BY ERIC BOOTH
We all know Salt Spring has a housing crisis. However, few amongst us appear to understand the magnitude or complexity of the crisis.
The 2021 Census stated there are 6,340 people on the island receiving employment income, which is about half of our total existing population.
If we estimate two employees live in each dwelling, about 3,000 homes on Salt Spring are now occupied by employees.
Currently, the lowest-priced home for sale on the island is $639,000. To qualify, with a 25 per cent down payment ($159,750), a family income of $141,500 is required . . . far beyond the reach of average family income. The median house price is $985,000, and the average home price is $1,300,000. It doesn’t take a rocket scientist to understand that Salt Spring real estate has already outpaced the ability of the average employee to own.
Meanwhile the number of rental homes continues to decline, due to new owners purchasing and moving to the island. Investors, who bought rental homes years ago, are taking advantage of the current increased values and are selling to new owners who plan on living here, and, more importantly, have no plans to rent their new purchase. At the same time, rental rates continue to rise.
Adding to the crisis is the baby boomer retirement bubble. The average number of years someone works can be generalized as 50 years (15-65). As each island employee retires, a new employee must take their place. The average employee lives for 15 years after retirement and continues to occupy their home. Thus, every time someone retires, a new home is required for the replacement employee.
Thus, the oft referred to 200 affordable housing units, currently in various stages of planning, will not even cover the projected loss of rental units by the time those units become available. We aren’t winning, or even keeping even. We are falling behind each year.
Given the above facts, we can approximate the total “workforce housing units” (WHU’s) we need going into the future as being 3,000.
The assumptions are:
(a) currently virtually no employee can afford to buy a home now, at today’s prices.
(b) as retirees die, their homes will be bought by people “from away” who are wealthy enough to buy.
(c) as a result of (b) the number of homes occupied by existing employees (who own their own homes) and retirees (who own their own homes) will continue to decline eventually to zero.
(d) if a current employee (who owns their own home) decides to relocate, their home will not be bought by an employee because of (a).
Thus, as we move into the future, ALL properties on the island will eventually be occupied/owned by non-employees, the residents who depend upon employees for all of the services we currently enjoy/require.
Assuming 3,000 WHU’s are needed, long term, to house our existing workforce, we can assume another 30 per cent will be needed to house retiring employees (15 years/50 years = 30 per cent). 3,000 x 1.3 = 3,900 dwellings.
What does this mean with respect to our future population on the island? Currently it’s estimated there will be about 8,000 market homes on the island. Using a density of 2.0 people per dwelling = 16,000 population. However, there are some potential offsets, such as the trend towards summer occupancy vs all year round occupancy and, any market properties that will be acquired for WHU’s.
Adding another 3,900 WHU’s with 2.0 people per dwelling in them totals an estimated future population of about 24,000. While anyone can argue with some of the above assumptions, the magnitude of the housing crisis is crystal clear.
The next step is looking at the challenges we face as we move towards solving the crisis, assuming of course our community actually wants to solve it, as opposed to giving it just “lip service.”
Stay tuned for Part Two – “Where WHU’s – Up or Out?”
P.S. I realize the above will create numerous questions. I have set up an interactive Facebook Group to respond to any questions you may have. Search for “Salt Spring Workforce Housing.”
The writer is a long-time Salt Spring resident and island realtor. The above is the first in a column series by Eric Booth about the housing crisis.