Affordability Agenda

Many current development policies and planning practices favour more expensive housing and transport modes over more affordable options. For example, restrictions on compact housing types in residential neighbourhoods 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.

Local

• Establish affordable infill housing development targets, such as the 1.5% Neighbourhood Affordability Solution. 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 neighbourhoods 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.
• Pre-zone areas designated for multi-family in the Official Community Plan (OCP). This will reduce infill development costs, increasing moderate-priced project feasibility.

• Allow an additional story for corner lots, larger lots (one additional story for each 1,000 square meters), and on busier streets (arterials or subarterials). These are locations where taller buildings have less impact on neighbours.
• Exempt moderate-priced housing from inclusivity mandates. This encourages developers to build more moderate-price units, which directly increases affordability for moderate-income households, and for lower-income households through filtering.
• Reduce fees and approval requirements for smaller and moderate-priced infill developments, since these are the projects we most need.
• Reduce or eliminate parking requirements and require or encourage unbundling (parking rented separately from housing units), so residents are not forced to pay for parking spaces they do not need. Many cities are doing this now to increase affordability, allow more compact development and reduce traffic problems.

• Allow new buildings to be up to 1.5 times higher than existing adjacent buildings. For example, if existing homes are two stories, new homes may be three. Automatically increase the allowable heights of single-family parcels adjacent to a commercial development by one story, and allow conversion to multi-family on these parcels after a time period, such as ten years.
• Allow higher densities and building heights in exchange for more affordable units. Target densities can be applied in accessible locations, for example, at least three stories along minor arterials and four stories along major arterials.
• Subsidize housing for people with special needs, including those with disabilities and low incomes.
• Improve affordable housing design.Municipal governments can support contests, planning charrettes and workshops to encourage better design. The Affordable Housing Design Advisor, the Missing Middle Website, and Portland’s Infill Design Project provide resources for improving lower-priced housing design.
• Where there is a shortage of rental housing, support rental housing development, and reform policies that favour home ownership over renting.
• Expedite development approvals and reduce development fees for smaller and lower-priced projects. For example, reduce the number of public hearings, and eliminate traffic impact study requirements, for projects with fewer than 20 units, at least half of which are affordable to median-income households.
• 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.
• Establish complete streets policies, so all streets are designed to accommodate diverse uses and users.
• Improve public transit services. Accelerate  Victoria Transit Future Plan implementation. This plan includes increased service (more frequency, destinations and operating hours), higher operating speeds (bus lanes, signal priority and faster loading), more comfort and amenities (better buses, stops and stations), plus improved user information and payment systems. The only problem is its 25-year completion target; many of us will be dead before it is fully implemented! Accelerated funding will allow faster implementation.
• Improve Interregional Transit Connections. Currently, public transit service between the CRD and nearby regions is infrequent and expensive. Victoria-Vancouver connections could be improved with better user information, integrated fares, as well as better bus service and comfortable bus shelters at ferry terminals. Connections between Victoria and Duncan could be improved with frequent (hourly) and affordable (up to $5.00 one way) bus service.
• Support local carsharing, bikesharing, and ridesharing services.

Provincial/State

• 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

Our Affordable and Inclusive Neighbourhood Agenda, describes eight local and regional policies that can significantly increase moderate-priced infill in walkable urban neighbourhoods, which increases affordability and inclusivity, in order to achieve our local and regional affordable housing goals.

Our Efficient and Equitable Transportation Agenda identifies six specific policies to create a more diverse, efficient and equitable regional transportation system.  By improving resource-efficient travel, and providing incentives for travellers to use the most efficient options for each trip, it can achieve emission and traffic reduction targets and provide diverse economic, social and environmental benefits.

Alex Cecchini (2015), Barriers to Small Scale Infill Development, Streets MN.

Cities for Everyone (2018), Victoria Affordability Backgrounder

Generation Squeeze (2017), Solving the #Code Red Affordability Crisis – Gen Squeeze Policy Priorities.

Housing Affordability and Livability Agenda is a City of Seattle program to create more affordable and inclusive neighbourhoods.

Legalizing Inexpensive Housing is a Sightline Institute series which examines how public policies can support more affordable housing development.

Making Room Vancouver is the City of Vancouver’s program to create more affordable and inclusive neighbourhoods.

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.