Much has been made of housing costs in Metro Vancouver.
But a new study from Andy Yan, the director of the City Program at Simon Fraser University, said the price of the mortgage isn’t the whole story. Transportation costs need to be included in the overall affordability equation.
In that case, living in Langley isn’t quite the bargain many people thought it was.
“Transportation is like an iceberg. We only see the top 10 per cent, but the bulk of the cost is hidden,” he said.
The data come from Statistics Canada’s 2011 National Household Survey. On average, a city dweller spends $298,459 on transportation over the 25-year life time of a mortgage. Included in that is everything from public transit to gas to bike maintenance. In Langley, that number jumps to $566,755. It is like a second mortgage and Yan says the theory of driving until you can afford a home is flawed. Studies have shown in the 2008 housing crisis in the U.S., the people with the highest transportation costs had the highest default rates.
“The only way to reduce the costs is to improve transit access to the suburbs,” Yan said.
The number everyone talks about is $1 million. Homes that have surpassed that psychological barrier have become the benchmark for what people can afford.
In Vancouver, 89 per cent of all single-family homes are worth more than $1 million. With transportation costs included the number jumps to 99 per cent.
In Langley, the numbers aren’t all that much different. Fewer than 1 per cent of homes are assessed at more than $1 million, but with transportation costs added the number jumps to more than 70 per cent. It’s an indication of just how much transportation adds to the total cost.
“It shows how much work we have to do on regional planning.”
Yan believes Metro Vancouver can make transportation more accessible.
“The more we design our region to be livable, the more we can reduce this transportation cost,” he said.
Data from the 2016 survey are starting to trickle in. By the New Year Yan hopes to have an update to his numbers.
“It could show an increase in costs, or it might show a decline, but it will still be a large amount of money people will have to pay somehow.”