The new plan for the redevelopment of Little Mountain neighbourhood in East Vancouver has been released to the public. The plan calls for wholesale gentrification of the Riley Park-Little Mountain neighborhood. The 15-acre site that previously held 224 units of social housing will be replaced with 1600 units of market condominiums.
In exchange for a zero-percent increase in the amount of affordable housing on the site, the neighborhood will be transformed by luxury condos and retail, putting upward pressure on local property values. Like in other working-areas of Vancouver, this new high-end development will usher in rent increases, more renovictions and even more demolitions.
In Vancouver, there are on average two home demolitions per day. The Little Mountain plan ensures that the rate of demolitions will be particularly high in the Riley Park area. In addition to the demolition of Little Mountain social housing, the city has its sight set on demolishing all single-family homes at the north-east corner of the Little Mountain property.
Even though evictions and displacement are systemic throughout Vancouver, the city has not conducted a social impact study to understand the possible social effects of these demolitions and mega-projects. When asked at Thursday’s press conference whether the City plans to conduct such a study, Senior Planner Ben Johnson said “No,” claiming that there are no impacts because “homes are going for $1million in the neighborhood.” According to the city, the renters who make up large part of Little Mountain, Riley Park, Kensington-Cedar Cottage, Sunset, and Mount Pleasant are not part of the equation.
The new plan announced by the private developer, Holborn Group, consists of sixteen towers of luxury condominiums. There are nine towers planned at ten to fourteen stories, while the rest of the density is spread out between four to nine stories. It is assumed that Holborn bought the property from the provincial government for a price fixed to existing levels of zoning, at four stories, while committing to replace the 224 units of social housing.
This “one-for-one” deal is a coup for Holborn because on a mega-project of this size, the city would normally apply its mega-project housing policy requiring that 20% of all units be social housing. The planned 2,000 units would normally accompany at least 400 units of social housing, but in this case the Memorandum of Understanding (MOU) signed between the City and the Province assures Holborn that only 224 units are necessary. Furthermore, low-income tenants have been forced into the precarious waiting room of history. The first phase of the project will now not be completed until 2017 at the absolute earliest, even though all replacement housing was promised to be completed by 2010 at the latest.
When Holborn bought Little Mountain, the land was zoned for four stories. Holborn claims to have paid an above-market rate because the Province promised that the land would be upzoned in the future to allow more condo units. Of course, rezoning is a City power, outside the Province’s jurisdiction. If the Province indeed made a guarantee to Holborn that the land would be rezoned, then the Province was on the one hand attempting to undermine the local community planning process (including the existing Riley Park Community Vision), and on the other hand seems to have misrepresented the Province’s powers to Holborn. However, there is no reason to feel sorry for Holborn. Holborn has more than enough lawyers to know exactly what they were getting into. The most likely scenario is that the Province and Holborn colluded to strong-arm the City and undercut local planning processes.
The Province’s strong-arming seems to have worked on the City, as the MOU signed by the City and the Province assumes that there will be future re-zoning — even though increases in zoning would “contradict” the existing Riley Park Community Vision of four stories. The under-selling of a vast parcel of land to a private developer is reminiscent of the infamous sale of Expo lands/North False Creek land to Concord Pacific in 1988. In that case, the Province also tried to guarantee a rezoning without consulting the city or local community.
In Vancouver, land-value is tied to the amount of development allowed on a site, which city planners call Floor Space Ratio (FSR). An FSR of 1 means that the developer can build enough square-footage to cover the entire property to one storey, while an FSR of 2 would allow double that square-footage. Under Little Mountain’s current zoning, the FSR is set at 2. According to the City’s calculations, increasing the FSR to 2.8 would instantly increase the land value by $40M — probably an under-estimate. This increase in land value is called the “land lift.” Unless the City attempts to recoup this value, the money will go directly into Holborn’ pocket as extra-profits, over and above ‘regular’ profit rate of 15%.
According to an independent economic report by Coriolis consultants, the ‘land lift’ to an FSR of 2.8 would allow the city to recoup about $40M from Holborn. In reality, the number would be less because the city normally keeps a maximum of 75%-80% of any value generated from a land-lift — put another way, the city on average gives away at least 20% free money to the developer on any given deal where the zoning happens after the sale. In return, the developers donate to the two main political parties, NPA and Vision.
Even if the City recoups 80% of the increase land value, Holborn will keep 20% of these extra profits, which in this case may be $10M. In addition to these extra ‘land-lift’ profits, Holborn will still plan to make the ‘regular’ 15% profit on the entire project. Furthermore, the rezoning increases the over-all size of the project dramatically, so this ‘regular rate’ now constitutes 15% of a much larger pie.
To summarize, the current City administration agrees to a regular profit rate of 15%, calculated after construction and land costs. All city calculations are made to guarantee that a developer will earn super-profits at monopoly rates, and that a rate below 15% is deemed “not viable” — of course, the ceiling can be pushed higher and 15% only represents a guaranteed minimum. Then, when the city upzones a property, this becomes 15% of a larger pie. On top of that, the increased land value (land lift) is only partially recouped by the city, the remainder being extra-profits for the developer. Finally, these profits are back payments to the development industry for financing municipal election campaigns.
Short History of Little Mountain
The back story of Little Mountain is one of beauty, scandal and disgrace.
For over sixty years, Little Mountain housing served the community as a socially inclusive, well-built social housing complex where seniors, low-income families, persons with disabilities and others made a home. The complex was the first public housing project in Canada that was managed by a rotating committee of self-elected tenants.
On February 16 2007, however, BC Housing — through the Provincial Rental Housing Corporation (PRHC) — became the sole owner of Little Mountain. Shortly after, they sold the site to private developer Holborn.
In June 2009, the Province began the demolition of housing at Little Mountain. Hundreds of tenants were evicted on the spot in methods described as “eviction by fear and intimidation.” In July, the remaining tenants of Little Mountain wrote an open letter to BC Housing demanding that existing low-income units be protected in the midst of a housing crisis. The letter also decried the illegal demolition of “perfectly habitable homes.” The June demolition was illegal because a demolition permit had not yet been granted by the city.
In November 2009, facing fierce opposition from the community, all but a handful of units were were demolished. The province claimed that the units had to be demolished due to “deteriorating conditions” — conditions that both residents and former councillor Ellen Woodsworth argued were certainly manageable and not warranting demolition.
In reality, the Province ordered the demolition — approved and granted by a Vision-led city council — in order to satisfy Holborn. Instead of raising historically-low taxes on the super-rich, the province decided that budget shortfalls could only be made-up through the sale and demolition of social housing. Ironically, the province was scrounging for money partly because in 2007 it had committed to pay for the 12 sites of social housing, promised for completion by the 2010 Olympic Games. But yet by 2011 the sale between Holborn and the Province is still not final, and neither is the completion of the 12 sites.
Like far too many of the 12 sites, Little Mountain today sits empty in the midst of a housing crisis. Building scraps and crumbling debris now betray the site that once held 224 units of social housing. When you lay your eyes upon the zone of destruction, amidst one of the many tragedies of Vancouver’s ever-threatened commons, it is hard not to feel betrayed.
Land-Economics: Privatization of the Commons
BC Housing and the City of Vancouver continue a failed policy of leveraging public lands and affordable housing to build affordable housing. On their own terms, this means selling off Vancouver’s commons to the highest bidder, in the hope that the developer at the end of the project delivers a few units of social housing.
The case of other mega-projects in Vancouver is illustrative. When developers get into “financial trouble” — when profits fall too close to the expected 15%-minimum — they clamour that social housing must go. The parties develop a vested interest in depicting a crisis where there isn’t one, like at Vancouver’s Olympic Village. In that project the city was required to bail-out the developer and its loan to the tune of $375 million. When the city bought-out Fortress’s loan, Vancouver’s auditor KPMG stated that Vancouver taxpayers were actually backstopping the entire project costs of the Olympic Village, about $966 million.
According to Holborn’s site architect James K.M. Cheng, the site will remain empty until the project is heard by council in February 2012 and rezoned at a later date. Construction may start at the end of next year, and if council approves the project, it is expected that the site will take five years to rebuild. Looking forward, there is no end in sight; looking backwards, it is clear that the dealings between Holborn, the Province and the City to gentrify the neighborhood began years ago.
Today, low-income social housing at the Olympic Village site is a fading memory. The original promise of providing one-third low-income housing, another third affordable, and the last third market rate, has been abandoned — another tragedy. Currently only 84 units of the Village are run by the Co-operative Housing Federation of BC. Yet unlike other Co-ops across the city, none of these units are subsidized for low-income residents, but rather rent is matched to meet market rates. A one bedroom suite goes for $1500-1700/month, a two bedroom apartment rents for $1800-$1900/month, and a three bedroom unit rents for $2100-$2500/month.To make matters worse, tenants at the Olympic Village Co-op have complained since moving in to their units about faulty construction, inflated hot water and heating bills due to inoperative appliances and amenities, and a lack of fee-free common space in buildings. PIVOT Legal Society is currently representing as many as 40 low-income tenants whose bills are reaching as high as $148/month due to serious technical issues within the buildings, including things like extra charges for cold water. When heaters failed to work during the winter months, tenants were provided with electrical heaters, and when their electrical bills sky-rocketed, they were charged for the increased electrical costs.
According to Sadhu Johnston, deputy city manager of the City, there are still serious “inconsistencies” with the technology of the building, ranging from faulty pipes and meters, to general deficiencies to the entire operating system. Instead of finally addressing the grievances of low-income seniors — publicly known for months — the city is taking a belligerent stand towards the residents, telling them to either pay-up or get-out.
Slow gentrification of Mount Pleasant and Little Mountain
Looking back to Little Mountain, the City never should have trusted Holborn Group to provide social housing at the site. As it stands, Holborn has had a troubled history in Mount Pleasant. In the early years of the last decade, they bought up the block on the South-East corner of Main at 12th Ave and decided to redevelop the affordable homes into new market apartments and townhouses. When nine tenants were evicted from two turn-of-the-century “workers” homes on Watson Street (a narrow avenue that runs next to Main Street from Broadway), the residents burned their former homes to the ground. Confronted by angry residents and other community members, police and fire crews were pelted with bottles and debris, and eventually the VPD’s Emergency Response Team was called, read the riot act, and dispersed the crowd with tear gas.
Today, the rents on that site are still far too expensive for any of the long-standing poor and working class members of the neighborhood. Most recently, Happy Bats Cinema closed down due to exorbitant rents and had their collection seized by the bailiff, sold to the highest bidder to make up for the of $30,000 unpaid rent owed to their landlord.
In recent history, Holborn has had their own financial problems mirroring those of the Maleks. In February 24 2009, Holborn officially cancelled their $500,000,000 Ritz-Carlton project, a hotel-luxury residence slated for 1133 West Georgia Street. The project failed due to weak pre-sales attributed to the global recession. At the time, Holborn had left the site fully excavated and boarded up, writing to former investors who bought into the project that they would receive a full return on their deposits. The mixed-use building — ‘mixed’ in the sense that there would be high-end condos placed alongside high-end hotel suites — started to price their units at $1.5 million, while the most expensive penthouse would go for $28 million.
In order to save the project, Holborn’s CEO Joo Kim Tiah applied to the city for more height, 16 feet to be exact, to push the tower over 60-storeys to 616 feet — 30 feet below the Shangri-La’s 646 feet. According to Michael Flanigan, the director of the City’s real estate services, Holborn was taking “significant risk” by constructing their 60-storey building, whose profit margin was agreed upon as 1.8%. At the time municipal reporter Frances Bula countered that if the market were to change slightly, it would be reasonable for the profit from the project could go as high as 17%.
Holborn, the City of Vancouver and the Province, claim that the future Little Mountain development will be a mixed-income neighborhood coupled with subsidized housing, which will allow for a “better use” of the site that will be more “fully integrated into the larger business and residential community.” In every press release celebrating the new site, Holborn, the Province and the City reaffirm that they will “prioritize the replacement of the former 224 Social Housing Units.” The City also claims that it will attempt to target 20% of the units at the site for affordable housing. But nowhere is there a commitment from Holborn, the Province or the City to make this happen, or that the units will be the same, desperately needed family-size units as those that were demolished (at the same sq. footage that were destroyed). The only “explicit” commitment at this time is for rebuilding 224 units almost a decade behind schedule, but the history of broken promises should make us skeptical and vigilant about even these.
For community members still dedicated to the cause of social housing, anger is palpable. On November 9th community members against the privatization of the site reacted to the still-unused lands. Kia Salomons from Community Advocates for Little Mountain (CALM) stated, “Little Mountain is a tragedy because over 600 people were needlessly displaced beginning four years ago; 224 perfectly livable homes were destroyed in the middle of a housing crisis.” Surrounded by a group of supporters, Salomons added further, “Little Mountain exemplifies the provincial government’s failed approach to housing. The lessons are clear: private developers cannot produce social or affordable housing and public land must remain public.”
There should be no illusions, the City-Province-developer nexus in Vancouver has consistently shown for the last three years no genuine desire to build social or affordable housing.
The excuse from city councilors and province has become a cliche: “We just don’t have the funds at the moment.” This is the case because the city has consistently relied on private developers to build, if not pay for, both social housing and affordable housing in this city. Against repeated opinion, the funds are indeed there. Currently the city is sitting on $1 billion Property Endowment Fund. The Province too has $250 million in the bank allocated to build social housing. It is inexcusable that, in the middle of a housing crisis, the City and Province show no real desire to tackle the crisis head-on. As businesses, including those owned by the Mayor himself, leave the City because of high rents, Vision proposes corporate tax cuts instead of rent relief.
At the higher levels of government, corporate income taxes have dropped from 16.5 percent in 2001 to 10 percent in 2011, leading to a $7.7 billion dollar loss in revenue. B.C. corporate profits are expected to exceed $23.7 billion in 2011 and then rise to $31.3 billion by 2015. The money is there because it’s being given away, not only by the openly conservative Federal and Provincial governments, but by Vision Vancouver and the NPA.
Returning to the Wilderness of Little Mountain
At present, Little Mountain remains empty. Besides an easily scalable chain-linked fence surrounding the vacant 15-acre site, the only thing obstructing your view is banal construction signage, matched in the distance by orange fencing beneath a few solitary oaks. But rather than any object in particular, it is the wholesale enclosure of the commons that sours your perspective.
The wilderness of Little Mountain today mirrors the same wilderness of an empty, unresolvable contradiction — a social contradiction created by the death of socialized housing across the country. As progressive social-democrats throughout the province are absorbed by the insatiable, crusty sponge of neoliberalism, the practice of politics becomes dictated by the unfathomably deep pockets of the rich. From Vision Vancouver to Rich Coleman and BC Housing, a resounding profit-driven capitulation prevails, with the sole axiom that everything should be privatized.
The last remnants of the Commons, and every parcel of city and provincial land, are offered over to the technocractic management of life and the inexorable rule of profit and P3s. But for an entire community committed to the ideals of the former site — dedicated to the ideals of universal social housing and its unshakable principles — Little Mountain is still the site of permanent and unresolved struggle. The struggle will end when the residents achieve victory, or when the gears of a fraudulent system grind to a halt.
 Jeff Lee, “Fire finishes off heritage houses,” Vancouver Sun, Sep. 28, 2004.
 Heather Deal quoted at the all candidates debate in Mount Pleasant October 26, 2011.
More information: Please watch Former COPE Councillor Ellen Woodsworth speak out about Little Mountain