Vancouver’s Property Endowment Fund

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.

Councilor Reimer tries to ‘divide & conquer’ the DTES at 4am

Last Thursday, grassroots pressure forced Vancouver City Council to halt plans for two condo towers, as well as halting overall plans for height upzoning in the Downtown Eastside. Over 80 speakers were signed up to speak at City Hall, most against the City’s gentrification plan. But rather than listen to the delegations, Vision Vancouver introduced a so-called “emergency” motion. The motion agreed to grassroots demands to conduct a community plan and social impact study before rezoning.

It is time to take stock of what happened that day. Or rather, the night before, at 4am!

The first thing that stands out is this: why didn’t Vision Vancouver agree to these demands last year? Or last month, when The Mainlander published the arguments clearly. Or the day before the public hearing, so that 80 people wouldn’t have to take the day off work, school and life to come all the way down to City Hall? Apparently, Vision Councilor Andrea Reimer wrote the emergency motion at “4am” the night before. What made Vision change its mind at the last minute, after literally years of pressure from grassroots low-income organizations? Was it the letter signed by dozens of professors? Was it this dialogue between Mike Harcourt and Councilor Andrea Reimer on Jan 19? Was it our pull-no-punches editorial (we wish)? Was it the prospect of having to listen to 80 public speakers?

Weekly Roundup

AFFORDABILITY |

Several BC cities have been ranked “severely unaffordable” in a recent world-wide affordability report. The list included Vancouver, Victoria, Abbotsford and Kelowna.Vancouver ranked 324 out of 325, making it the second most unaffordable city in the world next to Sydney (another “Olympic” town).

The effects of the affordability crisis are hitting working people hard. It has been reported that working-class residents across the Lower Mainland have been struggling to find housing, and that the working-poor are increasingly turning to shelters.

In response to criticism that their policies are exacerbating the housing crisis, the City of Vancouver and the Province have repeatedly boasted about their mythical fourteen sites. Now, in another questionable arrangement with real-estate developers, the City is planning to abandon the requirement of affordable housing on North False Creek in exchange for two properties in the Downtown Eastside. But Councilor Geoff Meggs told CBC on Monday that the City might build condos for young professionals on one of these DTES sites (58 West Hastings – site of the 2010 Olympic Tent Village). Meanwhile, North False Creek would have 4 new unaffordable condo towers as part of a new casino complex (more below).

As previously reported, a coalition (10SITES Coalition) has been formed of Downtown Eastside organizations and allies to pressure the City to buy at least 10 sites per year for 5 years in their neighbourhood. Since it is now out in the open that BC cities are “severely affordable” – not merely Vancouver – housing activism will have a reason to grow across the province, and the 10SITES Coalition may prove to be a model.

CASINO |

A new casino proposal passed the first stage of approval at Vancouver City Council last week. The proposed development would also include four associated condominium towers, bringing a small-scale Las Vegas to downtown Vancouver.

Council is giving lip-service to the arguments against the Casino, but has so far approved the project. Some critics are proposing the Vision-led council is simply playing politics and that the proposal will likely go ahead.

The casino will be another way for the City to gain revenue from working-class residents instead of taxing businesses. Vancouver’s business taxes are extremely low. A study done May of last year rated Vancouver’s taxes not only as the lowest in Canada, but the lowest in the world (study here). Resistance to business taxes has caused somewhat of a revenue crisis. The recently-passed 2011 budget increased taxes by two percent, with almost all of the increases placed on residents instead of businesses.

Casinos have an interesting history in Vancouver, and are often associated with crime, corruption and money laundering. It is also important to note that the Great Canadian Casino made a significant donation to Vision Vancouver’s 2008 election campaign.

A public hearing on the casino will be held at City Hall on Feb 17.

City council sends public home at Height Review hearing

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.