Originally published at timlouis.ca

While the world watches the closing ceremonies of the 2012 Summer Olympic Games in London with excitement and enthusiasm, now is the perfect time to reflect on the Vancouver 2010 Olympics, and to draw conclusions that the two years that have passed allow us to draw.

In the years leading up to the Vancouver 2010 Olympics, many promises were made in an effort to win over public support. One of the most important promises was the delivery of social housing – lots of social housing. By the time the negotiations and roundtables leading up to the Vancouver Olympics were over, there was a concrete promise that if the city hosted the 2010 Olympics, there would be a Housing Legacy with over 3,200 units of social housing constructed prior to the opening ceremonies of the Olympic Games. With the benefit of hindsight we now know that this commitment was hollow. Not one unit was built in time for the Games, and after the big event the idea of a Housing Legacy was dropped.

Those who study the Olympics have documented the enormous amount of public money the Games absorb – not for the benefit of the community but for the benefit of the large corporations that earn sizable contracts and countless benefits. London is in many ways a spitting repeat of Vancouver. In both cities, the promised Olympic Village housing was shrewdly converted into a private gain for investors at the expense of taxpayers. In the wake of the global financial crisis of 2008, the municipal governments of London and Vancouver both stepped in as a lenders of last resort for their respective Olympic Village developments, resulting in massive bailouts for investors and developers.

Yesterday the City of Vancouver announced that it will be leasing some of its land to rental housing developers. The initiative is part of the city’s larger attempt to solve the housing crisis by giving market incentives for the construction of affordable housing in Vancouver. Private developers have been given tax breaks and fee exemptions under Vision’s two terms; this latest policy is a significant change because it adds subsidized land as part of the larger incentive package for the industry.

In the next few months the city will be taking proposals from developers for a total of five hundred new units of rental housing on six city-owned sites, mostly in South-East Vancouver. The submissions will be the first step in the life of 3-year projects slated for completion in 2015. According to city documents, the six sites initiative is slated to fulfill the city’s “non-market housing/social housing” section of the housing continuum. Recently the Pantages development saw the city approve “social housing” units in the DTES scheduled to rent at $900 for a one-bedroom per month.

In the four years since the financial crisis of 2008 brought a North American-wide collapse in housing prices, the Canadian government has successfully taken measures to bring real-estate prices back to their pre-crash levels. Following in the tracks of the American effort to rescue financial capital, the past four years have seen a joint effort by all levels of Canadian government to re-inflate the housing bubble by deregulating finance, extending new lines of direct investment into real-estate and lowering interest rates. The Canadian government has effectively called on the real-estate industry to lead the economy out of the recession, facing down typical historical patterns in which real-estate is the last industry to recover from system-wide crisis. Next to resource extraction, the only real growth industry in Canada since 2008 has been real-estate.

Yet today, as in 2008, the real-estate bubble is reaching a “tipping point,” according to a recent report by Canada’s Royal LePage. In cities like Vancouver and Toronto, housing prices have climbed to unprecedented levels, with Vancouver prices reaching up to 11 times the city’s average family income. The Bank of Canada has identified the Vancouver market as “ground zero” for the coming financial crisis, and from its perch at a distance, The Economist observes Canadian housing is “more overvalued than it was in America at the peak of its bubble.” All forms of debt are multiplying, but household debt in particular is currently higher in Canada than it was in the United States prior to the subprime crisis, with debt-to-income ratios reaching 153 per cent.

Federal exit from recession

In the two years following the global recession, federal banks across the world lowered interest rates in an effort to loosen the credit crunch and stimulate new rounds of investment. In September 2010, Mark Carney and the Bank of Canada lowered interest rates to 1 per cent, where they have since stayed. By the summer of 2011, the Canadian housing economy was showing obvious signs of escalation, and by June local prices moved well above their pre-recession peak. Having not only stimulated but “over-stimulated” the housing economy, Carney began issuing strong warnings about the unprecedented risk-exposure of Canadian mortgages. In reality, the central bank actually did everything in its power to continue the growing flow of cheap, low-interest money into the real-estate economy. Out of fear of exacerbating the underlying weakness of the recovery itself, the Bank of Canada took the position of searching out ways to buoy housing finance.

Vision Vancouver and city planners have recently launched a series of highly branded “ideas competitions” with design-heavy titles like re:THINK and re:CONNECT. While the stated purpose of these competitions has been to generate creative new ideas for the city’s greatest planning challenges, the reality is that these events represent staged spectacles that obscure Vancouver’s housing crisis. The story of re:THINK and re:CONNECT offers a textbook model for how to distract residents away from the the social injustices of extraordinary housing costs and incredible developer profits, displacing politics through the spectacle of competition.

The re:THINK housing competition encourages ordinary residents to submit and vote on ideas for “protecting and creating affordable housing in Vancouver,” while re:CONNECT called on the citizens of Vancouver to “join with local and international designers to ignite discussion and dream new possibilities for the future of the viaducts and the City’s broader Eastern Core.” By launching these flashy spectacles of competition, oriented primarily around designing our way out of the crisis (or ignoring the housing crisis completely in the case of re:CONNECT), Vision Vancouver is embracing the creative neoliberal language of community and citizen participation, while actually sidelining the fundamental socio-economic injustices of our developer-run city.