People are definitely taking liberties with the term ‘affordable housing’ these days.
It started out as being something suitable for low-income families. Now, it’s entirely up for interpretation.
Can a home in the $400,000 range be considered affordable housing to someone making $30,000-$40,000 a year? Not really, when you think about it.
Someone in that position would surely have to devote a considerable portion of their disposal income to housing. That’s not affordable because they’d have to cut back in other areas to make it work.
That price would be considered affordable to someone making a $1 million a year so it’s all very subjective.
For most average working folks, the truth is there’s really no such thing as affordable housing. Prices have skyrocketed over such a long period of time that a market correction must happen so people can live in a more comfortable fashion.
The fact such a large percentage of household incomes - whether for rent or a mortgage - goes to housing is ridiculous.
We’re starting to see signs of the market returning to some sort of normalcy that’s long overdue. People have made enormous amounts of money flipping houses in the last two decades while so many have struggled to make ends meet.
The only way it’s going to change is if people stop overpaying for properties. A couple of local examples have popped up recently.
The Selene in Old Town Chemainus still has units unoccupied more than a year after completion. The vacancies suggest people think it’s not worth the cost for the location.
In other words, they don’t think the investment will match the potential value in the future. There’s certainly still a high demand for housing so the logical thing that will happen is a price drop if a sale doesn’t happen.
Someone recently moved a house to a lot in Crofton and then built another level beneath it. It’s been advertised for rent at $1,900 a month and many have commented that’s too high.
If no one bites at that price, it will drop. If enough people think properties are overvalued, eventually owners are going to have to come to their senses if they can’t move them.