Editor,
Here's one way to attack the problem of affordable housing: co-operatives.
One of the problems with the present approach to affordable housing in Squamish is that we assume there is a way within the market to fix it. The main approach seems to be forcing developers to provide affordable housing units, or in lieu of that, making a contribution to some kind of fund.
Forcing a business venture to do something that is unprofitable will not work. Imagine walking into the local gelato shop and ordering them to sell two cones below cost for every five that they sell at a profit. Would that be fair? Developers don't control the market - they respond to it.
The Olympic announcement blew the cover off Squamish's housing market forever. If the experience of Vancouver says anything, we could probably build every square inch of valley floor and still be facing an average home price of hundreds of thousands, which is not affordable by any reasonable definition.
Anyway, forcing developers to sell units at some kind of loss only causes them to pass the costs on to someone else. And the benefit doesn't last - witness the fight over covenants in Whistler, or our own Amblepath.
Housing co-operatives are a long established concept in affordable housing. There are thousands of them across Canada. They are in some ways a hybrid between ownership and renting - you have security of tenure, like an owner, but you pay a monthly housing charge, like a renter.
Members collectively own their co-op via shares, similar to owning shares in a corporation. Most housing co-ops are non-profit, so they charge a housing fee to their members equivalent to whatever their overall expenses are (maintenance, taxes, etc.).
Some co-ops are subsidized by the government, but not all. Co-ops are protected by law against dissolution - if a co-op tries to wind itself down, the assets cannot be distributed among members - they must be transferred to other co-ops via the provincial government. Thus co-ops are secure against the pressures of market forces. Co-ops, unlike social housing, are self-governing and do not require a massive bureaucracy and ongoing taxpayer funds to support.
Taxpayer support comes only at the beginning, in the form of providing funds to establish the units. This funding is typically done as a mortgage, which the co-op pays back, with interest, to the lending parties.
The concept has worked reasonably well for decades. One co-op I am aware of in Vancouver recently paid off its mortgage and has begun looking into acquiring additional units and expanding. The trick is getting started. Obviously in today's market, land costs and construction costs are high.
Getting a co-op off the ground here in Squamish would most definitely involve government participation at one or all three levels. It could be financed in part by a small (emphasis on small, let's not punish home buyers for being able to afford to buy) fee on new developments. Remember too, the money is ultimately repaid. This is not a "sunk cost."
Looking out into the future, if you got a few of them going, you might effect some changes in the overall housing market. Landlords who have to compete with non-profit co-operatives might have incentive to build more value into their rents, or simply lower them.
Speculative buyers might not be so keen to buy if they are unable to charge rents high enough to support their large mortgages, putting a slight brake on the inexorable rise in real estate prices.
It's at least theoretically possible.
Brad Hodge
Squamish
