Building an Affordable Community:
The Bamberton Housing Strategy

Guy Dauncey, BA
Guy Dauncey & Associates
Victoria, B.C.

Abstract

Bamberton is planned as a new community for 12,000 people, to be built over 20 years, designed around the principles of traditional neighbourhood development, ecological sustainability and social inclusiveness. The site is 20 miles north of Victoria, in an area of Vancouver Island where the demand for housing is very strong, causing constant upwards pressure on prices, and bringing considerable problems of affordability. In order to make sure that affordable housing is included in the overall plans for Bamberton, South Island Development Corporation (the developer) and the Cowichan Valley Regional District have worked together to develop a 7-dimensional framework, which includes legal provision for a percentage of affordable rental and starter homes, plans for a non-profit Community Land Trust, community self-management plans, innovative approaches to lot-size and home-size (such as Growhomes™), and special needs measures. The community as a whole is being designed to encourage and support affordable lifestyles, as well as housing, with its own economy, and village designs which reduce the need for cars. An annual affordability review will enable the planners and developers to keep a check on the progress of the strategy.

***

Bamberton is being planned as a new community for 12,000 people, to be built over 20 years on a site partially occupied by an old abandoned cement works, on the western shore of the Saanich Inlet, 20 miles north of Victoria, at the southernmost end of the Cowichan Valley Regional District (CVRD). The town is being planned along Traditional Neighbourhood Development lines to be a whole and inclusive community for people of all ages and incomes, and a model of ecological sustainability, with its own local economy. The land is owned and the development is financed by four trade union pension funds, under management by the South Island Development Corporation.

The demand for housing in such a community will undoubtedly put pressure on prices, and increases the need for a deliberate affordable housing strategy. The challenge is to ensure that Bamberton becomes a community which is able to provide housing for people of all ages and incomes.

British Columbia saw a net increase of 75,000 new residents in 1993. 12,000 settled on Vancouver Island, where the supply of new housing is unable to keep up with demand, causing 15% - 20% annual inflation in the price of housing. The escalation is particularly sharp at the lower end of the market. Average prices for residential development in the Duncan area (near Bamberton) increased by 21% in 1991; townhouses by 44%. The price of lots in the area increased by 36% in the first quarter of 1993, over 1992 average prices. Average incomes only increased by 5% pa. Over 50% of the 1990 tax returns for the Cowichan Valley indicated incomes under $20,000, which is insufficient to buy a home, townhouse or apartment in the area 1.

The federal government's 2/3rds contribution to provincial non-profit housing programs, which used to be the mainstay of affordable housing initiatives, was eliminated in January 1994. At the same time, a growing number of home-owners are arguing that southern Vancouver Island is already "full", and that further housing development should be stopped, placing added pressure on the affordability problem.

At Bamberton, South Island is planning to build a town which will include a strong economy, based on the technologies of the Information Age, in a rich environment which seeks to realize the full benefits of human potential. As such, it is likely to stimulate both the learning and the earning capacity of its residents, which will in turn contribute towards their ability to pay for housing. South Island has set a performance goal that "People who work at Bamberton should be able to live at Bamberton"2. The task facing South Island was to design a strategy which would include the necessary regulatory, technical and financial elements, while developing a community self-management process which would ensure the progress of the strategy over the full 20-year development period, and beyond.

The Strategy

Bamberton is designed to accommodate 4,900 homes in 3 phases, over a 20-year period. Zoning Amendment ByLaw No 1501 permits 2964 units of single family residential housing (which includes single family townhousing, as long as it is on its own bareland strata or fee simple parcel of land), 1293 units of townhouse residential, and 643 units of apartment residential 3.

The Strategy contains 7 dimensions

* Planning Measures

* Regulatory Measures

* Community Self-Management Measures

* Building Form and Method Measures

* Special Needs Measures

* Community Land Trust Ownership Measures

* Financial Measures.

These components are designed to meet the needs of 3 different groups who need affordable housing:

(a) Those on minimal income, who normally require subsidized rental accommodation;

(b) Those who either cannot hope to buy even at the lowest market prices (the rental sector);

(c) Those who hope to buy if prices are within their reach (entry level buyers).

Planning Measures

Bamberton is to be a community which supports affordable lifestyles, as well as housing. Most of the houses will be within 5 minutes walk of a neighbourhood centre and elementary school. By developing a strong local economy in the town, and establishing car-pooling and transit into Victoria, the need for car-ownership (or 2nd car ownership) will be reduced, releasing disposable income. A low yearly car-cost of $3,000 will service $25,000 additional mortgage, assuming that a lender is willing to stretch the CMHC "30% of income" guideline. The neighbourhood design, with narrow set-backs, front porches, community parks, tot-lots and pedestrian friendly streets should encourage a strong sense of community with frequent street conversations, and enable children to build strong local friendships, lessening the burdens of childcare, and the suburban task of being a constant child-chauffeur. Day-care facilities in each neighbourhood centre will support working parents. Energy efficient homes (R2000 equivalent) will reduce long-term energy costs, and the compact village-based building form will reduce costly servicing on a per unit basis. A prohibition on interim land-sales prior to closing (which encourages speculative flipping), and a 'must-build' clause, to eliminate speculative land-holding, also fall into this category.

Regulatory Measures

In preparing the amendment to the Official Settlement Plan (CVRD By-Law 1500), South Island and the CVRD agreed on a number of regulatory measures designed to ensure that affordable housing would be included in the plans 4 :

(a) The amended OSP states that affordable single family housing is to be encouraged at Bamberton using a variety of innovative techniques, including smaller lots (185sq m), to achieve a desirable goal of 10 - 25% of all single family units (296 - 741 units).

(b) Secondary suites are permitted on all single family lots larger than 450 sq m, provided the overall FSR does not exceed that permitted for the main dwelling. If 5% of single family dwellings choose to install secondary suites, this will produce 148 rental suites.

(c) 10% of the multi-family dwelling units (193 units) are reserved for affordable rental accommodation, based on CMHC affordability guidelines. With government subsidy programs effectively gone, innovations such as the proposed Community Land Trust will be needed to realize this requirement.

(d) There is to be an affordability review every year, or following the completion of every 250 dwelling units, conducted by the CVRD in concert with the development permit process, to keep track and make adjustments, if needed.

(e) In order to strengthen the enforcement of the overall affordability provisions built into ByLaws 1500 and 1501, the CVRD has stated that a special affordable housing bylaw is to be written for Bamberton prior to Fourth Reading, reflecting Bill 57. Bill 57 has added a new section to the Municipal Act, enabling municipalities to incorporate a definition for affordability into their zoning bylaws, to amend existing zones to include affordable housing measures, and to allow municipalities to enter into housing agreements with the owners of property, which can be entered against title to ensure long-term affordability. The legal backing that Bill 57 provides will provide a structure of enforcement for the strategy as a whole.

Community Self-Management Measures

A full-time Housing Coordinator will be employed, financed initially by South Island, and subsequently by a share of the fees that would otherwise have gone to realtors for the sale of the affordable lots. The Coordinator will have several roles:

(a) To research and publish a Bamberton Affordable Housing Portfolio, detailing a wide range of affordability options, putting the information in the hands of future residents and development partners.

(b) To establish a non-profit Bamberton Community Housing Team, made up from residents, which will take the overall responsibility, along with South Island and the CVRD review team, for realizing the affordability goals.

(c) To consult with future residents and groups of residents who are in need of affordable housing, and work out the best ways their needs can be met.

(d) To consult with prospective development partners of affordable housing options, whether private developers, non-profit housing societies or cooperative or cohousing groups, and develop projects for specific parcels of land.

(e) To develop the proposed Community Land Trust.

Building Form and Method Measures

A wide range of building forms and methods can be used for private ownership, cooperative ownership, community land trust leases, condominium lease, or rent. These will be featured in the Affordable Housing Portfolio :

(a) Smaller houses, on smaller lots. Zoning ByLaw 1501 permits single family dwellings units to be on lots as small as 185 sq m. The rough price being quoted for the sale of an average 450 sq m serviced lot at Bamberton is $81,000. Smaller lots will likely cost less. At a building cost of $75 per sq ft, a 2,000 sq ft house will cost $161,000, giving $267,000 for a 3-bedroom house on a 5,000 sq ft lot, once 7% GST and 7% realtors fees are included. Many entry-level buyers would happily live in a 800 sq ft home, if that gave them a chance to buy. If a small lot sells for $50,000, and the house can be built for $60,000, the approximate cost (after GST and fees) would be $125,400. For this and other options, the Portfolio would show a range of different designs, and indicate how would-be purchasers can proceed.

(b) Self-Contained Secondary Suites These provide direct rental housing, while assisting the buyer with a mortgage, provided a bank is willing to accept the income as mortgageable.

(c) 'Charlie House' This is a CMHC recommended single family unit built for easy conversion into 2 units, enabling a family to rent out part of their house when they are young, reclaim it as the kids get older, and rent it out again when the kids leave home.

(d) 'The Grow-Home' This is a Montreal developed concept which enables the owners purchase and move into a partially completed home (built to Building Code) of perhaps only 500 sq ft, and 'grow' into a further 500 sq ft 2nd floor as their income increases, or by doing the work themselves.

(e) Single Adult/Single Parent Shared Homes This is a cooperative or condominium arrangement which enables 3 - 8 single adults and children to own, rent or lease a shared home, providing private space, and shared kitchen and other facilities. With less than 30% of family units consisting of 2 parents + children, there is a great need for accommodation for single adults which provides both privacy and social contact.

(f) Congregate Housing This is similar to (e), while making specific provision for the elderly or the disabled. Abbeyfield Homes are probably the best-known example. There are 643 permitted apartment units, some of which will likely be used for affordable congregate care projects.

(g) CoHousing This is a Danish innovation which has established a firm foothold in North America. 20 - 30 households share in the purchase, planning and development of a parcel of land, where they build private units generally 7% smaller than average, and a 'Common House' with facilities where members can cook, eat, meet and share various facilities. CoHousing is not a specifically affordable option, but provision can be made within projects to include affordable units. South Island is committed to working with CoHousing groups on design and servicing adjustments.

(h) Self-Build South Island is intending to import a project from Scotland, where starting with laid foundations, a group of 18 novices and 7 experienced tradespeople build a complete timber-frame house up to finishing in 3 weeks, with the costs being recouped by fees, and by the sale of the house. Self-build programs, as a separate initiative, enable groups of 4-5 people to build homes for each member, supported by a skilled manager and building trades advisors. The sweat equity reduces building costs.

(i) Modular Homes The savings on production and building time reduce costs.

Special Needs Measures

South Island has committed that 5% of all units will incorporate adaptable designs, permitting easy conversion for accessibility for wheelchairs and hydraulic elevators at a later date, saving $5000 in the cost of conversion. The Affordability Coordinator will encourage builders and owners to use adaptable designs with a higher 10% target in mind.

Community Land Trust Ownership Measures

Unless there is a major increase in available building land on southern Vancouver Island, sufficient to meet the demand, the price of housing at Bamberton will inevitably be subject to continued inflation, in tandem with the rest of the housing market. For those who cannot afford to purchase, and who have no expectations of capital accumulation or capital inheritance, this causes the prospects for home-ownership to disappear altogether. The inequity of this is that over a lifetime of paying rent, those renting pay more money than those purchasing, with nothing to show for it at the end, and nothing for their children to inherit.

Community Land Trusts make a partial contribution to a solution, enabling people to own their own houses while leasing the land, which is taken off the market and owned in perpetuity by the Trust. 10% of the units at Bamberton will be made available for first option offers to a Bamberton Land Trust, at the appraised market rate. The Trust will work with non-profit housing development groups to structure the plans and the financing arrangements for the land. The development groups will manage the building process, organizing the lease of the land to applicants selected by priority from a waiting list. The Trust will structure repayments for the land on a 'lease to buy' arrangement, with annual payments structured beyond the terms of the mortgage, with payments from leaseholders matching payments to the owner. Selected residents will be able to build or buy a home, while leasing the land. When they want to leave, they can sell their home for its appraised value back to the Land Trust, which resells to others on the priority list. Owners can also leave their home to their children in their will. The system provides life-time security, the benefits of home-ownership, and a degree of capital accumulation through the purchase of the home. A proportion of the units would be sold to people at the lower end of the income scale, as a substitute for social housing. If the option to buy is not taken up within an agreed period, it will expire, and the land be placed on the open market. If 10% of all units can be secured under Land Trust ownership, this will yield 490 affordable units in total.

Financial Measures

3 mechanisms have been put forward for use; a fourth may be a useful addition :

(a) Lease-to-Buy arrangements These offer purchasers the ability to begin on a leasehold basis, and convert to a mortgage as their income improves. For the pension fund owners, long-term financing plans of this kind are quite welcome, since their own income needs are steady and long-term. This method can apply to individuals and non-profit housing groups, as well as to the Land Trust.

(b) Energy efficient mortgages Where lenders such as the Bank of Montreal are willing, mortgage interest rates can be lowered by 1/4%, reflecting the lower long-term cost of energy-efficient houses.

(c) Mortgage Scholarships This is a small initiative which has the potential to assist up to 5 people per year. Individuals are chosen on the basis of merit and community contribution, and advanced the funds for an interest-free second mortgage of up to $30,000, allowing a reduced down-payment. The scholarships would be repaid upon resale, with an inflation-linked index. In return, the 'scholars' would agree to undertake 100 hours per year of voluntary community service.

(d) Community Mortgage Guarantee Fund The fourth mechanism may be needed to address likely resistance within the lending community to the more innovative approaches. Growhomes, for instance, are technically unfinished, and present a problem for resale, should a bank be obliged to repossess. A Community Mortgage Guarantee Fund would operate in the same manner as a Community Loan Guarantee Fund, of which there are many successful examples worldwide. A sum of money is loaned by individuals and reinvested in a long-term interest-bearing account, and used to underwrite a bank's loan, covering the additional 'risk' which the bank may be sensitive to. If a Growhome owner defaults, the Fund undertakes the repossession and resale on behalf of the bank, giving the bank the security it needs to extend the initial mortgage. The same system may be able to underwrite "no-car mortgages", where a mortgagee is permitted an additional $25,000 on top of the 30% income qualification, reflecting the annual saving that can be obtained by not owning a car.

Figuring out the Results

Taken overall, the strategy has the potential to produce the following results :

Affordability Method Min Max

10% - 25% of single family units 296 741

and townhouse units are allowed

on 145 sq m lots.

+ 'innovative techniques'

Secondary suites allowed on larger 148 296

single family lots

This represents 5% and 10%

of the SF units, respectively

Community Land Trust 400 600

There will be some overlap with the

use of the smaller lots

Includes the 10% affordable rental

Affordable apartment units 64 128

= 10% and 20% of apartments

Total affordable units 908 1765

= 18% - 36% of total units

Conclusion

South Island's intention is to build a whole, balanced and inclusive community at Bamberton, which will support the development of healthy and sustainable lifestyles for people of all incomes and ages. The success of the overall affordable housing strategy is clearly critical to the realization of this goal.

Beyond all the efforts which will go into the development of the strategy at Bamberton, however, lies a far more important factor, which is the long-term supply of housing on southern Vancouver Island as a whole. As long as the island has no overall strategy to address growth management in a cohesive, responsible and sustainable manner, including the provision of affordable housing and other amenities in every new development, the current inflationary pressure on land-prices will continue. It will not be possible to create an island of affordability in a sea of property inflation. It is South Island's hope that some of the initiatives which are being proposed for Bamberton will have application further afield, and contribute to the development of a long-term affordability strategy for the Island as a whole. It is this which is most urgently needed.

Guy Dauncey

Guy Dauncey is a writer, lecturer and consultant in the field of sustainable community development. He is author of 'After the Crash : The Emergence of the Rainbow Economy' (Greenprint, 1988) and other titles.

Footnotes :

1. Access Building Association, The Bamberton Proposal - an Evaluation of Affordable Housing, for the CVRD (May 1993), pp 2-4.

2. South Island Development Corporation, Affordability (July, 1992), p A-1

3. Zoning Amendment ByLaw No 1501, CVRD (October 1993), p 30

4. OSP Amendment ByLaw No 1500, CVRD (October 1993), p 4.

5. Access Building Association, The Bamberton Proposal - an Evaluation of Affordable Housing, for the CVRD (May 1993), pp 18-23.

Additional Bibliography :

Ahrentzen, Sherry, Hybrid Housing, Centre for Architectural and Planning Research, Milwaukee (1991)

Ahrentzen, Sherry & Franck, Karen, New Households, New Housing, Van Nostrand Reinhold (1991)

CMHC, New Made-to-Convert Housing, CMHC (1988)

Duff, Jocelyn, 'Small Is Affordable' Canadian Housing (Summer 1990) pp17-23

Durrett, Chuck and McDamant, Elizabeth, Cohousing, Ten Speed Press (1990)

Hulchanski, David, et al, Housing and Community Planning. The Municipal Role in the Supply and Maintenance of Low Cost Housing : A Review of Canadian Initiatives. UBC (1990)

Moore, Steve, 'Two architects envision truly affordable housing' Berkshire Eagle, March 3rd 1991

Phelps, Priscilla, 'Low Income Housing That Sustains Residents'. Urban Ecologist (Winter 1993)

Rabinovitch, Jannit, Creating Housing for Healthy Communities, B.C.Ministry of Health and SPARC of B.C. (Jan 1993).

Rybczynski, Witold, The Pleasures of the Small House, City & Country Home (Sept 1992) pp 60-68

Turnbull, Shann, Community Land Bank, Town & Country Planning, UK (Sept '86)

Various, 'When Small is Enough' Harrowsmith Special Report (no date)