Vision Vancouver-dominated city council voted yesterday, Tues Dec 13, to approve the terms of reference for a so-called “affordability task force.” The task force will consult developers, financiers, architects, and other members of Vancouver’s real estate oligopoly — the very interests responsible for the city’s permanent housing bubble and for the city’s culture of rent gouging — in order to produce policy recommendations by March 2012.
Earlier this week, before the terms of reference were even approved by council, Mayor Robertson announced that the task force would be co-chaired by himself and ‘multimillionaire’ developer Olga Ilich.
Olga Ilich is a firmly entrenched member of the lower-mainland’s real estate oligopoly. Ilich is founder and president of Suncor Development Corporation. Most inappropriately, she was president of the Urban Development Institute (UDI), which is the development industry’s primary lobby organization. The UDI lobbies City Hall regularly to destroy and gentrify low-income neighborhoods, to over-ride local community planning processes, and to undermine renters rights.
Ilich is also a BC Liberal. She was a cabinet minister under Gordon Campbell from 2006-2009. News articles about Ilich’s appointment in other publications (The Sun, 24hours, The Straight, Observer, etc) refrain from mentioning the words “BC Liberal” and “Gordon Campbell,” downplaying these connections in order to protect Gregor Robertson from criticism from the left. When the NPA appointed BC Liberal insider, and Gordon Campbell confidante, Geoff Plant to run project civil city, progressives in Vancouver denounced the decision in the strongest terms. But now that Robertson has made an equivalent appointment, progressives seem committed to self-censorship, amnesia, and capitulation.
Certainly the appointment of Ilich sends a strong message to the city’s elite, and especially to the development industry. The message? “Don’t worry, we have put a BC Liberal, multimillionaire developer, UDI president in charge. Nothing will happen that creates true affordability. Prices will not go down. Profits will not go down. Corporate taxes will not go up. All solutions will be private solutions. The real estate industry will remain in the driver’s seat. There will be no new public housing. Don’t worry, dear developers who donated over a million dollars to Vision’s election campaign. Thank you, developers — this is our repayment to you!”
The process for selection of Ilich as co-chair was untransparent. The Vision party made the decision behind closed doors and presented it to Council yesterday as a fait accompli. It is of particular interest to uncover the criteria for selecting the co-chair. Why were community representatives deliberately excluded in favour of developers?
The one positive aspect of the task force is that it recognizes the affordability crisis. The preamble to yesterday’s motion, like the Mayor’s recent inaugural address, makes this explicit recognition. It is the least the city’s elites can do to recognize that the rest of us are forking-over too much of our income to landlords. Rents in Vancouver continue to rise and remain the highest ($1,237/month) of any major Canadian city. Poll after poll shows that unaffordability is the primary concern of residents.
However, for the past decade, the problem has not been lack of recognition, but lack of action. The announcement of the “task force” this week was a déjà vu moment. During the 2008 campaign, Vision Vancouver also held up “affordability” as one of its mantras, and after the election called an “affordable rental housing” engagement process. Developers, financiers, and other stakeholders were invited to a series of workshops in the spring of 2009. The result was a report recommending tax breaks for developers to incentivize development of rental housing (STIR program) — and that’s all. The tax-breaks delivered few rental units, and no affordable ones.
With no ideas left, the Vision-led council sat on its hands for two and a half years. Meanwhile housing prices increased 20% from 2010-2011. During last month’s 2011 election campaign, Vision did not propose any new ideas for dealing with the housing crisis. Councilor Meggs promised to continue the STIR program. Mayor Robertson vaguely mentioned “leveraging city assets.”
It’s likely that Ilich’s developer-driven task force will focus on developer tax breaks. It will surely re-affirm the STIR program. The terms of reference specifically mention the Tax Increment Equivalent Growth program (TIEG). TIEG is simply more corporate tax cuts. For example, in the City of Toronto, TIEG corporate tax cuts are part of the city’s business improvement “Agenda for Prosperity” geared to “attract investment in such industries as life sciences, biotechnology, information technology, environmentally friendly products, tourism, film and other screen-based industries, and manufacturing.” This is an idea well-suited to Ilich, who was Minister of Tourism under Gordon Campbell, but it’s not going to help Vancouver’s low-income renters.
Worse, the terms of reference for the committee cause one to wonder whether the “task force” may do the opposite of its stated purpose. For example, Ilich is being charged with “Assessing risks and opportunities of existing City-owned housing assets.” The task force may be used as a cover to liquidate even more city assets, including public housing assets, for the purposes of private condo development. It is necessary to be vigilant regarding these possibilities.
Yesterday, Robertson emphasized that the task force will “include the private sector, the industry that builds all our housing.” But the fact that the private sector now builds all of our housing is one of our main problems. What we need now more than ever is to reactivate Vancouver’s Public Housing Corporation.
The task force co-chairs will be accepting requests from individual stakeholders to participate in the task force until the the first week of January. The Mayor has already indicated that the committee will be dominated by the real estate industry:
“The task force will be composed of members with expertise in the areas of finance, real estate, market development, architecture and design, academia, federal and provincial policy, non-market housing development and land use planning.”
Nowhere is there mention of resident associations, renters, or people most affected by the crisis. At council yesterday, Green Party Councilor Adriane Carr asked why “in the list of sectors to be represented, citizen groups are not represented,” to which the Mayor responded that citizens are excluded from ‘phase one’, where recommendations are developed. ‘Phase two’ will consist of presenting the developer task force’s recommendations to community groups and residents in an attempt to legitimize the undemocratic process.
Also of note, Councilor Carr requested respectfully to be a Council liaison for the task force, but was dismissed by Robertson. For the purposes of message-control, only Vision party members, Louie and Meggs, were appointed liaisons.
It would be prudent to reduce expectations surrounding this task force, and for the renters of Vancouver to self-organize to create a power-base outside Olga’s “real estate oligopoly” committee.
Photo credit: Flickr user John Biehler
Bradley
December 15, 2011 at 9:02 am
Why mention her net worth? Does that affect her ability to do the job she was appointed to do?
jesse
December 15, 2011 at 11:28 am
In a fit of irony, if Robertson bends over backwards to developers just as Vancouver’s property market starts stagnating due to a demand dearth, supply-side initiatives may not be as necessary as we think.
I know it’s a long shot for all Vancouver has known to be true for the past decade, but dare to optimistically dream this task force may be wholly unnecessary.
Randy Chatterjee
December 16, 2011 at 12:44 pm
I agree it is wrong and unnecessary to list a person’s presumed net worth in an article about an appointment to a government board. However, one’s connections and financial interests are relevant, and a justification for recusal.
Why were no affordable housing activists, Habitat for Humanity volunteers, or low-income people invited onto this new “Task Force?” It seems paternalism, and the theft of public value that follows with it, are alive and well in Vancouver.
Just as one of Vision’s first acts in power was to approve the illegal demolition of low-income housing for 700 people at Little Mountain, so next on their target list is the 200 low-income residents of Heather Place, just four blocks from City Hall.
If the 86 units of Heather Place–built entirely with public funding less than 30 years ago–are torn down, then the “affordable housing” lies will be laid bare again.
How long can Vancouver take this economic predation before our local economy collapses from the weight of debt and the flight of working residents?
Randy Chatterjee
December 16, 2011 at 1:06 pm
jesse says…dare to optimistically dream this task force may be wholly unnecessary.
All markets self-correct in time. The issue is time. Now more than three years after the phenomenal residential property market collapse in the US, average US housing lease rates have barely changed. Why?
Invested capital.
The only way to lower rates is to force a cram-down refinance of the underlying assets. This forces banks to recognize and report portfolio losses immediately, and they would argue “unnecessarily.” It also creates a dramatic shrinking of both credit availability and the money supply, accelerating the increase in unemployment. Housing prices will also fall even more rapidly. Many banks will also fail, leading to government bailouts of depositors (or worse, the bailing out of the banks themselves).
Indeed all of this may well be necessary, in time, as asset bubbles are necessarily unwound, but it never happens fast due to the huge economic interests and legal hurdles involved. Nor probably should it.
The bottom line is that new construction built at $500 psf or higher will never rent for $1, nor $2, and only maybe $3 psfpm. So, expect any new high-rise 500-sf 1BR to rent for at least $1500 (with taxes and condo fee), because it cannot be financed otherwise.
The only sustainable affordability approach that can work is to drive down dramatically the cost of land and of construction, neither of which is in the interest of likely anyone on this new Mayor’s Task Force.
david hadaway
December 20, 2011 at 11:09 am
Bradley, the short answer to your question is ‘yes’.
Olga Ilich’s net worth doesn’t preclude her from this position but is certainly relevant, even more than her politics, a moment’s thought should tell you why.
Having made a fortune from speculative property development she has obtained huge benefit from the very phenomenon the consequences of which she is investigating, and will continue to do so in the future. This must affect her viewpoint in itself as well as creating a clear financial self interest which might become a conflict of interest. Add to this the absence of balancing opinion in the ‘task force’ and this knowledge becomes essential in assessing its ultimate conclusions.
It’s said that poachers make the best gamekeepers but equally you don’t put a fox in charge of the henhouse.
Dale
September 1, 2015 at 6:02 pm
This task force is a complete joke. I am sure it was put together to pad their wallets off the backs of hard working citizens that can no longer afford to live in Vancouver. If the government really wanted to fix the affordability issue, they would enact a law that prohibits non-residents from owning real estate, problem fixed! Just like Australia, China and many other countries that actually have a clue. Anything other than passing laws to restrict foreign real estate investment is just a further waste of tax payers money. When they start saying it is a supply and demand issue they need to open up more ALR to build more homes to the panel members can make more money by selling the houses to China, you may as well call it a day and find another province to live in.