Micro Lofts Just a Micro Solution

Property developer Reliance Properties unveiled plans to build so-called "micro lofts" in Vancouver that average a paltry 270 square feet. Many claim that these smaller units, which will likely rent for around $750, can be a solution for Vancouverites of more modest means, especially students and single service-sector workers. These people, and frankly many more, are finding themselves priced out of the Vancouver market, which is now being dubbed the most unaffordable in the world. The entire region, and not just the downtown core either, has seen years and years of rising prices. This growth, in my opinion, is unsustainable. House and condo prices have exploded across the region; home prices have more than doubled in some areas. These micro lofts aren't much of a solution for the sky-high real estate market in Metro Vancouver. Instead, fiscal policies should be adopted by government to curb this growth before people must abandon the dream of home ownership and settle for renting or at best, cramped apartment living like pictured above, where the toilet is literally in your shower and your bed has to fold up inside the wall. Finance Minister Jim Flaherty opined last month that the federal government may take steps to cool the housing market, including shortening the allowable duration of mortgages (currently 35 years) or increasing the required 5% down payment. I urge the finance minister and the federal government to strongly consider doing both. The government needs to act to stamp down the runaway inflation in the housing market. Yes, require larger down payments. Yes, reduce the amortization period. I suggest also that it's time interest rates begin to creep back up from their current historic lows. The low cost of mortgages is a key driving force in the real estate market right now with people scrambling to buy-in while interest rates are as low as they are. Begin to ratchet those rates up and hopefully we can see home prices descend back to earth. If left unattended, as it has been for the last decade, real estate will continue to grow itself a nice shiny bubble that will burst just as Canada has finished climbing out of the great recession of '08-'09 and I'd rather endure the pain of deflating it now than wait for the 'pop'.