The debate over the future of affordable housing is becoming bigger.
It is becoming readily apparent that housing costs are going through the roof.
There are lots of reasons for it.
The key ones in order are:
The high cost of land. Land in the urban areas is continually on an upward spiral. And high land costs in such big cities as Vancouver and Toronto are going through the roof. And as less land becomes available and more people want to move into the major cities the costs will go upward and upward.
The high construction costs. Wages for homebuilders are really high, among the highest in the economy. And the reason for that are twofold. Unions have made sure their workers are well paid and taken care of. Some people such as plumbers can make as much as $150,00 with generous benefits. As well there is a shortage of qualified workers thereby increasing pressure on wages. As well the price of materials keep increasing.
The high approval costs. One recent estimate from the C.D. Howe Institute, an economic think tank, estimated the costs of getting a house built range from an average $229,000 in the eight most restrictive cities to $600,000 in Vancouver.
Municipalities are notoriously slow in approving building permits. There are constant revisions required from municipal inspectors and all sorts of costs such as sewer access, electrical access to the power grid; all have to be factored into building housing.
And finally, but not least, there is the question of attitude in North America.
To put it mildly – it is regressive and not progressive.
New construction methods such as modular housing, pre-fab housing and anything that does not fit the traditional norms of housing are frowned upon by the politicians and especially the public.
The attitude of Not In My Backyard is alive, well and strong.
But that is a shame because great affordable housing already exists, especially in Europe.
And it is the future. The future of affordable housing.