Zero Sum Game?

zero sum game: a situation in which one person or group can win something only by causing another person or group to lose it. 

I just pulled the current homes for sale on Salt Spring Island statistics off of the Victoria MLS System.

The lowest priced home on Salt Spring, in which you can live in year round, is a 974 square foot, 50 year old, 1969 mobile home, while the second is a 1,018 square foot condo, that is 29 years old, for $449,000.

The required income to purchase mobile is around $70,000/year, while the condo unit would be over $80,000/year.

In other words, there is no longer ANYTHING (okay…ONE) which could be considered “affordable” by the average working family on the island, using the 2015 median income of families of $70,366/year.

The number is ZERO… that’s a “0” with as many 0’s following it as you want to put.

Victoria MLS Salt Spring Nov.11/19 Income
Price Range Homes # listed Av$ Required
0 $149,000 0
150000 $199,000 0
200000 $299,000 0
300000 $399,000 1 $339,000 70,000+
400000 $499,000 5 $475,180 80,000+
500000 $599,000 7 $579,071 100,000+
600000 $699,000 12 $665,866 100,000+
700000 $799,000 11 $768,277 100,000+
800000 $899,000 9 $853,888 100,000+
900000 $999,000 3 $978,333 100,000+
1000000 $1,499,999 18 $1,244,277 100,000+
1500000 $1,999,999 7 $1,768,257 100,000+
2000000 $2,999,999 4 $2,447,500 100,000+
3000000 $3,999,999 1 $3,499,000 100,000+
4000000 $4,999,999 0
5000000 and up 0
Total 78

Compare those numbers with these from the 2015 IWAV updated  Salt Spring Housing Needs Assessment.

Table 36 – MLS listings – Single Family, Condos and Town Homes Available 2009-2015
Price Range # listed
2009
# listed
2014
Change
2009-2014
# listed
2015
Change 2009-2015
0 149,000 0 0 0 0 0 n/a
150,000 199,000 0 0 0 1 1 n/a
200,000 299,000 1 11 10 4 3 300%
300,000 399,000 12 53 41 31 19 158%
400,000 499,000 27 30 3 18 -9 -33%
500,000 599,000 25 41 16 29 4 16%
600,000 699,000 18 28 10 14 -4 -22%
700,000 799,000 17 13 -4 9 -8 -47%
800,000 899,000 16 11 -5 4 -12 -75%
900,000 999,000 13 9 -4 12 -1 -8%
1,000,000 and up 46 21 -25 46 0 0%
Total # 175 217 42 168 -7 -4%
Median $ 749,000 549,000 -200,000 639,000 -110,000 -15%
Average $ 1,001,757 688,486 -313,271 1,026,361 24,604 2%

BUT, the good news is…oh wait…there isn’t really any good news here.

Due to the increase in real estate values since 2015 (median house price up 10% from $749,000 to $825,000), with the average house price now…wait for it… $1,026,284….investors who have been holding on to rental properties are now selling them off and realizing a return on their investments. Why would anyone rent out a home worth $600,000 for $2,000/month, when the mortgage/tax/insurance carrying costs are likely over $4,000/month?

And, due to the poor rental rate of return VS purchase price, virtually none of the rental properties sold are being continued on as rentals. Rents can’t cover mortgages, especially when the federal government has reduced amortization terms from 35 to 25 years, AND, demanded people qualify at 2% above prime.

So, ask yourself these questions:

  1. Why do you suppose are the fundamental, underlying, rational, common sense reasons real estate values are so high here, and with so few listings? (Hint – think supply/demand)
  2. If you were a betting person, would you bet home prices on the island will be higher 10 years from now or lower?
  3. How many renters will be given their notices to move out over the next 10 years?
  4. How many workers are currently couch surfing or living in cars or tents, or are renting their accommodation?
  5. How many workers are currently commuting to Salt Spring?
  6. Is the housing crisis, which has been acknowledged by the Islands Trust in over 24 studies over the same number of years, going to get better, or worse over the next 10 years?
  7. Long term, how many community housing dwellings (similar to Whistler’s employee housing which now boasts 1900 units) will Salt Spring need over the next 50 years?
  8. Given NIMBYists and BANANAists decrying virtually every proposed development rezoning (including Meadowlane and Croftonbrook) when do you think it will be easier to rezone land for community housing, now? Or in 10 years?

The “zero sum game” here is this – In order to increase density for the long term health of the community, some community members are going to have to lose their sense of entitlement to less traffic, less people, less children, less noise, less disturbance… or, the community will die.

I grew up here, in a community which really cared for itself. Currently, I see that wonderful rurality of characters, artists, artisans, bakers, musicians, etc. slowly ebbing away, with no leadership to take the helm, and no vision of the future. In fact, the blindness and speed at which this community is proceeding off the cliff is staggering.

Open your eyes…its all happening right before them.

 

 

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