Monday, January 22, 2007

Affordable housing, unaffordable taxes

A study from the Frontier Centre for Public Policy places London near the top of affordable housing in Canada as measured by median house prices divided by median annual income. On average, it costs London home buyers three times their annual income to buy a house; of 35 Canadian markets surveyed, London is the sixth most affordable in Canada by this metric. But as David MacLean of the Canadian Taxpayers Federation notes in a link sent to us by a reader, housing prices are a mixed message: while low prices are certainly a benefit to residents, low relative prices are often signs of a moribund economy, a conclusion sustained in London by its relatively low median family income as well.

Overall, however, housing prices are as likely to be the product of urban planning than of local economic well-being. Prices in most high-priced markets like Vancouver are driven by artificially enforced scarcity through regulatory restrictions on land use and development, which is why on average it costs home buyers there 7.7 times their annual income to buy a house. Fortunately, London has been spared much of the anti-sprawl zoning agenda by an administration that calculates for the time being at least that assessment revenues are simpler to obtain through horizontal growth than vertical, even to the extent of subsidizing the expansion of the housing market. The lax policy on urban planning is a sorely needed reprieve for Londoners who, in part because of the excessive subsidization of urban life here, pay a higher percentage of their relatively low incomes on property taxes than 55 out of 66 other Canadian municipalities, according to another study last year. There's no consolation for local politicians in any of these statistics.


rhebner said...

I think geography may have as much to do with Vancouver's house prices as any municpal regulations.
The city is bordered by water on the west and south and hard against a mountain on the north. There just isn't the available land to develop a lot of affordable housing. Finding a decent place to live within a respectable commuting time isn't easy out there.

In London you can drive in all four directions and find a small town that is still within commuting distance. Those that can afford it, will move to boonies and lessen the demand in the core, thus keeping prices down.

MapMaster said...

Certainly geography influences the rationales behind planning and regulation, but there is quite a substantial amount of land in the GRVD that is artificially mandated for other uses. The relative difficulty and popularity of Vancouver's geography does suggest that it should have higher housing prices, but hardly to the extent that it does now.

Honey Pot said...

Well look at that the hezzassholes are acting up again. You know what that means, we are going to have to pay to evacuate the Lebanese-Canadians...... again. Best keep that affordable housing, they will need a place to live for three or four months before they go back, and it will be cheaper than putting them up in four star hotels.