Stephen Rees's blog

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

Posts Tagged ‘affordable housing

Policy Recommendations to Combat Vancouver Housing Unaffordability

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This is a bit frustrating, but it derives from a feature of Tumblr that does not permit comments. In view of recent experience I must admit to being tempted to move this blog to Tumblr. So, to you new readers looking at this paragraph and thinking about telling me I am wrong, and then going on to insult me – and even issue death threats for being blocked – I am NOT going to allow your comment to appear until I am satisfied that you are not just another troll.

The link to this quote came up on Twitter and is very interesting: I do not know the author (Saeid Fard) but Wisemonkeysblog is a good source of useful tweets and retweets

The piece opens

There has been a lot of talk from all three levels of government addressing Vancouver’s (and the rest of Canada’s to a lesser extent) housing affordability problem. Each has taken its turn to punt the issue to another level of government. In that vane, here is a non-exhaustive list of policy solutions that would attack the issue along with a highly subjective measure of expected impact.

and there are some ideas I will pass over. But not this one

 

Invest in (fast) transit

Expected Impact: Low to Medium
Jurisdiction: Municipal (with Provincial cooperation)

A better transit system in Greater Vancouver would connect more affordable neighbourhoods to the core and unlock their livability. Vancouver does have natural, geographic boundaries like oceans and mountains that restrict how far we can develop, but a lot of our constraints are self-imposed. In cities like New York, you can live as far away as Connecticut and still make it to midtown in about an hour. You can’t get to downtown Vancouver from parts of Burnaby in that time during rush hour.

There are several observations that occur to me. Impact is likely better than anticipated but will take time, firstly because it is not just provincial cooperation that is needed, the feds have to come up with their third too. But even if the Yes side gets a majority in the current (we are still counting) plebiscite, it is NOT binding and what would you bet on Christy finding reasons why BC can’t afford more transit for Metro Vancouver.

Moreover, a lot of employment is outside of downtown Vancouver, and much of that in places difficult to serve with any kind of transit. But also, of course, by “fast” I think he means grade separated trains and those take a long time to build.

Burnaby actually has more, and faster, transit options, than nearly any other municipality. They have also rejected trolleybus extensions (Corrigan can’t stand the wires) and an additional WCE station to help BCIT students and workers on the Willingdon corridor get to their TriCities/Maple Meadows homes faster.

Anyway, “faster” transit may not help if the overall trip is less convenient, due to transfers, access and so on. Often what is needed is not so much faster transit as more frequent, reliable transit and better route penetration into low density areas to reduce access times. When the overall trip experience includes long walks, indeterminate waits and discomfort (no shelter, no seat, no toilets at the station) it doesn’t matter how fast the transit vehicle is. Moreover, in some cases, you also need to be able to get on and not have to watch one or more transit vehicles depart without you.

But you regular readers know that and I doubt Tumblr readers will find their way here. Will they?

Afterthought: but I was also going to say that the original concerns about suburban sprawl appeared long before freeways did. Railways – interurbans and rapid transit – spurred dramatic growth on the edges of what had been fairly compact areas from the middle of the nineteenth century onwards. I know several people who were greatly concerned that the opening of West Coast Express would turn more of Maple Ridge, Pitt Meadows and Mission into bedroom communities. I am not sure if anyone has done any follow up research on that, and the lack of a proper census probably renders that moot now.

 

Written by Stephen Rees

June 20, 2015 at 6:14 pm

Posted in transit

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“NIMBYs in the twenty-first century”

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The title comes from an article in The Economist (paywalled) which discusses the work of a graduate student who has challenged the very successful book by Thomas Piketty “Capital in the 21st Century”.

I have had to return the copy that I was reading to the library: the wait list is long and the number of copies limited. If you want a good summary then Cory Doctorow has done a very good job of that.

Matthew Rognlie

On March 20th Matthew Rognlie (pictured), a 26-year-old graduate student at the Massachusetts Institute of Technology, presented a new paper at the Brookings Papers on Economic Activity. Although the paper began its life as a 459-word online blog post comment, several reputable economists regard it as the most serious and substantive critique that Mr Piketty’s work has yet faced.

Without actually quoting the whole of the article, the point I want to tackle is this. “housing wealth is the biggest source of rising wealth”

Economist graph

“Policy-makers should deal with the planning regulations and NIMBYism that inhibit housebuilding and which allow homeowners to capture super-normal returns on their investments.”

Now this seems to me to be a very familiar assertion that I have read from the same gang of dealers in secondhand ideas who like to attack government spending on transit. They have asserted more than once that the ALR is responsible for unaffordable housing in Vancouver. For instance here’s the Fraser Institute – citing Wendell Cox (pdf)

The land scarcity created by the ALR has rendered Vancouver housing the most “severely unaffordable” of any major city in the 265 metropolitan markets across Canada, the United States, Australia, New Zealand, the United Kingdom, and Ireland, as analyzed by Wendell Cox and Hugh Pavletich (2009) in their fifth annual International Housing Affordability Survey

And the same thing in almost any city that imposes an urban growth boundary to limit sprawl.

Dr. Shlomo Ange of the Stern School of Business (NYU) Urban Expansion Project puts the issue simply in his introduction:where expansion is effectively contained by draconian laws, it typically results in land supply bottlenecks that render housing unaffordable to the great majority of residents.

The Economist of course does not have to reference these reports since, as we learned recently, the marketplace of ideas has adopted this notion unquestioningly. Or has it?

The argument stems from the idea that markets are better at determining everything than policy makers. Except that markets can only determine the level of use of those things that are priced. And most of the things that are of real value – breathable air and clean water for instance – are not priced. Land capable of producing food is priced far below what it would be as land designated as suitable for development. Smart Growth seeks to protect this land from development by ensuring that land within the growth boundary is better utilized.

Smart growth planning allows us to create new housing choices that are more affordable. We need to:

  • make better use of existing land and buildings (for example, by filling in vacant lots and allowing homes to be built over stores)

  • allow a mix of home types in every neighbourhood, like secondary suites, granny flats, and single- and multi-family dwellings

  • provide a mix of homes with commercial in the same neighbourhood

  • carefully add new homes in existing neighbourhoods, such as units in the basement or above the garage (to increase rental supply and provide extra income to help with the mortgage)

  • provide easy access to jobs and transportation choices, so households can save on transportation costs

In fact the very idea of “affordable housing” might be misleading because it fails to encompass travel costs. Indeed the old saw about buying a house was “drive until you qualify”. The amount you can borrow to buy a house is controlled (in our case by the rules of CHMC) but no-one controls the amount of time and money you spend commuting. This idea is encapsulated neatly in the last of those bullet points. It is also the case, of course, that in markets like Vancouver, many people cannot afford to buy and renting is increasing in popularity even if the supply of rental housing may not be responding as we might like.

It also ignores all the evidence that the conventional model is unsustainable. All the infrastructure that is needed to support sprawl makes it financially unaffordable – as Charles Marohn admirably demonstrates at Strong Towns. The US congress has been arguing for years how to patch up the crumbling interstate system, given their refusal to even contemplate raising the gas tax which funded its construction but not its maintenance. And the bits which are usable fill with traffic congestion which building more roads has never relieved. This makes for very unhappy commutes (see Charles Montgomery “The Happy City”) but again human happiness is another one of those externalities which markets ignore. Prices were supposed to be based on “utility” but every study shows that simply piling up more cash fails to make anyone happy.

Indeed the greatest failing is that the inequality puts more resources in the hands of those who pay politicians to adopt policies that are disastrous to human existence but are good for their short term profit.

What bothers me about the Economist piece  is the nonchalance which goes along with omniscience. It goes without qualification what policy makers must do. Because all we are talking about is inequality and where wealth comes from. So none of those dull externalities need get considered at all.

And all of this it seems to me has been covered by others more able and capable than I, but that work does not seem to get cited when I go looking for it. I am actually not too dissatisfied by this piece, but at one stage I was seriously considering crowdsourcing it. I am sure that my regular crew of commentators will be piling in but if you know of other articles which deal with this particular debate (“the impact of growth control on housing affordability” gets 54,700 hits) in particular with reference to either this region or the Pacific North West, by all means let me know.

Afterword

Just how unaffordable is Metro Vancouver – and how will that change? VanCity has this forecast

Of course, there is a policy that could deal effectively with affordability, just as there is a policy that would end Homelessness. It simply requires the provision of subsidised housing. Of course those who oppose taxes on the wealthy will howl with rage. But all that we have to do to free up some resources is stop subsidizing fossil fuels – and rethink our agricultural subsidies too, while we are at it. It is ridiculous that corn and sugar production is subsidized when we are dying from diabetes, obesity and heart disease. All of which are also strongly associated with sprawl. Utah – hardly a radical liberal sort of state – eliminated homelessness by simply housing the homeless, which turned out to be cheaper than making them stay on the streets.

Written by Stephen Rees

March 25, 2015 at 4:08 pm

Condo tower, social housing, public consultation and court ruling

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Screen Shot 2015-02-05 at 3.26.45 PM

City Conversations today revolved around the controversial City decisions and subsequent court case surrounding a land swap between the city and a developer at Richards & Helmcken. Jubilee House is an existing somewhat run down facility that is in need of replacement. The developer proposed to build a replacement at 1099 Richards  St.that would add 75 rental suites, and would then build a 36-storey tower on city owned 508 Helmcken beside Emery Barnes Park. On January 27 the BC Supreme Court ruled that the process was flawed and the development could not proceed until there was a new public hearing.

UPDATE April 23 2015

The B.C. Court of Appeal has sided with the City of Vancouver and Brenhill Developments in a high-profile case against the Community Association of New Yaletown.

This morning, Chief Justice Robert Bauman delivered the news, telling those in the courtroom that written reasons will be provided later.

The decision overturns B.C. Supreme Court Justice Mark McEwan’s ruling last year that voided a rezoning and a development permit to allow for a 36-storey residential tower and a 13-storey housing complex just north of Emery Barnes Park.

source The Georgia Straight

The presenters at the conversation were John Green of the Community Association of New Yaletown – supported by their lawyer Nathalie Baker – and Alice Sandberg of the BC Nonprofit Housing Association.

John Green opened by saying that the entire city development process was new to all of the CANY members. He said they were in favour of social housing but the city had rammed through the redevelopment in an unfair process: “it didn’t matter what we said”.

Emery Barnes Park is in the heart of the downtown towers – not at the edges like all of the other parks. It could probably do with some enlargement. The Urban Design Panel examined the proposed deal on 27 March 2013 and found that the tower floor plate was too large, the development too dense for the site. Despite this the City Planner at their next meeting urged them to reconsider the proposal – even though there had been no changes – and it was approved. On July 16 there was a public hearing into the rezoning, where it was noted that there were several violations of the Official Development Plan for the area – five times the density, four times the height and with a six foot setback instead of the prescribed twelve feet. People in the area felt that the development was not a good fit. They felt there was a lack of transparency on the deal between the developer (Brenhill) and the City. Overall there would be no increase in social housing as the extra 75 units would be rented at 27% above the market rents for comparable units in the area. There was also the matter of a $50 million difference in the value of the site between the City’s valuation in the land swap and the BC assessment. The deal had not been put out to tender, and therefore the market had not been tested to see what other amenities other developers might be prepared to offer for the city’s site. It was a very complex process and hard to understand.

Alice Sandberg   did not look at the site specifically but examined the more general issue of local government’s role in providing affordable rental housing. She covered a lot of ground very quickly. “Affordable housing” is a relative term and can be applied to rental or ownership. “Social housing” specifically refers to rental housing which incorporates some subsidy from government to help meet the needs of specific groups of people. The development of either requires a range of financial and human resources – and she runs workshops on how to make housing affordable. At one time senior governments had a considerable role through capital grants, specialised mortgages, subsidies and rent supplements. The landscape has now changed. There are no supply side programmes: all are demand side and require the involvement of multiple partners. Senior governments – in Canada and BC – are driven by an ideological agenda and their priorities are to concentrate on the most vulnerable groups as well as emphasizing the role of private sector.

Local governments have some tools in their regulatory toolbox that controls development: these include planning and land use controls, zoning, and development approvals.  In addition they can provide financial incentives, land and partnerships.

The public perception of these developments is that they do not like change in their neighborhood. “They don’t like sprawl and they don’t like density.”

Participants

1.  The City could have increased the supply of social housing. They “got nothing” and missed the opportunity

2.  The land swap has not happened

3.   Small apartments on Richards were going to be 350 square feet and rent at $1100 pm or $3.39 per sf

4.  “This is not social housing it is human warehousing for profit.”

5.  Nathalie Baker did not make a presentation but responded to most of the factual questions: There was a two year process of negotiation between the City and the developer. This is not unusual and obviously during the process of negotiation there has to be privacy over the arrangements until the deal is finalised for public examination. However, that does not mean that when the proposal is presented facts that are material to the development can be withheld. The public hearing has to be informed if we are to get a smart decision that is in the public interest. Council decided yesterday that there needs to be more time to reconsider this development and fifteen other, similar deals.

6.  Councillor Adrienne Carr said that there had been no formal meetings of the Council with the developer, though individual councillors may have attended meetings with staff and the developer. At yesterday’s meeting she was surprised to hear the City Planner use the phrase “when Council reconfirms the decision” as it is imperative that when the Council looks at the deal that the court quashed they have to have an open mind. There also has to be an opportunity for the public to comment on changes to the plan. Council also needs to reconsider its definitions of social housing and density bonus.

7. Alice Sandberg you cannot do a building now that is all social housing. Only one third of the units can qualify for government assistance

8.  Chris de Marco observed that the city needs to consider who gains and who bears the cost. In her view the local neighborhood was being asked to absorb more development which benefits the whole region but the impact of that is not shared fairly

9. Gordon Price responded but I regret that my scribbled notes are unintelligible. If he reads this perhaps he can clarify in the comments. I do recall him observing that the longer he is out of office, the better it seems in hindsight.

10. Some senior staff – and indeed some councillors – seem to be micromanaging staff and hampering their ability to do their jobs

11. The process to date has been a waste of time and money. How do we improve this?

12.Nathalie Baker Council was always obliged to disclose information – the judges ruling actually changes nothing. Council can make decisions even if they are unpopular but they cannot conceal essential information. Up to now they have not been living up to their obligations

13. Opposed to “micro sized units” which may be harmful to mental health and also fail to meet the needs of an aging population who may need more space to use mobility aids

14. What can we do to prevent bad decisions?

15.  Randy Chatterjee:  Why is it that governments only have capital programmes and do not provide help to maintain and operate social housing?

I observed that this problem affects many other programmes – not just housing. There is no federal support for maintaining or operating roads, transit …. and so on.

Alice Sandberg also pointed out that timber frame buildings thirty years ago were not designed to last much longer than that.

——————-

Vancouver City Council has been given a very sharp check on its leash by the legal system. It should not be necessary for a Community Association to have to resort to the courts and Freedom of Information requests just to get Council to meet its obligations imposed by legislation and the Vancouver Charter.

I was very impressed that Councillor Carr came to this meeting. She handled the situation with grace and aplomb and is clearly an asset. No staff or other councillors appeared: that says it all.

We also need to elect much better governments federally and provincially that serve the people of this country – all of the people – not just the very wealthy and the big corporations. Public housing – like public transport – is an essential part of a civilised society. The private sector cannot and will not meet the needs of society at a reasonable cost.

Written by Stephen Rees

February 5, 2015 at 5:32 pm

More on Community Land Trusts

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I am pleased to be able to pass along a link to the Lincoln Land Institute’s newsletter which brings news of John Emmanuel Davis (a visiting fellow there) and a new initiative in Boston. You may recall he spoke at SFU about housing affordability earlier this year

Written by Stephen Rees

June 30, 2008 at 6:11 pm

The Affordable City

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Municipal Support for Community Land Trusts and Other Models of Shared Equity Homeownership

John Emmeus DavisPhoto by Jason Vanderhill

John Davis of Burlington Associates introduced himself as a practitioner not an academic. In the small town of Burlington, Vermont he has been one of the pioneers of a way to make home ownership possible for people on low incomes. Through a variety of mechanisms a number of cities in the US have been trying to come up with mechanisms that retain the value of subsidies given to low cost housing, and over the last twenty years the movement has grown rapidly.

He spoke this evening to a small but attentive audience at SFU. He had a lot of slides filled with words and a DVD. Far more than I could take note of. But I hope that this short report will capture the essence of his ideas.

Shared equity ownership is a method used to enable people who would not qualify for a commercial mortgage have a better alternative to renting , which in the US has no security of tenure. There are also tax advantages for home owners in the US. Many municipalities have tried to do something about the provision of affordable housing since the federal government withdrew from public housing in the first Regan administration. Many states have also abrogated their responsibilities in the field of public housing.

The traditional methods of subsidizing home ownership concentrated upon subsidizing poor homeowners. While the source of funding was usually federal or state it was passed through to the home owner as a grant or low cost loan, with the homeowner taking all the risk but also all of the increase in value over time. The devolution to the cities as a result of the federal retreat from housing subsidy meant there were fewer dollars available to the cities, so they turned to regulation. While some used incentives to developers to provide affordable housing – such as bonus density – other required “inclusionary zoning”. That is, of any housing development 10 to 15% of the units would have to be affordable. In other words there is a mandated cross subsidy from market to affordable housing. The private sector in recent years has seen a major collapse in house prices, with rising numbers of foreclosures due to mortgage defaults. Many of these were due to “creative financing” – mortgages with low introductory rates but steep increases to market rates after a year or two.

Most cities are now very concerned about the lack of affordable housing, especially for essential service workers. Mr Davis said there has been “a seismic shift in municipal policy” and most cities now subsidize supply of housing especially through non-profit organizations. The intention is to retain the subsidy even though houses continue to be sold, in order to maintain a stock of affordable housing and provide a social safety net. New forms of tenure have been developed and a new class of “nongovernmental housing”. These are price restricted and are restricted to people excluded from the market. He referred to it as a third sector, which perforce has had to be very innovative.

The idea is that the equity in the home from increasing house prices is shared between the owner and the housing trust or co-op. Owner occupation gives a bundle of rights – and shared equity means that some of these rights are relinquished or reduced to reflect the extent of the assistance the owner has been given to acquire the property. When it comes to be sold it has to be offered back to the trust or resold only to a qualified buyer at a price predetermined by a formula in the original deed of ownership.

While there are a wide variety of not for profit associations organizing co-ops, condominiums and housing trusts, one of the most numerous now is the “community land trust”. The trust is set up to acquire and administer land. To do so it has to raise funds either from governments, or these days charitable organisations. (The US has far higher rates of charitable donations than most other countries , partly reflecting the widening disparity between rich and poor but also the more generous tax treatment of charitable donations.) The land is then used for a housing development – which may be carried out by the trust itself, or private developer or a non profit. The homes are sold but not the land under them. This is leased, usually at nominal rents, with the lease documents containing the restrictive covenants. He remarked that it was essential that there be an activist attitude as covenants have been shown not to be self enforcing.

In general, so far these ventures have succeeded in keeping affordable housing available and at the same time allowing the working poor to move up into the housing market. Generally there is the same pride of ownership, and properties are usually well maintained. The owner is also entitled to keep the value of any improvements made to the property itself. In the event of default, the trust usually manges to intervene early in the process to try and renegotiate or find a way to allow the owner to become a tenant. However, if the home has to be sold by the bank (or other mortgage holder) the restrictive covenants are not then binding on the new owner, but they have to pay a market lease rate. Most prospective buyers are happy to accept the restrictive covenants in return for a much lower lease payment.

The statistics he had indicated that while this is still a small segment of housing in the US, in some places it has become quite significant especially when municipal government has been active to try and promote affordable housing (e.g. San Franscisco and Chicago). The current collapse of house prices, and the uncertainties of the credit crisis mean that many of his analytic charts give no guidance as to what may happen next. Up until recently house prices were rising and equity increasing. This may not be true in future.

He emphasized that there is no one size fits all solution. There are a wide range of applications including traditional, single family homes, condominiums, co-ops, trailer parks and mixed use developments. CLTs have also become landlords to other nonprofit service groups as well as running rental housing, homeless shelters and other related activities. He also said that it is not an easy option and requires a dedicated team of people willing to work hard for little or nothing, and significant financial support. However once the land has been secured, CLTs have been successful in retaining affordability as well as allowing homeowners some ability to increase their wealth and pass it along to their heirs.

One key factor has been the structure of the board of the trust. He recommends a tripartite structure so that no one group can dominate the trust and divert its ends. Thus the home owners make up one third of the board, the neighbours (the surrounding community) one third with the rest of the seats filled by appointments made by the two groups acting together to select people will relevant skills and standing, such as local bankers or councillors. In this way no one interest can trump the others, but all decisions require some support from at least one other group.

It is clear that the situation in the US has some parallels here but there are some significant differences. For instance, there are no tax advantages from home ownership here, whereas in the US mortgage interest is tax deductible. Municipalities here have generally not been active in housing supply. While there is a non profit housing sector, it has been shrinking, not growing, mainly as a result of government neglect. And there are also fewer sources of charitable funds.

Written by Stephen Rees

May 16, 2008 at 11:17 pm

Zone for Affordable Housing

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Instead of doing the usual “roundup of the year” the Tyee has been publishing useful articles. The common theme is making BC a better place. That in itself is an interesting idea. Our government appears to think that BC is already “the best place on earth” which kind of lets them off the hook from actually tackling any of its problems. (And, by the way, the banner ad when I clicked on this article was a very pointed political message from the teachers union. “If our schools were convention centres they might get some attention”)

This idea comes from a councillor in Whistler, where the unaffordability of housing is no longer just affecting the service workers. It has become so that no-one who relies on employment for their income can afford to live in Whistler anymore. Land costs have risen, but so have construction costs. Basically the housing market has failed – and now only provides for the super rich.

While he acknowledges that public housing provision does have a role, if ordinary people are to be able to get into the market there must be a new zoning for affordable housing.

“We learned the hard way that the very best way to solve this problem was to integrate the community.”

Housing market failure

Unlike Vancouver and other communities where the housing debate had been triggered by rampant homelessness, Whistler is more clearly focused on developing housing for working families.

“I don’t want to give the impression that social housing isn’t important. It’s very important. But I think all the recent attention on social housing may have clouded the issue that we’re facing right now,” Wake said.

Wake urged rural and suburban communities to zone land for affordable housing as soon as possible, and set it aside for later use. “This is something we didn’t do in Whistler.”

“Start downtown and work out. Create complete neighbourhoods,” Wake suggested. “We really want to marry the affordable housing opportunities with smart growth principles. We’re not talking about building inexpensive housing out on the periphery. We’ve got to build it in walk-able, livable neighbourhoods,” Wake said.

And when you put it that way it sounds obvious, and is clearly something that all communities in the lower mainland need to get on with pretty quickly. For if we really are immune from the collapse of the market south of the border, and the credit crunch due to asset backed paper is not our problem, it will not be long before we too are in the same situation as Whistler. In fact, if you think about it, we already are.

Written by Stephen Rees

January 3, 2008 at 9:32 am

Posted in land use, Urban Planning

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