Archive for December 16, 2009

Resiliant Canadian Home Prices–Alternative Theory

December 16, 2009 / Wendy Waters / 6 comments

Unlike the housing market crash in the USA, in Canada the average home price is reaching record highs, or is already there depending upon how you measure it and adjust for inflation. Market watchers are starting to cry “bubble!” They are predicting a burst, or at least a noticeable slow down soon.  (Good article in the Globe and Mail on who is saying what, and why.)  They may be right — or not.

However, here I offer the theory that maybe the steady increase in house prices isn’t a bubble, but a response to shifting urban trends.  The demand for homes (whether condo, townhouse or single family) close to the urban core continues to grow, while supply cannot keep pace.  The result is rising prices.

Increasingly, individuals and families want to live in close proximity to jobs, as well as urban amenities.  There is a limited supply of housing in such places, and thus prices go up.

When analysts speak of record high prices, they are typically talking aggregate values, nationally.  What I want to see are prices broken down by proximity to urban core.  Home price increases may be uneven geographically with the rapid increase of metro core homes masking declining or stable values in suburban places and smaller towns.In the Metro Vancouver area, for example, homes actually in Vancouver, near or in the dense urban core — with proximity to a wide variety of urban amenities from restaurants to theatre, the ocean and transit — have continued to increase in price throughout the recession.  But in the more distant, automobile-centred suburban areas, this is not the case.

In the GTA, I’m hearing a similar phenomenon.  Home values in Rosedale or Forest Hill continue to rise; demand for downtown Condos has not been satiated.  But what about the distant suburbs?

Does anyone have some good, local level numbers?

Other comments on my theory that it’s the rising sale prices of houses in certain places driving up the national average?

Category: urban history /

Gentrification and diversity

December 1, 2009 / Wendy Waters / No comments

The challenge as many North American metro areas urbanize — evolve into higher density, urban playgrounds — is maintaining diversity in these new and renovated neighbourhoods.

An article by Aaron Renn of the Dallas Morning News is circulating among the urban bloggers that notes how “White” some of the cities often considered models for future urban development are or have become (Portland, in particular).  While many of the statements in the article ignore some historical context, this paragraph hits a challenge of our times:

Many of the policies of Portland are not that dissimilar from those of upscale suburbs in their effects. Urban growth boundaries raise land prices and render housing less affordable exactly the same as large lot zoning and building codes that mandate brick and other expensive materials do. They both contribute to reducing housing affordability for historically disadvantaged communities. Just like the most exclusive suburbs. 

This paragraph holds true if the city’s urban planners and voters don’t also push for different forms of housing — a diversity of housing options to maintain a fertile environment for a more diverse population, if you like.

Gentrifying urban spaces need: small and larger rental options, of varying age, quality and price;  home ownership options of all variety from high rise condo to ground-oriented row house — and some single family homes nearby.

Sure the latter might only be affordable by the highest income cohort group, but this group is as important to the diversity of a neighbourhood as artists, coffee baristas, and junior software programers.

Problems arise in an urban space when one group — whether poor, rich, or in the middle dominates to the point of shutting out all others. And lets face it, mono-cultural life is not what people want when they choose urban spaces over suburban ones.

Category: development conflicts, diversity /