Zoocasa recently conducted a study of the best and worst North American cities for affordable housing and Vancouver came second worst.
The study sourced, “December 2018 median home prices for 30 major U.S. markets and five Canadian, and calculated the minimum income required to purchase in each city.”
From there, the study compared the minimum income needed to the actual median household income, and calculated the difference to determine whether there was an income surplus or an income gap.
The annual income required to afford a home in each Canadian city was based on the following factors:
- city’s home price in Canadian dollars
- a down payment of 20%
- a mortgage amortization of 30 years
- an interest rate of 3.75%
The annual income required to afford a home in each U.S. city was based on the following factors:
- city’s home price in American dollars
- a down payment of 20%
- a mortgage amortization of 30 years
- an interest rate of 4.5%
The study noted that the benchmark home price in Vancouver is $1,156,050 CAD, and that the required income to purchase a home at that cost is $164,844 CAD. However, the actual median income in the city is $65,327 CAD, which represents an income gap of $99,517 CAD.
San Francisco was ranked as the least affordable housing market in North America. Here, the benchmark home price is $1,360,000 USD and the required income is $236,268, but the actual median income is $96,265 USD. This figure represents an income gap of $140,003 USD.
On the other end of the spectrum, Calgary had an income surplus of $40,297 CAD. The city’s benchmark home price is $400,00 CAD and the required income is $57,037 CAD, but the median income in Calgary is $97,334 CAD.
Least Affordable Housing Markets
- San Francisco: Income gap of $140,003 USD
- Vancouver: Income gap of $74,825 USD ($99,517 CAD)
- Los Angeles: Income gap of $68,847 USD
- San Jose: Income gap of $63,166 USD
- Boston: Income gap of $49,603 USD
- New York City: Income gap of $49,066 USD
- San Diego: Income gap of $31,533 USD
- Seattle: Income gap of $29,587 USD
- Washington: Income gap of $26,595 USD
- Miami: Income gap of $20,733 USD
