Vancouver experiment in affordable home ownership succumbs to the market

Vancouver experiment in affordable home ownership succumbs to the market

Depending on your level of cynicism, the story of 60 West Cordova is a testament to good intentions that carried unintended consequences or an object lesson in greed.

Located on the edge of Vancouver's notorious Downtown Eastside, 60 West Cordova is an attempt to provide low-income residents of the neighbourhood with an affordable entry into Vancouver's high-priced real estate market.

The 10-storey condominium contains 12 non-market apartments and another 96 affordable units earmarked for low-income buyers who must live and work in the area and must also help with the building's maintenance.

Prices for the one- and two-bedroom units between 531 and 785 square feet started at $219,000, with most selling for under $300,000 – a screaming deal by Vancouver standards.

The project's numerous partners included the developer Westbank and architect firm Henriquez Partners, both of which have a track record of innovating developments in the troubled district.

Launched in 2010, the building was finished in 2012. But two years later, The Tyee news site reports the bold experiment in housing affordability appears to have turned into another symbol of the area's steady gentrification.

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Some of the early buyers, who were required to live in their units and not sell for at least a year, now have cashed in, reselling them for profits as high as $74,000, The Tyee said. Others have turned their units into rental properties; BC Assessment office data shows as of March, 16 per cent of the building's units were no longer owner-occupied.

"If I were to come in now and buy the apartment that I'm in now from somebody else, I wouldn't find it that affordable," Sylvia Lim, a resident who bought her unit when the building opened in 2012, told The Tyee. "I would sort of see it as being on the average price range for most one-bedroom condos in the area."

The situation is embarrassing, former Downtown Eastside planner Nathan Edelson told The Tyee, because the developer did not plan for what would happen when a second generation of buyers came into the building. Bringing down the unit costs to an affordable level was an achievement, he said.

"How to keep them down was the critical issue, and they didn't quite get there," said Edelson. "But the next one, I suspect, will. It'll have to."

Last year, five of the building's market-rate units were resold at prices between $306,000 and $330,000, with an average profit of almost $56,000, The Tyee reported.

"Two or three sales of that sort would really make a difference on the affordability [of a building]," Edelson said.

Almost three quarters of the units now carry assessed values of more than $300,000, according to The Tyee.

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Westbank spokeswoman Jill Killeen told the news site that while the project was set up to discourage condo-flippers and investment-oriented buyers, the rise in values was predictable.

"It should be expected that assessed values are higher than the original purchase price because the homes were purposely sold for less than market value as that was the goal of the project," she said.

Which begs the question: Is it possible to create affordable housing that people can buy instead of rent, then keep it affordable for future owners?

Edelson said such a mechanism is in place for the building's dozen non-market units but he'd prefer the city not invest in affordable home ownership unless there's a way to keep prices down after the initial purchase.

The city has plans for more than 8,000 affordable home-ownership units under its recently approved Downtown Eastside local area plan, which Edelson said means it will have to find ways to keep those projects from experiencing the same price spikes as 60 West Cordova.

"The mechanism around resale is the critical one," he said.