A New Look at Affordability
To say affordability is an important issue in this region would be an understatement. Vancouver has been recognized as one of the least affordable cities in the world. However, just because we view something as important doesn’t mean we’re right about it. Now I’m not saying that “No, Vancouver is very affordable”. What I’m saying is our conventional definition of affordability gets which parts of the region are affordable and which ones aren’t wrong.
When we think of affordability, we usually think only of housing costs. A common threshold used for affordability is spending less than 30% of income on housing. However, looking at housing costs alone leaves a false impression that it is more affordable to live in the suburbs as housing costs are generally lower. What we forget is that in the suburbs you often have to own a car and with that comes with high transportation costs. In most cases, these additional costs offset any savings in housing expenditures.
So when we think of affordability, we should really we should be thinking of housing AND transportation costs. This is what the Center for Neighbourhood Technology has done; they have created a Housing and Transportation (H+T) Affordability Index that defines affordable as a household spending less than 45% of its earnings on housing and transportation. For the past few months, I’ve been part of a group examining affordability in Greater Vancouver when looking at both housing and transportation costs. We created a similar index using 2006 Census data and 2011 Translink Trip Diary data.
We wondered: with this new definition of affordability, how does our view of what is affordable and what is not change? What areas in Metro Vancouver are the most (and least) affordable and what policies could make the biggest difference in improving affordability?
How does including transportation costs change our view of affordability?
It turns out, a lot. Below is an map comparing the conventional definition of affordability with our new housing and transportation definition. (Yellow means affordable and blue means unaffordable.)
It is immediately apparent that our region is considerably less affordable when we factor in transportation costs. What is less apparent is that some census tracts in the City of Vancouver became affordable with our new definition. Overall though, our region is significantly less affordable than we think it is. A scary thought.
So, the truth is Vancouver (proper) is more affordable than we think, but the region is much less affordable than we think. And the main cause of that is transportation costs (Yellow is <15% of household income)
Where does affordability lie?
The most affordable areas in the region were found to be the West End and Metrotown, whereas the least were found at the periphery in Surrey, Coquitlam, Port Moody and West Vancouver.
Areas that are walkable, centrally-located and have good access to transit are much more affordable than those that are car-oriented and where land uses are segregated.
How do we make Metro Vancouver more affordable?
The areas we should be focusing affordability improvements are areas that are unaffordable and where people are experiencing it. (Reducing living expenses for West Vancouver millionaires is not a priority)
The image above is a plot of all the census tracts in Metro Vancouver based on actual affordability and experienced affordability. We calculated experienced affordability by using the income of local residents instead of for the whole region. The dividing line for both axes is the 45% affordability threshold. Overall, the ‘cloud’ appears centred with many areas on both sides of the affordability divides.
The area of greatest concern is the top right quadrant. These are areas with very high housing and transportation costs where the residents are spending more than 45% of their income on housing and transportation. Though the entire ‘cloud’ appears to be centred around the threshold, it is not the case for different cities in the region.
Here is Vancouver…
…and here is Surrey:
Vancouver has only when census tract in our ‘Greatest Concern’ quadrant, whereas Surrey has about half of its census tracts here. This image shows there is clear and pressing need for affordability improvements in Surrey and other suburbs such as Coquitlam, White Rock, Langley and Maple Ridge where people are really experiencing a lack of affordability.
When it comes to improving affordability, improving transit and walkability in the suburbs makes a lot of sense. The Evergreen Line (contrary to what some believe) and Surrey Rapid Transit would greatly reduce transportation costs and improve affordability.
In conclusion, including transportation in the affordability equation makes it clear that it is the Urbs, not the Suburbs, that are truly affordable and that if we really want to improve affordability in Metro Vancouver, improving transit and creating a more walkable environment in places like Surrey would make the biggest difference.