moderated-priced infill housing, such as unjustified minimum parcel and unit sizes, limits on building heights, restrictions on multi-family housing and secondary suites, setback requirements, and unjustified fees and impact studies.
- Increase allowable densities and heights. There are incremental ways to accommodate affordable infill. A good approach is to allow taller buildings and higher densities on corner and larger lots, to minimize impacts on neighbours. For example, Traditional Neighbourhoods that currently only allow two story homes should allow three stories on corner lots, plus one additional story for each 1,000 square meters (approximately 10,000 square feet, or a quarter acre), so a 1,000 square meter corner lot may be up to four stories, and a 2,000 square meter corner lot may be up to five stories.
- Significantly reduce or eliminate minimum parking requirements for lower-priced housing in walkable urban neighbourhoods. Develop parking management programs to encourage more efficient use of parking facilities and address potential spillover problems (motorists parking where they should not). Require landlords to unbundle parking (rent parking separately from housing) so occupants are not forced to pay for parking spaces they do not need.
- Establish affordable housing programs which identify affordable housing needs, establish affordable housing development targets with identified ways to achieve those targets, and support efficient future management of social housing.
- Subsidize development of housing for people with special needs, including those with disabilities and very low incomes.
- In areas with affordable housing shortages and rapid housing development, apply inclusionary zoning, in which developers must sell or rent a portion of units (usually 5-15%) below market prices.
- Where there is a shortage of rental housing, support rental housing development, and reform policies that favour home ownership over renting.
- Adjust development impact fees to recognize the lower costs of providing public infrastructure and services, and the lower vehicle trip generation rates of affordable housing in walkable urban neighbourhoods, compared with urban fringe housing development.
- Improve sidewalks, crosswalks, paths and bike lanes, and reduce traffic speeds where needed to ensure that walking and cycling are comfortable and safe.
- Improve public transit services, particularly in lower-income neighbourhoods and other areas with many car-free households.
- Establish “complete streets” policies, so all streets are designed to accommodate diverse uses and users.
- Encourage local carsharing, bikesharing, and ridesharing services.
- Encourage delivery services by local stores.
- Support Smart Growth development policies that increase the supply of affordable housing in walkable urban neighbourhoods.
- Provide adequate social assistance to ensure that people with special needs and low incomes can afford safe and comfortable housing in walkable urban neighbourhoods.
- Support and subsidize social housing development, including special housing to accommodate people with disabilities, and housing cooperatives that provide moderate-priced “workforce” housing.
- Support rental housing development, and reform policies that favour home ownership over renting.
- Establish and effectively enforce renter/tenant rules and rights.
- Where foreign investors significantly drive up housing prices, apply targeted taxes or regulations to discourage speculation.
- Provide adequate support and funding for affordable transport modes, including walking, cycling, ridesharing and public transportation; reform transportation agencies and funding practices to become more multi-modal.
- Support affordable carsharing, vehicle rental services and bikesharing in urban areas.
Risks and Trade Offs
Some affordable housing strategies may have unintended consequences: they may increase affordability for some households but reduce affordability for others, or in other ways, fail to achieve their goals.
For example, a rent subsidy for a particular group, such as people with disabilities or seniors, will increase affordability for recipients, but can cause rent inflation by allowing some households to pay more for desirable units, and so displace households that do not qualify. Only if the total supply of the desired housing increases, such as more lower-priced apartments in walkable urban neighbourhoods, can all households find suitable housing.
Subsidies and inclusionary zoning policies may increase affordability for the households selected to receive below-market housing, but such programs can usually only serve a small portion of affordable housing demands, and they can reduce total housing development, particularly moderate-price housing.
Inclusionary zoning can be successful in areas with very strong housing demand so developers always build as many units as regulations allow, but if demand is weaker they build fewer units, particularly moderate priced units, resulting in less affordable future housing supply. For example, if basic housing units costs $200,000 to build, and regulations require 10% be priced at $100,000, each of the nine market-priced units bears an additional $11,111 ($100,000/9) cost, which adds about $20,000 to their final price, including additional overhead and financing costs. This is a small increase for high-priced housing (2% for a million dollar house) but a large increase for lower-priced housing (11% for a $200,000 condominium). In this way, inclusionary zoning can reduce housing affordability, particularly over the long run, by reducing construction of moderately-priced housing that contributes to future affordable housing stock.
Similarly, regulations that limit rent increases can increase existing residents’ affordability, but by reducing profitability discourage new rental housing development which will reduce the future supply of affordable rental housing.
The strategies that tend to provide the greatest total affordable benefits reduce infill development construction costs. These increase the affordability of both for-profit housing and the number of units that can be built by non-profit development agencies. For example, a million dollar subsidy could only create about five affordable single-family suburban houses, but ten to twenty affordable urban apartment units with unbundled parking.
For more information
Affordability and Choice Today (ACT) Program removes barriers to the development of affordable housing by funding and promoting practical solutions at the local level.
ACT (2009), Housing Affordability and Choice: A Compendium of ACT Solutions, Federation of Canadian Municipalities.
ACT (2009), Housing In My Backyard: A Municipal Guide For Responding To NIMBY, Federation of Canadian Municipalities.
Alex Cecchini (2015), Barriers to Small Scale Infill Development, Streets MN.
Cities for Everyone (2018), Victoria Affordability Backgrounder
Deborah Curran and Tim Wake (2008), Creating Market and Non-Market: Affordable Housing. A Smart Growth Toolkit for BC Municipalities, Smart Growth BC.
Generation Squeeze (2017), Solving the #Code Red Affordability Crisis – Gen Squeeze Policy Priorities.
Todd Litman (2015), Welcome To Our Neighborhood: A Manifesto For Inclusivity, Planetizen.
Sara Maxana (2016), YIMBY Keynote Speech, Yes In My Backyard Conference.
PHSA (2014), Healthy Built Environment (HBE) Linkages Toolkit, Provincial Health Services Authority.
CitySpaces Consulting (2014), Toward More Inclusive Neighbourhoods, BC Housing Ministry.
Robert Steuteville (2016), Walkable is More Affordable, But the Rent is Still Too High: People With Moderate Incomes End Up Spending Less of Their Hard-Earned Income in Walkable Places, Public Square.
Mac Taylor (2016), Perspectives on Helping Low-Income Californians Afford Housing, Legislative Analyst’s Office.