At a coffee shop on Vancouver’s East side, three friends who grew up on the city’s West side talk about the $1-million homes that are too expensive for them to buy, that seem out of their reach forever.
Adam Kebede, Maya McDonald and Julien Thomas were all born in the 1980s, when single-family detached homes across Vancouver were much cheaper than they are today. For this first wave of Generation Y, or Millennials – people born between the early 1980s and early 2000s – finding a place to live requires a reality check and abandoning dreams of owning a single-family detached home.
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“Buying a Vancouver house is not even close to affordable for us,” said Mr. Kebede, 28, a graduate student who rents a two-bedroom suite with his brother for a total of $1,300 a month. Mr. Kebede, Ms. McDonald and Mr. Thomas are each renting modest places on the East side, where accommodation is more affordable than on the West side.
The three friends want to stay in Vancouver, but don’t want to buy condos. All three have university degrees, and while they might one day land jobs with decent salaries, they have already shifted their attention to some form of communal living or other shared accommodation while they wait for a chance to buy into Vancouver’s real estate market.
Their situation highlights an important shift in attitude that is being felt in Vancouver and to a lesser degree in other parts of Canada. Young, well-educated wage earners, who for decades have regarded a detached home as a natural aspiration, are now revising their expectations, ratcheting down their hopes.
It’s a change that has major implications for home builders and local governments, who are under increasing pressure to create affordable accommodation for those priced out of the market by the rapid rise in home prices over the past decade.
The geographic line that Vancouver real estate buffs draw to symbolize the million-dollar divide in housing prices has been shifting ever eastward over the years. Homes formerly deemed affordable on the East side are now part of a landscape where only those with hefty down payments need bother bidding.
Fifty-four per cent of single-family detached properties in the City of Vancouver were assessed at $1-million or greater on July 1, 2012. That is a dramatic increase from four years earlier, when only 34 per cent of detached homes had assessments of $1-million or higher.
Vancouver architect Bing Thom said prospective home buyers within Vancouver’s city limits have to deal with the reality that single-family detached homes are not an entitlement. “It is already an outmoded lifestyle – Dick and Jane, and the kids and the dog. That’s gone,” Mr. Thom said. “Tomorrow might not be better than yesterday.”
But Mr. Thom asserts that bigger homes aren’t necessarily better, and he supports recent moves by the City of Vancouver to entice builders to construct multifamily units where single-family lots used to be the norm.
Seeking to spur builders to pack extra density on valuable land, Vancouver city council in May approved new zoning rules for the Norquay neighbourhood on the East side. It’s an experiment that, if all goes well, will lead to mass rezoning in other parts of Vancouver to encourage developers to construct row houses and townhouses in areas that have traditionally been dominated by single-family homes.
Under the new regulations, builders are able to assemble at least two single-family lots that are located side-by-side, and then go through the process of a development permit application.
It’s an initiative designed to help people like Mr. Kebede and his friends. In the pocket where they live on the East side, once known for its working-class roots, many homes are approaching the $1-million mark, and some are there already.
The eclectic Commercial Drive neighbourhood on the East side has become the trio’s edgy new hangout. They hold no illusions about saving up enough money for a down payment for a single-family detached house on the East side, let alone on the West side, where they have fond memories of growing up and graduating from high school.
Ms. McDonald, 27, is paying $500 in monthly rent for her basement room, plus utilities. She shares a house with four others in the Commercial Drive area. Renting is fine in the short term, but she aspires to being a homeowner in the future. “I would be interested in buying into co-op housing or a townhouse or row house,” said Ms. McDonald, who will be graduating with a diploma in education this fall. She already has a bachelor of science in geography and a master’s degree in urban planning.
Ms. McDonald and her friends say that barring inheritances or other financial windfalls, no one that they know in their generation will be able to buy a Vancouver single-family detached home on their own.
Andrew Yan, an urban planner with Bing Thom Architects, has produced a map that shows homes assessed for at least $1-million in blue and homes less than $1-million in red. It serves as stark illustration of a housing market that has seemingly defied logic. “The challenge is to set down roots in the city you grew up in,” Mr. Yan said.