Vancouver Needs to Emulate Chinese Housing Policy

The story of Chinese investor impact on Vancouver real estate is neither new nor surprising. But recent changes to real estate taxation within China may ramp up hunger for this favored class of investment in offshore locations — and further exacerbate conditions local to Vancouver. In a nutshell, China seems to be on the verge of exporting even more financial froth.

At the same time, China seems to be developing an internal approach to housing affordability that Vancouver needs to emulate.

Beijing has now prohibited residents from buying more than two dwelling units, and non-residents are required to show five years of tax documentation in order to make a purchase (Feb 18: “China home”).

Any Canadian public official who talks about affordable housing in Vancouver should be met with a demand to bring forward similar measures.

OPINION | Despite Rennie’s hoax, Olympic Village will remain empty

Condo marketer Bob Rennie claims to have sold 128 of 230 condo units up-for-grabs in the latest round of sales at the Olympic Village. Similar to last week’s re-launch of the The Village on False Creek, where Bob Rennie hired people to wait in line at the sales centre, Rennie’s press conference earlier today was a charade. Again this week, people were “hired by the realtor,” according to one hiree (see video here).

Rennie’s strategy was quite simple: over the past few weeks and months, he asked his speculator and real-estate agent friends how much they would be willing to pay for some units. Then, he convinced the City to let him sell-off 230 units at a discounted price to his speculator friends (who will not live in them). Then he planned to announce the sales as though these were actual families buying the units.

This ruse was the only way Bob Rennie could convince the public that the units were still viable as luxury condominiums. But the condo units, two thirds of which were promised to Vancouver’s poor as part of the Olympic housing legacy, will remain empty.

Rennie’s hope is that the hype will “lift the fog” from the “ghost town,” and that actual residents will then purchase the units now owned by Rennie’s speculator friends. Eventually, if people move into the units, Rennie can try to sell the remainder of the units not-yet on the market.

To reinforce the hype and create headlines, real-estate agents were paid to wait in line outside the sales office last week. Last week a similar attempt to use the media to draw interest in a real-estate development in Burnaby was called out.

The Vancouver Sun’s editorial board should resign for poor-bashing

Real estate developers were noticeably upset when, on Jan 20, residents of Vancouver’s Downtown Eastside scored a partial but significant victory against the City’s undemocratic condo-tower plan. Instead, the City was forced to finally allow a (potentially) resident-driven planning process for the area.

Shocked by their defeat, it took developers and their friends in the Corporate media over one week to respond to the democratic turn of events. Finally, on January 27, the Vancouver Sun editorial board published their talking points in an editorial titled Giving a lift to the Downtown Eastside: Build taller buildings. The piece is so counter-factual, misleading, and bigoted that it is worth unpacking line-by-line.

The Sun’s convoluted editorial begins by acknowledging that Vancouver needs more housing. Indeed, Vancouver needs more purpose-built social and affordable housing – but not more purpose-built luxury condos as the Sun prefers.

The Sun then asserts that because the Lower Mainland has a limited land-base, we must build higher buildings in the Downtown Eastside. But the Downtown Eastside already has a higher-than-average population density – why not build the towers in Shaughnessy instead?

The Sun then notes that there are “300 to 1,000 souls” who are homeless in the Downtown Eastside, but offers no solutions at all, nor any response to residents’ valid concern that gentrification will compromise the remaining low-income housing stock, pushing more people onto the street.

Instead of advocating a sophisticated approach to problem-solving in the Downtown Eastside, the Sun insults and stereotypes groups trying to address problems: “[The DTES] serves as the raison d’etre of swarms of social agencies, NGOs and self-proclaimed anti-poverty activists…Some activists have a vested interest in preserving the status quo. A gloomy ghetto of misery, destitution and squalor keeps them in business.”

Firstly, it is not acceptable to use language (“swarms of…”) which insinuates that community organizations are like insects. Nor is it ethical to suggest that it is a bad thing for people to form organizations to help each other out, to work for social justice, and to make their neighbourhoods better places.

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.