It's not every day that you wake up, read the news, and learn that your beloved city has just earned the title of being the least affordable urban center on earth. That's what happened last week, when local headlines trumpeted the news that Vancouver, BC, edged out almost 300 cities to score this dubious distinction. Want to find out how your city rated? Keep reading.
First, a bit about the rationale used to determine how affordability is ranked. Every year for the past six years, an organization called the Frontier Centre for Public Policy conducts something called the Demographia International Housing Affordability Survey. The survey gathers information about housing costs, then compares this data against median household incomes.
The report's authors, Wendell Cox and Hugh Pavletich, who based their findings on 2009 third-quarter data, said that to be considered affordable, housing prices have to have a Median Multiple of 3.0 or less – or, in other words, the price of the average home must be equivalent to no more than three years' household income for an average family in that area.
The Median Multiple scale progresses upward from there: Moderately Unaffordable is 3.1 to 4.0; Seriously Unaffordable is 4.1 to 5.0; and Severely Unaffordable is 5.1 and higher.
The survey report states that "[In] Vancouver the median sale value was $540,900 and the median household income was $58,200, giving a Median Multiple of 9.3.'"
I guess they haven't gotten around to creating a Super-Mega-Severely Unaffordable category. Maybe next year!
Rounding out the top five list of least affordable cities were four Australian destinations: Sydney, Sunshine Coast, Darwin, and Gold Coast. Honululu was ranked number 6, making it the least affordable city in the US.
At the other end of the list, Detroit was rated the most affordable city in the world, with a Median Multiple of 1.6.
What does this all mean for Vancouver in real terms? Well, sadly, people – particularly creative types and families – seem to be leaving in droves, as there's very little in the way of affordable housing, and even less in the way of affordable family housing, in the city. It's unfortunate, because one of the things that has always made Vancouver a fun place to live has been the diversity of people who live here. More importantly, diversity is touted as an indicator of the health of a community. It'll be interesting to see what changes the next few years will bring.
Read the full report here: 6th Annual Demographia International Housing Affordability Survey