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Almost everything you have read or heard so far about the Vancouver’s task force on housing affordability is misleading, off-base or just wrong

October 11th, 2012 · 63 Comments

I have seen some strange media circuses in my life, but the one that happened the last two weeks — as people attempted to report on the final report from the housing affordability task force — was one of the weirder ones in the annals of communications.

I will attribute some of this fiasco to the city. The 15-point priority action plan in Appendix A was just too big a wad of policy to swallow for many people. Yes, I know all of you at the city have been working on this forever and it’s crystal clear to you what’s going to happen. But there were too many nuances and technical terms for reporters, even some hard-working ones, to get everything that was in there.

As a result, I hear people — calling in to the NW show that I’m on, talking about this in general conversations, writing letters to various editors and blogs — who are so mixed up that it’s kind of sad to listen to. At this point, as far as I can tell, there are an awful lot of people who think:

1. The whole city has been rezoned without public consultation to allow towers on main streets and a bunch of apartment buildings on the streets next to main streets

2. The city is looking for 20 streets that can be reduced by half, with the other half going to social housing, apartments and other kinds of housing — the so-called “thin streets” projects.

3. The city was going to do that, but there was such an uproar from the gentle citizens that the city totally backed off on that part of the plan.

4. The Vision council is just letting its big developer friends do what they want all over the city.

5. Everything that’s going to be built will be constructed by private developers, who will just charge whatever they can get, so how will that be affordable?

6. It’s all part of an evil plot.

Okay, maybe not everyone believes the last one but some do. And none of it is true.

I’ve been as big a critic of any of some of the Vision approvals of spaceship towers in Vancouver neighbourhoods recently. But a lot of the criticism that’s currently circulating is based on a completely erroneous interpretation of what Vision/the city is doing. If I could point out some facts:

– The city has not been wholesale rezoned. There was an interim rezoning passed that is going to allow some six-storey buildings around neighbourhood centres and on main streets — two storeys higher than what is allowed now — and will allow 20 rowhouse or stacked townhouse projects around the city, no more than two per neighbourhood.

When the first 20 are in, staff have to report back evaluating how they are working. If/when the Vision council decides it does want to create a new form of zoning that allows stacked townhouses/rowhouses on either side of all the city’s arterial roads, that will require a public hearing and everyone will get a chance to weigh in.

– The thin streets projects and the stacked townhouses/rowhouses projects are two different things. There will be 20 townhouse/rowhouse projects allowed, and applications are about to start coming in. There are NO, repeat NO, thin-street projects even close to becoming reality. The report said only that the concept should go out to the three communities that currently have planning processes underway, to see if one project per community could be included in the plan.

– The city didn’t really back away from anything with respect to that. If you read closely, the deputy city manager said that communities will get to decide on whether those projects are included in the plan. That was always the intention. Absolutely nothing has changed.

– The new forms of housing proposed are actually not the kind that Vision’s “big developer friends” would have any interest in building. Six-story apartment buildings on main streets, stacked townhouses and rowhouses, little bits of housing on part of a narrowed street are the very last thing that Westbank, PCI, Wall Developments or anyone of that ilk would contemplate building. They do big stuff.

The builders who will benefit are the small operations, the kinds of people who put up one four-storey condo project after another on Kingsway, slowly creating more housing stock without anyone noticing because they’re so busy fighting the latest tower.

Or it’s the kind of smalll company that will do a small eight-unit rowhouse complex — the kinds of companies that can sometimes build lower-cost housing because they’re not going through the big, expensive rezoning fights and they operate on much, much smaller margins than the big developers, who generally cream off 15 to 35 per cent of a building’s total sales revenue as their reward for risking the millions needed for a large tower.

– Everyone seems to have missed that the city is putting conditions on the rowhouse/townhouse projects to require some level of affordability and that it would continue to own the land under any “thin streets” housing, so it could also use its equity to create some affordability.

These are the conditions that were set out for any rowhouse/townhouse development:

Projects that would be considered are:
 where 100% of the residential floor space is rental housing
 where units are sold for at least 20% below market value and include a secure
mechanism for maintaining that level of affordability over time (e.g. resale
covenant, 2nd mortgage, etc.)
 innovative housing models and forms of tenure such as co-housing, when they
can demonstrate enhanced affordability as determined by the City
 where a Community Land Trust model is employed to secure increasing
affordability over time.

And, although it’s not spelled out in the thin streets project, various staffers and politicians have said elsewhere that city would likely retain control of any reclaimed street pavement and lease it out long-term. That way, the city could start offering the kinds of innovative housing deals that Simon Fraser University and the University of B.C. have been putting in place for their faculty and staff.

For example, a row of houses along one thin street could be sold at 80 per cent of normal market value for that area and size of lot to various buyers. Then, when the owners sold later, they would get back 80 per cent of whatever the normal market value is at the time of sale. Whoever buys next would get the same 80-per-cent deal, which keeps that below-market house as an asset for future residents forever.

(I should point out that the “thin streets” concept also envisioned having other uses besides housing. Some of the land could be used for park space, community gardens or anything else besides road pavement.)

As I keep droning on here endlessly, the controversial part of all this is not really the fact that the city is experimenting with these new forms. It’s going to be how they decide who gets access to these below-market units. Then we’ll really see the fur fly.

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  • Thought of The Night

    “24 Hours Vancouver should change their name to 24 Hors D’oevancouver. One-bite appetizer paper, all day long.”

    The other day I left a short comment/ feedback in the 24HV attached to the “Duel” between David Eby & Kathryn Marshall article, here:

    So far, NADA, ZILCH, NICHT…!
    It appears to me that 24 Hours Vancouver is not partial to real dialog and/or controversial POV angles.
    So, after more than 48 hours waiting for their moderator’s “approval”, I said to myself … screw’em!
    Here it is:
    Thought of The Day

    “One cannot ‘Task Force’ empathy, friendliness, and love in thy neighbour. The Soviets have tried it… with ‘mixed’ results!”

    So, your city wants you to blind date your neighbour.
    I thought renters, condo & home owners, have strata, community centres, local cinemas (ouch) and bowling alleys (double ouch) for that.
    There are Boys & Girls Clubs in Vancouver. Big Brothers & Sisters. Foster Grandmas. Senior Ballroom Dancing Halls. Social Houses.
    FREE amenities would do more for togetherness than any City Fun Guide.
    Vision Vancouver must have this diabolical dream that one day they could have their own appointed comrade as hallway monitor, in charge of Mrs. Piffle’s lights in #404 as she must be in bed before 8.00 PM Eastern Saving The Planet Time.
    Matchmaking is not City Hall’s business what-so-ever.
    Kathryn – David (1-0)… again.

    We live in Vancouver and this keeps us busy.

    Now, 24 Hours Vancouver children, was this that bad!? 🙂

  • waltyss

    Ah Glissy: That’s the difference between 24 hours and this blog. They get to edit out what doesn’t pass muster. Unfortunately, this blog doesn’t. 24 hours 1: Bula blog 0

  • Ha, ha, ha…
    That, was one of my lightest, fat free, skimmed, all organic, free run, ethical grown, fair trade comment… in a loong time!
    If that didn’t pass the 24 Herr Censor’s litmus test, then I’m sorry, 24 Hours is not worth picking from the street box, not even for FREE.
    I’m also considering changing 24 Hours to Metro for my kitty’s litter box. I don’t want him to come down with… constipation.
    That’s why, IMHO:
    Frances Blog – 24 Hours (1 -0 ) 🙂

  • waltyss

    I’d agree with the skim milk, your little tirade certainly had no heft. And, well, the old Soviet, gulag, Stalinist city hall riff. I’d beat a kopek that they have seen that before….from you. I certainly have.
    Look at it this way. It was like a politically incorrect meal at the Naam. Not particularly filling; certainly not satisfying with mouse droppings in the corners. I hate to say, Glissy, but I think they didn’t publish it because, well, how can I say this kindly….it was same old, same old, and worst of all, not particularly amusing.
    But keep trying. I understand.

  • Naah, Waltyss, you’re wrong.
    This was my first, the only, and the last comment sent to 24 Hours!
    Everything else…

  • Kirk

    @MB 48.
    Yep, high demand plus limited supply forces prices up. My point was that it feels like in this city, only half the demand for housing is from people who actually want a place to live. The other half is from investors who continue to push the entire market skyward.

    Maybe a high tax on investment real estate capital gains or some other sort of disincentive on real estate speculation would bring prices down. But, like I said before, I can’t imagine those kinds of solutions would ever get approved.

    And, someone will say no one will buy, investment will pull out, and the market will fall. Uh, yeah, that’s the end goal — take the excessive profits out of real estate. People will still buy a place to live. People can still build/buy rental units, but most of the profit will be from rental income, not capital appreciation.

  • Higgins

    Kirk #56,
    Vancouver Real Estate (VER) should be a registered trademark with the BCLC ! I thought any… Casino must register, am I right or wrong?
    waltyss #52,
    Hold your horses. I think in this instance 24 Hours suffered from the Halloween Syndrome, they knew the House of Horrors is fake but still they were too scared to go in, as they might have screamed like a girl!

    Though, I read Glissando’s comment #51, word for word, and I have to say it… it looks perfectly OK to me!

    “One cannot ‘Task Force’ empathy, friendliness, and love in thy neighbour. The Soviets have tried it… with ‘mixed’ results!”
    THAT’S A FACT! (Check the history of collectivization)

    “So, your city wants you to blind date your neighbour.”
    FACT! (can you spell ‘Arranged Marriage’?)

    “I thought renters, condo & home owners, have strata, community centres, local cinemas (ouch) and bowling alleys (double ouch) for that.”
    FACT! (weren’t we just discussing the bowling alley on Arbutus the other day, or the Hollywood cinema?)

    “There are Boys & Girls Clubs in Vancouver. Big Brothers & Sisters. Foster Grandmas. Senior Ballroom Dancing Halls. Social Houses.”
    FACT! (pick up a Phone Book and look)

    “FREE amenities would do more for togetherness than any City Fun Guide.”
    FACT! (but where to get the money for this when all the other pet projects need seed money)

    “Vision Vancouver must have this diabolical dream that one day they could have their own appointed comrade as hallway monitor, in charge of Mrs. Piffle’s lights in #404 as she must be in bed before 8.00 PM Eastern Saving The Planet Time.”
    FICTION! (though after so many BS stories surrounding Vision is hard not to take it as FACT!)

    “Matchmaking is not City Hall’s business what-so-ever.”

    Glissy, you must be the exception to the rule as I think you are too good for 24 Hours Vancouver, and they know it! Thanks Frances for this Forum… and apologies for my previous ‘indiscretions’ ! 🙂

  • Terry M

    Glissando 51
    You serious?
    It must be a misunderstanding. The teen in charge of updating g the 24 hours site has gone on vacation!
    Higgy 57 makes a good case.
    Waltyss 54 same old, same old, like he likes it!Q
    Back to the topic, housing affordability is a mirage in Vancouver. Why on earth do we need a spotter to point at no target?

  • @ Jan Pierce 41

    Yours is not the first concern I have seen articulated over the ‘overreach’ of planning on the heels of the housing report.

    All neighbourhood groups must stand on high alert over a CAC-money-grabbing posture that is coming through loud and clear from City Hall.

    Six stories on all arterials? Really? Haven’t these folks heard about the long standing urban tradition of proportioning the height of fronting buildings to the width of rights-of-way?

  • MB

    @ Glissando 53,

    My cat prefers the Sun. She’s big and requires a broadsheet publication.

  • MB

    @ Kirk 56,

    Well, we’re still in the tail end of one of the deepest recessions ever and real estate prices didn’t come down more than the mid-teens, then they bounced up again.

    Conclusion: The value of land in Vancouver remains solid.

    My semi-educated guess is that any new tax on real estate investment will probably dampen the fire, but not put it out. You’ve got to have a real big crowd of average beer swillers to put a fire out.

    And you’d have to distinguish between genuine investment and speculation, which would only slow the hands of those with means while they reach for the cheque-signing pen.

  • gasp

    Kirk @56:

    CRA is perfectly capable of distinguishing between genuine investment and speculation in real estate and has been doing so for many years. Genuine investment gains are taxed as capital gains, whereas speculative gains are taxed as income gains.

    However, it takes some time for the CRA to audit these transactions and, when they do, the back tax, interest and penalties can often double the tax owing.

    I suspect there are many speckers and flippers as well as realtors in Vancouver who will be caught in the net when the CRA finally catches up with them.

    There are many vacant properties in Vancouver currently owned by immigrants who came to Canada under the investor or entrepreneur categories, who don’t understand our tax laws and see real estate as an easy way to make untaxed gains. Once a few of these “investors” find all their “profits” taxed away, the desire to engage in these activities should be extinguished.

    The federal government shut down these immigration programs in July 2012. Suddenly all the “hot asian money” has disappeared, prices are coming down (20% on the west side so far), and the real estate industry is freaking out – blaming the federal government’s mortgage amortization rules for the slowdown in the market.

    In addition, lending practises in Canada are changing due to new rules for the banks from the OSFI. This means developers, speckers, flippers and offshore investors will find it increasingly difficult to borrow money to engage in real estate speculation or investment.

  • Michelle S of Mt Pleasant

    Great, insightful, knowledgable comments all around but folks I think I have the answer and it’s really quite simple!
    Organized, educated protest… stopped Geoff Meggs from being able to make a mess out of the NDP today.
    Forget the lip service….show up on their doorsteps and in the communities Vision Vancouver is on a warpath to destroy.
    Yes it may mean standing in the rain getting cold but to wipe that smirk off of Meggs face today made it more than worth it.
    Time for proactive action Vancouver… the conversation for after when we remove Vision from power and start to heal the wounds inflicted by their egomanical attack on our great city!