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Inside 'Making Home': How can Vancouver make homeownership a reality in one of the world's priciest cities?

The City of Vancouver has embarked on an ambitious housing plan to help a middle class that’s increasingly priced out or leaving the city altogether. So what does it all mean?
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Can a new initiative, called 'Making Home,' help people become homeowners in Vancouver - one of the country's most expensive real estate market?

Gentle density. Affordability. Creative solutions. A disappearing middle class.

The catchphrases are aplenty as the City of Vancouver embarks on an ambitious housing plan to help a middle class that’s increasingly priced out, or leaving the city altogether.

But what is actually needed to make the city’s latest attempt at bolstering homeownership a tangible reality in a city often pegged as the most expensive in North America, if not the world?

A pair of housing experts with significant skin in the game spoke to Vancouver Is Awesome in the week following council’s backing of the Making Home initiative, which calls for city staff to develop policies allowing up to 2,000 lots currently zoned for single-detached homes or duplexes to be developed for up to six homes.

Ron Rapp is the CEO of the Homebuilders Association Vancouver (HAVAN), a group that recently released a study suggesting land accounts for 38 per cent of the cost of building a new home in Metro Vancouver.

“The only way to be able to address the affordability question is to find a way to mitigate that land price,” Rapp said in a phone interview. “Your hard costs are not going to change significantly and your administrative costs are not going to change significantly.”

Rapp sees few issues for the building industry to adapt to the plan: the proposed in-fill housing types aren’t new, nor are the technical aspects of building such homes. There shouldn’t be a need for additional parking given that the new homes would be built near transit or bike routes.

What could be a nuisance is the actual staging required for a tight building envelope - parking for tradespeople, having the necessary space for material and equipment delivery and ensuring there are services at the lot line to support the additional dwelling units.

“Th program does not overtly affect the quality and character of the neighbourhood because it’s the same scale as the houses that are there now,” Rapp said.

Passed on Jan. 26 and spearheaded by Mayor Kennedy Stewart, the plan is geared to households who earn $80,000 or less per year and want to buy a home. The average price of a detached home in Vancouver is about $1.8 million.

A builder could either pay a development fee based on square footage to the city instead of providing an affordable unit or units or build one or more affordable homes for households in the $80,000 or less category and have fees waived.

Any fees paid to the city would be redirected to help build permanent affordable units in other neighbourhoods, expand childcare and accelerate council’s climate change goals, according to a website devoted to the mayor’s proposal.

Information on the website suggests the approach would limit speculation while the “land lift” of the property value would go right back into building affordable homes or used to generate “hundreds of millions of dollars” for the city.

Jake Fry is the CEO of Smallworks, a Vancouver business that designs and builds laneway homes. He’s also co-director Small Housing BC, which helped launched a feasibility study in 2017 to gauge how and where smaller homes could fit in cities across the province. That study suggested 60 per cent of the city’s land base is zoned single-family (RS-1), affordable to less than eight per cent of Vancouver’s households.

Fry is talking to officials in Coquitlam, Kelowna and Nelson about plans similar to Vancouver’s. Rapp, meanwhile, said legislation similar to Making Home exists, or is being drafted, in Washington, Oregon and California.

But does the plan leave itself open to land speculation, as was argued in a Feb. 4 Vancouver Sun opinion piece by urban planner Andy Yan?

“If this is done properly, it mitigates land speculation,” Fry said. “Those people wouldn’t want to be involved because they’re not going to buy the land, make profit off the land, build and make a profit on the building - they just don’t have the revenue stream. This is meant for the homeowner who understands the math and goes, ‘I’m going to finance this and do it.’”

Fry argues that keeping the $80,000 affordability threshold is a crucial aspect of Making Homes, but he also stresses the need for the city to not get in the way of itself; planners and those who issue permits have to make the building process a streamlined, easy experience without overly proscriptive limits or unnecessary delays.

“We have lots of capital — some of it’s investment, speculative or temporary foreign capital — who have come in and they bought these properties and they have no way out. The only thing they can do is sell to someone to make more money and at one point, that Ponzi Scheme will fail and we’ll all be unhappy,” Fry said. “But this is a way for today and tomorrow for those people to be able to turn that type of housing, which is inadequate housing stock, into viable neighbourhood housing.”

With files from Mike Howell