Housing ‘task force’ plan not strong enough to dent developer-backed affordability crisis

The City’s developer task force released another interim report today — a follow-up to the previous very preliminary interim report (see The Mainlander‘s analysis here).

Although the latest proposal and its ideas remain in draft form, the document contains a couple of substantial policy proposals, including a municipal Housing Authority and a Land Bank. These are two very good ideas, but the question remains: will the proposals actually be implemented? If so, will it be at a scale capable of meeting the demand for real affordable housing? Will it be done in a way that benefits residents and communities instead of private developers?

The Housing Authority proposal is a good idea, but not a new idea. For example, the City of Vancouver Public Housing Corporation has existed since the 1980s. But it has been so inactive that it owns only a dozen buildings, most of them in the Downtown Eastside. For this reason, The Mainlander has been consistently arguing in favour of a reactivated and robust Housing Authority. During the 2011 civic election campaign, Vision and the NPA did not endorse a Housing Authority. COPE was the only party to do so.

It is surely a step in the right direction to start talking about what a reactivated Housing Authority will look like. The trick is to make it powerful enough to make a real difference. For that to happen, the devil is in the details. And today’s interim report is weak on details. It floats the idea of a hypothetical “City-owned entity, such as a Housing Authority, [which] could enable the City to deliver on its objectives for social and affordable rental housing.”

In terms of governance, it mentions that the Authority would be run by an arms-length Board, with appointees who have the “skills” and “experience” to “optimize the return on the City’s investment.” It is interesting to compare this with COPE’s election proposal: “COPE is proposing that the authority be governed by a board of directors composed of one-part city councilors and the mayor, one-part residents, and one-part community organizations.”

Regarding the powers of the Authority, today’s report seems to promote a relatively passive entity. On the one hand, it would facilitate public-private partnerships (“respond nimbly to emerging partnership opportunities with the private sector, non-profit societies and senior governments”). On the other hand, it would promote administrative efficiency (“consolidate all of the City’s non-market housing portfolio under one administrative entity, streamlining and standardizing operations” and “channel City capital grants to not-for-profit housing societies”).

Contrast this with a more robust Housing Authority. The City could use its zoning powers to create $100s of millions in value per year, which the Authority could invest in social housing for those of us most in need. The Authority could also act as a kind of ‘public option’, providing significant amounts of housing at cost, keeping private developers ‘honest’.

The report mentions that many other cities have Housing Authorities (“Metro Vancouver Edmonton, Winnipeg, and Toronto for instance”). However, it would be better to study models of other cities around the world (as was the case when Vancouver learned from global harm-reduction models a decade ago). Namely, it would be good to visit, and welcome delegations from, Vienna, Hong Kong, Singapore, and New York, which have powerful and successful Housing Authorities.

The report also discusses the possibility of a Land Bank or “community land trust,” which would buy and consolidate land for affordable housing. This is not a new idea either. Both South and South-East False Creek were assembled in this way by the city. Whereas South False Creek was relatively successful, by comparison SE False Creek was a boondoggle: a public-private partnership approach was taken, and private developers were bailed-out to create luxury housing on publicly assembled land. There are many lessons to be learned from these experiences.

The report also proposes using union pension funds to build some of the housing. Sun journalist Jeff Lee today drew parallels between this proposal and another implemented by Mayor Gordon Campbell in 1989. In that scheme, a partnership between the city and Jack Poole created the Vancouver Land Corporation (also known as VLC Properties), with the supposed mandate of building affordable housing. The City of Vancouver invested $50 million and VLC promised to build 2,000 rental units per year, to increase housing supply, and to push down prices. But in the first year, only 52 units were built. It took the new entity six years to build only a thousand units. Eventually it became just another private developer making profit off of public assets (Concert Properties). It would be prudent to be vigilant about such schemes.

Danger signs

The report also has several concerning recommendations. It proposes watering-down the city’s ‘inclusionary zoning policy’, which stipulates that 20% of units in any new large developments must be affordable/social housing. The purported rationale for this policy retreat is that senior government funding is needed to build the 20%. However, that is simply not the case. The truth is that giant corporations like Concord Pacific (a major Vision donor) simply don’t want to build social housing on North False Creek. Instead of watering-down this requirement, it would be better if inclusionary zoning were applied applied across the whole city, in all new developments above a certain size.

The report also prioritizes tax cuts for developers. In particular it proposes getting rid of community amenity contributions (CACs), a radical NPA platform plank. The rationale is that CACs are too “unpredictable” for developers. However, they are not unpredictable: if a developer wants to upzone their property, at least 75 percent of increased value goes to the city for amenities required by the additional residents. The decision about what amenities are chosen is neighbourhood specific. Certainly this decision-making process should be made more democratic, but developers should not complain about having to pay for CACs. As Harry Rankin used to say, 100% of the money created by upzoning should go to the city. Why should a developer get free cash? It’s a recipe for corruption.

Finally, the report proposes giving a “Nexus pass” for first class developers, allowing them to build housing with no public oversight (“allowing applicants to hire third-party consultants with the authority to sign off plans in the early stages of an application”). This framework is analogous to Harper’s revamping of the environmental regulatory process.

These free-market ideas are based on the NPA framing that supply is limited by “red tape”. In actual fact, inventory is carefully managed by the large firms to keep prices and profit-margins high. The developer oligopoly most fears a steady supply of affordable housing that actually meets demand.

What now?

The final task force recommendations are to be completed by September 2012. Hopefully the emphasis will be on the Housing Authority and the Land Bank, rather than on the anti-“red tape” free-market solutions. Hopefully the Authority will have community and tenant representation on its board. In the end, actions will speak louder than words. All the reports in the world are meaningless, so long as none of us can afford to live in our own city.