Increasing the supply of new apartments is a better way of keeping units within affordable ranges than reducing the demand by preventing downtown Hamilton from being a desirable place to live.
By Nicholas Kevlahan
Published November 04, 2015
Last week the Hamilton Spectator ran an interesting series on the tenth anniversary of the original Vital Signs report on poverty in Hamilton.
We are in a much different situation today than we were in 2005. The economy is growing, property values are increasing, new building permits top a billion dollars each year and urban neighbourhoods that were desolate and despairing a decade ago are currently revitalizing with new residents and businesses reinvesting in the vacant buildings and empty lots.
One concern that has emerged is the fear that gentrification will push low-income residents out of their homes.
It's definitely time for Hamilton to start developing proactive policies around housing before we find ourselves in an affordability crisis, but we need to be careful not to fall prey to the misguided notion that keeping the downtown and lower city poor, run-down and unattractive is good social policy.
If buildings are not maintained, eventually they become unsafe and uninhabitable, which is what has already happened to many buildings downtown. In other words, blocking urban reinvestment ensures that the "affordable housing" made possible by neglect and disinvestment will steadily crumble away.
We must also confront the perception that "mixed income" is sometimes a euphemism for "no middle class or rich people". Achieving mixed income in a poor area means, by definition, that as more middle- and upper-income residents move in, the proportion of low-income residents will decrease to something close to the average over the city (roughly 20 percent).
The best way to do this, of course, is to build new accommodation without displacing existing residents. Since so many downtown properties are empty above ground level, surface parking or entirely vacant, there is lots of room to do this without eliminating existing units.
The Residences of Royal Connaught, a new development that recently came under some scrutiny in an RTH article, has been held up as an example of gentrification driving up prices. However, condo units in the building start at $261,000, which is really very modest compared to condo prices in Toronto or Vancouver.
Of course, the ideal policy is to build in a requirement to integrate 15-20 percent geared-to-income units in larger developments. However, that policy becomes much easier to implement when property values are higher and developers have profit margins to play with.
For decades, downtown Hamilton had the opposite problem: property values were so low that there was no way for developers to make money constructing new apartment buildings. As a result, essentially no large rental apartment buildings have been built downtown since the 1970s.
Now, as downtown Hamilton becomes more attractive, vacancy rates are dropping and rents are rising as demand increases against a flat supply. Increasing the supply of new apartments is a better way of keeping units within affordable ranges than reducing the demand by preventing downtown Hamilton from being a desirable place to live.
It's also important to remember that the buildings from the 1960s and 1970s will eventually need to be renovated (or demolished) and that will also cost money. This is why the new apartment developments are so important! Objecting to new apartment buildings as "gentrification" is just wrong-headed.
You must be logged in to comment.