Re: Langley Advance June 30, 2016, Painful Truth: Perverse incentives drive housing by Mathew Claxton
Great article, Mr. Claxton, however some other issues on affordability are also causes.
Keep the dream of homeownership alive.
As first time and only time buyers 43 years ago, looking for a place to raise our family, with a mortgage we invested in a 2.4 acre Fernridge property.
It was really out in the boonies at the time, had a really old, beat up house and sheds that kept us constantly in debt with repairs. But we struggled and managed to make it livable.
Recently with the help of an inheritance we tore down the old house and rebuilt a new one (a six year project) doing most of the work ourselves.
We intend on living out our lives here as seniors and yes the land has appreciated in value over the years but so have our taxes which escalated 16.2 per cent this last year while our pension plan is receding.
Our children and grandchildren will hopefully receive some benefit from our investment if there is anything left.
What about the costs that local government is imposing on homebuyers?
Mr. Claxton, I’ll bet your wages don’t even come close to today’s public sector bureaucrats, yet you are being squeezed out of the affordable market.
Land prices fluctuate with market conditions. Bubbles come and go but in a free country this is how it is, traditionally more accommodating for the lower and middle class than more socialist or communist systems.
In todays western world, “developer” has become a maligned term where it is implied that it is obscene to make a profit. In reality, even a two-lot subdivision has a developer involved who may also happen to be the landowner and/or contractor.
Developers are risk taking businesses who co-ordinate land assembly, finances and government regulation processes; hire engineers, planning consultants, surveyors and contractors; install all the infrastructure and services; pay development cost charges, etc.; and create housing or individual lots for purchase by homebuilders.
The most important thing to remember is that developers estimate all the costs involved and then add their profit like every business does.
All costs including taxes get passed down the line to the end user, the consumer purchasers.
1. Squeezing the developers for more tax fees like unauthorized CACs ‘Community Amenity Contributions’ is a direct hit of over $20,000 transferred to new homebuyer’s mortgages. Ammortized over many years, it costs the homeowner more than double that.
If there is a shortfall of development recovery, it should be bourn by the taxpayers as a whole, not by hastily penalizing homebuyers.
2. Some of the local government subdivision requirements are excessive ‘Cadillac’ type facilities that are unnecessarily jacking up costs.
At public hearings, open houses, etc. you often hear demands continually asking for more and more but not considering the cost factors.
Example; ‘Greenways’ have become a big fad with planners everywhere but they also have a downside. People are now pushing back and complaining of them.
Three metre (10’) wide meandering concrete paths intended to include both cyclists and pedestrians may be appealing to cyclists and joggers but are bad for kids, women and senior pedestrians.
They take up more land and are more expensive than the traditional 1.5m (5’) sidewalks with separate bike-lanes on each side of the street.
‘Greenways’ in my opinion should be eliminated in the single family lot areas.
Roland Seguin, Fernridge