Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Archive for August 23rd, 2007

Metro Vancouver downplays location-efficient mortgages

with 4 comments Vancouver

From a pure mortgage underwriting perspective, it appears that CMHC would not consider the transportation-linked mortgage to be a viable commercial product

I do not think that CMHC is actually helping Canadians. For a start the need for mortgage underwriting seems to me to be grossly overrated. And before you write to me about the recent US sub-prime problems, they arose from people using the equity in their homes to pay off their credit cards – or finance some more consumer spending – not first time buyers struggling to get in to the market.

CMHC first of all regulates how much you can borrow – but nobody regulates how much you spend on transportation. So it is not surprising that we see people moving out to where they can buy something with what CMHC is prepared to guarantee, where they will spend a lot more on commuting. Secondly in order to get a high ratio mortgage – one where you do not have to have a great wad of cash on hand to slap a big down payment – you pay more in insurance. In fact the last house I bought, I decided to add some money that had been earmarked for some much needed renovations to the house we were buying, just so I could get a lower ratio mortgage: it reduced my monthly payments so much it was worthwhile to defer the new roof and windows a few years. Of course that probably increased our energy consumption too, but I doubt CMHC is interested in energy efficient mortgages either, and in those days hydro was still cheap.

Metro Vancouver did not help its case by examining places like Langley, Port Coquitlam, North Surrey, and Maple Ridge as potential LEM markets. As they remark – there’s no transit there to speak of (ok – the exact quote is “did not have the transportation infrastructure needed to successfully support these initiatives”.) What they should have looked at is how LEMs would have made places like East Vancouver, Burnaby and New Westminster affordable and attractive for the people whom otherwise are going to head out to the suburbs. A bigger mortgage can be handled if your household does not need two cars – forget the gas, just look at the lease payments you are not making. Especially if you can join a car co-op to act as back up to your transit pass.

And exactly what risk has there been in Metro Vancouver lately in terms of mortgage defaults? House prices have been steadily increasing. A house bought seven years ago for under 250k now sells for over $500k. So that $200k mortgage looks like a safe bet to get paid off after transaction costs by year two or three. Not much risk there!

So why do we actually need CMHC? Why is it a federal institution? And anyway, what the heck happened to all those federally funded housing programs that were the centerpiece of so many of the seminars my planning colleagues went to at LSE? (I did the transportation option, but most of them did housing – in the seventies it was the bigger issue for those with a social conscience.) Hard to believe now, but Canada used to be seen as a model in places like Britain.

One of the great tragedies of the right wing’s victory of the last few decades has been the loss of progress that had been made in getting low income citizens out of slums. Now we have homeless people begging on the streets of the world’s most liveable city. And in the suburbs the invisible homeless continue their couch surfing, and hope to find a tiny, illegal and unsafe basement suite they can share with someone.

Written by Stephen Rees

August 23, 2007 at 6:57 pm

Posted in housing

Transportation | Tipping point for hybrids?

with 6 comments Vancouver

Citizens are finally demanding electricity-powered cars—many years after David Suzuki bought Canada’s first hybrid.

Well this citizen isn’t and I have lusted after an electric car for years. But when it came time to replace the 12 year old minivan I had a bad case of sticker shock. One good thing about Toyota is that there is no dickering, so you can do price comparisons on line and know before you go to the dealership what the bottom line is. For you do not pay the often quoted “price” because you are going to have to pay taxes and fees, delivery and you will probably want something more than the absolute base model.

So for me the choice came down to the hybrid Prius at around $40k – and fuel consumption of 4.1 l/100km or the slightly less exotic Yaris for which I paid around $20k and am expecting 6.3 l/100km. These figures do not include the Government rebate since you cannot actually get it yet ($2k for the Prius, $1k for the Yaris) – though the claim forms are expected to be available … in due course.

You can buy a lot of gas for $20k – so for someone who does not too many kms (there were only 150,000 or so on the old van after 12 years) the economic case is not there. And the rebate is, frankly, irrelevant. And anyway, I do not want to invest an extra $20k upfront in my mobility for not very much return other than bragging rights. And I will be burning a lot less fuel than I was in the old van too – that was getting around 12 l/100km at the end.

And if I was going to throw that kind of money around on a car I think I would expect a bit more than better fuel consumption.

My Yaris

Written by Stephen Rees

August 23, 2007 at 6:10 pm

Running off the rails

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Melbourne | Herald Sun

There is a sort of wicked glee that comes over me when I read this sort of stuff. The Germans have a word for it. “Schadenfreunde” – delight at the discomfiture of one’s friends.

It goes to show that Vancouver is not alone in the way it mismanages its public transport. Melbourne has made an even greater cock up of it, and for much the same sort of reasons. They did go down the privatisation road that Translink was tempted to take but turned back from. They also cut the fares when there was no spare capacity. Yes cutting fares does boost ridership. But it also creates dreadful conditions and has a significant impact on revenues and hence ability to do anything about new capacity. Vancouver seems to have actually added more to its system in recent years. Mainly it is a matter of neglect and lack of investment (sound familiar?)

Anyway, as you cram yourself aboard a crowded bus on Broadway, or a packed SkyTrain, you can comfort yourself that there are some places where they have got it even worse.

And of course once again the Economist has picked Vancouver as the most liveable city.  (source: CBC News ) Apparently it is because we are so safe – such a low crime rate and no threat from terrorists – and really good transportation links. Which I can only assume refers to the airport, as the trains are not up to much (one a day to Seattle and three a week to the rest of Canada) – and, according to the provincial government – neither are the highways.

Written by Stephen Rees

August 23, 2007 at 7:56 am

Posted in transit, Transportation

Blog Stats

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WordPress has just produced a new feature. They now allow bloggers to see not just the number of views per day but also per week and per month. So in a spirit of shameless self congratulation – or rather, thanks to my readership – here is the new graph.


Written by Stephen Rees

August 23, 2007 at 7:34 am

Posted in Uncategorized