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Blog transcript below: 

Dave Graham
Welcome to Ed's perspective. This is a series of conversations about Parksville. Featuring the personal views of Mayor Ed Mayne. I'm Dave Graham this time, we're going to talk about affordable housing. Now, much has been said and written about this in recent times. But let's begin by defining a term, Ed, if you could please explain just exactly what is meant by affordable housing?

Ed Mayne
Dave, that's a great question. And it's probably the most difficult one of the day, there are a number of definitions for affordable housing, but there's two primary ones that we like to work with. The first one is the one that Parksville uses, when we do our calculations, for affordable rents in how we arrive at that is we take 80% of the median income for the city of Parksville. And then we take 30% of that as the base rent for individuals. So the calculation here right now, based on 2020, one's median income is about $1,302.11 per month, that is adjusted on an annual basis, as soon as we get the new reports, then we will recalculate it again for the next year. So that's the first one. It sounds like it's a good thing. But when you look at it, the reality is a median wage means that 50% of your population are below that median wage. So we've got a vacuum there, if you will, on people being able to afford their rents, because in my mind, 30% of your income is about as much as you should be paying for your rent, if you're going to pay for groceries, childcare, transportation, and all the other day to day expenses, it's pretty difficult when your rent start going above that 30% level. So you know, if you look at somebody that's making $18 an hour for 40 hours, and that's about $3,100 a month, if you look at it that way. And as a result, $1,302 a month really amounts to 40% 42%, actually, of your income. And that's before any deductions for income tax or unemployment insurance, it's getting to be pretty expensive. So that's the one calculation it is the best we have right now for the city. But the province has another calculation, one that I like a lot more. And what they do is you hand them a T four slip at the end of the year, and it says, Hey, Dave made $60,000 A year therefore 30% of that, so you pay $18,000 A year is your rent $1,500 a month and  it stays that way till the next year, when you bring your T force slip in, and it gets adjusted. And that kind of locks you into that 30% level. So somebody could be making 60,000, they could be making 100,000, but it still works out to be 30%. And then the province, what they do is they they subsidize the landlord or the nonprofit society that's renting these places out. They subsidize them the difference between what that 30% is and what the actual cost to operate that processes. Two different definitions. I like the second one the best. But the reality is, is that we can't have every province has a limited amount of money that they provide to the municipalities for this BC housing subsidy. So we have to do what we have to do to make the rest of it work.

Dave Graham
Okay, here's another humdinger for you. How the heck did we get here? What were the factors that contributed to this lack of affordable housing?

Ed Mayne
We've got to go back to what we learned in grade nine economics supply and demand. That's really what this whole thing is about. The reality is, is back in the 60s in the 70s, rental spaces, 50% of the population was renting. 50% was owning it was kind of an even split at that point in time. And there was enough availability of rental space that it kind of controlled where the rent levels were. What happens is in the mid 1970s, inflation starts to hit our prime minister of the day who happens to have the same last name as our current prime minister. He looked at it in order to control rents because they were escalating with inflation. In order to control it. What he did is he fixed rents. The problem was at that point in time as all the developers that were putting their money into rental housing, said wait a minute, we can't carry these costs without the long term increases that came up. So what they ended up doing is they said, to heck with it, we're out of the rental game and we'll start buying and doing stratas we'll start doing commercial real estate will start doing a lot of other things where we get a greater return on our investment. When he first did it, it was a homerun because you know, everybody's rent stayed fixed, and it wasn't escalating through the roof. But as time goes by, and there's less and less availability of places, it becomes harder and harder to find places to rent. So that was where it's all started. And it's carried from there, we still have a supply problem.

Dave Graham
That consideration aside, how would you say Parksville is doing in terms of having an impact on making housing more affordable, both in terms of rental and ownership?

Ed Mayne
Let's talk about rentals first off. We were at a very stagnant level for many years here in Parksville. For the reasons that I just mentioned, you know, supply and demand. One of the things that this council has done is we said, wait a minute, if we want to attract young families into our town, if we want to get doctors to move into our town, we have to start making life more affordable so we started to approve a fair number of units in Parksville. For example, since 2018, which is when the last election was we have put in 977 rental units in the city of Parksville still not enough.  When we were talking about 977 rental units the first thought is is oh, that's way too many, we're never going to rent them out, there's going to be this glut of buildings sitting empty. Not only are they rented out, but we have a waiting list, we could build at least another 400 units and still be tapped into this. So it is something that will continue to grow. The demand on an affordable housing is a never ending battle. Parksville is doing a pretty good job at keeping up. But it's not getting ahead of the game and that's really what we want to look at. When you get down to homeownership. Oh my god, we're losing that that race big time right now. I mean, last week, I read in the paper where the average freestanding house in Parksville was selling for a million dollars. Nobody making $50,000 a year can at least nobody that I know can can afford a mortgage on a million dollar home. Okay, so buying houses is something that we have to work on. And we are coming up with it. Council meeting here this week, we just passed a pilot program that staff are going to put together where we're going to help assist in the downpayment of homes for first time homebuyers who have lived in the city of Parksville for two years, and hopefully we can we can help out a little bit on the low end of the market, we're not going to help people that are looking for million dollar homes, we put a cap on it at $490,000. And of course, people are gonna say you can't find a $490,000 house. Yeah, you can. It's just It doesn't have two bathrooms. It doesn't have granite countertops, it doesn't have quarry tile floors, and all of the bells and whistles. It is a two bedroom strata unit 900 square feet, we can probably see them coming in at around 470 to $490,000 according to the developers that I've talked to.


Dave Graham
Are there other approaches a municipality can take in order to help ease the situation of affordable housing?

Ed Mayne
There are a number of things that municipalities can do according to the Local Government Act and to the Community Charter. For example, we can waive development cost charges for affordable housing. Okay, that's our prerogative to do that. And we do do that for all affordable housing units there's no development cost charges. We allow the developers if it's if you're doing a building, and more than 30% of that building is comprises of affordable housing, we'll look at waiving property taxes on those particular units. So there's a number of things that we can do. The big thing that the municipalities have to do is to process the applications quickly. One of the major costs for a developer is time. And so if you have to go for a rezoning and it takes you a year to get that piece of property rezoned, the developer is sitting there with with the cost of that, and has to carry that soft cost, as they call it, and adds to the price the overall price of a development. So our job is to be able to process rezonings faster, and we're going to be.  In fact  at our last meeting we've had staff go out and look at ways to do that and hopefully we will come up with a solution within the next month or so for that.  We are also the fastest at processing development permits and building permits there's nobody that comes close, we're taking a week to process a building permit for a house and we're taking two and three or four weeks for for commercial developments. So we're moving them through our staff are amazing. They have taken it as a personal challenge to process this as quick as they possibly can, because they know the upside for the city. 

Dave Graham
Okay, what about first time homebuyers? Do you have any light at the end of the tunnel for them?

Ed Mayne
People can afford the monthly mortgage payments, it's accumulating that downpayment for the unit. So the process, what we're looking at is, we want to be able to help first time homebuyers by putting in $17,500 towards their downpayment. And that doesn't sound like a lot, in some cases. Sounds like a whole bunch of other cases. But the reality is, is a $490,000 house or strata, rather, a 5% down payment is $25,000. And so if we put in 17,500, the individual has to come up with $7,500, either through their own wherewithal or from family or however they achieve getting that.  They're going to have to cover things like mortgage insurance and land transfer tax and all the normal closing costs that you and I would have when we buy a house. So we want to help get the ball rolling by providing a 17,500 for them, it is going to be a grant, you live in this place for five years at the end of five years if you want to sell it, you sell it for what the market will bear and you don't owe the City of Parksville any money. The beauty of all of this Dave is the fact that it's not going to cost the taxpayers of Parksville one cent, what we've done is we're working with developers right now, if we upgrade a piece of property, and if so, let's say you buy this piece of property, and it is zoned for single family housing and you want it upgraded to multiple units. Single Family Housing might sell for seven or $800,000 an acre, high density residential properties can sell upwards to $2 million. So you if you get it rezoned, you've taken the value of two $2 million, you've increased the value right off the top by $1.2 million. So what we ask from these developers, okay, we're helping you out, we're contributing to your success. So what we ask from you is to make a community contribution and you know, in the past has been for things like the fire hall or will help you do a garden here, or we'll do a playground there or will contribute to umpteen different things that it's been, what we're saying is we want you to put $1,000 for every unit that you open on that piece of property into a affordable housing reserve fund. So that will be where the downpayment of 17,500 comes from is so every 18 units that are developed on a piece of property, that will mean one more unit that we can sell under this program. It's a pilot program, right now it's a test, we're going to run three to five of these units, hopefully, and lay it out so that we can see how it works.

Dave Graham
You've always made it clear that a major part of your platform has been affordable housing. And is it fair to say that's the number one priority?

Ed Mayne
No doubt about it, Dave. In the upcoming election, and if I'm fortunate enough to be reelected, that will be the thing that I will be driving and people will be hearing from me constantly, is we have to improve our affordable housing. Every other major goal the city has is built around affordable housing, if you think about it, I can't attract young families to come into town if they can't afford to live here. I can't attract doctors if they can't afford to live here. There was a write up in the paper here just in the last couple of days where a doctor is moving out of Victoria because they can't afford the rent in Victoria. So you know, young doctors just coming out of university owing significant dollars for student loans and everything. They have just as hard a time as anybody else making rents payable, so we can't attract doctors. And that's something we need desperately here. So yes, affordable housing will be the number one priority. And then right below that will be let's finish the swimming pool process out and find out where we're gonna go with that. And then we can start to look at economic development for the community and can we get businesses where higher paying jobs are available, and that'll be the you know, the another part of the upcoming agenda

Dave Graham
Okay, we covered a lot of ground there. Hopefully we added some clarity to the affordable housing picture. Hey, please join us again for more conversations about Parksville with Mayor Ed Mayne. I'm Dave Graham, and thanks for listening to Ed's perspective.