Yesterday, the Mayor’s Developer Task Force released its interim report. On the surface, the four page pamphlet does not provide anything new, containing only the standard free market jargon and housing bubble diagrams we have seen for the last three years. As former planner Brent Toderian has recently stated, the plan regurgitates much of what the City has already proposed.

Instead of proven solutions, there will be only market solutions to housing affordability built by for-profit housing developers. The same mechanisms that gave us a housing crisis in the first place will now be used to address it.

The report is clear that those who need housing the most will be left out of the mandate of the task force: the task force will only be looking at how to build housing for people with incomes above $21,500. It is claimed that individuals who make less than this amount will have their housing needs addressed by the City’s Housing and Homelessness Plan. The Housing and Homelessness Plan calls for the construction of 38,000 units of housing — 20,000 of these condos — over the next ten years. This amounts to 3,800 units, in other words, less housing than the 4,000 or more units that have been built annually for the past decade.

If anything, the Developer Affordability Task Force and its interim report signals an intensification of neoliberal policy solutions to the housing crisis, inaugurated less than ten years ago by the NPA. These policies should be familiar to Vancouverites, not least because they are the same policies enacted by the BC Liberals, the Federal Conservatives and other boosters of the free market who call for stronger private property rights and unhinged corporate control.

Red Tape

One of the first buzzwords of the Task Force is “flows.” The term “flows” means that the Developer Task Force wants city council to increase the “flow” of developments, fast-tracking them though the planning department. During the last municipal election, Suzanne Anton and the NPA repeatedly called for the City to cut red-tape, and so that demand has been met.

Developers, and other business-minded folks in search of profit are impelled to perpetuate the myth that crises are only caused by too much red-tape and regulation. The myth distracts from the truth that prices are inflated because the total privatization of the housing market has allowed for a private oligopoly of firms to exert full market control, choke supply, and perpetually defer the promise to build affordable housing matched to income.

Tax Breaks

The affordability Task Force recommends lobbying the federal government to implement “tax incentives” for real estate developers. This is a moot point since it is unlikely to happen. Vancouver already has the lowest corporate tax rates in the world, and developers already receive special tax breaks and fee exemptions from city hall. Furthermore, both the Bank of Canada and the Minister of Finance have commented that Vancouver’s real-estate market is over-heated.

Those in the real-estate industry will be quick to state that in the decades when much of our cities’ affordable housing stock was built, the federal government had a tax incentive program in place, such as the Multiple Unit Residential Building (MURB) program. A causality is then drawn between tax incentives and the construction of rental housing. Marg Gordon, Executive Director of the BC Apartment Owners and Managers Association and member of the city’s Task Force argued that we need to return to a period before 1986, when the federal government provided such tax breaks. However, a study conducted by the journal Housing Policy Debate analyzed the effects of programs such as the federal MURB program and showed that providing tax breaks to developers pushed land prices even higher. In that case, the tax breaks were quickly absorbed into land prices.[1] While it is certain that tax incentives have padded the pockets of developers at the public expense, it is highly debatable that they have ever created affordable rental housing.

Evidence consistently shows that the best ways to fund affordable housing projects is either through the construction of government-owned affordable housing or through subsidies to renters and tenants — not to developers.[2] There is no evidence, other than scant anecdotal evidence put forward by corporate think tanks or developers themselves, showing that tax incentives can induce the construction of real affordable housing. As City of Vancouver co-director of planning, Ann McAfee once said, “there is considerable evidence to suggest that if the objective is to provide affordable housing to the average renter, we should target the subsidies directly to the renter through shelter-allowances, and build non-profit housing.”

Leveraging City Land

To induce the construction of affordable housing, the Task Force is proposing to “Leverage City Assets.” If the past five years are any indication, this will lead to a wholesale privatization of the City’s land holdings — a policy that will be disastrous for Vancouver’s renters in the short and long term. As at the provincial and federal levels, the corporate world constantly has its eye on publicly owned goods. It sees these goods not only as being produced by an alternative model of non-profit production which threatens monopoly capitalism, but also as a site of new business opportunities.

The best example of this is the Olympic Village, where City assets were “leveraged” to build affordable housing to offset costs incurred by Millennium Development. The Olympic Village was originally supposed to be filled with two-thirds affordable housing, one half of which was designated for low-income “deep-core-need” individuals and families. Today, less than 10% of its units are filled with people on low incomes. Meanwhile, the same developers who supposedly went bankrupt (but in reality were bailed out) have shifted their new capital into large-scale gentrifying projects along the Hastings corridor.

Another example is the City’s involvement with Heather Place public housing near VGH. Like Little Mountain, the City wants to demolish existing affordable housing and build condos, returning only a token number of units to affordable levels. Under the current plan, massaged by Vision City Councilor Geoff Meggs, units that rent out at $600-800 per month will be raised to $1600-2000 per month, vastly reducing the affordability under the guise of increasing it. This will take place through a public-private-partnership, such that government will take on a massive amount of liability while profits accrue to a private developer. Unless there is a significant push-back by Heather Place tenants, it is quite possible that this project will become a model for others throughout the City.

It is likely that if Vision Vancouver and Geoff Meggs, under the patronage of the development industry, continue the cynical model of demolishing affordable housing to build “unaffordable-affordable-housing,” the City will lose some of the assets it needs to truly solve the crisis.

The Housing Continuum

The Affordability Task Force is continuing to operate using the term “Housing Continuum.” This concept hinges on the assumption that there is a relatively high level of housing mobility in Vancouver, where people can move up from homelessness towards owning a single family home. This “trickle down” or “supply side” economics posits that if the free market is allowed reign free, it will build the right kind of housing in the right numbers so that prices will decrease across-the-board.

In urban geography and economics, the equivalent of the “Housing Continuum” is called “filtering theory,” which posits that the construction of high-income housing will fill the needs of all levels of tenants. In Vancouver, this neoliberal ideology has been used to justify the construction of luxury condominiums in low-income neighbourhoods like the Downtown Eastside, Mount Pleasant and Cedar Cottage. Proponents of these projects argue that if there is no new supply, housing will become unaffordable, and that by introducing new units — regardless of who they are marketed to or how much they cost — will bring down the cost of housing for everyone. In reality, and especially in Vancouver, this is never the case. When low-income neighbourhoods are filled with luxury condominiums, the neighbourhood becomes unaffordable. As they say, “there goes the neighbourhood.” What is crucial to understand is that large-scale gentrification projects are profitable for developers precisely because they replace existing housing through conversions and demolitions without significantly increasing the overall supply of housing stock.

The failure of filtering theory is well documented. As one report states in the inter-disciplinary, urban studies journal Geoforum: “[filtering theory] legitimates the status quo, the persistence of gross inequalities in housing provision and the existence of substandard housing, and justifies allocation of resources and subsidies to those already well-off and well-housed, directing support away from those in greatest need.”[3]

Neoliberal Ideology

Cuts to “red tape,” tax breaks, privatization, and trickle-down housing economics are all examples of the same neoliberal ideology that has turned British Columbia into the most unequal province in the country. It is a pattern that we have seen in many governments across the world and it will continue to destroy Vancouver’s stock of affordable housing.

This comes as no surprise given that the Mayor’s Co-chair of the Task Force is Olga Ilich. Ilich became a rising star in right-wing circles in the late 1980s by pushing through the massive Terra Nova sprawl project on Richmond’s ALR lands. She awed the corporate developer community by defeating environmentalists and First Nations through years of public hearings and court cases, despite copious evidence of corruption (Ilich sat on the the City of Richmond’s advisory body that recommended the land privatization; also, the responsible minister personally profited from the deal.)

Olga and Milan Ilich (her business partner and brother-in-law) became Gordon Campbell’s biggest financial backers through the 1990s until 2009. She was appointed president of a developer lobby organization, the Urban Development Institute, in the late 1990s. In that capacity, she argued relentlessly that tax-cuts for developers would increase affordability. Finally, she became Gordon Campbell’s Minister of Labour, helping him dismantle British Columbia’s social programs in favour of the corporate-welfare state. Now she gets to implement her neoliberal schemes under the aegis of Gregor Robertson and Vision Vancouver.

These policies will only make super-rich developers even richer. The Task Force is likely to make Vancouver even more unaffordable than it is today. If Vancouver is to build affordable housing, the ideology of corporate deregulation and private monopoly needs to be defeated. The interests of real-estate developers and those in need of affordable housing are directly opposed to one another. High real-estate prices in Vancouver have turned the city into a one industry town — real-estate — at the expense of the vast majority of its residents. Until renters assert themselves against the developer oligopoly, the city’s housing crisis will only worsen.

Cited

[1] Van Dyk, Nick. “Financing Social Housing in Canada.” 1995. Housing Policy Debate: 6(4).

[2] ibid.

[3] Gray, Fred and Boddy, Martin. “The Origins and Use of Theory in Urban Geography: Household Mobility and Filtering Theory.” 1979. Geoforum: 10.