Mayor’s task force on housing affordability
Municipal governments receive 8 cents out of every tax dollar that Canadians pay. Being at the bottom of the funding pile severely limits cities’ ability to solve problems unilaterally without the support and cooperation of other levels of government, NGOs, business and residents. This is not to say that cities should not being doing more, and simply not address what other levels of Government download. On the issue of affordable housing, cities need to do more and Vancouver is not an exception. Mayor Gregor Robertson’s Task Force on Housing Affordability final report entitled Bold Ideas Towards an Affordable City, is an example of the complex combinations of policy tools that the city is forced to work with in an attempt to develop more affordable housing. CoV report
While some would characterize policies that incentivizes business to act in certain ways as “a give away to developers” and conversely others would characterize the creation of a housing authority as “interfering with the invisible hand of the market”, the reality is that the issues are highly complex and require a number of different interventions to increase housing stock and improve the variety of housing unit types. The critical question to ask is whether or not the city is achieving its objective of developing more “affordable housing”? How is “affordability” defined and are city residents getting a benefit from the policy intervention are the questions that needs to be answered.
The report proposes a number of recommendations to create more affordable housing, for households with moderate incomes ranging from $21,500 to $86,500. The general thrust is to create more affordable housing types for middle-income households. The report recommends a variety of tools from directed government action in the form of developing a City Housing Authority, to incentivizing building types through changes to zoning.
Interim Rezoning Policy
While increases to density is a necessary condition to create affordability; increases to density do not always equal more affordability. (I heard Jill Davidson says this once and I am paraphrasing). Residents of Vancouver have become very skeptical of increasing density through rezoning as a tool to create affordability. I think because “affordability” is not being defined by the city and folks don’t see new development as a benefit that they can participate in.
Affordability
It’s hard to know if you have achieved something if you don’t define it and without a definition it is also harder to measure progress. If the city is going to give more density to a project there needs to be a direct and mandated benefit of more affordability. The city in the past has used a number of ways to define affordability ranging from comparing the costs of renting to ownership, claiming more supply simply equals affordability and pointing to proximity to transit as another element of affordability. BUT, really, REALLY, why try to reinvent the wheel, when CMHC has defined affordability for renters as paying less then the 30% of a household income before taxes on housing including in rent and any payments for electricity, fuel, water and other municipal services.
The report states in 1.1 that: “Projects must demonstrate an enhanced level of affordability beyond that provided through the delivery of a generally more affordable housing type alone. Applicants will be expected to demonstrate their ability to maximize the level of affordability in the project.”
How will that work or what it means is not clearly defined. There is no definition of affordability. Projects that are participating in the “interim rezoning zone” should be mandated at the front end of the process that a portion of the project be affordable to the median income of a community.
Inclusionary Zoning
Inclusionary zoning is policy that mandates a certain amount of affordable units in projects where the city has discretionary powers to do so. For example when a developer wants seeks to rezoning a parcel of land to create more buildable density, the city is not obliged to grant the request. A complex process to evaluate what the “benefit” to Vancouver residents will be. In these case the city could mandate 30 % of a projects units should be affordable to the median income of the community where there are located. The “Olympic Village” started of with the very ambitious inclusionary zoning policy of 1/3 market housing, 1/3 middle income housing and 1/3 social housing. Vancouver needs to return to this 1/3, 1/3, and 1/3 standard.
Asking developers to provide more affordability is not how the market works. Developers are in business to make money and they will make as much as they can. The point is, affordability needs to be defined and the city needs to mandate it to have the benefit of participating in the “Interim Rezoning Policy” or in any project where the city has the power to mandate it.
The task force makes recommendations about incentivizing projects that are Transit Orientated Development (TOD) but is silent on the issue of reducing parking. This is a huge lost opportunity. Building parking is an extreme waste of money that otherwise could be used to create more affordable units by lowing construction cost. Lower construction cost can be captured by the city through inclusionary zoning policy and passed on to renters. Given the massive problem of global warming and the dramatic need to change transportation patterns, it makes no sense to build parking in buildings where folks are being invited to take transit.
Vancouver Housing Authority
One of the boldest recommendations of the report is the development of Housing Authority for Vancouver. The creation of a Housing Authority would be a significant step in creating the capacity within the City to partner in projects and to use City funds. These dollars from the Capital Plan and the Property Endowment Fund could then be used to create a variety affordable housing types. This would be a complex project for the city to develop, but one with enormous potential and once operational to create housing on an ongoing bases and to have shovel ready projects planned when funds from senior levels of government are available. By building in-house expertise to partner on projects and to gain expertise with project management there would many opportunities to partner with large intuitional investors like union pension funds to create affordable housing units.
Conclusion
Finding the solutions to solve the issue of the lack of affordable housing requires broad-based consensus on the need to take bold actions. There is a current of opinion that somehow if you can’t afford to live in Vancouver then you should move (see recent article by CBC Stephen Quinn ) and this is simply wrong. Beyond the very compelling necessity of building an inclusive and just city based on vales and principles not solely based on “profit motive”, having affordable housing options is going to be vital to the city’s economy to be entrepreneurial and creative. The Mayor’s task force captures this very point in the following statement:
“How Vancouverites decide to address these challenges is fundamental to the future
of our city. Should we simply let the market decide what kind of city we want and who
gets to live here? Or should we take the actions needed to increase the diversity of
affordable housing options, and maintain the vibrancy, diversity and economic competitiveness of our city?”
The test for Mayor’s Task Force on affordability is whether residents actually get a benefit of more affordable housing. This is where residents are skeptical and becoming cynical because if whole notion of “affordability” is not defined and not measured, the success of the policy initiative seems to be gauged by how well the public relations exercise has been executed.
Great article Brent. Thank-you for your level-headed discussion and clarity in dealing with an incredibly complex problem.