The story of Chinese investor impact on Vancouver real estate is neither new nor surprising. But recent changes to real estate taxation within China may ramp up hunger for this favored class of investment in offshore locations — and further exacerbate conditions local to Vancouver. In a nutshell, China seems to be on the verge of exporting even more financial froth.

At the same time, China seems to be developing an internal approach to housing affordability that Vancouver needs to emulate.

Beijing has now prohibited residents from buying more than two dwelling units, and non-residents are required to show five years of tax documentation in order to make a purchase (Feb 18: “China home”).

Any Canadian public official who talks about affordable housing in Vancouver should be met with a demand to bring forward similar measures.

IMGP7530

Condo marketer Bob Rennie claims to have sold 128 of 230 condo units up-for-grabs in the latest round of sales at the Olympic Village. Similar to last week’s re-launch of the The Village on False Creek, where Bob Rennie hired people to wait in line at the sales centre, Rennie’s press conference earlier today was a charade. Again this week, people were “hired by the realtor,” according to one hiree (see video here).

Rennie’s strategy was quite simple: over the past few weeks and months, he asked his speculator and real-estate agent friends how much they would be willing to pay for some units. Then, he convinced the City to let him sell-off 230 units at a discounted price to his speculator friends (who will not live in them). Then he planned to announce the sales as though these were actual families buying the units.

This ruse was the only way Bob Rennie could convince the public that the units were still viable as luxury condominiums. But the condo units, two thirds of which were promised to Vancouver’s poor as part of the Olympic housing legacy, will remain empty.

Rennie’s hope is that the hype will “lift the fog” from the “ghost town,” and that actual residents will then purchase the units now owned by Rennie’s speculator friends. Eventually, if people move into the units, Rennie can try to sell the remainder of the units not-yet on the market.

To reinforce the hype and create headlines, real-estate agents were paid to wait in line outside the sales office last week. Last week a similar attempt to use the media to draw interest in a real-estate development in Burnaby was called out.

IMGP7648

Real estate developers were noticeably upset when, on Jan 20, residents of Vancouver’s Downtown Eastside scored a partial but significant victory against the City’s undemocratic condo-tower plan. Instead, the City was forced to finally allow a (potentially) resident-driven planning process for the area.

Shocked by their defeat, it took developers and their friends in the Corporate media over one week to respond to the democratic turn of events. Finally, on January 27, the Vancouver Sun editorial board published their talking points in an editorial titled Giving a lift to the Downtown Eastside: Build taller buildings. The piece is so counter-factual, misleading, and bigoted that it is worth unpacking line-by-line.

The Sun’s convoluted editorial begins by acknowledging that Vancouver needs more housing. Indeed, Vancouver needs more purpose-built social and affordable housing – but not more purpose-built luxury condos as the Sun prefers.

The Sun then asserts that because the Lower Mainland has a limited land-base, we must build higher buildings in the Downtown Eastside. But the Downtown Eastside already has a higher-than-average population density – why not build the towers in Shaughnessy instead?

The Sun then notes that there are “300 to 1,000 souls” who are homeless in the Downtown Eastside, but offers no solutions at all, nor any response to residents’ valid concern that gentrification will compromise the remaining low-income housing stock, pushing more people onto the street.

Instead of advocating a sophisticated approach to problem-solving in the Downtown Eastside, the Sun insults and stereotypes groups trying to address problems: “[The DTES] serves as the raison d’etre of swarms of social agencies, NGOs and self-proclaimed anti-poverty activists…Some activists have a vested interest in preserving the status quo. A gloomy ghetto of misery, destitution and squalor keeps them in business.”

Firstly, it is not acceptable to use language (“swarms of…”) which insinuates that community organizations are like insects. Nor is it ethical to suggest that it is a bad thing for people to form organizations to help each other out, to work for social justice, and to make their neighbourhoods better places.

For the last few years the City has repeatedly claimed that there is no money for housing. As the Mayor said last October when rejecting social housing above the Strathcona Library: “we don’t have the money in the drawers…we have real limitations and uncertainty in the economy and city books in terms of what we can do.”

The reality, however, is that Vancouver has the lowest business taxes in the world. This surprising fact is complimented by another little-known fact: City Hall controls a multi-billion dollar fund it could use to develop social and affordable housing, called the Property Endowment Fund.

The Property Endowment Fund (PEF) was originally created in 1975 and was valued at around $100 million. It holds all of the city’s long-term land leases – for example, the parking lot on which the Vancouver Art Gallery hopes to construct its new building, at Cambie and Georgia. The Fund was initially created by the centre-left municipal party TEAM (TEAM was the result of a similar left-wing split that spawned Vision out of COPE). TEAM created the Fund in order to hem an NPA policy of selling city owned properties and then shifting the sale over to the operating budget in order to decrease taxes. The PEF was a strategy to stop the dead-weight loss of city land holdings while creating funds to “support the City’s public objectives.”

Today, the board of the PEF is comprised of the Mayor, two Councillors, the City Manager, and the Director of Finance. Minutes to meetings of the board have, in the past, not been available to the public. However there have been both successful and unsuccessful Freedom of Information Act (FOI) requests for documents of the PEF board.  There have been several calls by City Councillors to make this fund more transparent. COPE Councillors Tim Louis and Ellen Woodsworth have both spoken out about the fund’s lack of accessibility. However, secrecy remains the status quo. This has led to wide speculations and criticisms of its value and current use.

In the mid 2000’s it was proposed by some that the PEF should be used in ways outlined in its mandate: to support the City’s public objectives. For a long time the city has desperately needed more social housing and the current Council has done next to nothing to stop homelessness. In the mid 2000’s, NPA mayor Sam Sullivan quashed proposals to use the PEF for progressive initiatives, instead arguing to “restore sustainability” to the Fund. What he meant was to maintain a profitable fund that adds a few millions dollars to the City’s operating budget to keep down our low business taxes.

Fast-forward to 2010 and the Property Endowment Fund is estimated to be worth almost $3 billion. The fund is rarely itself discussed, but has a tendency to loom over municipal politics. It was discussed briefly in 2010, when conservative blogger Daniel Fontaine of city-caucus filed a Freedom of Information Act request for PEF board meeting minutes, of which there were none in 2009. The revelations of the FOI were significant: the PEF board had not met that year.

Right now, the Fund is managed in secret by the Real-Estate division of the City government. The holding of such a large fund is not only an internal conflict of interest, since councillors can directly affect land prices by the powers of rezoning, but also a public conflict of interest, because while the people of Vancouver have prioritized housing affordability as a number-one issue, the fund makes the city into a real-estate speculator, helping to further push up the property values that make our city so unaffordable.

This past Thursday, the Vancouver Police Department published a press release about a series of arrests made in the Downtown Eastside. It describes eight suspected drug traffickers who used violence, torture, and fear to cruelly control residents involved in the drug trade. Some of the conditions the victims of these criminals had been put through include being stabbed, beaten, and held in cages. As the press release states, this is the first case of Criminal Organization charges in Vancouver police history.

It took community protests to pressure police to investigate exploitation of Downtown Eastside residents. The two police initiatives leading to the arrests were part of an umbrella program called “Sister Watch,” which was designed to curb violence against women in the Downtown Eastside in response to grassroots protest.

Although it would be an improvement for the police to begin protecting residents from exploitation, it must be said that the strong-arm approach of both the VPD is a significant part of the problem of violence in the Downtown Eastside. The “war on drugs” diverts resources away from social services into policing. It simply has not been the case that police use these resources to protect residents from exploitation. On the contrary, the police impose added violence onto the poor, who are unfairly shuffled through the revolving door of “justice.”

Instead of hearing 80 speakers from the public, City Council voted today to defer hearings until a later consulation. Fifty of those speakers were at council to speak against a motion to build condos in the downtown eastside under the Height Review plan (see yesterday’s Editorial).

According to the Mayor’s website, council decided not to hear from the public and voted instead to create a “community committee, chaired by one member of the Building Communities Society and one member of the Downtown Eastside Neighbourhood Council. The committee [will] engage with local residents and provide a report to council by December 31, 2011 on community priorities for planning and development in the neighbourhood. As well, the City would commit to completing the social impacts study by December 31, 2011.”

According to the Straight, “the motion called for the report, which proposes building height changes to some sites in Chinatown and the Downtown Eastside, to be referred to public hearing and for city staff to conduct a social impact study on low-income residents of the Downtown Eastside.” However, it is not clear if this is actually true, because according the mayor’s website, “Mayor Robertson is recommending that until the social impacts study and the community committee’s report are complete, that council respect existing plans and policies for the Downtown Eastside.”

This means that instead of delaying all plans until public consultation is completed in December 2011, the City is trying to defer public input while rushing ahead with existing plans under the Height Review. According to a Carnegie Community Action Project press release, “five of the condo sites in Chinatown may be going to public hearing in February and could still go ahead.” City policy recognizes that Chinatown is inside the downtown eastside, but now they are treating Chinatown as a separate entity in order to avoid criticism and input. According to Harold Lavender of CCAP, “I live in Chinatown and they just broke the DTES into artificial pieces based on the priorities of developers. If I had a say, I could have influenced their decision. This process is a travesty.” If the City is actually serious about hearing from the downtown eastside, they will stop condo plans for Chinatown until at least December 31, 2011.


IMGP7617


Mayor Robertson and his party won power on the backs of the poor, claiming to represent their aspirations and promising to “End Homelessness.” Today, Vision Vancouver is waging war on the Downtown Eastside, the last refuge for Vancouver’s low-income residents.

One might wonder at the use of a military analogy – “waging war” – but sadly Robertson’s party has employed ruthless political tactics to outmaneuver Vancouver’s most marginalized residents who, despite negligible resources, are nonetheless fighting back stronger than ever.

As we have reported previously, Vision Vancouver is moving to implement the NPA’s gentrification plan for the Downtown Eastside (deceptively called the “Historic Area Height Review”). The plan, which goes to Council for a vote this Thurs, Jan 20, calls for seven 15-storey condo towers in the Downtown Eastside. It is certain that these developments would impact surrounding property values. Low-income residents, as well as the stores, services, and amenities they use, would be displaced at a pace even greater than what is already underway, with the social and economic goal of gentrifying a low-income community by importing a new class of residents (which City Planning staff like to call “body heat“).

The Decoy

To distract the broader public from their undemocratic plan to gentrify the Downtown Eastside, the Vision-led City Council will be voting on a separate “view-corridors” proposal for towers in the central business district at the same Jan 20th meeting as the DTES plan. The City has purposefully attempted to link these very different plans in the public’s mind, with some success. The supposed link between them is the abstract notion of “height.” The two plans both deal with building heights, but will inevitably have more significant impacts on density and social demographics. Focusing on height instead of density changes the debate. This article from Sunday’s Province, for example, is stuck in the City’s frame about “height,” ignoring any question of social impact, and referring only fleetingly to the Downtown Eastside at the end of the article.